Interim Operations of the Company. Except (i) as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve its present relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to, do any of the following: (a) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof; (b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants; (c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan; (d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such; (e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger; (f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m); (g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice; (h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice; (i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000; (j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined; (k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law; (l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company; (m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000; (n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party; (o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party; (p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods; (q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries); (r) enter into any material joint venture or partnership; (s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act; (t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice; (u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder; (v) create any Subsidiary; or (w) enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 3 contracts
Samples: Merger Agreement (Flir Systems Inc), Merger Agreement (Flir Systems Inc), Merger Agreement (Icx Technologies Inc)
Interim Operations of the Company. Except (i) The Company covenants and agrees as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of itself and its Subsidiaries that during the Company Disclosure Schedule, period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (w) disclosed in Section 5.1 of the Company Disclosure Letter, (x) expressly contemplated or permitted by this Agreement, (y) required by applicable Law, or (z) agreed to in writing by Parent, after the date of this Agreement and prior to the Effective Time Time:
(a) the business of the Company shall, and shall cause each of its Subsidiaries to, conduct its business shall be conducted only in the usual, regular and ordinary course consistent with past practice practice, and the Company shall use all its commercially reasonable efforts to preserve intact its current business organization, organization and goodwill and the business organization and goodwill of its Subsidiaries and keep available the services of its their current officers and employees and preserve its present relationships and maintain existing relations with customers, suppliers, licensorsofficers, licensees, distributors, Governmental Entities employees and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except creditors;
(wb) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and nor shall not it permit any of its Subsidiaries to, (i) enter into any new line of business, (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater, in the aggregate, than the amount in the Company’s total capital budget for calendar year 2006 approved by the Company Board on January 26, 2006, which has been furnished to Parent prior to the date of this Agreement, plus (y) any other capital expenditure, obligations, liabilities or commitments made by the Company after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, the Company shall not commit to incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event the Company’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions so long as such expenditures with respect to any individual acquisition do not exceed $1,000,000 or (iii) during any rolling three (3) month period, incur or commit to any capital expenditures contemplated by the Company’s capital budget described in clause (ii) above in an amount that exceeds, by more than thirty percent (30%) the amounts contemplated by such budget to be incurred or committed to during such three (3) month period;
(c) the Company shall not, nor shall it permit any of the following:its Subsidiaries to, amend its certificate of incorporation or bylaws or similar organizational documents;
(ad) except for Shares the Company shall not, nor shall it permit any of its Subsidiaries (other than direct or indirect wholly owned Subsidiaries) to, declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to be issued its capital stock;
(e) the Company shall not, nor shall it permit any of its Subsidiaries to (i) adjust, split, combine or delivered pursuant reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to the exercise of Options or Warrantsacquire, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the any shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge class or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any such securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that other than (x) issuances of Company Common Stock pursuant to the Company may Options or Performance Stock Awards outstanding on the date of this Agreement (y) issuances of Company Stock Options or Company Stock Awards prior to the Effective Time to directors or new employees in the ordinary course of business and consistent with past practice, or (ii) except as required pursuant to the terms of the Company Plans in effect on the date of this Agreement, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) withhold Shares of this Section 5.1(e) other than pursuant to satisfy Tax obligations with respect to any “cashless” exercise provisions of existing Company Stock Options, Restricted Stock Awards and RSUs granted prior to the date hereof ;
(f) other than (i) as required pursuant to the Equity terms of the Company Plans or in effect on the Assumed Subsidiary Equity Plans and date of this Agreement (ii) acquire Shares as specifically described on Section 5.1(f) of the Company Disclosure Letter or (iii) grants of retention bonuses or adoption of retention plans in connection with the surrender transactions contemplated by this Agreement, provided that no such bonuses shall be granted and no awards will be made under any such plans unless the beneficiary thereof agrees to continue his or her employment through the Effective Time and thereafter for a transition period to be determined in the discretion of Shares by holders Parent but not to exceed a time period of Options 90 days after the Effective Time, and provided further that the aggregate amount of all payments pursuant to such grants, awards or Warrants in order to pay plans after the exercise price date hereof shall not exceed $250,000, the Company shall not, nor shall it permit any of the Options or Warrants;
its Subsidiaries to, (cx) grant any Optionsincrease in the compensation or benefits payable or to become payable by the Company or any of its Subsidiaries to any former or current director, Restricted Stock Awards, RSUs officer or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders employee of the Company or of any of its Subsidiaries other than to non-officer employees in the ordinary course of business consistent with past practice, (y) adopt, enter into, amend or otherwise increase, or accelerate the payment or vesting of the amounts, benefits or rights payable or accrued or to become payable or accrued under, any Company Plan (other than entry into employment agreements with new hires in the ordinary course of business consistent with past practice; provided that such employment agreement shall be terminable at will, without penalty to the Company or any of its Subsidiaries), or (z) grant any severance or termination pay to any officer, director or employee of the Company or any of its Subsidiaries except termination amounts paid to non-contract employees related to termination of such employee’s employment in the Company’s ordinary course of business and consistent with past practice;
(g) the Company shall not, nor shall it permit any of its Subsidiaries to, change its methods of accounting (other than Tax accounting, which shall be governed by clause (m) below) in effect as of the date of this Agreement, except in accordance with changes in GAAP as concurred to by the Company’s independent auditors;
(h) the Company shall not, nor shall it permit any of its Subsidiaries to (i) other than in the ordinary course of business consistent with past practice acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or (ii) other than in the ordinary course of business consistent with past practice or pursuant to agreements in effect on the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, acquire any assets;
(i) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter or the sale of obsolete or other Company Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, the Company shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Company Assets and shall not, nor shall it permit any of its Subsidiaries to sell, lease exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of any material Company Assets;
(j) the Company shall not, nor shall it permit any of its Subsidiaries to, mortgage, pledge, hypothecate, grant any security interest in, or otherwise subject to any other Lien other than Permitted Liens, any of the Company Assets;
(k) the Company shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which the Company or any of its Subsidiaries is bound and except for any payments, discharges or settlements that do not wholly owned exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate;
(l) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, the Company shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in Section 3.9(a) or 3.18 of the Company Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly) by , any of the Company’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (l), the term “affiliates” shall not include any employees of the Company in their capacity as suchor any of its Subsidiaries, other than the directors and executive officers thereof;
(em) except as set forth in Section 5.1(m) of the Company Disclosure Letter, the Company shall not, nor shall it permit any of its Subsidiaries to, make or change any material Tax election, change any material method of Tax accounting, grant any material extension of time to assess any Tax or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liability;
(n) the Company shall not intentionally, nor shall it permit any of its Subsidiaries to intentionally, take any action that would, or could reasonably be expected to, result in any of its representations and warranties set forth in this Agreement becoming untrue in a manner that would give rise to the failure of the closing condition set forth in Section 6.3(a);
(o) the Company shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its SubsidiariesSubsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of the Company) or any agreement relating to an Acquisition Proposal, except as provided for in Section 5.3;
(p) the Company shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Merger;
(f) acquire (i) by purchaseCompany Credit Agreement, merger or otherwise, any business or equity interest of any Person or (ii) incur or assume any asset or assets, except for purchases of components, raw materials or supplies short-term Indebtedness other than in the ordinary course of business consistent with past practice or as any short-term Indebtedness under the Company Credit Agreement, (iii) modify the terms of any Indebtedness to increase the Company’s obligations with respect thereto, provided that the Company may increase the amount outstanding under the Company Credit Agreement and provided further that in addition to any obligations permitted by this section, the Company may incur long-term, short-term or increases in its obligation under Section 6.1(mexisting debt under items (i);
, (gii) selland (iii) in an aggregate amount not to exceed $20,000,000, lease(iv) assume, licenseguarantee, mortgage, sell and leaseback endorse or otherwise encumber become liable or dispose responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of its properties or other assets or any interests thereinthe Company), except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
practice and in no event exceeding $2,000,000 individually, (hv) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other PersonPerson (other than to wholly owned Subsidiaries of the Company), or by such Subsidiaries to the Company, other than to the Company and its wholly owned Subsidiaries, and other than customary loans or advances to employees in respect of travel accordance with past practice, or other related expenses (vi) enter into any material commitment or transaction, except in the ordinary course of business consistent with past practicepractice and except as otherwise authorized in Sections 5.2(b), 5.2(h) and 5.2(i);
(iq) except as required by Law or except as required by the terms Company shall not, nor shall it permit any of a Benefit Plan in effect as of the date of this Agreementits Subsidiaries to, (i) enter into an employment agreement with any Person agreement, understanding or grant to any Person any right to severancecommitment that materially restrains, retention, change in control limits or termination compensation or benefits, or increase any Personimpedes the Company’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries’ ability to compete with or conduct any business or line of business, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to including geographic limitations on the Company’s President or any of its Subsidiaries’ activities (other than confidentiality agreements and Chief Operating Officer, area of mutual interest agreements entered into in the ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000business);
(jr) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their termsas contemplated by this Agreement, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practiceshall not, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or nor shall it permit any of its Subsidiaries is a party to, modify or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce amend in any material respect, or consent to any matter with respect to which consent is required underterminate, any material confidentiality or similar contract to which the Company it is a party or waive in any material respect or assign any of its Subsidiaries is a party;
(o) waive the benefits of, material rights or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnershipclaims;
(s) engage the Company shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in any transactionsfull force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, agreementscasualties, arrangements risks and contingencies as is customary in the domestic or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;applicable foreign oil and gas exploration industry; and
(t) otherwise manage the Company shall not, nor shall it permit any of its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter intoSubsidiaries to, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any an agreement, contract, agreement, commitment or arrangement to do any of the foregoing. Notwithstanding anything in this Section 5.1 to the contrary, the Company shall not intentionally, nor shall it permit any of its Subsidiaries to intentionally, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on the Company.
Appears in 3 contracts
Samples: Merger Agreement (Petrohawk Energy Corp), Agreement and Plan of Merger (KCS Energy Inc), Agreement and Plan of Merger (Petrohawk Energy Corp)
Interim Operations of the Company. Except The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (except as otherwise expressly contemplated by this Agreement or the Stock Option Agreement or set forth in Section 6.1(a) of the Company Disclosure Letter), without the prior written consent of Parent, which consent shall not be unreasonably withheld or delayed:
(i) its and its Subsidiaries' businesses shall be conducted in all material respects in the ordinary and usual course (it being understood and agreed that nothing contained herein shall permit the Company to enter into or engage (through acquisition, product extension or otherwise), in any material respect, in any new line of business);
(ii) to the extent consistent with (a) above it and its Subsidiaries shall use their reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, reinsurers, distributors, creditors, lessors, employees and business associates;
(iii) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its charter or by-laws or amend, modify or terminate the Rights Agreement; (iii) split, combine or reclassify its outstanding shares of stock; (iv) authorize, declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly-owned Subsidiaries and other than regular quarterly cash dividends paid by the Company not in excess of $.07 per share; or (v) repurchase, redeem or otherwise acquire, except in connection with any of the Company Stock Plans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its stock or any securities convertible into or exchangeable or exercisable for any shares of its stock;
(iv) neither it nor any of its Subsidiaries shall (i) except as required permitted under clause (v), issue, sell, pledge, dispose of or encumber any (x) shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire any shares of, its capital stock of any class or (y) securities convertible into or exchangeable for any other property or assets (other than Shares issuable pursuant to options outstanding on the date hereof under any of the Company Stock Plans or upon conversion of the Convertible Notes); (ii) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other material property or assets (including capital stock of any of its Subsidiaries) or take any action to incur or modify any material indebtedness or other material liability; (iii) other than for information systems, make or authorize or commit for any capital expenditures other than in amounts less than $20.0 million individually and $20.0 million in the aggregate; or (iv) make or authorize or commit for any capital expenditures for information systems except for amounts which, individually or in the aggregate, are less than $25.0 million; or (v) make any acquisition of, or investment in, the assets or stock of any other Person or entity (other than a Subsidiary) except for ordinary course investment activities or as otherwise permitted by LawSection 6.1(a);
(v) neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans or increase the salary, wage, bonus or other compensation of any employees except increases for employees of the Company occurring in the ordinary and usual course of business (which shall include, but not be limited to, (i) regular annual grants of options under the Company Stock Plans, the number of Company Options subject to and the recipient of each such grant to be determined in consultation with Parent; provided that the vesting of such options shall not accelerate as a result of the change in control contemplated by the Merger and provided, further, that the maximum number of Shares issuable pursuant to such options shall be calculated in accordance with past practice and the terms of the Company Stock Plans and shall not exceed 3,300,000 Shares (each such option, when granted, shall be a Company Option), (ii) as consented to grants and payment of awards under the Company's Management Incentive Plan and Long-Term Incentive Plan in writing by Parent accordance with the terms of such plans and (iii) salary increases for those employees who have a rank of vice president or higher in accordance with the Company's normal salary guidelines and annual salary pool which, in the aggregate, do not exceed 4% of their aggregate current salaries, and salary increases for other employees which do not exceed, in the aggregate, 3.5% of their aggregate current salaries) and except reasonable retention arrangements which are necessary for the operation of the Company entered into with the prior written consent of Parent, which consent shall not be unreasonably withheld, delayed or conditioned), .
(iiivi) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve its present relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, do any of the following:
(a) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) shall pay, discharge, settle or satisfy (x) any claimsinsurance claim, liabilities, obligations liability or litigation obligation (absolute, accrued, asserted or unasserted, contingent or otherwise) for amounts in excess of $2,500,000 or (y) any non-insurance claim, liability or obligation (including extra-contractual obligations), other than (I) the payment, discharge, settlement discharge or satisfaction of such claims, liabilities or obligations in the ordinary and usual course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves$500,000 or (II) ordinary course repayment of indebtedness or incurred since the date payment of such Financial Statements contractual obligations when due;
(vii) neither it nor any of its Subsidiaries shall make or change any Tax election, settle any material audit, file any amended tax returns or permit any insurance policy naming it as a beneficiary or loss-payable payee to be canceled or terminated except in the ordinary and usual course of business consistent with past practicebusiness;
(viii) neither it nor any of its Subsidiaries shall enter into any agreement containing any provision or covenant limiting in any material respect the ability of the Company or any Subsidiary or affiliate to (A) sell any products or services of or to any other person, (iiB) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify engage in any respect, or, subject line of business or (C) compete with or to obtain products or services from any person or limiting the terms hereof, fail ability of any person to enforce, provide products or consent services to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or affiliates;
(ix) neither it nor any of its Subsidiaries shall enter into any (x) new quota share or reinsurance transaction pursuant to which $2,000,000 or more in annual ceded written premiums are ceded by the Company Insurance Subsidiaries or (vy) waive renewal, extension or modification of an existing treaty or other program pursuant to which $15,000,000 or more in annual ceded written premiums are ceded by the Company Insurance Subsidiaries;
(x) neither it nor any material benefits of, or agree of its Subsidiaries shall take any action that would cause any of its representations and warranties herein to modify become untrue in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or ; and
(xi) neither it nor any of its Subsidiaries is a party;
(o) waive the benefits of, will authorize or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement an agreement to do any of the foregoing.
Appears in 3 contracts
Samples: Merger Agreement (Usf&g Corp), Merger Agreement (St Paul Companies Inc /Mn/), Merger Agreement (St Paul Companies Inc /Mn/)
Interim Operations of the Company. Except During the period from the date of this Agreement to the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 8.1, except (iw) as may be required by Law, (iix) as consented to in writing by Parent (with the prior written consent of Parent, which consent shall not be unreasonably withheld, delayed or conditioned), (iiiy) as contemplated or permitted by this Agreement or (ivz) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date business of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business shall be conducted only in the usual, regular ordinary and ordinary usual course of business in all material respects consistent with past practice practice, and, to the extent consistent therewith, the Company and its Subsidiaries shall use all commercially reasonable efforts to (i) preserve intact its their current business organization, keep available the services of its current officers organization and employees and (ii) preserve its present their relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities suppliers and others having business dealings with them them; provided, however, that no action by the Company or any of its Subsidiaries with respect to the end that its goodwill and ongoing business matters addressed specifically by any provision of this Section 6.1 shall be unimpaired at the Effective Timedeemed a breach of this sentence unless such action would constitute a breach of such specific provision. In addition, and without Without limiting the generality of the foregoing, except (w) as may be required by Law, (x) as consented to in writing by Parent (with the prior written consent of Parent, which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly as contemplated or permitted pursuant to by this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement prior to the Effective Time, neither the Company shall not, and shall not permit nor any of its Subsidiaries to, do any of the followingwill:
(a) except for Shares Common Stock to be issued or delivered pursuant to the exercise of Options or WarrantsCompany Options, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each Convertible Notes and Convertible Preferred Stock outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary pursuant to the Company’s Equity Plans as in effect on the date hereof with respect to new hires consistent with past practice, issue, deliver, grant, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, deliverygrant, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interestinterest of the Company or any of its Subsidiaries, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interestinterest of the Company or any of its Subsidiaries, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest of the Company or any of its Subsidiaries or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights)of the Company or any of its Subsidiaries, or (ii) any other securities of the Company and or any of its Subsidiaries in respect of, in lieu of, or in substitution for, Shares Common Stock outstanding on the date hereof, or (iii) any restricted stock awards or performance awards under the Company Equity Plans or any phantom stock, stock appreciation rights or similar rights;
(b) except pursuant to the Company’s Equity Plans as in effect on the date hereof, redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities capital stock of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares capital stock or declare, set aside for payment or pay any dividend in respect of any Shares capital stock or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such, other than (i) with respect to the Company, the payment of the previously declared cash dividend on the Common Stock payable on August 1, 2007 and the declaration and payment of the required quarterly cash dividends payable with respect to the Convertible Preferred Stock (but with the understanding and agreement that no further cash dividends will be declared on the Common Stock prior to the earlier to occur of the Effective Time or the termination of this Agreement; provided, however, that the Company may pay a dividend of $0.05 per share on Common Stock payable on or after November 1, 2007 if the Effective Time has not occurred prior to such date, it being understood any such dividend may be declared and have a record date prior to November 1, 2007 with payment contingent on the Effective Time not occurring by November 1, 2007) and (ii) dividends by a wholly owned Subsidiary of the Company;
(ed) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(e) make any acquisition of (whether by merger, consolidation or acquisition of stock), make any investment in any interest in, or acquire all or substantially all the assets of, any corporation, partnership or other business organization or division thereof, except for acquisitions, investments or assets that do not exceed $5,000,000 in the aggregate;
(f) acquire sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof, other than sales or dispositions of less than $10,000,000 in the aggregate;
(g) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Material Contract; provided that nothing herein shall preclude the Company and its Subsidiaries from negotiating or entering into successor agreements to the CBAs referenced in Section 4.15(b).
(h) except as contemplated in the Company’s capital expenditure budget for the current fiscal year previously provided to Parent, authorize, or make any commitment with respect to, any single capital expenditure which is in excess of $5,000,000 or capital expenditures which are, in the aggregate, in excess of $15,000,000;
(i) by purchaseexcept for borrowings under the existing credit facilities of the Company and its Subsidiaries, merger incur any material indebtedness for borrowed money, or assume or guarantee the obligations of any Person with respect to any material indebtedness for borrowed money, or make any loans, advances or capital contributions to any other Person (other than to the Company or a Subsidiary of the Company), in each case, other than (i) in the ordinary course of business, pursuant to letters of credit or otherwise, any business or equity interest of any Person or (ii) any asset commodity or assetscurrency sale or hedging agreements, in each case in the ordinary course of business and which can be terminated on 90 days or less notice without penalty;
(j) (A) grant any increases in the compensation or fringe benefits of any of the Company’s directors, officers or key employees, except for purchases regular annual increases in base salary for key employees in the ordinary course of componentsbusiness and in accordance with past practice, raw materials (B) enter into any new employment or supplies severance agreements with any such director, officer or key employee, (C) amend any existing employment or severance agreements with any such director, officer or key employee or (D) amend the Ryerson Severance Plan or the Amended and Restated Ryerson Change in Control Severance Trust (or any schedule or attachment thereto); provided that the Company may enter into employment and severance agreements with new hires consistent with past practice;
(k) except as may be contemplated by this Agreement, establish, adopt, terminate or amend any of its material Benefit Plans or fund or make any contribution to any Benefit Plan or any related trust or other funding vehicle, other than (i) regularly scheduled contributions to trusts funding qualified plans and (ii) as may be required to comply with applicable Law;
(l) change any of the accounting methods used by the Company unless required by GAAP or applicable Law;
(m) other than in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m)required by applicable Law, (i) enter into any settlement or compromise of any material Tax liability, (ii) enter into any closing agreement relating to any material Tax or (iii) surrender any right to claim a material Tax refund;
(gn) sell, lease, license, mortgage, sell and leaseback settle or otherwise encumber or dispose of compromise any of its properties or other assets or any interests therein, litigation except for sales of inventory and used equipment in if the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than amount paid to the Company other party (including as reimbursement of legal fees and its wholly owned Subsidiariesexpenses) does not exceed $1,000,000 or, and other than to employees in respect of travel or other related expenses in if greater, the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect total incurred case reserve amount for such matter, as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to maintained by the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(wo) enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Ryerson Inc.), Merger Agreement (J.M. Tull Metals Company, Inc.)
Interim Operations of the Company. Except (i) The Company covenants and agrees as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of itself and its Subsidiaries that during the Company Disclosure Schedule, period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (w) disclosed in Section 5.1 of the Company Disclosure Letter, (x) expressly contemplated or permitted by this Agreement, (y) required by applicable Law, or (z) agreed to in writing by Parent, after the date of this Agreement and prior to the Effective Time Time:
(a) the business of the Company shall, and shall cause each of its Subsidiaries to, conduct its business shall be conducted only in the usual, regular and ordinary course consistent with past practice practice, and the Company shall use all its reasonable best efforts to preserve intact its current business organization, organization and goodwill and the business organization and goodwill of its Subsidiaries and keep available the services of its their current officers and employees and preserve its present relationships and maintain existing relations with customers, suppliers, licensorsofficers, licensees, distributors, Governmental Entities employees and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except creditors;
(wb) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and nor shall not it permit any of its Subsidiaries to, do (i) enter into any new line of business, (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2005 other than capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than, and during the same time period set forth in, and generally on the same specific items included in the Company’s total capital budget for calendar year 2005 approved by the Company Board in December 2004, which has been furnished to Parent prior to the date of this Agreement, plus $6 million from the 2004 budget that was not spent; provided however, with respect to any and all expenditures and commitments made by the Company after the date of this Agreement which are in excess of $1,000,000, the Company shall provide Parent reasonable notice and an opportunity to give input regarding any such expenditures.
(c) the Company shall not, nor shall it permit any of the following:its Subsidiaries to, amend its certificate of incorporation or bylaws or similar organizational documents;
(ad) except for Shares the Company shall not, nor shall it permit any of its Subsidiaries (other than direct or indirect wholly owned Subsidiaries) to, declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to be issued its capital stock;
(e) the Company shall not, nor shall it permit any of its Subsidiaries to (i) adjust, split, combine or delivered pursuant reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to the exercise of Options or Warrantsacquire, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the any shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge class or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any such securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that other than issuances of Stock and Company Rights pursuant to the Company may Options outstanding on the date of this Agreement except with respect to issuances of Company stock options prior to the Election Deadline to new employees in the ordinary course of business and consistent with past practice, or (ii) except as required pursuant to the terms of the Company Plans in effect on the date of this Agreement, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof of this Section 5.1(e);
(f) except as required pursuant to the Equity terms of the Company Plans in effect on the date of this Agreement or except as specifically described on Section 5.1(f) of the Assumed Subsidiary Equity Plans and Company Disclosure Letter, the Company shall not, nor shall it permit any of its Subsidiaries to, (i) grant any increase in the compensation or benefits payable or to become payable by the Company or any of its Subsidiaries to any former or current director, officer or employee of the Company or any of its Subsidiaries, (ii) acquire Shares in connection with adopt, enter into, amend or otherwise increase, or accelerate the surrender of Shares by holders of Options payment or Warrants in order to pay the exercise price vesting of the Options amounts, benefits or Warrants;
rights payable or accrued or to become payable or accrued under, any Company Plan (cother than entry into employment agreements with new hires in the ordinary course of business consistent with past practice; provided that such employment agreement shall be terminable at will, without penalty to the Company or any of its Subsidiaries, (iii) grant any Optionsseverance or termination pay to any officer, Restricted Stock Awardsdirector or employee of the Company or any of its Subsidiaries except termination amounts paid to non-contract employees related to termination of such employee’s employment in Company’s ordinary course of business and consistent with Company’s past practices, RSUs or other equity-based awards or grant (iv) designate any options to purchase Shares more prospects under the Company’s 2007 Employee Stock Purchase Mission Resources Corporation Bonus and Deferred Compensation Plan;
(dg) splitthe Company shall not, combinenor shall it permit any of its Subsidiaries to, subdivide change its methods of accounting in effect as of the date of this Agreement, except in accordance with changes in GAAP as concurred to by the Company’s independent auditors;
(h) the Company shall not, nor shall it permit any of its Subsidiaries to (i) acquire any Person or reclassify other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any Shares other manner, or declare(ii) other than in the ordinary course of business consistent with past practice or pursuant to agreements in effect on the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, acquire any assets;
(i) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set aside forth in Section 5.1(i) of the Company Disclosure Letter, the Company shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Company Assets and shall not, nor shall it permit any of its Subsidiaries to sell, lease exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of any material Company Assets;
(j) the Company shall not, nor shall it permit any of its Subsidiaries to, mortgage, pledge, hypothecate, grant any security interest in, or otherwise subject to any other Lien other than Permitted Liens, any of the Company Assets;
(k) except as set forth on Schedule 5.1(k) of the Company Disclosure Letter, the Company shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or pay satisfy any dividend claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in respect accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which the Company or any Shares of its Subsidiaries is bound and except for any payments, discharges or otherwise make settlements that do not exceed $250,000 individually or $1,000,000 in the aggregate, or (ii) compromise, settle, grant any payments waiver or distributions release relating to stockholders any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $250,000 individually or $1,000,000 in the aggregate;
(l) the Company shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in Section 3.9(a) or 3.18 of the Company Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Company’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (l), the term “affiliates” shall not include any employees of the Company or any of its Subsidiaries, other than the directors and executive officers thereof;
(m) except as set forth in Section 5.1(m) of the Company Disclosure Letter, the Company shall not, nor shall it permit any of its Subsidiaries that is not wholly owned (directly to, make or indirectly) by Company change any material Tax election, change any method of Tax accounting, grant any extension of time to assess any Tax or settle any Tax claim, amend any Return in their capacity as suchany material respect or settle or compromise any material Tax liability;
(en) the Company shall not, nor shall it permit any of its Subsidiaries to, take any action that would, or could reasonably be expected to, result in any of its representations and warranties set forth in this Agreement becoming untrue in a manner that would give rise to the failure of the closing condition set forth in Section 6.3(a);
(o) the Company shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, Subsidiaries (other than the MergerMerger or with respect to an inactive wholly-owned Subsidiary of the Company) or any agreement relating to an Acquisition Proposal, except as provided for in Section 5.3;
(fp) acquire the Company shall not, nor shall it permit any of its Subsidiaries to, (i) by purchaseincur or assume any long-term debt, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice and in no event exceeding $10,000,000 in the aggregate, incur or as permitted under Section 6.1(m);
assume any short-term indebtedness, (gii) sellmodify the terms of any indebtedness to increase the Company’s obligations with respect thereto (iii) assume, leaseguarantee, license, mortgage, sell and leaseback endorse or otherwise encumber become liable or dispose responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of its properties or other assets or any interests thereinthe Company), except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
practice and in no event exceeding $250,000 in the aggregate, (hiv) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, Person (other than to the Company and its wholly owned SubsidiariesSubsidiaries of the Company, and other than or by such Subsidiaries to the Company, or customary loans or advances to employees in respect of travel accordance with past practice and in no event exceeding $250,000) in the aggregate, or other related expenses (v) enter into any material commitment or transaction, except in the ordinary course of business consistent with past practice;
(iq) except as required by Law or except as required by the terms Company shall not, nor shall it permit any of a Benefit Plan in effect as of the date of this Agreementits Subsidiaries to, (i) enter into an employment agreement with any Person agreement, understanding or grant to any Person any right to severancecommitment that materially restrains, retention, change in control limits or termination compensation or benefits, or increase any Personimpedes the Company’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries’ ability to compete with or conduct any business or line of business, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to including geographic limitations on the Company’s President or any of its Subsidiaries’ activities (other than confidentiality agreements and Chief Operating Officer, area of mutual interest agreements entered into in the ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000business);
(jr) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their termsas contemplated by this Agreement, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practiceshall not, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or nor shall it permit any of its Subsidiaries is a party to, modify or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce amend in any material respect, or consent to any matter with respect to which consent is required underterminate, any material confidentiality or similar contract to which the Company it is a party or waive in any material respect or assign any of its Subsidiaries is a party;
(o) waive the benefits of, material rights or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnershipclaims;
(s) engage the Company shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in any transactionsfull force and effect the existing insurance policies covering the Company or its Subsidiaries or their respective properties, agreementsassets and businesses or comparable replacement policies, arrangements or understandings with any Affiliate or other Person that would be required except to the extent such policies cease to be disclosed under Item 404 of Regulation S-K under the Securities Act;available on commercially reasonable terms; and
(t) otherwise manage the Company shall not, nor shall it permit any of its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter intoSubsidiaries to, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any an agreement, contract, agreement, commitment or arrangement to do any of the foregoing. Notwithstanding anything in this Section 5.1 to the contrary, the Company shall not, nor shall it permit any of its Subsidiaries to, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement.
Appears in 2 contracts
Samples: Merger Agreement (Petrohawk Energy Corp), Merger Agreement (Mission Resources Corp)
Interim Operations of the Company. Except (a) During the period from the Agreement Date to the Share Acceptance Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 8.1 (except (i) as may be required by Law, (ii) as consented to in writing by Parent (which with the prior written consent shall not be unreasonably withheld, delayed or conditioned)of the Parent, (iii) as contemplated or permitted by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule), from the date business of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business shall be conducted only in the usual, regular ordinary and ordinary usual course of business in all material respects consistent with past practice practice, and, to the extent consistent therewith, the Company and its Subsidiaries shall use all reasonable best efforts to (1) preserve intact its their current business organization, keep available the services of its current officers and employees and preserve its present (2) maintain their relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities suppliers and others having business dealings with them them, (3) notify and consult with Parent promptly (A) after receipt of any material communication from any Governmental Entity or inspections of any manufacturing or clinical trial site and before giving any material submission to a Governmental Entity and (B) prior to making any material change to a study protocol, adding new trials, making any material change to a manufacturing plan or process, or making a material change to the end development timeline for any of its product candidates or programs, (4) preserve intact and keep available the services of present employees of the Company and its Subsidiaries, (5) keep in effect casualty, product liability, workers’ compensation and other insurance policies in coverage amounts substantially similar to those in effect at the date of this Agreement, and (6) preserve and protect the Intellectual Property owned by the Company and its Subsidiaries; provided, however, that no action by the Company or any of its goodwill and ongoing business Subsidiaries with respect to matters addressed specifically by any provision of this Section 6.1(a) shall be unimpaired at the Effective Timedeemed a breach of this sentence unless such action would constitute a breach of such specific provision. In addition, and without Without limiting the generality of the foregoing, except (wA) as may be required by Law, (xB) as consented to in writing by Parent (with the prior written consent of the Parent, which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement conditioned or (zC) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement prior to the Effective Timetime when, pursuant to Section 1.3(a), the Parent’s designees for director constitute the majority of the Company Board, the Company shall not, and shall not permit any of its Subsidiaries to, do any of the following:
(ai) except for Shares to be issued amend its certificate of incorporation or delivered pursuant to the exercise of Options bylaws (or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, equivalent organizational documents);
(ii) issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (ix) any shares of its capital stock of any class or any other ownership interestinterest of the Company or any of its Subsidiaries, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interestinterest of the Company or any of its Subsidiaries, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest of the Company or any of its Subsidiaries or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights)of the Company or any of its Subsidiaries, or (iiy) any other securities of the Company and or any of its Subsidiaries in respect of, in lieu of, or in substitution for, Shares Company Common Stock outstanding on the date hereofAgreement Date, except for (1) Company Common Stock to be issued or delivered (A) pursuant to the Company Equity Plans, (B) in connection with acquisitions consistent with past practice or (C) pursuant to the Chestnut Merger Agreement, (2) the issuance, grant or delivery of up to an aggregate amount of 750,000 Company Stock Options, Company Restricted Stock and Company RSUs to certain of its employees, directors and consultants or (3) the exercise of the Top-Up Option;
(biii) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding SharesCompany Common Stock, Options, Warrants other than (x) from holders of Company Stock Options in full or other securities partial payment of the Company exercise price, or any of its Subsidiaries; provided, however, that the Company may (iy) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender withholding of Shares Taxes payable by holders any holder of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Company Stock Options, Company Restricted Stock Awardsor Company RSUs upon the exercise, settlement or vesting thereof, in each case to the extent required or permitted under the terms of such Company Stock Options, Company Restricted Stock or Company RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase applicable Company Equity Plan;
(div) split, combine, subdivide or reclassify any Shares Company Common Stock or declare, set aside for payment or pay any dividend or other distribution in respect of any Shares Company Common Stock or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such; provided that this Section 6.1(a)(iv) shall not apply to dividends or distributions declared, set aside for payment or paid by wholly owned Subsidiaries of the Company to the Company or any other wholly owned Subsidiary of the Company;
(ev) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the MergerTransactions;
(fvi) acquire acquire, sell, lease, dispose of, pledge or encumber any assets, other than (ix) by purchaseacquisitions in existing or related lines of business of the Company or any of its Subsidiaries as to which the aggregate consideration for all such acquisitions does not exceed $2,000,000, merger (y) sales, leases, dispositions, pledges or otherwiseencumbrances of assets with an aggregate fair market value of less than $2,000,000, any business or equity interest of any Person or (iiz) any asset sales or assets, except for purchases transfers of components, raw materials or supplies inventory in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m)business;
(gvii) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or (x) other assets or any interests therein, except for sales of inventory and used equipment than in the ordinary course of business consistent with past practice;
(h) , incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement Date or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than (A) to the Company and its or any wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee Subsidiary of the Company or any of its Subsidiaries, any increase in compensation other than, with respect (B) strategic investments as to Persons who are which the aggregate consideration for all such investments does not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreementexceed $2,000,000, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (iy) pay, discharge, settle discharge or satisfy any material claims, liabilities, liabilities or obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement discharge or satisfaction of (1) in the ordinary course of business and consistent with past practice, liabilities reflected or reserved against in the Company’s consolidated balance sheet as of the Balance Sheet Date, (2) liabilities incurred in the ordinary course of business since the Balance Sheet Date, or (3) all amounts under the Loan Agreement, in accordance with Section 6.8(b)(iii);
(viii) change the compensation payable to any officer, director, employee, agent or consultant, or enter into any employment, severance, retention or other agreement or arrangement with any officer, director, employee, agent or consultant of the Company or any of its Subsidiaries, or adopt, or increase the benefits (including fringe benefits) under, any employee benefit plan or otherwise, except (A), in each case, as required by Law or in accordance with existing agreements provided to Parent and disclosed in the Company Disclosure Schedule and (B), in the case of compensation for employees, agents or consultants who are not officers or directors, in the ordinary course of business consistent with past practice unless the total compensation payable to such employee, agent or consultant (including base, bonus opportunity at target, equity, sign-on bonus and relocation) equals or exceeds two hundred thousand dollars ($200,000) US; or make any loans to any of its directors, officers or employees, agents or consultants, or make any change in accordance with their termsits existing borrowing or lending arrangements for or on behalf of any such persons pursuant to an employee benefit plan or otherwise;
(ix) except as may be contemplated by this Agreement, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practicepractices or to the extent required or advisable to comply with applicable Law, terminate or materially amend any Benefit Plans;
(iix) cancel change in any indebtednessmaterial respect any of the accounting methods used by the Company unless required by GAAP or applicable Law;
(xi) enter into a Material Contract or amend, (iii) waive terminate or waive, release or assign any material rights or claims with respect to any Material Contract in any material respect;
(xii) settle (x) any suit, action, claim, proceeding or rights of substantial valueinvestigation that is disclosed in the Company SEC Reports filed prior to the Agreement Date or (y) any other suit, action, claim, proceeding or investigation;
(ivxiii) waive any benefits ofmake, revise, or agree amend any material Tax election or settle or compromise any material federal, state, local, or foreign Tax liability, change any material Tax accounting period, change any material method of Tax accounting, enter into any closing agreement relating to modify any material Tax, file any amended Tax Return, file any Tax Return in a manner inconsistent with past practice, surrender any respect, or, subject right to the terms hereof, fail to enforceclaim a material Tax refund, or consent to any matter with respect to which consent is required under, any standstill waiver or similar contract to which extension of the Company or any statute of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by limitations applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, Tax claim or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiaryassessment; or
(wxiv) enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
(b) The Company shall promptly advise the Parent orally and in writing of any change or event that has had or would reasonably be expected to have a Company Material Adverse Effect.
Appears in 2 contracts
Samples: Merger Agreement (COV Delaware Corp), Merger Agreement (Covidien PLC)
Interim Operations of the Company. (a) Except (i) as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth described in Section 6.1 5.1(a) of the Company Disclosure ScheduleLetter, or as otherwise expressly required or permitted by this Agreement, each of Seller and the Company covenant and agree as to itself and its Subsidiaries that, during the period from the date of this Agreement to Execution Date until the Effective Time the Company shallClosing, unless Buyer shall otherwise approve in writing, and except as required by applicable Laws, the Business shall cause each of its Subsidiaries to, conduct its business only be conducted in the usual, regular and ordinary course consistent with past practice and, to the extent consistent therewith, each of the Seller (solely as it relates to the Business), the Company and their Affiliates shall use all their respective commercially reasonable efforts to preserve their business organizations intact its current business organizationand maintain the Business’ existing relations with Governmental Entities, keep available the services of its current officers grant providers, suppliers, creditors, lessors and employees and preserve its present relationships other parties with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others having whom the Business has a material business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without relationship.
(b) Without limiting the generality of of, and in furtherance of, the foregoing, from the Execution Date until the Closing, except (w) as required by Law, (x) as consented to in writing otherwise expressly required by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth described in Section 6.1 5.1(a) of the Company Disclosure ScheduleLetter or (y) as Buyer may approve in writing, from the date of this Agreement to the Effective Time, Seller and the Company shall not, and shall not permit any of its their Subsidiaries to, do any of the following:
(a) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) adopt any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries change in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide Organizational Documents or reclassify any Shares change in the Organizational Documents of Seller or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly could prevent, materially delay or indirectly) by Company in their capacity as suchmaterially impair the consummation of the Transactions;
(eii) adopt sell, convey, transfer, pledge or otherwise encumber or dispose of any of the Interests, except pursuant to this Agreement;
(iii) deposit any Interests held into a plan voting trust or enter into a voting agreement or arrangement with respect to any such Interests or grant any proxy with respect thereto;
(iv) create any Subsidiaries of complete the Company;
(v) enter into any agreements or partial liquidationarrangements imposing material changes or restrictions on the Program Assets or the Business;
(vi) obligate the Company to acquire (A) assets from any other Person or (B) any business or Person, dissolution, merger, by merger or consolidation, restructuringpurchase of substantially all assets or equity interests or by any other manner, recapitalization in each case, in any transaction or series of related transactions;
(vii) other reorganization of the Company than pursuant to Contracts to which Seller or any of its SubsidiariesSubsidiaries are a party that are in effect as of the Execution Date, other than the Merger;
(f) acquire (i) by purchasetransfer, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise encumber or dispose of any of its properties the Program Assets;
(viii) issue, sell, pledge, dispose of, grant, transfer, encumber or other assets authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of any interests therein, Equity Interests of Seller or the Company;
(ix) except for sales the grant of inventory and used equipment non-exclusive licenses in the ordinary course of business consistent with past practiceand the statutory expiration of Intellectual Property Rights, sell, assign -58- or transfer, license, subject to a Lien (other than a Permitted Lien), abandon, allow to lapse or otherwise dispose of any Company IP;
(hx) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of the Interests;
(xi) create or incur any Lien material to the Business;
(xii) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement Indebtedness or guarantee any such indebtedness Indebtedness of another Person, or make issue or sell any loans, advances debt securities or capital contributions warrants or other rights to acquire any debt security of Seller or any of its Subsidiaries; provided that any Indebtedness that is extinguished in full prior to, or investments inconcurrently with, the Closing shall not be deemed to be a breach of this provision;
(A) except as set forth in the capital budget set forth in Section 5.1(b)(xiii) of the Company Disclosure Letter, make or authorize any other Personcapital expenditures in excess of [**] at the Company or otherwise related to the Business in the aggregate during any 12-month period; (B) fail to make any capital expenditures related to the Business described in the capital budget set forth in Section 5.1(b)(xiii); or (C) fail to use good faith efforts to make any additional capital expenditure otherwise required to operate the Business in substantially the same manner as presently conducted;
(xiv) enter into any Contract that would have been a Material Contract had it been entered into prior to the Execution Date;
(xv) amend, modify, fail to renew or terminate any Material Contract;
(xvi) other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business business, consistent with past practice, amend, modify, cancel or waive any debts or claims held by it or waive any material rights related to the Business;
(ixvii) make any changes with respect to its accounting policies or procedures, except as required by changes in Law or GAAP;
(xviii) settle any Action at the Company or otherwise related to the Business or the Program Assets or any other obligation or liability of Seller or any of its Subsidiaries related to the Business or the Program Assets;
(xix) (A) make, change or revoke any material Tax election, (B) change any material method of Tax accounting, (C) adopt or change any material Taxable year or period, (D) enter into any material closing agreement with respect to Taxes, (E) file any material amended Tax Return, (F) settle or compromise any material Tax claim or assessment or (G) surrender any material claim for a refund of Taxes;
(xx) except as required by Law or except as required by pursuant to the terms of a any Benefit Plan in effect as of the date of this Agreement, (iAgreement and set forth in Section 5.1(b)(xx) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company Disclosure Letter, or any of its Subsidiariesas otherwise required by applicable Law, any (A) increase in any manner the compensation or consulting fees, bonus, pension, welfare, fringe or other thanbenefits, with respect to Persons who are not directors severance or officers and do not report directly to the Company’s President and Chief Operating Officertermination pay of any Employee, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure for the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis annual bonuses for completed periods based on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements actual performance in the ordinary course of business consistent with past practice, (iiB) cancel cause or permit the Company to become a party to, establish, adopt, amend, commence participation in or terminate any indebtednessBenefit Plan or any arrangement that would have been a Benefit Plan had it been entered into prior to this Agreement, (iiiC) waive cause or assign permit the Company to grant any claims new awards, or rights amend or modify the terms of substantial valueany outstanding awards, under any Benefit Plan, (ivD) waive forgive any benefits of, loans or agree to modify in issue any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or loans (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except other than routine travel advances issued in the ordinary course of business consistent with past practicebusiness) to any Employee, (E) cause or permit the Company to hire any employee or engage any independent contractor (who is a natural person) or (iiF) terminate the employment of any Employee other than for cause;
(xxi) become a party to, establish, adopt or enter into any collective bargaining or other labor union Contract;
(xxii) fail to distributepay or satisfy when due any material account payable or other material liability related to the Business or the Program Assets, license or co-promote other than any product of the Company or any of its Subsidiaries (including products under development and products licensed such liability that is being contested in good faith by the Company or any of its Subsidiaries);
(rxxiii) enter into fail to keep current and in full force and effect, or to apply for or renew, any material joint venture permit, approval, authorization, consent, license, registration or partnershipcertificate issued by any Governmental Entity related to the Business or the Program Assets;
(sxxiv) engage in subject the Company or any transactionsof its Subsidiaries to any bankruptcy, agreementsreceivership, arrangements insolvency or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Actsimilar proceeding;
(txxv) otherwise manage its working capital in a manner other than take any actions or omit to take any actions that would, individually or in the ordinary course aggregate, reasonably be expected to result in any of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination conditions set forth in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any SubsidiaryArticle VI not being satisfied; or
(wxxvi) enter into any contractagree, agreement, commitment authorize or arrangement commit to do any of the foregoing.
(c) Nothing contained in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct the Company or the operations of the Business prior to the Closing Date. Prior to the Closing Date, Seller shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over the operations of the Company and the Business.
Appears in 2 contracts
Samples: Membership Interest Purchase Agreement (Biohaven Research Ltd.), Membership Interest Purchase Agreement (Biohaven Pharmaceutical Holding Co Ltd.)
Interim Operations of the Company. Except The Company covenants and agrees as to itself and its Subsidiaries that, after this date and prior to the Effective Time (i) unless Parent shall otherwise approve in writing, or unless as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) otherwise expressly contemplated by this Agreement or expressly disclosed in the Company Disclosure Letter):
(ivi) as set forth in Section 6.1 the business of the Company Disclosure Scheduleand its Subsidiaries shall be conducted in all material respects in the ordinary and usual course and, from the date of this Agreement to the Effective Time extent consistent therewith, each of the Company shall, and shall cause each of its Subsidiaries to, conduct shall use its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable commercial efforts to preserve its business organization intact its current business organizationin all material respects, keep available the services of its current officers and employees as a group (subject to changes in the ordinary course) and preserve maintain its present relationships existing relations and goodwill in all material respects with customers, suppliers, licensors, licenseesregulators, distributors, Governmental Entities creditors, lessors, and others having business dealings with them it;
(ii) the Company shall not issue, deliver, grant or sell any additional Company Common Shares or any Company Options (other than the issuance, delivery, grant or sale of Company Common Shares or Company Options pursuant to the end exercise or conversion of Company Options outstanding as of this date);
(iii) the Company shall not (A) amend its Articles of Incorporation or bylaws, amend or take any action under the Rights Agreement, or adopt any other shareholders rights plan or enter into any agreement with any of its stockholders in their capacity as such; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property in respect of any of its capital stock; or (D) repurchase, redeem or otherwise acquire or permit any of its Subsidiaries to purchase, redeem or otherwise acquire, any shares of its capital stock or any Company Options (it being understood that its goodwill and ongoing business this provision shall be unimpaired at not prohibit the Effective Time. In additionexercise (cashless or otherwise) of Company Options);
(iv) the Company shall not, and without limiting shall not cause or permit any of its Subsidiaries to, take any action that would prevent the generality Merger from qualifying as a "reorganization" within the meaning of Section 368 of the foregoingCode or take any action that it knows would cause any of its representations and warranties in this Agreement to become inaccurate in any material respect;
(v) except as expressly permitted by this Agreement, and except (w) as required by Lawapplicable law or pursuant to contractual obligations in effect on this date; the Company shall not, and shall not permit its Subsidiaries to, (A) enter into, adopt or amend (except for renewals on substantially identical terms) any agreement or arrangement relating to severance, (B) enter into, adopt or amend (except for renewals on substantially identical terms) any employee benefit plan or employment or consulting agreement (including, without limitation, the Company Benefit Plans referred to in Section 3.10); or (C) grant any stock options or other equity related awards;
(vi) except for borrowings under lines of credit existing as of this date in the ordinary course of business consistent with past practice, neither the Company nor any of its Subsidiaries shall issue, incur or amend the terms of any indebtedness for borrowed money or guarantee any such indebtedness (other than indebtedness of the Company or any wholly-owned Subsidiary);
(vii) neither the Company nor any of its Subsidiaries shall make any capital expenditures in an aggregate amount in excess of the aggregate amount reflected in the capital expenditure budget, a copy of which is attached to the Company Disclosure Letter;
(viii) other than in the ordinary course of business consistent with past practice, neither the Company nor any of its Subsidiaries shall transfer, lease, license, sell, mortgage, pledge, encumber or otherwise dispose of any of its or its Subsidiaries' property or assets (including capital stock of any of its Subsidiaries) material to the Company and its Subsidiaries taken as a whole, except pursuant to contracts existing as of this date (the terms of which have been previously disclosed to Parent);
(ix) neither the Company nor any of its Subsidiaries shall issue, deliver, sell or encumber shares of any class of its capital stock or any securities convertible into, or any rights, warrants or options to acquire, any such shares, except any such shares issued pursuant to options and other awards outstanding on this date under Company Benefit Plans;
(x) as consented neither the Company nor any of its Subsidiaries shall acquire any business, including any facilities, whether by merger, consolidation, purchase of property or assets or otherwise, except to the extent provided for in writing by Parent the capital expenditure budget attached to the Company Disclosure Letter;
(which consent xi) The Company shall not be unreasonably withheldchange its accounting policies, delayed practices or conditioned), methods except as required by GAAP or by the rules and regulations of the SEC;
(yxii) expressly permitted other than pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective TimeAgreement, the Company shall not, and shall not permit any of its Subsidiaries to, do take any of the following:
(a) except for action to cause Company Common Shares to cease to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding listed on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereofNasdaq National Market System;
(bxiii) redeemThe Company shall not, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of shall not permit any of its Subsidiaries that is not wholly owned to, enter into any Company Contract described in clauses (directly c) and (d) of Section 3.18, or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete enter into or partial liquidationamend any distribution, dissolutionsupply, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by inventory purchase, merger franchise, license, sales agency or otherwise, any business or equity interest advertising contract outside of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice in scope and amount but in no event for a term (or as permitted under Section 6.1(m)an extension of a term) beyond the date that is one year after the Closing Date;
(gxiv) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the The Company and its wholly owned Subsidiariesshall not, and other than to employees in respect of travel shall not cause or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or permit any of its Subsidiaries is a party or (v) waive any material benefits ofto, or agree to modify in any material respect, change or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amendmake any material Tax election, renew, modify settle any audit or consent to the termination of (other than a termination in accordance with its terms) file any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiaryamended Tax Returns; or
(wxv) The Company shall not enter into into, or permit any contractof its Subsidiaries to enter into, agreement, commitment any commitments or arrangement agreements to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Minnesota Mining & Manufacturing Co), Merger Agreement (Robinson Nugent Inc)
Interim Operations of the Company. Except The Company covenants and agrees as to itself and its Subsidiaries that during the period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (iw) as required by Lawset forth in Section 5.1 of the Company Disclosure Letter, (iix) as expressly contemplated or permitted by this Agreement, including without limitation Section 5.3 of this Agreement or (y) consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule, from after the date of this Agreement and prior to the Effective Time Time:
(a) the business of the Company shalland its Subsidiaries shall be conducted only in, and shall cause each of the Company and its Subsidiaries toshall not take any action except in, conduct its business only in the usual, regular and ordinary course of business consistent with past practice practice, and the Company shall use all its reasonable best efforts to preserve intact its current business organization, organization and goodwill and the business organization and goodwill of its Subsidiaries and to keep available the services of its their current officers and key employees and preserve its present and maintain existing relationships with customers, suppliers, licensorsofficers, licensees, distributors, Governmental Entities employees and others having business dealings creditors and other persons with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, or any Subsidiary has significant business relationships;
(b) the Company shall not, and nor shall not it permit any of its Subsidiaries to, do (i) enter into any new line of the following:
business, or (aii) except for Shares incur or commit to be issued any capital expenditures, or delivered pursuant any obligations or liabilities in connection with any capital expenditures, in excess of $2 million per obligation other than capital expenditures and obligations or liabilities incurred or committed to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on prior to the date hereof or incurred or committed to as may be reasonably required to conduct emergency operations on any well, pipeline or other facility;
(c) the issuance Company shall deliver promptly to Parent updates on the operations of the Company at least monthly;
(d) the Company shall not, nor shall it permit any of its Subsidiaries to, amend its articles of incorporation or bylaws or similar organizational documents;
(e) the Company shall not, nor shall it permit any of its Subsidiaries to, declare, set aside, make or pay any dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to its capital stock or other equity interests, except for dividends by any Subsidiary to the Company or any other wholly-owned Subsidiary of the Company;
(f) the Company shall not, nor shall it permit any of its Subsidiaries to (i) adjust, split, combine, subdivide or reclassify any capital stock or other equity interests or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge class or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any such securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that other than issuances (1) of shares of Company Common Stock pursuant to the Company may Options outstanding on the date of this Agreement or (2) by a wholly owned Subsidiary of the Company of such Subsidiary’s capital stock or other equity interests to the Company or any other wholly owned Subsidiary of the Company, or (ii) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrantsthis Section 5.1(e);
(cg) the Company shall not, nor shall it permit any of its Subsidiaries to, (i) grant any Options, Restricted Stock Awards, RSUs increase in the compensation (including base salary and target bonus) or other equity-based awards benefits payable to any officer or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders director of the Company or any of its Subsidiaries, (ii) except in connection with promotions on a basis consistent with past practices, grant any increase in the compensation or benefits payable to any employee who is not an officer of the Company or any of its Subsidiaries that or to any director of the Company or any of its Subsidiaries, (iii) except as required to comply with applicable Law or any agreement in existence on the date of this Agreement or as expressly provided in this Agreement, adopt, enter into, amend or otherwise increase, or accelerate the payment or vesting of the amounts, benefits or rights payable or accrued or to become payable or accrued under any collective bargaining, bonus, profit sharing, thrift, incentive compensation, deferred compensation, severance, termination, change in control, retention, hospitalization or other medical, life, disability, insurance or other welfare, profit sharing, stock option, stock appreciation right, restricted stock or other equity based, pension, retirement or other employee compensation or benefit plan, program agreement or arrangement or (iv) enter into or amend any employment or consulting agreement or, except in accordance with existing contracts or agreements, grant any severance or termination pay to any officer, director or employee of the Company or any of its Subsidiaries (except for nonsubstantive changes made for the purposes of complying with Section 409A of the Code) or otherwise approved in advance in writing by Parent;
(h) the Company shall not, nor shall it permit any of its Subsidiaries to, change its methods of accounting in effect at December 31, 2007, except changes in accordance with GAAP and applicable Law as concurred with by the Company’s independent auditors;
(i) the Company shall not, nor shall it permit any of its Subsidiaries to, acquire or agree to acquire (including, without limitation, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner) any Person, any other business organization, division or business of such Person or, other than in the ordinary course of business consistent with past practice, any assets;
(j) the Company shall not, nor shall it permit any of its Subsidiaries to, sell, lease, farmout, exchange, transfer, assign or otherwise dispose of, or agree or commit to sell, lease, farmout, exchange, transfer, assign, or otherwise dispose of, any of the Company Assets, except for the sale of Hydrocarbons in the ordinary course of business consistent with past practice;
(k) the Company shall not, nor shall it permit any of its Subsidiaries to, mortgage, pledge, hypothecate, grant any security interest in, or otherwise subject to any other Lien other than Permitted Liens, any of the Company Assets;
(l) except for Taxes, to which Section 5.1(n) shall apply, the Company shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, pay, discharge or satisfy any Claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) except for the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities or obligations reflected or reserved against in the Company Balance Sheet or liabilities or obligations in accordance with the terms of the Company Material Contracts and any contract entered into in the ordinary course of business and consistent with past practice to which the Company or any of its Subsidiaries is a party as in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not wholly owned in violation of this Agreement, in each case to which the Company or any of its Subsidiaries is a party, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of Litigation covered by insurance or where the amount paid or to be paid does not exceed $1 million for any individual Claim or series of related Claims, or $1 million in the aggregate for all Claims;
(m) the Company shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement insofar as such agreements are disclosed in Section 3.19 of the Company Disclosure Letter), or enter into any agreement, arrangement, or understanding, directly or indirectly) by , with any of the Company’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (m), the term “affiliates” shall not include any employees of the Company in their capacity as suchor any of its Subsidiaries, other than the directors and executive officers thereof and employees who share the same household with such directors and executive officers;
(en) the Company shall not, nor shall it permit any of its Subsidiaries to, make any change to any material Tax method of accounting, make or change any material Tax election, authorize or undertake any indemnities for Taxes, extend any period for assessment of any Tax, file any request for ruling or determination, amend any material Return (including by way of a claim for refund) or settle or compromise any material Tax liability, except where such action would not have a material effect on the Tax position of the Company and its Subsidiaries, taken as a whole;
(o) the Company shall not, nor shall it permit any of its Subsidiaries to, take any action that would reasonably be expected to (i) result in any of the conditions to the Merger set forth in Article VI not being satisfied, (ii) result in a Material Adverse Effect on the Company or (iii) materially impair or delay consummation of the Merger or the other transactions contemplated hereby;
(p) the Company shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, Subsidiaries (other than the Merger) or any agreement relating to an Acquisition Proposal, except for Acceptable Confidentiality Agreements and except as permitted in Section 5.1(i);
(fq) acquire the Company shall not, nor shall it permit any of its Subsidiaries to, (i) by purchaseincur or assume any indebtedness except indebtedness incurred, merger or otherwiseand letters of credit issued, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies under the Company Credit Agreement in the ordinary course of business consistent with past practice business, (ii) modify any material indebtedness or as permitted under Section 6.1(m);
other liability to increase the Company’s (g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties Subsidiaries’) obligations with respect thereto, (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
Person (h) incur any indebtedness for borrowed money in addition to that incurred as other than a wholly owned Subsidiary of the date of this Agreement or guarantee any such indebtedness or Company), (iv) make any loans, advances or capital contributions to, or investments in, any other Person, Person (other than to the Company and its wholly owned SubsidiariesSubsidiaries of the Company, and other than or by such Subsidiaries to employees in respect of travel the Company), or other related expenses (v) enter into any contract, commitment or transaction, except in the ordinary course of business and consistent with past practicepractice and in no event exceeding $2 million in the aggregate, except as permitted under Section 5.1(b);
(ir) except as required by Law or except as required by the terms Company shall not, nor shall it permit any of a Benefit Plan in effect as of the date of this Agreementits Subsidiaries to, (i) enter into an employment agreement with any Person agreement, understanding or grant to any Person any right to severancecommitment that materially restrains, retention, change in control limits or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee impedes the ability of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under or would limit the charter or organizational documents of any Subsidiary ability of the CompanySurviving Entity or any affiliate of the Surviving Entity after the Effective Time, to compete in or conduct any line of business or compete with any Person or in any geographic area or during any period of time;
(ms) authorize or make the Company shall not, nor shall it permit any commitment with respect of its Subsidiaries to, enter into any capital expenditure material joint venture, partnership or other expenditures similar arrangement or materially amend or modify in an adverse manner the terms of (including in respect of research and development)or waive any material rights under) any existing material joint venture, partnership or other similar arrangement (other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000any such action between its wholly owned Subsidiaries);
(nt) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess shall not, nor shall it permit any of such reserves) its Subsidiaries to, terminate any Company Material Contract to which it is a party or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims of its rights or rights of substantial value, (iv) waive Claims under any benefits of, or agree to modify Company Material Contract in any respect, or, subject a manner that is materially adverse to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, modify or (ii) to distribute, license or co-promote amend in any product of the material respect any Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries)Material Contract;
(ru) the Company shall not make, enter into or assume any Derivative Transaction or enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required agreement to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner sell Hydrocarbons other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunderat market pricing;
(v) create modify any Subsidiary; orexisting agreement or enter into any new agreement with the Company’s financial advisors or similar consultants, including without limitation, Rxxxxxx Jxxxx & Associates, Inc. and Scotia Waterous (USA), Inc.;
(w) the Company shall not, nor shall it permit any of its Subsidiaries to, publicly announce an intention, or enter into any an agreement, contract, agreement, commitment or arrangement arrangement, to do any of the foregoing; and
(x) the Company shall, and shall cause its Subsidiaries to, at their sole cost and expense, maintain all insurance policies and replacement insurance policies having substantially similar coverages as the insurance policies in Section 3.17 of the Company Disclosure Letter.
Appears in 2 contracts
Samples: Merger Agreement (Stone Energy Corp), Merger Agreement (Bois D Arc Energy, Inc.)
Interim Operations of the Company. Except The Company covenants and agrees as to itself and its Subsidiaries that during the period from the date of this Agreement until the Merger I Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (iw) as set forth in Section 5.1 of the Company Disclosure Letter, (x) expressly contemplated or permitted by this Agreement, including without limitation Section 5.3 of this Agreement, (y) required by applicable Law, or (iiz) as consented to in writing by Parent after the date of this Agreement and prior to the Merger I Effective Time (which consent shall not be unreasonably withheld, delayed or conditioned), ):
(iiia) contemplated by this Agreement or (iv) as set forth in Section 6.1 the business of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business shall be conducted only in the usual, regular and ordinary course consistent with past practice practices, and the Company shall use all reasonable best efforts to preserve intact its current business organization, organization and goodwill and the business organization and goodwill of its Subsidiaries and to keep available the services of its their current officers and key employees and preserve its present relationships and maintain existing relations with customers, suppliers, licensorsofficers, licensees, distributors, Governmental Entities employees and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except creditors;
(wb) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and nor shall not it permit any of its Subsidiaries to, do (i) enter into any new line of business, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures other than capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than 110% of, and during the same time period set forth in, the 2007 monthly operating plan previously made available to Parent or as may be reasonably required to conduct emergency operations on any well, pipeline or other facility;
(c) the Company shall not, nor shall it permit any of the following:its Subsidiaries to, amend its certificate of incorporation or bylaws or similar organizational documents;
(ad) except for Shares the Company shall not, nor shall it permit any of its Subsidiaries (other than direct or indirect wholly owned Subsidiaries) to, declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to be issued its capital stock or delivered pursuant other equity interests; and the Company shall not, nor shall it permit any of its Subsidiaries to the exercise (i) adjust, split, combine or reclassify any capital stock or other equity interests or issue, grant, sell, transfer, pledge, dispose of Options or Warrantsencumber any additional shares of, the settlement or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awardsany kind to acquire, each outstanding on the date hereof or the issuance of the any shares of capital stock of any class or of any other such securities or agreements of the Company or any of its Subsidiaries, other than issuances (A) of shares of Company Common Stock pursuant to the Company Options or Company Awards outstanding on the date of this Agreement, (B) of Company Options in an amount consistent with past practice to non-officer employees hired after the date hereof in the ordinary course of business consistent with past practice, (C) by a wholly owned Subsidiary of the Company of such Subsidiary’s capital stock or other equity interests to the Company or any other wholly owned Subsidiary of the Company, issueor (D) pursuant to the Company Rights or the Company Rights Agreement in effect on the date of this Agreement, deliveror (ii) redeem, sell, dispose of, pledge purchase or otherwise encumber, acquire directly or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) indirectly any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, securities or any rights, warrants, options, calls, commitments or any other agreements of the type described in clause (i) of this Section 5.1(d), except as (1) required by the terms of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution forother equity interests in, Shares the Company or any of its Subsidiaries outstanding on the date hereofof this Agreement, (2)contemplated by any Company Benefit Plan existing on the date of this Agreement and included in Section 3.10(a)(1) of the Company Disclosure Letter or (3) contemplated by any employment agreement of the Company existing on the date of this Agreement and included in Section 3.10(a)(2) of the Company Disclosure Letter;
(be) redeemthe Company shall not, purchase nor shall it permit any of its Subsidiaries to, (i) grant any increase in the compensation (including base salary and target bonus) or otherwise acquire, or propose benefits payable to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities officer of the Company or any of its Subsidiaries; (ii) except in connection with promotions on a basis consistent with past practices, grant any increase in the compensation or benefits payable to any non-officer of the Company or any of its Subsidiaries; except that notwithstanding (i) and (ii) above, the Company may pay incentive compensation bonuses for 2006; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations shall not pay officers and employees bonuses in the aggregate amount in excess of 125% of the amount set forth in Section 5.1 of the Company Disclosure Letter and, with respect to Optionsofficers, Restricted Stock Awards and RSUs granted prior to in no event in an amount greater than the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares calculated amount expressly provided for in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
Annual Incentive Compensation Plan as approved by the Company’s Compensation and Management Development Committee (ddetermined without regard to any discretion of such committee to increase any bonus pools under such plan) split(but, combinewith respect to each officer, subdivide in no event greater than 125% of such officer’s target bonus for 2006), (iii) except as required to comply with applicable Law or reclassify any Shares agreement in existence on the date of this Agreement or declareas expressly provided in this Agreement, set aside for adopt, enter into, amend or otherwise increase, or accelerate the payment or vesting of the amounts, benefits or rights payable or accrued or to become payable or accrued under any bonus, incentive compensation, deferred compensation, severance, termination, change in control, retention, hospitalization or other medical, life, disability, insurance or other welfare, profit sharing, stock option, stock appreciation right, restricted stock or other equity based, pension, retirement or other employee compensation or benefit plan, program agreement or arrangement or (iv) enter into or amend any employment agreement or, except in accordance with existing contracts or agreements, grant any severance or termination pay to any dividend in respect of any Shares officer, director or otherwise make any payments or distributions to stockholders employee of the Company or of any of its Subsidiaries other than amendments in the form of Exhibit B hereto (except for nonsubstantive changes to conform to the underlying agreement) or made for purposes of complying with Section 409A of the Code;
(f) the Company shall not, nor shall it permit any of its Subsidiaries to, change its methods of accounting in effect at December 31, 2005, except changes in accordance with GAAP and applicable Law as concurred with by the Company’s independent auditors;
(g) the Company shall not, nor shall it permit any of its Subsidiaries to, acquire by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any Person or other business organization, division or business of such Person or other than in the ordinary course of business consistent with past practices or disclosed in Section 5.1(g) of the Company Disclosure Letter, any material assets; provided, however, that is the foregoing shall not be deemed to prohibit a merger involving only one of the Company’s wholly owned Subsidiaries, on the one hand, and another of the Company’s wholly owned Subsidiaries on the other hand or the acquisition of assets to the extent permitted by Section 5.1(b);
(h) the Company shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any of the Company Assets, except for (A) the sale of Hydrocarbons in the ordinary course of business consistent with past practice, (B) any sale, lease or disposition pursuant to agreements existing on the date of this Agreement and entered into in the ordinary course of business or disclosed in Section 5.1(h) of the Company Disclosure Letter, or (C) any sale, lease or disposition in an arms length transaction to an unrelated Person, for not less than fair market value and not in excess of $5.0 million individually or $10.0 million in the aggregate;
(i) the Company shall not, nor shall it permit any of its Subsidiaries to, mortgage, pledge, hypothecate, grant any security interest in, or otherwise subject to any other Lien other than Permitted Liens, any of the Company Assets;
(j) except for Taxes, to which Section 5.1(l) shall apply, the Company shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, pay, discharge or satisfy any material Claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any material payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of the Company Material Contracts as in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which the Company or any of its Subsidiaries is a party, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of Litigation covered by insurance or where the amount paid or to be paid does not exceed $5.0 million for any individual Claim or series of related Claims, or $10.0 million in the aggregate for all Claims;
(k) the Company shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement insofar as such agreements are disclosed in Section 3.19 of the Company Disclosure Letter), or enter into any agreement, arrangement, or understanding, directly or indirectly) by , with any of the Company’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (k), the term “affiliates” shall not include any employees of the Company in their capacity as suchor any of its Subsidiaries, other than the directors and executive officers thereof and employees who share the same household with such directors and executive officers;
(el) the Company shall not, nor shall it permit any of its Subsidiaries to, make any change to any material Tax method of accounting, make or change any material Tax election, authorize any indemnities for Taxes, extend any period for assessment of any Tax, file any request for ruling or determination, amend any material Return (including by way of a claim for refund) or settle or compromise any material Tax liability, except where such action would not have a material effect on the Tax position of the Company and its Subsidiaries taken as a whole;
(m) the Company shall not, nor shall it permit any of its Subsidiaries to, take any action that would reasonably be expected to (i) result in any of the conditions to the Merger set forth in Article VI not being satisfied, (ii) result in a Material Adverse Effect on the Company or (iii) materially impair or delay consummation of the Mergers or the other transactions contemplated hereby;
(n) the Company shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, Subsidiaries (other than the MergerMergers) or any agreement relating to an Acquisition Proposal, except for Acceptable Confidentiality Agreements and except as permitted in Section 5.1(g);
(fo) acquire the Company shall not, nor shall it permit any of its Subsidiaries to, (i) by purchaseincur or assume any indebtedness except indebtedness incurred and letters of credit issued under the Company Credit Agreement in the ordinary course of business, merger or otherwise, any business or equity interest of any Person or (ii) modify any asset material indebtedness or assetsother liability to increase the Company’s (or any of its Subsidiaries’) obligations with respect thereto, (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a wholly owned Subsidiary of the Company), except for purchases of components, raw materials or supplies in the ordinary course of business and consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in no event exceeding $1.0 million in the ordinary course of business consistent with past practice;
aggregate, (hiv) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, Person (other than to the Company and its wholly owned SubsidiariesSubsidiaries of the Company, and other than or by such Subsidiaries to the Company, or customary loans or advances to employees in respect consistent with past practice or short-term investments of travel or other related expenses cash in the ordinary course of business in accordance with the Company’s cash management procedures), or (v) enter into any material commitment or transaction, except in the ordinary course of business and consistent with past practice;
(i) practice and in no event exceeding $5.0 million in the aggregate, except as required by Law permitted under Section 5.1(b); provided, however, that the restrictions in this Section 5.1(o) shall not prohibit the incurrence of any long-term debt or except as required short-term indebtedness or other liability or obligation by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant Company that is owed to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee wholly owned Subsidiary of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as wholly owned Subsidiary of the date of this Agreement, take any action Company that is owed to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any another wholly owned Subsidiary of the Company;
(mp) authorize or make the Company shall not, nor shall it permit any commitment with respect of its Subsidiaries to, enter into any capital expenditure agreement, understanding or other expenditures (including in respect commitment that materially restrains, limits or impedes the ability of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any Subsidiary of its Subsidiaries is a party or (v) waive any material benefits ofthe Company, or agree would materially limit the ability of the Surviving Entity or any affiliate of the Surviving Entity after the Merger I Effective Time, to modify compete in or conduct any line of business or compete with any Person or in any material respect, or, subject to the terms hereof, fail to enforce in geographic area or during any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any period of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periodstime;
(q) sellthe Company shall not, transfer nor shall it permit any of its Subsidiaries to, enter into any material joint venture, partnership or license to any person other similar arrangement or materially amend or modify any rights in an adverse manner the terms of (i) to or waive any material rights under) any existing material joint venture, partnership or other similar arrangement (other than any such action between its wholly owned Subsidiaries);
(r) the Company Intellectual Property Rightsshall not, nor shall it permit any of its Subsidiaries to, terminate any Company Material Contract to which it is a party or waive or assign any of its rights or Claims under any Company Material Contract in a manner that is materially adverse to the Company or, except in the ordinary course of business consistent with past practice, modify or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into amend in any material joint venture or partnershiprespect any Company Material Contract;
(s) engage in the Company shall not make or assume any transactions, agreements, arrangements Derivative Transaction with a duration of more than 90 days or understandings with enter into any Affiliate or other Person that would be required agreement to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner sell Hydrocarbons other than in the ordinary course of business consistent at market pricing and in no event with past practice;a duration of more than 90 days; and
(ut) (i) enter intothe Company shall not, amendnor shall it permit any of its Subsidiaries to, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any an agreement, contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Houston Exploration Co), Merger Agreement (Forest Oil Corp)
Interim Operations of the Company. Except (i) as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (ivw) as set forth in Section 6.1 4.1 of the Company Disclosure ScheduleLetter, (x) as required by applicable Law or any Order, (y) as expressly contemplated or required by this Agreement (including the Separation Principles) or the other Transaction Documents, or (z) as the Company reasonably determines may be necessary to comply with any COVID-19 Measures, during the period from the date of this Agreement until the earlier of the Closing and the termination of this Agreement, unless the Investor otherwise consents in writing (such consent not to the Effective Time be unreasonably withheld, conditioned or delayed), (a) the Company shall, and shall cause each of its Subsidiaries the other SiC Entities to, conduct its business only in the usual, regular and ordinary course consistent with past practice and use all their commercially reasonable efforts to preserve intact its current operate the SiC Business in all material respects in the ordinary course of business organization, keep available the services of its current officers and employees to maintain and preserve in all material respects its present and their existing relationships with customers, suppliersemployees, licensors, licensees, distributors, Governmental Entities independent contractors and others other business relationships having material business dealings with them the SiC Entities (it being understood that no action by the Company or its Subsidiaries with respect to the end that its goodwill and ongoing business matters specifically addressed by any provision of Section 4.1(b) shall be unimpaired at the Effective Time. In additiondeemed a breach of this sentence unless such action would constitute a breach of such other provision), and without limiting the generality of the foregoing, except (wb) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and shall cause the SiC Entities not permit any of its Subsidiaries to, do any of the following:
(ai) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge sell or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for grant any shares of its capital stock or other equity or voting interests, or securities exercisable for, exchangeable for or convertible into such shares of capital stock or other equity or voting interests, other than (A) the sale and issuance of the Purchased Units in accordance with this Agreement, (B) the sale or issuance of up to 33,333,334 Common Units to Other Investors at a purchase price per Common Unit not less than the purchase price per Purchased Unit, (C) the issuance of securities of any SiC Entity (other than the Company) to the Company or to any other ownership interestSiC Entity or (D) the grant or issuance of equity or equity-based awards permitted pursuant to Section 4.1(b)(vii);
(ii) split, combine, subdivide, recapitalize or reclassify any shares of its capital stock or other equity or voting interests;
(iii) amend the Company’s Organizational Documents in a manner that would materially and adversely affect the Investor;
(iv) declare, pay or set aside any dividend or make any distribution with respect to any shares of capital stock or other equity or voting interests or redeem, purchase or otherwise acquire any of its outstanding shares of capital stock or other equity or voting interests, or any rights, warrants, options, calls, commitments or any other agreements of any character options to purchase or acquire any shares of its capital stock or other equity or voting interests, other than any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights dividends and stock appreciation rights), or (ii) any other securities distributions paid by wholly owned Subsidiaries of the Company and to the Company or to any of its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereofwholly owned Subsidiaries;
(bv) redeemadopt or enter into a plan of complete or partial liquidation or dissolution of any of the SiC Entities;
(vi) other than in the ordinary course of business or pursuant to the Capex Budget, (A) make any material investment in, by means of a purchase of stock or securities, contribution to capital, property transfer, or purchase of any property or assets of, any Person other than the Company or any wholly-owned Subsidiaries of the Company or (B) sell, transfer, mortgage, encumber or otherwise acquire, dispose of any of its properties or propose assets or any business which in any case is in excess of $10,000,000 based on a GAAP value to redeem, purchase any Person other than the Company or otherwise acquire, any outstanding Shares, Options, Warrants wholly-owned Subsidiary of the Company;
(vii) (A) grant any equity or other securities equity-based awards of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares Subsidiaries to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans any director or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization employee of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person Subsidiaries or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(iB) except as required by Law or except as required by under the terms of a any Company Benefit Plan or any Contract in effect as of the date of this Agreement, (i) enter into an employment agreement with grant or pay any Person or grant bonus to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer director or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment Subsidiaries outside of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their termsbusiness, of liabilities reserved against in including any bonus payable upon the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a partyClosing;
(oviii) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practicebusiness, make, change or revoke any material Tax election, change any accounting method, amend any material Tax Return, enter into any material closing agreement, settle, compromise, concede or abandon any material Tax claim or assessment relating to any SiC Entity or surrender any right to claim a refund of material Taxes;
(u) (iix) enter into, amend, renew, modify into any side letter or consent Other Investment Agreement with any Other Investor that has the effect of (A) establishing governance rights relating to the termination of (other Company that are more favorable in any material respect to such Other Investor than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 the rights that would will be a Material Company Contract if in effect on afforded to the date of this Investor under the LLC Agreement or (iiB) providing for a purchase price per Common Unit that is less than the purchase price per Purchased Unit to be paid by the Investor hereunder at the Closing;
(x) amend, waive, modify, fail to enforce terminate or consent rescind any of the Transaction Documents in a manner adverse to the termination of Investor (other than a termination except in accordance with it termsan immaterial respect), except (A) its material rights thereunder;
for the Separation Documentation or (vB) create any Subsidiaryas contemplated by Section 4.2; or
(wxi) enter into any contract, agreement, commitment agree or arrangement commit to do any of the foregoing. Notwithstanding the foregoing, (y) nothing in this Agreement shall give the Investor, directly or indirectly, the right to control or direct the Company’s operations or the SiC Business prior to the Closing and (z) this Section 4.1 shall not restrict the operations of any SiC Entities with respect to the Coherent Business. Prior to the Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement and applicable Law complete control and supervision of its operations.
Appears in 2 contracts
Samples: Investment Agreement (Coherent Corp.), Investment Agreement (Coherent Corp.)
Interim Operations of the Company. Except During the period from the date of this Agreement to the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 8.1 (ithe “Pre-Closing Period”) (except (w) as may be required by Law, (iix) as consented to in writing by with the prior written consent of Parent (provided that Parent shall be deemed to have consented if Parent does not object within 72 hours after a written request for such consent is delivered to Parent by the Company), which consent shall not be unreasonably withheld, delayed or conditioned), (iiiy) as contemplated or permitted by this Agreement Agreement, or (ivz) as set forth in Section 6.1 of the Company Disclosure Schedule), from the date business of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business shall be conducted only in the usualOrdinary Course of Business, regular and ordinary course consistent with past practice and the Company will use all commercially reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve maintain its present relationships relations and goodwill with its material suppliers, customers, supplierslandlords, licensors, licensees, distributors, Governmental Entities creditors and others having material business dealings relationships with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Timeit. In addition, and without Without limiting the generality of the foregoing, except (w) as may be required by Law, (x) as consented to in writing by with the prior written consent of Parent (provided that Parent shall be deemed to have consented if Parent does not object within 72 hours after a written request for such consent is delivered to Parent by the Company), which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly as contemplated or permitted pursuant to by this Agreement Agreement, or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement prior to the Effective Time, Time neither the Company shall not, and shall not permit nor any of its Subsidiaries to, do any of the followingwill:
(a) amend its Organizational Documents;
(b) except for Shares Common Stock to be issued or delivered pursuant to the exercise Company Equity Plans and except for the issuance, grant or delivery of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary equity awards issued pursuant to the CompanyCompany Equity Plans in the Ordinary Course of Business, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interestinterest of the Company or any of its Subsidiaries, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interestinterest of the Company or any of its Subsidiaries, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest of the Company or any of its Subsidiaries or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights)of the Company or any of its Subsidiaries, or (ii) any other securities of the Company and or any of its Subsidiaries in respect of, in lieu of, or in substitution for, Shares Common Stock outstanding on the date hereof;
(bc) redeem, purchase purchase, exchange or otherwise acquire, or propose to redeem, purchase purchase, exchange or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase PlanCommon Stock;
(d) split, combine, subdivide or reclassify any Shares or Common Stock;
(e) declare, set aside for payment or pay any dividend or other distribution in respect of any Shares Common Stock or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company shareholders in their capacity as such;
(ef) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(fg) acquire (i) by purchase, merger or otherwise, any business or equity interest other than sales of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies inventory in the ordinary course Ordinary Course of business consistent with past practice or as permitted under Section 6.1(m);
(g) Business, acquire, sell, lease, exclusively license, mortgagedispose of, sell and leaseback pledge or otherwise encumber or dispose of any of its properties or other assets or any interests thereinthat, except for sales of inventory and used equipment in the ordinary course aggregate, are material to the Company and its Subsidiaries, taken as a whole, or have a fair market value (or are valued on the records of business consistent with past practicethe Company) in excess of $500,000;
(h) incur any indebtedness for borrowed money in excess of $1,000 in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its or any wholly owned Subsidiaries, and other than to employees in respect Subsidiary of travel or other related expenses in the ordinary course of business consistent with past practiceCompany;
(i) except as other than in the Ordinary Course of Business, grant any material increases in the compensation of, or grant bonuses or special remuneration to, or make severance payments (other than severance payments required by Law existing plans or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee policies of the Company or as required by law) to, any of its Subsidiariesdirectors, any increase in compensation other than, with respect to Persons who are not directors officers or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreementemployees, or (iv) terminate the enter into any new employment of or hire severance protection agreements with any Person whose annual compensation exceeded such directors, officers or is reasonably expected to exceed $100,000employees;
(j) except as required by terminate, amend or waive any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or material rights in any other way secure Material Contract in a manner that would be materially adverse to the payment of compensation and benefits Company or fail to perform any material obligations under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determinedMaterial Contract;
(k) enter into any Contract that would be a Material Contract, other than Contracts for the sales of products in the Ordinary Course of Business;
(l) adopt, terminate or amend any Benefit Plans in a manner that would materially increase the costs to the Company;
(m) change any of the accounting methods used by the Company Company, including accelerating the payment of any Liabilities or its Subsidiaries delaying the collection of any receivables in a manner inconsistent with past practices, unless required by GAAP or applicable Law;
(ln) amend take any action that would invalidate or cause the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents cancellation of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter current insurance coverage or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, maintain current insurance coverage or consent to suitable renewals thereof providing coverage substantially the same as any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiaryexpiring policy; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoing;
(o) make any investments or capital contributions to any Person other than capital contributions to direct or indirect wholly-owned Subsidiaries of the Company
(p) settle any material litigation against the Company and/or its directors, including litigation relating to the transactions contemplated hereby or by the Prior Agreement; provided that the Company shall give Parent the opportunity to participate in the defense or settlement of any such litigation.
Appears in 2 contracts
Samples: Merger Agreement (Silicon Storage Technology Inc), Merger Agreement (Microchip Technology Inc)
Interim Operations of the Company. Except (a) During the period from the date of this Agreement to the earlier of the Effective Time and the date, if any, on which this Agreement is terminated pursuant to Section 8.1, except (i) as may be required by Law, (ii) as consented to in writing by with the prior written consent of Parent (which may be via e-mail from the person named under Section 9.3 to receive notices on behalf of Parent hereunder), which consent shall not be unreasonably withheld, delayed or conditioned), (iii) as contemplated or permitted by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure ScheduleLetter, from the date of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct carry on its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable best efforts to preserve intact its current business organization, keep available the services of its current officers and employees employees, maintain in effect all material licenses and permits required to carry on their respective businesses, maintain in effect any exemptive orders or exemptive relief which they have received from the SEC and which are currently in effect and preserve their material business relationships; provided, however, that no action by the Company or any of its present relationships Subsidiaries with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others having business dealings with them respect to the end that its goodwill and ongoing business matters addressed specifically by any provision of this Section 6.1 shall be unimpaired at the Effective Time. In addition, and without deemed a breach of this sentence unless such action would constitute a breach of such specific provision.
(b) Without limiting the generality of the foregoing, during the period from the date of this Agreement to the earlier of the Effective Time and the date, if any, on which this Agreement is terminated pursuant to Section 8.1, except (wi) as may be required by Law, (xii) as consented to in writing by with the prior written consent of Parent (which may be via e-mail from the person named under Section 9.3 to receive notices on behalf of Parent hereunder), which consent shall not be unreasonably withheld, delayed or conditioned), (yiii) expressly as required, contemplated or permitted pursuant to by this Agreement or (ziv) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective TimeLetter, the Company shall not, and shall not permit any of its Subsidiaries to, do any of the following:
(ai) except for Shares Company Common Stock to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each equity awards outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary pursuant to the CompanyCompany Benefit Plans, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interestinterest of the Company or any of its Subsidiaries, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interestinterest of the Company or any of its Subsidiaries, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest of the Company or any of its Subsidiaries or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights)of the Company or any of its Subsidiaries, or (ii) any other securities of the Company and or any of its Subsidiaries in respect of, in lieu of, or in substitution for, Shares Company Common Stock outstanding on the date hereof;
(bii) except pursuant to the Company Benefit Plans, redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or WarrantsCommon Stock;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(diii) split, combine, subdivide or reclassify any Shares Company Common Stock or declare, set aside for payment or pay any dividend (whether in cash, stock or property, or any combination thereof) in respect of any Shares Company Common Stock or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(eiv) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(fv) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies other than in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) business, acquire, sell, lease, license, mortgage, sell and leaseback or otherwise encumber lease or dispose of any assets that, in the aggregate, are material to the Company and its Subsidiaries, taken as a whole, to any Person other than a wholly-owned Subsidiary;
(vi) enter into any new line of its properties or business;
(vii) other assets or any interests therein, except for sales of inventory and used equipment than in the ordinary course of business consistent with past practice;
(h) business, redeem, repurchase, prepay, defease, incur or otherwise acquire any indebtedness for borrowed money money, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement have the economic effect of any of the foregoing, in each case, in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practiceindebtedness;
(iviii) except as required by Law make any investment or except as required by the terms of a Benefit Plan in effect loan (other than any unfunded commitments existing as of the date hereof) either by purchase of stock or securities or otherwise, contributions to capital, property transfers, or purchase of any property or assets of any other individual, Person or other entity (other than a Subsidiary);
(ix) except as may be required under any Company Benefit Plan or as provided for in this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Planin, take any action to accelerate the vesting or payment or fund or in any other way secure the payment of, the compensation and benefits of any compensation of the Company’s directors, officers, consultants or benefits under key employees, enter into any Benefit Plan employment or severance agreement with any such director, officer, consultant or key employee, or adopt, terminate or materially change amend any assumption used to calculate funding obligations with respect to any Company Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determinedPlan;
(kx) make any material change in any of the tax or financial accounting principles, practices or methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(lxi) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary material Tax Return of the Company, except as may be required by applicable Law and except for immaterial amendments under make, revoke or amend any material Tax election of the charter Company, or organizational documents of settle or compromise any Subsidiary material Tax liability or refund of the Company;
(mxii) authorize directly or make indirectly take any commitment action, or knowingly fail to take any action, which action or failure to act is reasonably likely to cause the Company to fail to qualify or not be subject to tax as a RIC; provided, however, on or before the Closing Date, the Company shall declare and pay a dividend or dividends which, together with respect toall previous such dividends, shall have the effect of distributing to its shareholders all of the Company’s investment company taxable income (computed without regard to any deduction for dividends paid), if any, any prior year shortfall as determined under Section 4982(b)(2) of the Code, plus the excess, if any, of its interest income excludible from gross income under Section 103(a) of the Code over its deductions disallowed under Sections 265 and 171(a)(2) of the Code for all taxable periods or years ending on or before the Closing Date, and all of its net capital expenditure or other expenditures gains realized (including in respect of research and developmentafter reduction for any capital loss carry forward), other than those which, individually, are less than or equal to $200,000 orif any, in all taxable periods or years ending on or before the aggregate, are less than or equal to $1,000,000Closing Date;
(nxiii) incur any capital expenditures;
(ixiv) payenter into any contract, dischargeagreement, settle commitment or satisfy any claims, liabilities, obligations arrangement whereby the obligation or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which liability imposed on the Company or any of its Subsidiaries is a party under such contract, agreement, commitment or (v) waive any material benefits ofarrangement would exceed $50,000, or agree to modify in any material respectwhereby such contract, oragreement, subject to the terms hereof, fail to enforce in any material respectcommitment or arrangement would otherwise constitute a Company Material Contract, or consent amend any contract, agreement, commitment or arrangements in existence on the date hereof that, after giving effect to any matter with respect to which consent is required undersuch amendment, any material confidentiality would impose an obligation or similar contract to which liability on the Company or any of its Subsidiaries is under such contract, agreement, commitment or arrangement in excess of $50,000 or constitute a partyCompany Material Contract;
(oxv) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practicebusiness, terminate, cancel, renew or agree to any material amendment of, change in or waiver under any Company Material Contract;
(uxvi) (i) enter intocommence or settle any material claim, amendsuit, renew, modify action or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunderproceeding;
(vxvii) create except as contemplated by this Agreement, amend the certificate of incorporation or by-laws of the Company or similar governing documents of any Subsidiaryof its subsidiaries; or
(wxviii) enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (PennantPark Floating Rate Capital Ltd.), Merger Agreement (MCG Capital Corp)
Interim Operations of the Company. Except (i) as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule, from From and after the date of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve its present relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoingAgreement, except (w) as may be required by Law, (x) as consented to in writing by with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) as expressly contemplated or permitted pursuant to by this Agreement or (z) as set forth in the Section 6.1 of the Company Disclosure Schedule, the business of the Company and its Subsidiaries shall be conducted only in the ordinary and usual course of business consistent with past practice, and, to the extent consistent therewith, the Company shall, and shall cause its Subsidiaries to, use reasonable efforts to (i) preserve intact their current business organization and (ii) preserve their present relationships with customers, suppliers and others having business dealings with them who are integral to the operation of their businesses as presently conducted; provided, however, that no action by the Company with respect to matters addressed specifically by any provision of this Section 6.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such specific provision. Without limiting the generality of the foregoing, except (A) as may be required by Law, (B) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (C) as expressly contemplated or permitted by this Agreement or (D) as set forth in Section 6.1 of the Company Disclosure Schedule, from and after the date of this Agreement to the Effective TimeAgreement, neither the Company shall not, and shall not permit any of nor its Subsidiaries to, do any of the followingwill:
(a) except for Shares to be issued or delivered pursuant to the exercise of Company Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each Warrants outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Company Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Company Options, Restricted Stock Awards and Company RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Company Options or Warrants in order to pay the exercise price of the Company Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any Subsidiary of its Subsidiaries the Company that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(ed) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(fe) acquire (ix) by purchase, merger or otherwise, any business or equity interest of any Person or (iiy) any asset or assetsassets that, individually, has a purchase price in excess of $100,000 or, in the aggregate, have a purchase price in excess of $250,000, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m)practice;
(gf) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(hg) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(ih) except as may be contemplated by Section 6.5(c) of this Agreement, except as required by Law or except as required by the terms of a Benefit Plan in effect accordance with its terms as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person Participant any right to severance, retention, change in control or termination compensation or benefits, or increase any PersonParticipant’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, Participant any increase in compensation, bonus, fringe or other benefits (except that, if the Closing shall not have occurred prior to February 1, 2009, the Company may make normal increases in cash compensation other than, with respect to Persons for employees and consultants who are not directors Specified Participants), (iii) pay or officers and do provide any compensation or benefit to any Participant that is not report directly to required under a Benefit Plan (other than the Company’s President and Chief Operating Officer, payment of normal cash wages or salaries in the ordinary course annual increases of business consistent with past practice, ) or (iiiiv) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000Benefit Plan;
(ji) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(kj) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(lk) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company’s Subsidiaries, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(ml) authorize or make any commitment with respect to, any new capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 100,000 or, in the aggregate, are less than or equal to $1,000,000250,000;
(nm) except as required by applicable Law, (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements financial statements of the Company included in the Filed SEC Documents Reports (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements financial statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(on) waive other than in the benefits ofordinary course of business consistent with past practice, (i) enter into any contracts relating to research, clinical trial, development, sale, supply, marketing or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which manufacturing by third parties of products (including products under development) of the Company or any of its Subsidiaries is a partyor products (including products under development) licensed by the Company or any of its Subsidiaries, (ii) initiate, launch or commence any sale, marketing, distribution, co-promotion or any similar activity with respect to any new product (including products under development) or (iii) file any new application for OCS grants or agree to accept any OCS grants deriving from an existing OCS program or file any amendment or agree to amend the terms of any existing OCS program;
(o) enter into, modify, amend or terminate any contract or waive, release, assign or fail to exercise or pursue any material rights or claims thereunder, which if so entered into, modified, amended, terminated, waived, released, assigned, or not exercised or pursued would reasonably be expected to (i) adversely affect the Company and its Subsidiaries in any material respect, (ii) impair in any material respect the ability of the Company to perform its obligations under this Agreement or (iii) prevent or materially delay the consummation of the transactions contemplated by this Agreement;
(p) except as required by applicable (i) make or change any material Tax Lawelection, prepare (ii) change any Tax accounting period or method, (iii) file any amended Tax Return, (iv) enter into any closing agreement with respect to Taxes, (v) settle any Tax claim or assessment, (vi) surrender any right to claim a material refund of Taxes, (vii) consent to any extension or waiver of the limitations period for the assessment of Taxes, (viii) file any new application for an “Approved Enterprise” status or file any amendment or agree to amend the terms of any existing “Approved Enterprise” status, (ix) make or change any Tax Return inconsistent with past practice orelection to treat the Company or any of its Subsidiaries as other than a corporation as defined in Treasury Regulations 301.7701-2 and 301.7701-3 (or any similar definition in any applicable foreign Law), on any such Tax Return, or (x) take any position, make other action outside the ordinary course of business if taking such action would materially affect the Tax of either the Company or any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periodsof its Subsidiaries after the Closing Date;
(q) sell, transfer or license to any person or adversely amend or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, Rights or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(wr) enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Johnson & Johnson), Merger Agreement (Omrix Biopharmaceuticals, Inc.)
Interim Operations of the Company. Except (i) as set forth in Section 5.1 of the Company Disclosure Schedule, as required by Law, (ii) pursuant to this Agreement or as consented to agreed in writing by Parent (which consent agreement shall not be unreasonably withheld, delayed withheld or conditioneddelayed), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date hereof until the earlier of (A) the valid termination of this Agreement in accordance with Article VIII hereto and (B) the time the designees of Parent have been elected to, and shall constitute a majority of, the Company Board of Directors pursuant to Section 1.3 (the Effective Time “Appointment Date”), the Company shall, and shall cause each of its the Company Subsidiaries to, (i) conduct its business only their businesses in all material respects in the usual, regular and ordinary course consistent with past practice and practice, (ii) use all commercially reasonable efforts to preserve intact its current their present business organizationorganizations, (iii) use commercially reasonable efforts to maintain satisfactory relations with and keep available the services of its their current officers and employees other key employees, (iv) maintain in effect all material foreign, federal, state and local licenses, approvals and authorizations, including all material licenses and permits that are required for the Company or any Company Subsidiary to carry on its business and (v) use commercially reasonable efforts to preserve its present existing relationships with material customers, lenders, suppliers, licensors, licensees, distributors, Governmental Entities distributors and others having material business dealings relationships with them to the end that its goodwill Company and ongoing business shall be unimpaired at the Effective TimeCompany Subsidiaries. In addition, and without Without limiting the generality of the foregoing, except (w) as set forth in Section 5.1 of the Company Disclosure Schedule, as required by Law, (x) pursuant to this Agreement or as consented to agreed in writing by Parent (which consent agreement shall not be unreasonably withheld, delayed withheld or conditioneddelayed), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date hereof until the earlier of (x) the valid termination of this Agreement to in accordance with Article VIII hereto and (y) the Effective TimeAppointment Date, the Company shall not, and nor shall not it permit any of its Subsidiaries Company Subsidiary to, do any of the following:
(a) except for Shares to be issued amend the Company Governing Documents or delivered pursuant to equivalent documents of any Company Subsidiary or amend the exercise terms of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each any outstanding on the date hereof or the issuance security of the Company or any Company Subsidiary;
(b) split, combine, subdivide or reclassify any shares of capital stock of the Company or any Company Subsidiary, other than any such transaction by a Company Subsidiary that remains a Company Subsidiary after consummation of such transaction, in the ordinary course of business consistent with past practice;
(c) declare, set aside or pay any dividend or other distribution payable in cash, stock or property (or any combination thereof) with respect to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its ’s capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereofstock;
(bd) redeem, purchase or otherwise acquire, or propose offer to redeem, purchase or otherwise acquire, any outstanding SharesEquity Interests, Optionsexcept (i) repurchases of unvested shares at cost in connection with the termination of the services relationship with any service provider pursuant to stock option or purchase agreements in effect on the date hereof, Warrants and (ii) repurchases of unvested shares in connection with the withholding of shares upon vesting of restricted stock;
(e) issue, sell, pledge, deliver, transfer, dispose of or encumber any shares of, or securities convertible into or exchangeable for, or grant any Company Stock Rights, Restricted Stock or warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class, or grant to any Person any right the value of which is based on the value of Shares or other securities capital stock, other than (i) the issuance of Shares (and associated Company Rights) reserved for issuance on the date hereof pursuant to the exercise of the Company Stock Rights disclosed in Section 3.2(b) of the Company Disclosure Schedule and outstanding on the date hereof in the ordinary course of business consistent with past practice of the Company Stock Plans or (ii) the issuance of shares of capital stock of the Company upon the exercise of Company Rights;
(f) acquire (whether pursuant to merger, stock or asset purchase or otherwise) in one transaction or any series of related transactions (i) except in the ordinary course of business consistent with past practice, any assets having a fair market value in excess of $25 million or (ii) any equity interests in any Person or any business or division of any Person or all or substantially all of the assets of any Person (or business or division thereof);
(g) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any of its Subsidiariesmaterial assets, other than (i) sales in the ordinary course of business consistent with past practice, and (ii) dispositions of equipment and property no longer used in the operation of the business;
(h) (i) incur or assume any long-term or short-term indebtedness except (A) short-term indebtedness made in the ordinary course of business consistent with past practice or (B) additional indebtedness under existing debt facilities or like replacement debt facilities in excess of indebtedness of the Company outstanding as of the date hereof; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, other than with respect to Company Subsidiaries in the ordinary course of business consistent with past practice; or (iii) make any loans, advances or capital contributions to, or investments in, any other Person, other than loans, advance or capital contributions to, or investments in, wholly owned Company Subsidiaries made in the ordinary course of business consistent with past practice; provided, however, that after the Appointment Time, the Company may shall not accelerate the vesting of, or make changes in, equity based compensation, Restricted Stock or Company Stock Rights, other than (i) withhold Shares by permitting the acceleration of any Company Options or other equity based compensation pursuant to satisfy Tax obligations the terms of agreements in existence on the date hereof which provide for such acceleration or (ii) as otherwise provided in Section 5.1 of the Company Disclosure Schedule;
(i) other than in the ordinary course of business consistent with respect past practice or as required by applicable law or the terms of any agreement existing on the date hereof, and in the case of any officer or director of the Company only to Optionsthe extent that the Compensation Committee has duly approved such action as an Employment Compensation Arrangement, make any change in, or accelerate the vesting of, the compensation or benefits payable or to become payable to, or grant any severance or termination pay to, any of its officers, directors, employees, agents or consultants or enter into or amend any employment, consulting, severance, retention, change in control, termination pay, collective bargaining or other agreement or any equity based compensation, pension, deferred compensation, welfare benefits or other employee benefit plan or arrangement, or make any loans to any of its officers, directors, employees, affiliates or agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to a Benefit Plan or otherwise; provided, however, that after the Appointment Time, the Company shall not accelerate the vesting of, or make changes in, equity based compensation, Restricted Stock Awards or Company Stock Rights, other than (i) by permitting the acceleration of any Company Options or other equity based compensation pursuant to the terms of agreements in existence on the date hereof which provide for such acceleration or (ii) as otherwise provided in Section 5.1 of the Company Disclosure Schedule;
(j) other than in the ordinary course of business consistent with past practice or as required by applicable law or the terms of any agreement or plan existing on the date hereof and RSUs granted in the case of any officer or director of the Company only to the extent that the Compensation Committee has duly approved such action as an Employment Compensation Arrangement: (i) pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or affiliates of the Company or any Company Subsidiary of any amount relating to unused vacation days; or (ii) adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, Company Stock Plan, stock purchase, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment agreement with or for the benefit of any Company or any Company Subsidiary director, officer, employee or agent, whether past or present, or amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing;
(k) except as publicly announced prior to the date hereof, announce, implement or effect any material reduction in labor force, lay-off, early retirement program, severance program or other program or effort concerning the termination of employment of employees of the Company or any Company Subsidiary other than routine employee terminations;
(l) incur any capital expenditures or any obligations or liabilities in respect thereof in excess of $25 million, in the aggregate, except those contemplated in the capital expenditures budgets for the Company and the Company Subsidiaries previously made available to Parent;
(m) enter into any agreement or arrangement that limits or otherwise restricts the Company, any Company Subsidiary, or upon completion of the Transactions, Parent or its Subsidiaries or any successor thereto from engaging or competing in any line of business or in any location;
(n) amend or modify in a material respect or terminate any Company Material Contract or otherwise waive, release or assign any material rights, claims or benefits thereunder, or enter into any contract that would be a Company Material Contract;
(o) settle, pay or discharge any litigation, investigation, arbitration, other than the payment, discharge or satisfaction, in the ordinary course of business consistent with past practice, of such claims, liabilities or obligations (i) disclosed or reserved against in the Financial Statements included in the Company SEC Documents filed prior to the date hereof pursuant in amounts no greater than the amount reserved with respect to the Equity Plans relevant liability therein or the Assumed Subsidiary Equity Plans and (ii) acquire Shares incurred in connection the ordinary course of business consistent with past practice since the surrender date of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrantssuch financial statements;
(cp) grant permit any Options, Restricted Stock Awards, RSUs material insurance policy naming it as a beneficiary or other equity-based awards a loss payee to be cancelled or grant any options terminated without reasonable prior notice to purchase Shares under the Company’s 2007 Employee Stock Purchase PlanPurchaser;
(dq) split, combine, subdivide or reclassify change any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company accounting methods used by it materially affecting its assets, liabilities or of business, except for such changes required by GAAP or Regulation S-X promulgated under the Exchange Act, as concurred in by its independent registered public accountants;
(r) revalue in any material respect any of its Subsidiaries that is not wholly owned (directly material assets, including writing down the value of inventory or indirectly) by Company writing down notes or accounts receivable, other than in their capacity as suchthe ordinary course of business consistent with past practice;
(es) make or change any material Tax election, change an annual accounting period, adopt or change any accounting method, file any amended Tax Returns, enter into any closing agreement with respect to material Taxes, settle or consent to any material Tax Claim, take any affirmative action to surrender any right to claim a refund of Taxes, or consent to any extension or waiver of the limitation period applicable to any Tax Claim;
(t) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, (other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(gu) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action which would, directly or indirectly, restrict or impair the ability of Purchaser to fund vote, or in any other way secure otherwise to exercise the payment rights and receive the benefits of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment a stockholder with respect to, any capital expenditure securities of the Company acquired or other expenditures (including in respect of research and development), other than those which, individually, are less than controlled or equal to $200,000 or, in the aggregate, are less than be acquired or equal to $1,000,000controlled by Parent or Purchaser;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Lawlaw, prepare convene any regular or file special meeting (or any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, adjournment or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(qpostponement thereof) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in of the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product stockholders of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any SubsidiarySpecial Meeting; orand
(w) enter into any written agreement, contract, agreement, commitment or arrangement to do any of the foregoing, or authorize in writing any of the foregoing.
Appears in 2 contracts
Samples: Agreement and Plan of Merger (Ericsson Lm Telephone Co), Agreement and Plan of Merger (Redback Networks Inc)
Interim Operations of the Company. Except Each Seller shall procure that, and covenant and agree that, after the date hereof and until the Closing Date, except (i) as required by Lawexpressly provided in this Agreement, or (ii) as consented to may be agreed in writing by Parent Purchaser:
(which consent shall not be unreasonably withheld, delayed or conditioned), (iiia) contemplated by this Agreement or (iv) as set forth in Section 6.1 the business of the Company Disclosure Scheduleand its Subsidiaries shall be conducted in the same manner as heretofore conducted and in a prudent manner (en bon père de famille), from in the date ordinary course, and each of this Agreement to the Effective Time Sellers, the Company shall, and shall cause each of its Subsidiaries to, conduct shall use its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable best efforts to preserve intact the business organization of the Company and its current business organizationSubsidiaries intact, keep available the services of its the current officers of the Company and employees its Subsidiaries and preserve its present relationships maintain the existing relations with material franchisees, customers, suppliers, licensorscreditors, licensees, distributors, Governmental Entities business partners and others having material business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, or its Subsidiaries. Neither the Company shall not, and shall not permit nor any of its Subsidiaries toshall institute any new methods of purchase, do sale, lease, management, accounting or operation or engage in any transaction or activity other than minor changes in the ordinary course of the following:business and consistent with past practice;
(ab) except for Shares to be issued or delivered the changes resulting from the increase of the share capital of the Company pursuant to the exercise of Options the BCEs and BSAs, neither the Company nor any of its Subsidiaries shall amend their certificates of incorporation or Warrantsby-laws or other constituent or governing document, to the settlement extent any such modification is not required by law, or by the rules or regulations of RSUs or any Governmental Entity;
(c) except for the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on changes resulting from the date hereof or the issuance increase of the shares share capital of the Company pursuant to the exercise of the BCEs and BSAs, neither the Company nor any of its Subsidiaries shall alter the Company or its Subsidiaries’ outstanding capital stock of or declare, set aside, make or pay any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge dividend; or otherwise encumber, purchase or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) redeem any shares of the Company or its Subsidiaries’ capital stock stock;
(d) except for the changes resulting from the increase of the share capital of the Company pursuant to the exercise of the BCEs and BSAs, neither the Company nor any class of its Subsidiaries shall issue or sell any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments warrants or any other agreements of any character rights to purchase or acquire any such shares of its capital stock or any other ownership interest or any securities convertible into or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as suchsuch shares;
(e) adopt a plan neither the Company nor any of complete its Subsidiaries shall: (i) incur or partial liquidationassume any long-term debt, dissolutionor except in the ordinary course of business, mergerincur or assume short-term Indebtedness or finance leases exceeding twenty-five thousand euros (€25,000) in the aggregate from the date hereof until the Closing; (ii) pay, consolidationrepay, restructuringdischarge, recapitalization purchase, repurchase or other reorganization of satisfy any Indebtedness issued or guaranteed by the Company or any of its Subsidiaries, except as required by the terms thereof; (iii) modify the terms of any Indebtedness, other than modifications of short term debt in the Merger;
ordinary and usual course of business and consistent with past practice; (fiv) acquire assume, guarantee, endorse or otherwise become liable or responsible (i) by purchasewhether directly, merger contingently or otherwise, any business or equity interest ) for the obligations of any Person or (ii) any asset or assetsother Person, except for purchases of components, raw materials or supplies as described in the Disclosure Schedule as being in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
; (hv) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person; (vi) enter into any material commitment or transaction (including any capital expenditure or purchase, other than sale or lease of material assets or real estate); (vii) write down the value of any inventory or write off as uncollectible, any material notes or accounts receivable, (viii) dispose of, abandon or permit to lapse any rights to any Intellectual Property;
(f) neither the Company and nor any of its wholly owned SubsidiariesSubsidiaries shall permit or allow any of their material properties or assets (real, and other than personal or mixed, tangible or intangible) to employees be subjected to any liens;
(g) neither the Company nor any of its Subsidiaries shall cancel any debts;
(h) neither the Company nor any of its Subsidiaries shall be a party to any acquisition (except for the acquisition of the shares held by Xxxx Xxx in respect Musiwave Asia Ltd), merger, spin-off, consolidation, purchase of travel stock or interest in any corporation, partnership, association or other related expenses business organization or enter into or form any material joint-venture or enter into any agreement leading to any of the foregoing;
(i) neither the Company nor any of its Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors, or employees, or enter into or amend any employment (providing for an annual gross compensation in excess of sixty thousand euros (€60,000)), severance, termination or other agreement with, or employee benefit plan for, or make any loan or advance to, any of its officers, directors, or employees or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to an employee benefit plan or otherwise (except in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000practices);
(j) except as required by neither the Company nor its Subsidiaries shall make any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action changes to fund their severance policy or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determinedpractices;
(k) change neither the Company nor any of its Subsidiaries shall (i) pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director or employee or pay or agree to pay or make any accrual or arrangement for payment to any officer, director or employee of any amount relating to unused vacation days, except to the accounting methods used by extent the Company or its Subsidiaries unless a Subsidiary is required by GAAP to do so on the date hereof, (ii) adopt or applicable Lawpay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any director, officer, employee, agent or consultant, whether past or present, except to the extent the Company or Subsidiary is required to do so on the date hereof, or (iii) amend any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing;
(l) amend neither the Company’s certificate of incorporation Company nor its Subsidiaries shall enter into any contract that contains a “most-favored nation” or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;similar provision.
(m) authorize neither the Company nor any of its Subsidiaries shall (i) grant to any third party a right to sublicense or make distribute any commitment with respect to, any capital expenditure or other expenditures of the Intellectual Property except for a grant (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than ordinary course of business) by the Company to a customer allowing such customer to sublicense and distribute the Intellectual Property; (ii) grant to any third party a license to the Intellectual Property outside the ordinary course of business; (iii) grant to any third party a license to the Software in source code form; or equal (iv) assign or otherwise transfer ownership of any Intellectual Property or any Software to $1,000,000any third party;
(n) (i) neither the Company nor any of its Subsidiaries shall pay, dischargerepurchase, settle discharge or satisfy any of its claims, liabilities, liabilities or obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement discharge or satisfaction in the ordinary course of business consistent with past practice or in accordance with their termsbusiness, of claims, liabilities or obligations reflected or reserved against in in, or contemplated by, the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the Balance Sheet date of such Financial Statements in the ordinary course of business consistent with past practice, business;
(o) neither the Company nor any of its Subsidiaries shall (i) change any of the accounting methods used by it unless required by French GAAP or (ii) cancel make any indebtednesselection relating to Taxes, change any election relating to Taxes already made, adopt any accounting method relating to Taxes, change any accounting method relating to Taxes unless required by French GAAP, enter into any closing agreement relating to Taxes, settle any claim or assessment relating to Taxes or consent to any claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment;
(iiip) waive neither the Company nor any of its Subsidiaries shall loan or assign advance any claims amount to, or rights sell, transfer or lease any material properties or assets (real, personal or mixed, tangible or intangible) to, or enter into any agreement or arrangement with, any of substantial valuetheir respective officers, directors or shareholders or associate of any of their officers, directors or shareholders except for (ivx) waive directors’ fees, and compensation to officers at rates not inconsistent with the Company or the Subsidiaries’ past practice or agreements in force and for (y) the Musiwave Asia Agreements;
(q) neither the Company nor any benefits ofof its Subsidiaries shall take, or agree to modify or commit to take, any action that would or is reasonably likely to result in any respect, or, subject of the conditions to the terms hereof, fail to enforceClosing set forth in ARTICLE VI not being satisfied, or consent (including any action that would make any representation or warranty of the Sellers contained herein inaccurate in any respect at, or as of any time prior to, the Closing Date) that would materially impair the ability of Sellers, the Company or Purchaser to consummate the Closing in accordance with the terms hereof or materially delay such consummation; and
(r) neither the Company nor any matter with respect of its Subsidiaries shall enter into any agreement, contract, commitment or arrangement (whether in writing or otherwise) to which consent is required under, do any standstill or similar contract to which of the foregoing. In the case where the Company or any of its Subsidiaries is shall wish to take any of the actions listed in Section 5.1(a) to (r) above, it shall notify its intention to Purchaser. Purchaser shall have a party seven (7) day period following actual receipt of the notice to answer such request and to authorize or (v) waive any material benefits of, not to authorize the Company or agree the relevant Subsidiary to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or take such action provided that Purchaser’s consent shall not be unreasonably withheld with respect to any matter with respect relating to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product current operations of the Company or any of its Subsidiaries the Subsidiaries. Failing sending an answer by Purchaser within the seven (including products under development and products licensed by the Company or any of its Subsidiaries);
(r7) enter into any material joint venture or partnership;
(s) engage in any transactionsday period mentioned above, agreements, arrangements or understandings with any Affiliate or other Person that would Purchaser’s consent shall be required deemed to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoinghave been obtained.
Appears in 2 contracts
Samples: Stock Purchase Agreement, Stock Purchase Agreement (Openwave Systems Inc)
Interim Operations of the Company. Except (i) as set forth in Section 5.1 of the Company Disclosure Schedule, as required by Lawchanges in applicable laws, (ii) as consented required pursuant to this Agreement or as agreed in writing by Parent (which consent agreement shall not be unreasonably withheld, delayed withheld or conditioneddelayed), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date hereof until the earlier of (A) the valid termination of this Agreement to in accordance with Article VIII hereto, (B) the Control Time, and (C) the Effective Time Time, the Company shall, and shall cause each of its the Company Subsidiaries to, (i) conduct its business only their businesses in all material respects in the usual, regular and ordinary course consistent with past practice and practice, (ii) use all commercially reasonable efforts to preserve intact its current their present business organizationorganizations, (iii) use commercially reasonable efforts to maintain satisfactory relations with and keep available the services of its their current officers and employees other key employees, (iv) use commercially reasonable efforts to maintain in effect all material foreign, federal, state and local licenses, approvals and authorizations that are required for the Company or any Company Subsidiary to carry on its business and (v) use commercially reasonable efforts to preserve its present existing relationships with material customers, lenders, suppliers, licensors, licensees, distributors, Governmental Entities distributors and others having material business dealings relationships with them to the end that its goodwill Company and ongoing business shall be unimpaired at the Effective TimeCompany Subsidiaries. In addition, and without Without limiting the generality of the foregoing, except (w) as set forth in Section 5.1 of the Company Disclosure Schedule, as required by Lawchanges in applicable law, (x) as consented required pursuant to this Agreement or as agreed in writing by Parent (which consent agreement shall not be unreasonably withheldwithheld or delayed), delayed or conditioned)from the date hereof until the earlier of (x) the valid termination of this Agreement in accordance with Article VIII hereto, (y) expressly permitted pursuant to this Agreement or the Control Time and (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and nor shall not it permit any of its Subsidiaries Company Subsidiary to, do any of the following:
(a) except for Shares to be issued amend the Company Governing Documents or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock equivalent documents of any Company Subsidiary to or amend the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock terms of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities security of the Company or any Company Subsidiary (provided however that nothing in this Section 5.1 shall preclude the dissolution of any Subsidiary that is not material to the Company and its Subsidiaries; provided, howevertaken as a whole, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed merger or reorganization of any Subsidiary Equity Plans and (ii) acquire Shares in connection with another Subsidiary provided that such the surrender surviving entity of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrantssuch transaction remains a Company Subsidiary);
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(db) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect shares of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization capital stock of the Company or any of its SubsidiariesCompany Subsidiary, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the transaction by a Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of Subsidiary that remains a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess after consummation of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a partytransaction;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Opsware Inc), Merger Agreement (Hewlett Packard Co)
Interim Operations of the Company. Except (i) The Company covenants and agrees as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of itself and its Subsidiaries that during the Company Disclosure Schedule, period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (w) disclosed in Section 5.1 of the Company Disclosure Letter, (x) expressly contemplated or permitted by this Agreement, (y) required by applicable Law, or (z) agreed to in writing by Parent, after the date of this Agreement and prior to the Effective Time Time:
(a) the business of the Company shall, and shall cause each of its Subsidiaries to, conduct its business shall be conducted only in the usual, regular and ordinary course consistent with past practice practice, and the Company shall use all its reasonable best efforts to preserve intact its current business organization, organization and goodwill and the business organization and goodwill of its Subsidiaries and keep available the services of its their current officers and employees Employees and preserve its present relationships and maintain existing relations with customers, suppliers, licensorsofficers, licensees, distributors, Governmental Entities Employees and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except creditors;
(wb) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and nor shall not it permit any of its Subsidiaries to, (i) enter into any new line of business, (ii) incur, commit to or make any capital expenditures, or any obligations or liabilities in connection with any capital expenditures, other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater, in the aggregate, than 115% of the Company’s total capital budget for calendar year 2012 as set forth in Section 5.1(b) of the Company Disclosure Letter, plus (y) expenditures (or obligations or liabilities related thereto) in connection with acquisitions so long as such expenditures with respect to any individual acquisition do not exceed $7,500,000, or (iii) during any rolling three (3) month period, incur, commit to or make any capital expenditures contemplated by the Company’s capital budget described in clause (ii) above in an amount that exceeds, by more than fifteen percent (15%), the amounts contemplated by such budget to be incurred or committed to during such three (3) month period;
(c) the Company shall not, nor shall it permit any of the following:its Subsidiaries to, amend its articles of incorporation or bylaws or similar organizational documents;
(ad) except for Shares the Company shall not, nor shall it permit any of its Subsidiaries (other than direct or indirect wholly owned Subsidiaries) to, declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to be issued its capital stock;
(e) the Company shall not, nor shall it permit any of its Subsidiaries to, (i) adjust, split, combine or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of reclassify any capital stock of any Subsidiary to the Company, or issue, delivergrant, sell, transfer, pledge, dispose of or encumber any additional shares of, pledge or otherwise encumbersecurities convertible into or exchangeable for, or authorize options, warrants, calls, commitments or propose the issuancerights of any kind to acquire, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that other than issuances of Company Common Stock pursuant to the Company may Options, Company Warrants or Restricted Stock Units outstanding on the date of this Agreement, or (ii) except as required pursuant to the terms of the Company Stock Plans in effect on the date of this Agreement, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) withhold Shares of this Section 5.1(e) other than pursuant to satisfy Tax obligations with respect to any “net cashless” exercise provisions of existing Company Options, Restricted Stock Awards and RSUs granted prior to the date hereof ;
(f) other than (i) as required pursuant to the Equity terms of the Company Plans in effect on the date of this Agreement, or the Assumed Subsidiary Equity Plans and applicable Law or (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price as specifically described on Section 5.1(f) of the Options or Warrants;
Company Disclosure Letter, the Company shall not, nor shall it permit any of its Subsidiaries to, (cx) grant any Optionsincrease in the compensation or benefits payable or to become payable by the Company or any of its Subsidiaries to any former or current director, Restricted Stock Awards, RSUs officer or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or any of its Subsidiaries, other than increases in wages, salaries and other cash compensation in the ordinary course of business consistent with past practice provided such increases shall in no event exceed 5% of such person’s annual compensation without the prior recommendation of the Company’s management after consultation with Parent and only after Parent’s written consent, which consent shall not be unreasonably withheld, (y) adopt, enter into, amend or otherwise increase, or accelerate the payment or vesting of the amounts, benefits or rights payable or accrued or to become payable or accrued under, any Company Plan (other than entry into employment agreements with new hires in the ordinary course of business consistent with past practice; provided that such employment agreements shall be expressly terminable at will, without penalty to the Company or any of its Subsidiaries and not provide for severance or other payments or benefits upon termination of employment or of the employment agreement), or (z) grant or increase any severance or termination pay to any officer, director or Employee of the Company or any of its Subsidiaries except termination amounts paid to non-contract Employees related to termination of such Company Employee’s employment in the Company’s ordinary course of business and consistent with past practice;
(g) the Company shall not, nor shall it permit any of its Subsidiaries to, enter into any collective bargaining agreement or other similar agreement with any labor union or labor organization;
(h) the Company shall not, nor shall it permit any of its Subsidiaries to, change its methods of accounting in effect as of the date of this Agreement, except in accordance with changes in GAAP as concurred to by the Company’s independent auditors;
(i) the Company shall not, nor shall it permit any of its Subsidiaries to (i) acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or (ii) other than in the ordinary course of business consistent with past practice or pursuant to agreements in effect on the date of this Agreement and set forth in Section 3.12 of the Company Disclosure Letter, acquire any assets;
(j) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 3.12 of the Company Disclosure Letter, the Company shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer, subject to any Lien other than Permitted Liens, or otherwise dispose of any Company Assets having a value in excess of $5,000,000 in the aggregate;
(k) the Company shall not, nor shall it permit any of its Subsidiaries to, (i) except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case by which the Company or any of its Subsidiaries is bound and except for any payments, discharges or settlements that is do not wholly owned exceed $1,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle or grant any waiver or release relating to any Litigation involving only the payment of monetary damages and the amount paid or to be paid does not exceed $1,000,000 individually or $5,000,000 in the aggregate;
(l) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, the Company shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect on the date of this Agreement and set forth in Section 3.9(a) or 3.18 of the Company Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly) by , any of the Company’s affiliates; provided, that for the avoidance of doubt, for purposes of this paragraph (l), the term “affiliates” shall not include any Employees of the Company in their capacity as suchor any of its Subsidiaries, other than the directors and executive officers thereof;
(em) except as set forth in Section 5.1(m) of the Company Disclosure Letter, the Company shall not, nor shall it permit any of its Subsidiaries to, make or change any material Tax election, change any material method of Tax accounting, grant any material extension of time to assess any Tax or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liability;
(n) the Company shall not, nor shall it permit any of its Subsidiaries to, take any action that would, or could reasonably be expected to, result in any of its representations and warranties set forth in this Agreement becoming untrue in a manner that would give rise to the failure of the closing condition set forth in Section 6.3(a);
(o) the Company shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, Subsidiaries (other than the Merger) or any agreement relating to an Acquisition Proposal, except as provided for in Section 5.3;
(fp) acquire the Company shall not, nor shall it permit any of its Subsidiaries to, (i) by purchaseincur or assume any long-term Indebtedness, merger other than any advances, loans or otherwiseother obligations under the Company Credit Agreement, any business or equity interest of any Person or (ii) incur or assume any asset or assets, except for purchases of components, raw materials or supplies short-term Indebtedness other than in the ordinary course of business consistent with past practice or as permitted any short-term Indebtedness under Section 6.1(m);
the Company Credit Agreement, (giii) sellmodify the terms of any Indebtedness to increase the Company’s obligations with respect thereto, lease(iv) assume, licenseguarantee, mortgage, sell and leaseback endorse or otherwise encumber become liable or dispose responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of its properties or other assets or any interests thereinthe Company), except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
practice and in no event exceeding $1,000,000 in the aggregate, (hv) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, Person (other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required or by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of such Subsidiaries to the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than customary loans or equal advances to Employees in accordance with past practice (and in no event exceeding $200,000 or, 250,000 in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the paymentor (vi) enter into any material commitment or transaction, discharge, settlement or satisfaction except in the ordinary course of business consistent with past practice or in accordance with their termsand except as otherwise permitted by Sections 5.1(b), of liabilities reserved against in the most recent Financial Statements of 5.1(i) and 5.1(j);
(q) the Company included in shall not, nor shall it permit any of its Subsidiaries to, enter into any agreement, understanding or commitment that materially restrains, limits or impedes the Filed SEC Documents Company’s or any of its Subsidiaries’ ability to compete with or conduct any business or line of business, including geographic limitations on the Company’s or any of its Subsidiaries’ activities (for amounts not in excess other than area of such reserves) or incurred since the date of such Financial Statements mutual interest agreements entered into in the ordinary course of business consistent with past practicebusiness);
(r) except as contemplated by this Agreement, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or shall not, nor shall it permit any of its Subsidiaries to, waive, release, relinquish or assign any of its rights or claims under any material contract to which it is a party or (v) waive any material benefits ofin a manner that is materially adverse to the Company, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, modify or (ii) amend in any material respect any material contract to distribute, license or co-promote any product of the Company or any of its Subsidiaries which it is a party (including products under development and products licensed by the in each case, any Company or any of its SubsidiariesMaterial Contract);
(r) enter into any material joint venture or partnership;
(s) engage the Company shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in any transactionsfull force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, agreementscasualties, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under risks and contingencies as is customary in the Securities Act;domestic oil and gas exploration industry; and
(t) otherwise manage the Company shall not, nor shall it permit any of its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter intoSubsidiaries to, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any an agreement, contract, agreement, commitment or arrangement to do any of the foregoing. Notwithstanding anything in this Section 5.1 to the contrary, the Company shall not intentionally, nor shall it permit any of its Subsidiaries to intentionally, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on the Company.
Appears in 2 contracts
Samples: Merger Agreement (Halcon Resources Corp), Merger Agreement (Georesources Inc)
Interim Operations of the Company. Except (i) as required contemplated or expressly permitted by Lawthis Agreement, (ii) as consented to required by Legal Requirements, or (iii) as contemplated by Section 5.1 of the Company Disclosure Schedule, during the period from the date of this Agreement until the Effective Time, unless Parent otherwise consents in writing by Parent (writing, which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its their business only in the usual, regular and ordinary course of business consistent with past practice and to comply with all Legal Requirements in all material respects and use all commercially reasonable efforts to preserve intact its current their present business organizationorganizations, keep available the services of its current their present executive officers and employees key employees, and to preserve its present the goodwill of those having material business relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Timeit. In addition, and without Without limiting the generality of the foregoing, except (w1) as contemplated or permitted by this Agreement, (2) as required by LawLegal Requirements or existing Employee Benefit Plans, or (x3) as consented to contemplated by Section 5.1 of the Company Disclosure Schedule, during the period from the date of this Agreement until the Effective Time, unless Parent otherwise consents in writing by Parent (writing, which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of neither the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of nor its Subsidiaries to, do any of the followingshall:
(a) except for Shares to be issued amend the certificate of incorporation or delivered pursuant to the exercise of Options bylaws (or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance similar organizational documents) of the shares Company or its Subsidiaries other than the liquidation of capital stock of any Subsidiary non-operating Subsidiaries that are not material to the Company;
(b) split, issue, deliver, sell, dispose of, pledge combine or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) reclassify any shares of its the Company’s capital stock of stock;
(c) declare, set aside or pay any class dividend or make any other ownership interestdistribution (whether payable in cash, stock or property) with respect to any shares of the Company’s capital stock;
(d) enter into any joint venture or partnership;
(e) issue any additional shares of, or any securities convertible or rights convertible into, exchangeable for, or evidencing the right options or other rights to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe foracquire, any shares of its capital stock stock, other than Company Shares issuable upon exercise of Company Options or upon conversion of the Company Convertible Notes;
(f) except in the ordinary course of business, consistent with past practices, sell, rent, lease, license, pledge, mortgage, transfer, leaseback or otherwise dispose of any other ownership interest of its properties or assets, except (including “phantom” rights and stock appreciation rights)A) sales of inventory in the ordinary course of business, (B) pursuant to contracts in force on the date of this Agreement, (C) dispositions of obsolete or worthless assets, (iiD) any other securities of pursuant to transactions solely among the Company and its wholly owned Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding (E) lease or sublease of real property on the date hereofmarket terms;
(bg) redeemexcept as permitted under existing equity compensation plans, purchase repurchase, redeem or otherwise acquireacquire any shares of the capital stock of the Company;
(h) incur any indebtedness for borrowed money or guarantee any such indebtedness, except for short-term borrowings incurred in the ordinary course of business pursuant to existing credit facilities or any replacement of credit facilities;
(i) adopt or enter into any plan, program or arrangement that would be an Employee Benefit Plan if it were in effect as of the date of this Agreement, or propose materially amend (including to redeemprovide for additional acceleration of vesting or additional rights under) any an Employee Benefit Plan, purchase or otherwise acquireincrease the compensation or (except in connection with an increase of a particular benefit for all employees eligible under such benefit arrangement as permitted under this Section 5.1(i)) the fringe benefits of any director, any outstanding Shares, Options, Warrants officer or other securities employee of the Company or any of its Subsidiaries; provided, however, that nothing in this Section 5.1(i) shall prohibit the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned from (directly or indirectlyA) by Company in their capacity as such;
(e) adopt a plan entering into at-will employment agreements with new employees below the level of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person executive officers or (iiB) any asset or assetsmaking such increases in compensation and fringe benefits to employees below the level of executive officers, except for purchases of components, raw materials or supplies either in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sellthat, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course aggregate, do not result in a material increase in the aggregate compensation expenses of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except taken as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000whole;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) practices, enter into, amend, renew, modify or consent amend any contracts with a term in excess of 12 months that are not terminable by the Company and its Subsidiaries on less than 120 days’ notice without material penalty to the Company or such Subsidiary, involving payment obligations for any single contract from and after the Effective Time (after giving effect to any reduction in payment obligations under such contracts upon a proper termination of (other than a termination such contracts in accordance with its their terms) in excess of $5,000,000 in the aggregate; provided, however, that the Company shall not, and shall cause its Subsidiaries not to, without the prior written consent of Parent, enter into any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date hereof would be required to be disclosed on Section 3.8(a) of this the Company Disclosure Schedule other than in the ordinary course of business, consistent with past practices, or that would require consent of a third party in the event of or with respect to the Offer or the Merger;
(k) change any of its methods of accounting or accounting practices in any material respect other than changes required under GAAP;
(l) make or change any material tax election, file any amended Company Returns, settle or compromise any material tax liability, or agree to any extension of a statute of limitations with respect to material taxes;
(m) authorize or make capital expenditures which are in excess of $2,000,000 in the aggregate;
(n) acquire (by merger, consolidation, acquisition of stock or material assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, except for the purchase of components, raw materials or other inventory or supplies in the ordinary course of business in a manner that is consistent with past practice;
(o) settle any material Legal Proceeding or other claim involving or against the Company or any of its Subsidiaries, except for settlements that would not be material to the Company and its Subsidiaries, taken as a whole, after taking into account existing reserves in the Latest Balance Sheet;
(p) fail to take any commercially reasonable action in connection with paying any fee or making any filing necessary to maintain any material Registered IP of the Company or any Subsidiary of the Company;
(q) (i) amend or terminate the Company Rights Agreement or (ii) amend, terminate, waive, modifyrelease or assign any material rights or claims under any standstill or similar Agreement, except, in the case of this clause (q)(ii), to the extent the Company’s Board of Directors determines in good faith (after consultation with counsel) that the failure to do so would create a material risk of a breach by the Company’s Board of Directors of its fiduciary duties to the Company’s stockholders;
(r) fail to enforce use commercially reasonable efforts to maintain existing insurance policies or consent comparable replacement policies to the termination extent available for a reasonable cost;
(s) take any action that would reasonably be expected to result in any of (other than a termination the conditions to the Offer set forth in Annex I or any of the conditions to the Merger set forth in Section 6 not being satisfied or that would reasonably be expected to materially delay the consummation of, or materially impair the ability of the Company to consummate, the transactions contemplated by this Agreement in accordance with it termsthe terms hereof;
(t) its material rights thereunderadopt a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation, recapitalization or other similar reorganization;
(u) enter into, amend, modify or supplement any contract, transaction, commitment or arrangement with any officer, director or other Affiliate (or any Affiliate of any of the foregoing); or
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment agree in writing to take or arrangement commit to do any of the foregoingforegoing actions.
Appears in 2 contracts
Samples: Merger Agreement (Gateway Inc), Merger Agreement (Acer Inc)
Interim Operations of the Company. Except The Company covenants --------------------------------- and agrees that, except (i) as required expressly contemplated by Lawthis Agreement, (ii) as consented to in writing required by applicable law, or (iii) as Parent may consent (which consent shall not be unreasonably withheldwithheld or delayed) in writing, delayed after the date hereof, and prior to the earlier of (x) the termination of this Agreement in accordance with Article VIII and (y) the time the designees of Parent constitute a majority of the Company Board of Directors (the "Appointment Date"): ----------------
(a) the business of the Company and the Company Subsidiaries shall be conducted only in the ordinary course of business consistent with past practice, and each of the Company and the Company Subsidiaries shall use its reasonable efforts to preserve its present business organization intact and maintain good relations with customers, suppliers, employees, contractors, distributors and others having business dealings with it;
(b) the Company shall not, directly or conditioned)indirectly, (i) except upon exercise of the Options or other rights to purchase Shares pursuant to the Option Plan outstanding on the date hereof or for the issuance of Shares pursuant to the terms of Options outstanding under the Plans in effect on the date hereof, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company or any capital stock of any Company Subsidiary beneficially owned by it, (ii) amend its Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) contemplated by this Agreement split, combine or reclassify the outstanding Shares or any outstanding capital stock of the Company;
(c) neither the Company nor any Company Subsidiary shall: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock, except, with respect to the Company, for regular quarterly dividends in an amount not to exceed $0.07 per Share; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants or rights of any kind to acquire, any shares of capital stock of the Company or any Company Subsidiaries, other than Shares reserved for issuance on the date hereof pursuant to the exercise of the Options outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any of its material assets, or incur or modify any material indebtedness or other liability, other than in the ordinary course of business consistent with past practice; or (iv) redeem, purchase or otherwise acquire any shares of its capital stock, or any instrument which includes a right to acquire such shares except in connection with the exercise of repurchase rights or rights of first refusal in favor of the Company with respect to shares of Common Stock issued upon exercise of Options granted under the Option Plan;
(d) except as set forth in Section 6.1 5.2(d) of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time neither the Company shall, and nor any Company Subsidiary shall cause each change the compensation or benefits payable or to become payable to any of its Subsidiaries toofficers, conduct its business only directors or employees (other than increases in wages to employees who are not directors or affiliates, in the usual, regular and ordinary course of business consistent with past practice and use all reasonable efforts to preserve intact its current business organizationpractice, keep available the services of its current officers and employees and preserve its present relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditionedany collective bargaining agreement), (y) expressly permitted pursuant enter into or amend any employment, severance, consulting, termination or other agreement or employee benefit plan or make any loans to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries toofficers, do any of the following:
(a) except directors, employees or affiliates or change its existing borrowing or lending arrangements for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or behalf of any of its Subsidiaries that is not wholly owned (directly such persons pursuant to an employee benefit plan or indirectly) by Company otherwise, other than such actions taken in their capacity as suchthe ordinary course of business consistent with past practice;
(e) neither the Company nor any Company Subsidiary shall pay or arrange for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or affiliate or pay or make any arrangement for payment to any officers, directors, employees or affiliates of the Company of any amount relating to unused vacation days, except payments and accruals made in the ordinary course of business consistent with past practice; adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any Company director, officer or employee, whether past or present, or amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing;
(f) the Company will not, in any material respect, modify, amend or terminate any of the material Company Agreements, and neither the Company nor any Company Subsidiary shall waive, release or assign any material rights or claims under any of the material Company Agreements;
(g) neither the Company nor any Company Subsidiary will permit any material insurance policy naming it as a beneficiary or a loss payee to be cancelled or terminated without notice to Parent;
(h) neither the Company nor any Company Subsidiary will (i) incur or assume any long-term indebtedness or any short-term indebtedness (which shall not include trade payables) (except for short-term indebtedness for working capital in the ordinary course of business not to exceed $50,000,000 in the aggregate); (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, other than in an immaterial amount; (iii) make any loans, advances or capital contributions to, or investments in, any other Person other than in an immaterial amount; (iv) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof or any equity interest therein; or (v) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(i) neither the Company nor any Company Subsidiary shall enter into or modify any collective bargaining agreement or any successor collective bargaining agreement to any collective bargaining agreement other than in the ordinary course of business;
(j) the Company and each Company Subsidiary shall timely and properly file, or timely and properly file requests for extensions to file, all federal, state, local and foreign tax returns which are required to be filed, and pay or make provision for the payment of all taxes owed by them;
(k) the Company shall not waive, amend or otherwise alter the Rights Agreement or redeem the Rights;
(l) neither the Company nor any Company Subsidiary will (i) change any of the accounting methods used by it except for such changes required by GAAP or (ii) make any Tax election or change any Tax election already made, adopt any Tax accounting method, change any Tax accounting method, enter into any closing agreement or settle any material claim or material assessment relating to Taxes or consent to any claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment;
(m) neither the Company nor any Company Subsidiary will pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business consistent with past practice, or of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(n) neither the Company nor any Company Subsidiary will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, Company Subsidiary (other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive neither the benefits ofCompany nor any Company Subsidiary will take, or agree in writing or otherwise to modify take, any action that would or is reasonably likely to result in any of the conditions to the Merger set forth in Article VII or any of the conditions to the Offer set forth in Annex I not being satisfied, or would make any representation or warranty of the Company contained herein inaccurate in any material mannerrespect at or prior to the Effective Time, any material confidentiality agreement or any standstill or similar agreement to which that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or any of its Subsidiaries is a partymaterially delay such consummation;
(p) except as required by applicable Tax Law, prepare or file neither the Company nor any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, Company Subsidiary shall make any electioncapital expenditure which is not in all material respects in accordance with the annual budget for the fiscal year 2002, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;a true and correct copy of which has been delivered to Parent; and
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of neither the Company or nor any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) Subsidiary will enter into any material joint venture or partnership;
(s) engage in any transactionsagreement, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoing, or authorize, recommend, propose, in writing or announce an intention to do any of the foregoing. Notwithstanding the foregoing, nothing in this Section 5.2 or any other provision of this Agreement shall prohibit (i) any wholly-owned direct or indirect subsidiary of the Company from paying cash dividends or making other cash distributions to the Company or any wholly-owned direct or indirect subsidiary of the Company in the ordinary course of business consistent with the Company's cash management procedures, or (ii) the Company (or any subsidiary of the Company) from 41 fulfilling its obligations under any agreement or contract specifically disclosed in Section 5.2 of the Company Disclosure Schedule and previously provided to Parent.
Appears in 2 contracts
Samples: Merger Agreement (Lee Sara Corp), Merger Agreement (Lee Sara Corp)
Interim Operations of the Company. Except During the period from the date of this Agreement to the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 8.1 (iexcept (w) as may be required by Law, (iix) as consented to in writing by Parent (with the prior written consent of Parent, which consent shall not be unreasonably withheld, delayed or conditioned), (iiiy) as contemplated or permitted by this Agreement or (ivz) as set forth in Section 6.1 of the Company Disclosure Schedule), from the date business of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business shall be conducted only in the usual, regular ordinary and ordinary usual course of business in all material respects consistent with past practice practice, and, to the extent consistent therewith, the Company and its Subsidiaries shall use all commercially reasonable efforts to (i) preserve intact its their current business organization, keep available the services of its current officers ; and employees and (ii) preserve its present their relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities suppliers and others having business dealings with them them; provided, however, that no action by the Company or any of its Subsidiaries with respect to the end that its goodwill and ongoing business matters addressed specifically by any provision of this Section 6.1 shall be unimpaired at the Effective Timedeemed a breach of this sentence unless such action would constitute a breach of such specific provision. In addition, and without Without limiting the generality of the foregoing, except (w) as may be required by Law, (x) as consented to in writing by Parent (with the prior written consent of Parent, which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly as contemplated or permitted pursuant to by this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement prior to the Effective Time, neither the Company shall not, and shall not permit nor any of its Subsidiaries to, do any of the followingwill:
(a) amend its Articles of Incorporation or Bylaws;
(b) except for Shares to be issued or delivered pursuant to the exercise of Stock Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Companyhereof, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interestinterest of the Company or any of its Subsidiaries, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interestinterest of the Company or any of its Subsidiaries, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest of the Company or any of its Subsidiaries or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights)of the Company or any of its Subsidiaries, or (ii) any other securities of the Company and or any of its Subsidiaries in respect of, in lieu of, or in substitution for, Shares Common Stock outstanding on the date hereof;
(bc) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase PlanCommon Stock;
(d) split, combine, subdivide or reclassify any Shares Common Stock or declare, set aside for payment or pay any dividend or other distribution in respect of any Shares Common Stock or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company shareholders in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment than in the ordinary course of business consistent with past practice, acquire, sell, lease, dispose of, pledge or encumber any assets that, in the aggregate, are material to the Company and its Subsidiaries;
(hg) other than in the ordinary course of business consistent with past practice, incur any material indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly or any wholly-owned Subsidiaries, and Subsidiary of the Company;
(h) other than to employees as set forth in respect Section 6.1(h) of travel the Company Disclosure Schedule, grant any increases in the compensation of any of its directors or officers, or enter into any new or amend any existing employment or severance agreements with any director, officer or key employee, or materially increase the compensation of any key employee other related expenses than in the ordinary course of business consistent with past practice;
(i) except as required by Law may be contemplated by, or except resulting from the transaction contemplated by, this Agreement or in the ordinary course of business consistent with past practices, terminate, materially amend or create any Benefit Plans or pay or accelerate any benefit thereunder, other than as may be required by the terms of a any Benefit Plan in effect as of on the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000hereof;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(k) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof or any significant amount of assets;
(l) amend pay, discharge or satisfy any material claim, liability or obligation other than in the Company’s certificate ordinary course of incorporation or business and consistent with past practice and other than to the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of extent reserved against in the Company, except as may be required by applicable Law and except for immaterial amendments under most recent consolidated financial statements included in the charter or organizational documents of any Subsidiary of SEC Reports filed prior to the Companydate hereof;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including not in respect the Company’s current capital budget included in Section 6.1(m) of research and development)the Company Disclosure Schedule, other than those which, in excess of $100,000 individually, are less than or equal to $200,000 or, 500,000 in the aggregate, are less than or equal to $1,000,000;
(n) make, revoke or change any material Tax election or material method of Tax accounting (within the meaning of Section 446(a) of the Code or similar provisions of state or local income Tax law), file any amended Tax Return (unless required by Law), enter into any closing agreement relating to a material amount of Taxes, settle or compromise any material liability with respect to Taxes or consent to any material claim or assessment relating to Taxes;
(o) (i) payabandon, dischargesell, settle assign, or satisfy grant any claimssecurity interest in or to any item of Owned Intellectual Property or Licensed Intellectual Property that is material to or necessary to operate the Company’s business in the ordinary course, liabilities(ii) grant to any third party any license, obligations sublicense or litigation (absolute, accrued, asserted covenant not to sxx with respect to any Owned Intellectual Property or unasserted, contingent or otherwise)Licensed Intellectual Property, other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, ; (iii) waive develop, create or assign invent any claims or rights Intellectual Property jointly with any third party (other than consultants in the ordinary course of substantial valuebusiness), (iv) waive any benefits ofdisclose, or agree allow to modify in be disclosed any respectconfidential Owned Intellectual Property, or, other than subject to commercially reasonably procedures to protect the terms hereofconfidentiality of such Owned Intellectual Property, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits offail to take all commercially reasonably actions that are required to maintain, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which that the Company or any reasonably believes are required to protect, its interest in each item of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which Owned Intellectual Property and the Company or any of its Subsidiaries is a partyLicensed Intellectual Property;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except other than in the ordinary course of business consistent with past practice, or (ii) on terms not materially adverse to distribute, license or co-promote any product of the Company and its Subsidiaries, taken as a whole, modify, amend or terminate any of its Subsidiaries Material Contract or waive, release or assign any material rights or claims thereunder;
(including products under development and products licensed q) fail to make in a timely manner any filings with the SEC required to be filed by the Company under the Securities Act or any the Exchange Act or the rules and regulations promulgated thereunder, except as would not affect the Company’s eligibility for the use Form S-3 under General Instruction I.A. to Form S-3; provided, however, that the filing of its Subsidiariesthe information required by Part III of Form 10-K by amendment to the Company’s Form 10-K not later than 120 days after the end of the Company’s fiscal year end shall not be deemed a violation of this Section 6.1(q);
(r) enter into any material joint venture contract or partnershipagreement with any director or executive officer of the Company or any Subsidiary or any of their respective affiliates (including any immediate family member of such person) or any other affiliate of the Company or any Subsidiary (other than a contract or agreement excluded from Section 6.1(h));
(s) engage in any transactionsdraw down on lines or credit or incur expenditures on research and development, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business and consistent with past practice;
(ut) (i) enter into, amend, renew, modify announce an intention or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoing; or
(u) fail to file Tax Returns or pay Taxes when due.
Appears in 2 contracts
Samples: Merger Agreement (Checkfree Corp \Ga\), Merger Agreement (Corillian Corp)
Interim Operations of the Company. Except (ia) as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed From the Effective Date until the Closing Date or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date earlier termination of this Agreement pursuant to ARTICLE IX, without the Effective Time prior written consent of the Buyer, the Company shall, and the Company shall cause each of its Subsidiaries the other Acquired Companies to, conduct its business :
(i) operate only in the usual, regular and ordinary course consistent with past practice and Ordinary Course of Business; and
(ii) use all commercially reasonable efforts to preserve intact its current business organization, keep available the services of its current officers organization and employees and preserve its present relationships with customersthird parties (including lessors, licensors, suppliers, licensors, licensees, distributors, Governmental Entities distributors and others having business dealings with them to the end that its goodwill customers) and ongoing business shall be unimpaired at the Effective Time. In addition, and without employees.
(b) Without limiting the generality or effect of Section 7.1(a), from the Effective Date until the Closing Date or the earlier termination of this Agreement pursuant to ARTICLE IX, except as set forth in Section 7.1(b) of the foregoing, except (w) Disclosure Schedule or expressly contemplated by this Agreement or the Ancillary Agreements or as required by Law, (x) as Order or any Governmental Authority, unless the Buyer has previously consented to in writing by Parent thereto (which consent shall will not be unreasonably withheld, delayed conditioned or conditioneddelayed), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, will not and shall not permit any of its Subsidiaries to, do any of the following:
(a) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of will cause the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;:
(i) except as required in the Ordinary Course of Business, (A) acquire, or dispose of, any material property or assets, (B) mortgage or subject to a Lien any property or assets (other than Permitted Liens) or (C) cancel any debts owed to or claims held by Law the Company or the Company Subsidiaries;
(ii) incur any Company Debt, other than borrowings under lines of credit or revolving credit facilities existing on the Effective Date;
(iii) enter into any agreement that would constitute a Material Contract, except agreements made in the Ordinary Course of Business;
(iv) amend, modify or terminate any (including by accelerating material rights or benefits under) Material Contract except in the Ordinary Course of Business or as required by the terms of a Benefit Plan such Material Contract;
(v) acquire any real estate or enter into any new lease with an annual cost greater than $100,000 per year;
(vi) engage in effect any transactions with, or enter into any agreement with, any Affiliates of the Company (excluding any intercompany agreements), except to the extent required by Law or pursuant to the terms of any Related Party Agreement disclosed in Section 5.16 of the Disclosure Schedule as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000Effective Date;
(jvii) make any material change to its accounting methods, principles or practices, except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless may be required by GAAP or applicable Law;
(lviii) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of make any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Companyamendment to its Governing Documents;
(mix) authorize issue or sell any Equity Interests or options, equity-based interests warrants or other rights to purchase any Equity Interests of the Company or the Company Subsidiaries or split, combine or subdivide the Equity Interests of the Company or the Company Subsidiaries;
(x) make any commitment with respect to, any new commitments for capital expenditure (other than capitalized software in the Ordinary Course of Business) in excess of $50,000 in the aggregate;
(xi) make any payment, discharge, satisfaction or settlement of any Action in excess of $50,000;
(xii) settle, agree to settle, waive or otherwise compromise any pending or threatened Actions (A) involving potential payments by or to any Acquired Company of more than $50,000 in aggregate, (B) that admit liability or consent to non-monetary relief, or (C) that otherwise are or would reasonably be expected to be material to the Acquired Companies, taken as a whole, or their respective businesses;
(xiii) write down the value of any tangible asset or assets in excess of $50,000 individually or $100,000 in the aggregate, other than write-downs of inventory in the Ordinary Course of Business;
(xiv) except in the Ordinary Course of Business or pursuant to any existing Contract, (A) increase the salary or other expenditures compensation of any director, officer, employee, or independent contractor who was paid or is expected to be paid more than $140,000 annually, (including B) make or grant any increase in respect of research and developmentany benefits under any Employee Plan (or any arrangement that would be an Employee Plan if it were in effect on the date hereof), (C) establish, adopt, amend, modify or terminate any Employee Plan (or any arrangement that would be an Employee Plan if it were in effect on the date hereof), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare Law or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, an existing contract or (iiD) to distributenegotiate, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renewextend or terminate any collective bargaining agreement or other Contract with any Union, modify or consent make any commitment or incur any liability to any Union;
(xv) hire, engage or terminate other than for cause the termination employment or engagement of any executive officer, employee or independent contractor with an annual salary or annual compensation greater than $140,000;
(xvi) make, or commit to make, any acquisition (including by merger, consolidation or acquisition of stock or assets) of any corporation, partnership or other business organization or entity or division thereof or otherwise enter into a new line of business or abandon or discontinue an existing line of business;
(xvii) (A) make any declaration or payment of, or set aside funds for, any dividend or other distribution with respect to any of its capital stock or other Equity Interests (other than cash dividends and cash distributions by or to a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement Subsidiary); or (iiB) amendrepurchase, waiveredeem, modifyor otherwise acquire or cancel any of its capital stock or other Equity Interests;
(xviii) merge or consolidate with any other Person;
(xix) open any facility or enter into any new line of business or close any facility or discontinue any line of business or any material business operations;
(xx) abandon, fail lapse, allow to enforce lapse, transfer, license or consent otherwise dispose of the rights to the termination of use any Intellectual Property (other than customer agreements entered into in the Ordinary Course of Business) or disclose material trade secrets to a termination third party other than in accordance with it terms) its material rights thereunder;
(v) create any Subsidiarythe Ordinary Course of Business pursuant to a non-disclosure or confidentiality agreement; or
(wxxi) (A) make, change or revoke any material Tax election, (B) amend any income Tax Return or other material Tax Return, (C) surrender any material refund or right thereto, (D) adopt or change any material accounting method in respect of Taxes or otherwise, (E) enter into any contract, closing agreement, commitment settlement or arrangement compromise of any income Tax liability or other material Tax liability, (F) consent to do any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, or (G) take any of the foregoingactions described in clauses (A), (B) and (C) of Section 5.11(a)(xv). Notwithstanding anything in Section 7.1 to the contrary (but excluding the prohibitions described in Section 7.1(b)(xxi)(G)), the Sellers, the Company and the Company Subsidiaries shall be permitted to take, and the Sellers shall be permitted to cause the Company and Company Subsidiaries to take, COVID Actions provided that the Company shall, prior to taking any such COVID Action, to the extent reasonably practicable, provide prior notice of such action to the Buyer and consider in good faith the views of Buyer with respect thereto.
Appears in 1 contract
Samples: Stock Purchase Agreement (Compass Group Diversified Holdings LLC)
Interim Operations of the Company. Except During the period from the date of this Agreement until the earlier of (ia) such time as designees of Parent first constitute at least a majority of the Company Board pursuant to Section 2.4(a), (b) the Effective Time and (c) the date, if any, on which this Agreement is earlier terminated pursuant to Section 9.1 (except (x) as may be required by Law, (iiy) as consented to in writing by with the prior written consent of Parent (provided that Parent shall be deemed to have consented if Parent does not object within seventy-two (72) hours after a written request for such consent is delivered to Parent by the Company), which consent shall not be unreasonably withheld, delayed or conditioned), or (iiiz) as contemplated or permitted by this Agreement or (iv) as set forth in Section 6.1 Agreement, the business of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business shall be conducted only in the usual, regular ordinary and ordinary usual course of business in all material respects consistent with past practice practice, and, to the extent consistent therewith, the Company and its Subsidiaries shall use all commercially reasonable efforts to (1) preserve intact its their current business organization, keep available the services of its current officers organization and employees and (2) preserve its present their relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities suppliers and others having business dealings with them them; provided, however, that no action by the Company or any of its Subsidiaries with respect to the end that its goodwill and ongoing business matters addressed specifically by any provision of this Section 7.1 shall be unimpaired at the Effective Timedeemed a breach of this sentence unless such action would constitute a breach of such specific provision. In addition, and without Without limiting the generality of the foregoing, except (wA) as may be required by Law, (xB) as consented to in writing by with the prior written consent of Parent (provided that Parent shall be deemed to have consented if Parent does not object within seventy-two (72) hours after a written request for such consent is delivered to Parent by the Company), which consent shall not be unreasonably withheld, delayed or conditioned, or (C) as contemplated or permitted by this Agreement, until the earlier of (1) such time as designees of Parent first constitute at least a majority of the Company Board pursuant to Section 2.4(a), (y2) expressly permitted the Effective Time and (3) the date, if any, on which this Agreement is earlier terminated pursuant to this Agreement or (z) as set forth in Section 6.1 of 9.1, neither the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit nor any of its Subsidiaries to, do any of the followingwill:
(a) amend its certificate of incorporation or bylaws (or equivalent organizational documents);
(b) except for Shares Common Stock to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof under the Company Equity Plans or the issuance of the shares of capital stock of any Subsidiary to the CompanyESPP, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interestinterest of the Company or any of its Subsidiaries, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interestinterest of the Company or any of its Subsidiaries, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest of the Company or any of its Subsidiaries or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights)of the Company or any of its Subsidiaries, or (ii) any other securities of the Company and or any of its Subsidiaries in respect of, in lieu of, or in substitution for, Shares Common Stock outstanding on the date hereof;
(bc) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase PlanCommon Stock;
(d) split, combine, subdivide or reclassify any Shares Common Stock or declare, set aside for payment or pay any dividend or other distribution in respect of any Shares Common Stock or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire acquire, sell, lease, dispose of, pledge or encumber any assets that, in the aggregate, are material to the Company and its Subsidiaries, taken as a whole (i) by purchase, merger or otherwise, any business or equity interest other than the sale of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies inventory in the ordinary course of business consistent with past practice or as permitted under Section 6.1(mbusiness);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any material indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its or any wholly owned Subsidiaries, and Subsidiary of the Company (other than to employees borrowings);
(h) grant any increases in respect the compensation of travel its directors, officers or other related expenses key employees, except in the ordinary course of business consistent business, or enter into any new employment or severance protection agreements with past practiceany such directors, officers or key employees;
(i) except as required may be contemplated by Law this Agreement or except as required by in the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practiceof business, (iii) enter into, adopt, terminate or amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000Benefit Plans;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(k) except as set forth in Schedule 7.1(k), make, or agree to make, any capital expenditures in excess of Fifty Thousand US Dollars ($50,000);
(l) amend the Company’s certificate of incorporation settle or the Company’s bylaws compromise any material claim by or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of against the Company;
(m) authorize or make allow any commitment with respect to, any capital expenditure or other expenditures (including insurance maintained by the Company to cease being in respect of research full force and development), other than those which, individually, are less than or equal to $200,000 effect; or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy take any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than action which would cause the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject conditions to the terms hereof, fail Closing to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would not be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoingsatisfied.
Appears in 1 contract
Interim Operations of the Company. Except (i) as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of The Company covenants and agrees that during the Company Disclosure Schedule, period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (y) expressly provided by this Agreement or (z) agreed to in writing by Parent, after the date hereof and prior to the Effective Time Time:
(a) the business of the Company shall, and shall cause each of its Subsidiaries to, conduct its business shall be conducted only in the usualOrdinary Course of Business, regular and ordinary course consistent with past practice and the Company shall use all its commercially reasonable efforts to preserve intact its current business organization, organization and goodwill and the business organization and goodwill of its Subsidiaries and keep available the services of its their current officers and employees and preserve its present relationships and maintain existing relations with customers, suppliers, licensorsofficers, licenseesemployees and creditors;
(b) the Company shall not, distributorsnor shall it permit any of its Subsidiaries to, Governmental Entities (i) enter into any new line of business or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures, other than capital expenditures and others having business dealings obligations or liabilities in such amounts not greater than one hundred ten percent (110%) of the amount of such capital expenditures and obligations or liabilities set forth in the Company's capital budget described in Section 5.1(b) of the Disclosure Letter (the "Capital Budget");
(c) the Company shall not, nor shall it permit any of its Subsidiaries to, amend its articles of incorporation or bylaws, except as contemplated by the transactions contemplated hereby;
(d) the Company shall not, nor shall it permit any of its Subsidiaries to, declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or any other property or right, with them respect to its capital stock; and the end that Company shall not, nor shall it permit any of it Subsidiaries to, (i) adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or of any other such securities or agreements of the Company or any of its goodwill and ongoing business shall be unimpaired Subsidiaries, other than issuances of shares of Company Common Stock pursuant to securities, options, warrants, calls, commitments or rights existing at the Effective Time. In additiondate hereof and previously disclosed to Parent in writing; or (ii) redeem, and without limiting the generality purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the foregoingtype described in clause (i) of this Section 5.1(d);
(e) the Company shall not, nor shall it permit any of its Subsidiaries to, (i) except for normal increases in the Ordinary Course of Business with respect to non-officer employees, grant any increase in the compensation or benefits payable or to become payable by the Company or any of its Subsidiaries to any employee; (ii) adopt, enter into, amend or otherwise increase, or accelerate the payment or vesting of the amounts, benefits or rights payable or accrued or to become payable or accrued under any compensation, severance, retention, other similar profit sharing, stock option or equity-linked pension or retirement plan, program agreement or arrangement; or (iii) enter into or amend any employment or severance agreement or, except in accordance with existing contracts or agreements disclosed in Section 3.13 of the Disclosure Letter, grant any severance or termination pay to any officer, director or employee of the Company or any of its Subsidiaries;
(f) the Company shall not, nor shall it permit any of its Subsidiaries to, change the accounting principles used by it unless required due to changes in GAAP or by Regulation S-X under the Exchange Act;
(g) the Company shall not, nor shall it permit any of its Subsidiaries to, make any acquisition, whether by purchase of stock or assets, of any Person or any division or business of any Person;
(h) the Company shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any of the Assets, except (wi) as required by Lawfor tractors and trailers in accordance with the Capital Budget or (ii) in the Ordinary Course of Business;
(i) the Company shall not, nor shall it permit any of its Subsidiaries to, mortgage, pledge, hypothecate, grant any security interest in, or otherwise subject to any other Lien other than Permitted Liens, any of the Assets;
(j) the Company shall not, nor shall it permit any of its Subsidiaries to, (xi) as consented to in writing by Parent pay, discharge or satisfy any material claims (which consent shall not be unreasonably withheld, delayed or conditionedincluding claims of stockholders), liabilities or obligations (yabsolute, accrued, asserted or unasserted, contingent or otherwise) expressly permitted where such payment, discharge or satisfaction would require any material payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of Material Contracts as in effect on the date hereof, or (ii) compromise, settle, grant any waiver or release relating to or otherwise adjust any material Litigation (other than the settlement of any Litigation described in Section 5.1(j) of the Disclosure Letter) outside the limits of any reserves set aside specifically for such settled Litigation;
(k) the Company shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with, or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Company's affiliates other than pursuant to agreements in force on the date of this Agreement or (z) as set forth in Section 6.1 3.21 of the Disclosure Letter;
(l) the Company Disclosure Scheduleand its Subsidiaries shall not make or change any Tax election, from the date of this Agreement to the Effective Time, amend any Return or settle or compromise any Tax liability;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, do take any of the following:
(a) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumberaction that would, or authorize or propose the issuancewould reasonably be expected to, delivery, sale, disposition or pledge or other encumbrance of result in (i) any shares of its capital stock of representations and warranties set forth in this Agreement becoming untrue in any class or any other ownership interestrespect, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries conditions to the Merger set forth in respect of, in lieu ofArticle VI not being satisfied, or in substitution for, Shares outstanding (iii) a Material Adverse Effect on the date hereofCompany;
(bn) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; providedshall not, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of shall not permit any of its Subsidiaries that is not wholly owned (directly to, adopt or indirectly) by Company in their capacity as such;
(e) adopt enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, Subsidiaries (other than the Merger) or any agreement relating to an Acquisition Proposal, except as provided for in Section 5.2;
(fo) acquire the Company shall not, and shall not permit any of its Subsidiaries to, (i) by purchase, merger incur or otherwise, assume any business indebtedness or equity interest of any Person or off-balance sheet financing obligations; (ii) incur or modify any asset material indebtedness or assetsother liability; (iii) assume, except for purchases of componentsguarantee, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback endorse or otherwise encumber become liable or dispose responsible (whether directly, contingently or otherwise) for the obligations of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
Person; (hiv) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, Person (other than to the Company and its wholly owned SubsidiariesSubsidiaries of the Company, and other than or by such Subsidiaries to the Company, or customary loans or advances to employees in respect of travel or other related expenses in the ordinary course of business consistent accordance with past practice; or (v) enter into any material commitment or transaction, except, in the case of clauses (i) through (v), (x) in accordance with the Capital Budget, (y) in the Ordinary Course of Business, or (z) if not covered in the Capital Budget, in amounts not exceeding $100,000 individually or $1,000,000 in the aggregate;
(ip) except as required by Law or except as required by the terms Company shall not, and shall not permit any of a Benefit Plan in effect as of the date of this Agreementits Subsidiaries to, (i) enter into an employment agreement with any Person agreement, understanding or grant to any Person any right to severancecommitment that materially restrains, retention, change in control limits or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of impedes the Company Company's or any of its Subsidiaries' ability to compete with or conduct any business or line of business, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to including geographic limitations on the Company’s President 's or any of its Subsidiaries' activities;
(q) the Company shall not, and Chief Operating Officershall not permit any of its Subsidiaries to, ordinary course annual increases consistent with past practice, (iii) enter into, adoptmodify, amend or terminate any collective bargaining agreement Material Contract or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 contract that would be a Material Company Contract if in effect on entered into prior to the date hereof, or waive or assign any of this Agreement its rights or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;claims; and
(vr) create the Company shall not, nor shall it permit any Subsidiary; or
(w) of its Subsidiaries to, enter into any an agreement, contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. Except During the period from the date of this Agreement to the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 8.1 (ithe “Pre-Closing Period”) (except (w) as may be required by Law, (iix) as consented to in writing by with the prior written consent of Parent (provided that Parent shall be deemed to have consented if Parent does not object within 72 hours after a written request for such consent is delivered to Parent by the Company), which consent shall not be unreasonably withheld, delayed or conditioned), (iiiy) as contemplated or permitted by this Agreement Agreement, or (ivz) as set forth in Section 6.1 of the Company Disclosure Schedule), from the date business of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business shall be conducted only in the usualOrdinary Course of Business, regular and ordinary course consistent with past practice and the Company will use all commercially reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve maintain its present relationships relations and goodwill with its material suppliers, customers, supplierslandlords, licensors, licensees, distributors, Governmental Entities creditors and others having material business dealings relationships with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Timeit. In addition, and without Without limiting the generality of the foregoing, except (w) as may be required by Law, (x) as consented to in writing by with the prior written consent of Parent (provided that Parent shall be deemed to have consented if Parent does not object within 72 hours after a written request for such consent is delivered to Parent by the Company), which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly as contemplated or permitted pursuant to by this Agreement Agreement, or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement prior to the Effective Time, Time neither the Company shall not, and shall not permit nor any of its Subsidiaries to, do any of the followingwill:
(a) amend its Organizational Documents;
(b) except for Shares Common Stock to be issued or delivered pursuant to the exercise Company Equity Plans and except for the issuance, grant or delivery of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary equity awards issued pursuant to the CompanyCompany Equity Plans in the Ordinary Course of Business, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interestinterest of the Company or any of its Subsidiaries, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interestinterest of the Company or any of its Subsidiaries, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest of the Company or any of its Subsidiaries or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights)of the Company or any of its Subsidiaries, or (ii) any other securities of the Company and or any of its Subsidiaries in respect of, in lieu of, or in substitution for, Shares Common Stock outstanding on the date hereof;
(bc) redeem, purchase purchase, exchange or otherwise acquire, or propose to redeem, purchase purchase, exchange or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase PlanCommon Stock;
(d) split, combine, subdivide or reclassify any Shares or Common Stock;
(e) declare, set aside for payment or pay any dividend or other distribution in respect of any Shares Common Stock or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company shareholders in their capacity as such;
(ef) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(fg) acquire (i) by purchase, merger or otherwise, any business or equity interest other than sales of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies inventory in the ordinary course Ordinary Course of business consistent with past practice or as permitted under Section 6.1(m);
(g) Business, acquire, sell, lease, licensedispose of, mortgagepledge or encumber any assets that, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practiceaggregate, are material to the Company and its Subsidiaries, taken as a whole;
(h) incur any indebtedness for borrowed money in excess of $1,000 in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its or any wholly owned Subsidiaries, and other than to employees in respect Subsidiary of travel or other related expenses in the ordinary course of business consistent with past practiceCompany;
(i) except as required by Law other than in the Ordinary Course of Business, grant any material increases in the compensation of its directors, officers or except as required by the terms of a Benefit Plan in effect as of the date of this Agreementemployees, (i) or enter into an any new employment agreement or severance protection agreements with any Person such directors, officers or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000employees;
(j) except as required by terminate, amend or waive any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or material rights in any other way secure Material Contract in a manner that would be materially adverse to the payment of compensation and benefits Company or fail to perform any material obligations under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determinedMaterial Contract;
(k) terminate or amend any Benefit Plans in a manner that would materially increase the costs to the Company;
(l) change any of the accounting methods used by the Company Company, including accelerating the payment of any Liabilities or its Subsidiaries delaying the collection of any receivables in a manner inconsistent with past practices, unless required by GAAP or applicable Law;
(lm) amend take any action that would invalidate or cause the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents cancellation of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter current insurance coverage or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, maintain current insurance coverage or consent to suitable renewals thereof providing coverage substantially the same as any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiaryexpiring policy; or
(wn) enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. Except (i) as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule, as required pursuant to this Agreement or as agreed in writing by Parent, from the date hereof until the earlier of (A) the valid termination of this Agreement to in accordance with Article IX hereto and (B) the Effective Time Time, the Company shall, and shall cause each of its the Company Subsidiaries to, (i) conduct its business only their businesses in all material respects in the usual, regular and ordinary course consistent with past practice and practice, (ii) use all commercially reasonable efforts to preserve intact its current their present business organizationorganizations, (iii) use commercially reasonable efforts to maintain satisfactory relations with and keep available the services of its their current officers and employees other key employees, (iv) maintain in effect all material foreign, federal, state and local licenses, approvals and authorizations, including all material licenses and permits that are required for the Company or any Company Subsidiary to carry on its business, (v) use commercially reasonable efforts to preserve its present existing relationships and goodwill with Governmental Entities, customers, lenders, suppliers, licensors, licensees, distributors, Governmental Entities lessors, employees, business associates, alliance team members and joint venture partners and others having business dealings relationships with them the Company and the Company Subsidiaries and (vi) refrain from knowingly taking or permitting any Company Subsidiary to take any action the end that its goodwill and ongoing business shall result of which would or would reasonably be unimpaired at expected to result in any of the Effective Timeclosing conditions set forth in Article VIII hereof not being satisfied. In addition, and without Without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, as required pursuant to this Agreement or as agreed in writing by Parent, from the date hereof until the earlier of (x) the valid termination of this Agreement to in accordance with Article IX hereto and (y) the Effective TimeDate, the Company shall not, and nor shall not it permit any of its Subsidiaries Company Subsidiary to, do any of the following:
(a) except for Shares to be issued amend the Company Governing Documents or delivered pursuant to equivalent documents of any Company Subsidiary or amend the exercise terms of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each any outstanding on the date hereof or the issuance security of the Company or any Company Subsidiary;
(b) split, combine, subdivide or reclassify any shares of capital stock of the Company or any Company Subsidiary, other than any such transaction by a Company Subsidiary that remains a Company Subsidiary after consummation of such transaction, in the ordinary course of business consistent with past practice;
(c) declare, set aside or pay any dividend or other distribution payable in cash, stock or property (or any combination thereof) with respect to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its ’s capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereofstock;
(bd) redeem, purchase or otherwise acquire, or propose offer to redeem, purchase or otherwise acquire, any outstanding SharesEquity Interests, except (i) for the acceptance of previously owned Shares in payment of all or a portion of the exercise price delivered by one or more optionees in the course of exercising all or portions of any Company Options, Warrants and (ii) for the withholding of otherwise deliverable Shares in the course of effecting one or more optionees’ tax withholding elections pursuant to the exercise of all or portions of any Company Options;
(e) issue, sell, pledge, deliver, transfer, dispose of or encumber any shares of, or securities convertible into or exchangeable for, or grant any Company Options, Restricted Stock or Warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class, or grant to any Person any right the value of which is based on the value of Shares or other capital stock, other than (i) the issuance of Shares reserved for issuance on the date hereof pursuant to the exercise of the Company Options disclosed in Section 4.2(b) of the Company Disclosure Schedule and outstanding on the date hereof or (ii) the issuance of shares of capital stock of the Company upon the exercise of Warrants;
(f) acquire (i) any Person (whether pursuant to merger, stock or asset purchase or otherwise) in one transaction or any series of related transactions or (ii) any equity interests in any Person or any business or division of any Person or any assets of any Person (or business or division thereof);
(g) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets or properties of the Company or any of the Company Subsidiaries having an aggregate value of more than $2,000,000;
(h) (i) incur or assume any long-term or short-term indebtedness except (A) short-term indebtedness made in the ordinary course of business consistent with past practice not to exceed $1,000,000 in the aggregate or (B) additional indebtedness under existing debt facilities or like replacement debt facilities for short-term working capital purposes not to exceed $5,000,000 outstanding at any time; (ii) issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any Company Subsidiaries, (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, other than with respect to Company Subsidiaries in the ordinary course of business consistent with past practice or (iv) make any loans, advances or capital contributions to, or investments in, any other Person, other than loans, advances or capital contributions to, or investments in, wholly owned Company Subsidiaries made in the ordinary course of business consistent with past practice;
(i) other than as required by applicable Law or the terms of this Agreement or any agreement existing on the date hereof make any change in, or accelerate the vesting of, the compensation or benefits payable or to become payable to, or grant any severance or termination pay to, any of its Subsidiariesofficers, directors, employees, agents or consultants or enter into or amend any employment, consulting, severance, retention, change in control, termination pay, collective bargaining or other agreement or any equity based compensation, pension, deferred compensation, welfare benefits or other employee benefit plan or arrangement, or make any loans to any of its officers, directors, employees, affiliates or agents or consultants make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to a Benefit Plan or otherwise take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan, take any action to accelerate the time of payment or vesting of any compensation or benefits under any Benefit Plan or make any material determination under any Benefit Plan, with respect to such determination, that is inconsistent with the ordinary course of business or past practice or that would result in a material liability to the Company; other than (i) by permitting the acceleration of any Company Options or Restricted Stock pursuant to the terms of agreements in existence on the date hereof which provide for such acceleration or (ii) as otherwise provided in Section 3.4 of this Agreement or Section 6.1 of the Company Disclosure Schedule;
(j) announce, implement or effect any material reduction in labor force, lay off, early retirement program, severance program or other program or effort concerning the termination of employment of employees of the Company or any Company Subsidiary other than routine employee terminations;
(k) incur any capital expenditures or any obligations or liabilities in respect thereof, in excess of the aggregate of those contemplated in the capital expenditures budgets for the Company and the Company Subsidiaries previously made available to Parent and summarized in Section 6.1(k) of the Company Disclosure Schedule; provided that in respect of capital expenditures for which budgeted amounts are contemplated in the capital expenditures budgets to exceed $500,000, neither the Company nor the Company Subsidiaries shall incur capital expenditures or any obligations or liabilities in respect thereof in excess of such budgeted amounts without the prior written consent of Parent;
(l) enter into any agreement or arrangement that limits or otherwise restricts the Company, any Company Subsidiary, or upon completion of the Transactions, Parent or its Subsidiaries or any successor thereto from engaging or competing in any line of business or in any location;
(m) except as disclosed in Section 6.1(m) of the Company Disclosure Schedule, amend, modify, extend or terminate any Company Material Contract, including any Company Collective Bargaining Agreement, or otherwise waive, release or assign any rights, claims or benefits thereunder, or enter into any contract that, if existing on the date hereof, would be deemed to be a Company Material Contract, including any such contract that would be deemed to be a Company Collective Bargaining Agreement; provided, however, that this Agreement shall not prohibit the Company may or any of the Company Subsidiaries from entering into aircraft leases after the date hereof with the prior agreement of Parent (i) withhold Shares it being understood that Parent has or will agree to satisfy Tax obligations the entering into of the letters of intent with respect to Options, Restricted Stock Awards and RSUs granted prior such aircraft leases as are referred to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (iiin Section 6.1(m) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or WarrantsCompany Disclosure Schedule);
(cn) grant settle, pay or discharge any Optionsclaims, Restricted Stock Awardslitigation, RSUs investigation or other equity-based awards arbitration, in each case made or grant any options to purchase Shares under pending against the Company’s 2007 Employee Stock Purchase Plan, any of the Company Subsidiaries or any of their officers and directors in their capacities as such, other than the settlement, payment or discharge of claims, litigation, investigations or arbitrations in the ordinary course of business consistent with past practice;
(do) split, combine, subdivide fail to maintain insurance at levels comparable to current levels or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares a manner consistent with past practice or otherwise make permit any payments material insurance policy naming it as a beneficiary or distributions a loss payee to stockholders be cancelled or terminated without reasonable prior notice to Purchaser;
(p) change any of the Company accounting methods used by it, except for such changes required by GAAP or of Regulation S-X promulgated under the Exchange Act, as concurred in by its independent registered public accountants;
(q) revalue any of its Subsidiaries that is not wholly owned (directly material assets, including writing down the value of inventory or indirectly) writing down notes or accounts receivable, other than as may be required by Company in their capacity as suchGAAP or applicable Law;
(er) make or change any material Tax election, change an annual accounting period, adopt or change any accounting method, file any amended Tax Returns, enter into any closing agreement with respect to material Taxes, settle or consent to any material Tax Claim, take any affirmative action to surrender any right to claim a refund of Taxes, or consent to any extension or waiver of the limitation period applicable to any Tax Claim;
(s) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, (other than the Merger);
(ft) acquire take any action which would, directly or indirectly, restrict or impair the ability of Purchaser to vote, or otherwise to exercise the rights and receive the benefits of a stockholder with respect to, securities of the Company or any Company Subsidiary acquired or controlled or to be acquired or controlled by Parent or Purchaser;
(iu) except as required by purchaseapplicable Law, merger convene any regular or otherwisespecial meeting (or any adjournment or postponement thereof) of the stockholders of the Company other than the Special Meeting;
(v) fail to continue, any business or equity interest in respect of any Person or (ii) any asset or assetsall Company Aircraft, except for purchases of components, raw materials or supplies in the ordinary course of business all material maintenance programs consistent with past practice (except as required or permitted by applicable Law), including using reasonable best efforts to keep all such Company Aircraft in such condition as permitted may be necessary to enable the airworthiness certification of such Company Aircraft under Section 6.1(m)the FAA to be maintained in good standing at all times;
(gw) sell, lease, license, mortgage, sell and leaseback decrease or otherwise encumber defer in any material respect the level of training provided to the employees of the Company or dispose of any of its properties the Company Subsidiaries or other assets the level of cost expended in connection therewith prior to the date hereof;
(x) fail to keep in effect any governmental route authority used by the Company or any interests thereinCompany Subsidiary as of the date of this Agreement, except for sales of inventory and used equipment provided that the restrictions set forth in this Section 6.1(x) shall not apply to any such failure if such failure occurs in the ordinary course of business consistent with past practice;
(hy) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant material changes to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed flight routes flown by the Company or any Company Subsidiary as of its Subsidiaries);the date hereof; and
(rz) enter into any material joint venture or partnership;
(s) engage in any transactionswritten agreement, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoing, or otherwise authorize in writing or take any action in furtherance of any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. Except During the period from the date hereof to the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 8.1 (except (i) as may otherwise be required by in connection with applicable Law, (ii) as consented to in writing by Parent (with the prior written consent of Parent, which consent shall not be unreasonably withheld, delayed or conditioned, (iii) as required by this Agreement, or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule), the Company shall and shall cause the Company Subsidiaries to conduct the Business only in the ordinary course of business, and, to the extent consistent therewith, the Company and the Company Subsidiaries shall use commercially reasonable efforts to preserve intact their current business organization and maintain their relationships with customers, resellers, distributors, franchisees (and other similar channel partners), suppliers, employees, licensors, licensees of the Business and others having Business dealings with them. Without limiting the generality of the foregoing (except (i) as may otherwise be required in connection with applicable Law, (ii) with the prior written consent of Parent, which consent shall not be unreasonably withheld, delayed or conditioned (but which may be withheld for any reason with respect to clauses (a)-(f) below), (iii) contemplated as required by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule), during the period from the date of this Agreement hereof to the Effective Time or the Company shalldate, and shall cause each of its Subsidiaries toif any, conduct its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve its present relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (on which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted this Agreement is earlier terminated pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time8.1, the Company agrees that it shall not, and nor shall not it permit any of its Subsidiaries Company Subsidiary to, do any of the following:
(a) amend its certificate of incorporation or bylaws (or equivalent organizational documents of any Company Subsidiary);
(b) except for Shares Company Common Stock to be issued or delivered pursuant to upon the exercise of Options or Warrants, the settlement of RSUs or the lapsing Company Options outstanding as of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Companyin accordance with their terms, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of of, (i) any shares of its capital stock of any class or any other ownership interestequity interest of the Company or any of its Subsidiaries, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interestequity interest of the Company or any Company Subsidiary, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership equity interest of the Company or any Company Subsidiary or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership equity interest (including “phantom” rights and stock appreciation rights), of the Company or any Company Subsidiary or (ii) any other securities of the Company and or any of its Subsidiaries in respect of, in lieu of, or in substitution for, Shares Company Common Stock outstanding on the date hereof;
(bc) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding SharesCompany Common Stock, Options, Warrants or other securities except for the acquisition of the shares of Company or any of its Subsidiaries; provided, however, that the Common Stock (and corresponding rights to purchase Company may Common Stock) (i) withhold Shares from holders of Company Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Options to the extent required or permitted under the terms of such Company Options or to satisfy related Tax obligations with respect to upon exercise or settlement of Company Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with as required by the surrender terms of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Benefit Plan;
(d) (i) split, combine, subdivide or reclassify any Shares shares of its capital stock or declare, set aside for payment or pay or agree to pay any dividend or other distribution in respect of any Shares shares of its capital stock or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as suchsuch or (ii) enter into any agreement with respect to the voting or registration of its capital stock;
(e) merge or consolidate the Company or any Company Subsidiary or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, business combination, recapitalization or other reorganization of the Company or any of its SubsidiariesCompany Subsidiary, other than the MergerTransactions, or restructure or reorganize any Business division, operating unit or Subsidiary;
(f) other than as permitted under Section 6.1(o), acquire (i) including by purchasemerger, merger consolidation, or otherwise, any business or equity interest acquisition of any Person or (ii) any asset stock or assets), except for purchases sell, lease, license or otherwise dispose of, or pledge or encumber any assets, or create, extend, grant or issue any Lien over any of componentsthe properties or assets of the Business, raw materials or supplies other than in the ordinary course of business consistent in connection with past practice or as permitted under Section 6.1(m)the sale of any of the Company’s services to customers;
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money Indebtedness in addition to that incurred maintained as of the date of this Agreement hereof or guarantee any such indebtedness Indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than (i) loans, advances or capital contributions by the Company or any wholly owned Company Subsidiary to the Company and its or any wholly owned SubsidiariesCompany Subsidiary, (ii) borrowings under the Company’s existing credit facilities in the ordinary course of business and (iii) trade account payables and similar liabilities arising in the ordinary course of business except for 60 Day Payables exceeding $200,000 in excess of the aggregate amount of 60 Day Payables listed on Schedule 4.5(g) of the Company Disclosure Schedule as of the date of this Agreement;
(i) grant any increases in the compensation of any of its directors, executive officers or employees, (ii) enter into or amend any employment or severance agreements with any directors, executive officers or employees, (iii) hire or terminate any employee or executive officer, other than (x) terminations with good cause or (y) hiring to employees replace an employee listed on Section 4.17 of the Company Disclosure Schedule at substantially the same compensation level, (iv) establish or amend any bonus, commission or incentive plan or performance targets under any existing bonus, commission or incentive plan, or (v) retain any consultant or enter into a consulting agreement;
(i) enter into, terminate or amend any Benefit Plan, except (i) as may be contemplated by this Agreement, or (ii) to the extent required to comply with applicable Law;
(j) change any of the accounting policies, practices, principles, procedures or methods used by the Company or any Company Subsidiary unless required by GAAP or applicable Law;
(i) waive, release, or assign any material claims or compromise, settle or agree to settle any Legal Proceeding (including any Legal Proceeding relating to this Agreement or the transactions contemplated hereby) other than waivers, releases, compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary damages not in excess of $75,000 individually or $150,000 in the aggregate and provide the Company and Company Parties with a full release of Liability, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company or any Company Subsidiary, or (ii) initiate any Legal Proceeding;
(l) make, change or revoke any Tax election (which shall include any election under Treasury Regulation section 301.7701-3), (ii) consent to any extension or waiver of the statute of limitations period applicable to any Tax claim or assessment, (iii) change any annual Tax accounting period, (iv) change (or make a request to any Taxing Authority to change) any method of Tax accounting or enter into any Tax allocation agreement, Tax sharing agreement or Tax indemnity agreement, (v) settle any Tax claim, audit or assessment, or (vi) knowingly surrender any right to claim a Tax refund;
(m) with respect of travel to any Company Intellectual Property, (i) encumber, impair, abandon, fail to maintain, transfer, license to any Person (including through an agreement with a reseller, distributor, franchisee or other related expenses similar channel partner), or otherwise dispose of any right, title or interest of the Company or any of its Subsidiaries in any Company Intellectual Property (other than in the ordinary course of business consistent with past practice) or (ii) divulge, furnish to or make accessible any material trade secrets within the Company Intellectual Property to any Person who is not subject to an enforceable written agreement to maintain the confidentiality of such trade secrets;
(n) terminate, cancel, materially amend, renew, or request or agree to any material change in or material waiver under any Specified Contract, or allow expiration, without exercise of renewal options available to the Company or any Company Subsidiary, of any Specified Contract necessary to conduct the Business as currently conducted, or enter into any other transaction outside the ordinary course of business consistent with past practice;
(io) except as required by Law make or except as required by the terms of a Benefit Plan authorize any capital expenditure in effect as excess of the Company’s capital expenditure budget as disclosed to Parent prior to the date of this Agreementhereof, or fail to make any capital expenditure provided for in such capital expenditure budget required to operate the Business in the ordinary course;
(p) (i) enter into an employment agreement with change the methods of collection of any Person customer accounts receivable or grant to any Person any right to severancediscount, retention, change in control transfer or termination compensation or benefits, or increase any Person’s rights theretoassign accounts receivable, (ii) grant any current fail to pay trade obligations when due or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, other than obligations being contested in good faith, (iii) enter into, adopt, into or amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance material transaction with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial valuean Affiliate, (iv) waive any benefits offail to keep intact all existing insurance arrangements, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any renew expiring insurance policies at levels of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business coverage consistent with past practice, or to submit claims or notifications of loss prior to any deadline imposed by an applicable insurance policy, or (iiv) to distribute, license or co-promote make any product material revaluation of the Company or any of its Subsidiaries assets or liabilities, including any material write-offs, material increases or decreases in any reserves or any material write-up of the value of inventory, property, plant, equipment or any other asset;
(including products under development and products licensed by q) take or fail to take any action intended to make any of the Company’s representations or warranties contained in Article IV untrue or incorrect or to cause the Company not to perform one or any more of its Subsidiaries);the covenants required hereunder to be performed by it, in each case that would result in the closing conditions set forth in Section 7.2(a) or Section 7.2(b) not being satisfied; or
(r) enter into or make any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any enforceable contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. Except (i) The Company covenants and agrees as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of itself and its Subsidiaries that during the Company Disclosure Schedule, period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (w) disclosed in Section 5.1 of the Company Disclosure Letter, (x) expressly contemplated or permitted by this Agreement, (y) required by applicable Law, or (z) agreed to in writing by Parent, after the date of this Agreement and prior to the Effective Time Time:
(a) the business of the Company shall, and shall cause each of its Subsidiaries to, conduct its business shall be conducted only in the usual, regular and ordinary course consistent with past practice practice, and the Company shall use all its reasonable best efforts to preserve intact its current business organization, organization and goodwill and the business organization and goodwill of its Subsidiaries and keep available the services of its their current officers and employees and preserve its present relationships and maintain existing relations with customers, suppliers, licensorsofficers, licensees, distributors, Governmental Entities employees and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except creditors;
(wb) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and nor shall not it permit any of its Subsidiaries to, do (i) enter into any new line of business, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2004 other than capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than, and during the same time period set forth in, the Company’s current capital budget approved by the Company Board in February 2004 and October 2004, the amount of which has been furnished to Parent prior to the date of this Agreement, or (iii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2005 other than capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than, and during the same time period set forth in, the Company’s total capital budget for calendar year 2005 approved by the Company Board in December 2004, which has been furnished to Parent prior to the date of this Agreement;
(c) the Company shall not, nor shall it permit any of the following:its Subsidiaries to, amend its certificate of incorporation or bylaws or similar organizational documents;
(ad) except for Shares to be issued the Company shall not, nor shall it permit any of its Subsidiaries (other than direct or delivered pursuant to indirect wholly owned Subsidiaries) to, declare, set aside or pay any dividend (other than, in the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance case of the Company, regular quarterly dividends consistent with past practice and in no event exceeding $0.06 per share per quarter) or other distribution, whether payable in cash, stock or any other property or right, with respect to its capital stock;
(e) the Company shall not, nor shall it permit any of its Subsidiaries to (i) adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly other such securities or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization agreements of the Company or any of its Subsidiaries, other than the Merger;
issuances (f) acquire (iA) by purchasethe Company of Company Options and Company Common Stock to employees and directors of the Company in the ordinary course of the Company’s annual compensation procedures, merger consistent with past practice and in accordance with Section 5.1(e)(i)(A) of the Company Disclosure Letter; (B) of Company Options to new hires or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies promoted employees in the ordinary course of business consistent with past practice or as permitted under and in accordance with Section 6.1(m);
5.1(e)(i)(B) of the Company Disclosure Letter; (gC) sell, lease, license, mortgage, sell pursuant to the Company Warrants and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of Company Options outstanding on the date of this Agreement or guarantee any such indebtedness issued after the date of this Agreement in accordance with clauses (A) or make any loans, advances (B) hereof or capital contributions to, or investments in, any other Person, other than (D) pursuant to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel Rights or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan Company Rights Agreement in effect as of on the date of this Agreement, or (ii) except as required pursuant to the terms of the Company Plans in effect on the date of this Agreement, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) enter into an employment agreement with of this Section 5.1(e);
(f) except as required pursuant to the terms of the Company Plans in effect on the date of this Agreement, the Company shall not, nor shall it permit any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights theretoof its Subsidiaries to, (iii) grant any increase in the compensation or benefits payable or to become payable by the Company or any of its Subsidiaries to any former or current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction such increases in the ordinary course of business the Company’s annual compensation procedures, consistent with past practice or and in accordance with their terms, of liabilities reserved against in the most recent Financial Statements Section 5.1(f)(i) of the Company included in Disclosure Letter; (ii) adopt, enter into, amend or otherwise increase, or accelerate the Filed SEC Documents payment or vesting of the amounts, benefits or rights payable or accrued or to become payable or accrued under, any Company Plan (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements other than entry into employment agreements with new hires in the ordinary course of business consistent with past practice; provided that such employment agreement shall be terminable at will, without penalty (iiother than severance obligations that accrue under the Company’s Amended and Restated Change in Control Plan as in effect on the date of this Agreement (the “CIC Plan”)) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practiceSubsidiaries, or (iiiii) grant any severance or termination pay to distributeany officer, license director or co-promote any product employee of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than grants to new hires in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent practice pursuant to the termination CIC Plan); (g) the Company shall not, nor shall it permit any of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if Subsidiaries to, change its methods of accounting in effect on as of the date of this Agreement or (ii) amendAgreement, waive, modify, fail to enforce or consent to the termination of (other than a termination except in accordance with it terms) its material rights thereunderchanges in GAAP as concurred to by the Company’s independent auditors;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. Except (i) as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule, as required pursuant to this Agreement or as agreed in writing by Parent, from the date hereof until the earlier of (A) the valid termination of this Agreement to in accordance with Article IX hereto and (B) the Effective Time Time, the Company shall, and shall cause each of its the Company Subsidiaries to, (i) conduct its business only their businesses in all material respects in the usual, regular and ordinary course consistent with past practice and practice, (ii) use all commercially reasonable efforts to preserve intact its current their present business organizationorganizations, (iii) use commercially reasonable efforts to maintain satisfactory relations with and keep available the services of its their current officers and employees other key employees, (iv) maintain in effect all material foreign, federal, state and local licenses, approvals and authorizations, including all material licenses and permits that are required for the Company or any Company Subsidiary to carry on its business, (v) use commercially reasonable efforts to preserve its present existing relationships and goodwill with Governmental Entities, customers, lenders, suppliers, licensors, licensees, distributors, Governmental Entities lessors, employees, business associates, alliance team members and joint venture partners and others having business dealings relationships with them the Company and the Company Subsidiaries and (vi) refrain from knowingly taking or permitting any Company Subsidiary to take any action the end that its goodwill and ongoing business shall result of which would or would reasonably be unimpaired at expected to result in any of the Effective Timeclosing conditions set forth in Article VIII hereof not being satisfied. In addition, and without Without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, as required pursuant to this Agreement or as agreed in writing by Parent, from the date hereof until the earlier of (x) the valid termination of this Agreement to in accordance with Article IX hereto and (y) the Effective TimeDate, the Company shall not, and nor shall not it permit any of its Subsidiaries Company Subsidiary to, do any of the following:
(a) except for Shares to be issued amend the Company Governing Documents or delivered pursuant to equivalent documents of any Company Subsidiary or amend the exercise terms of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each any outstanding on the date hereof or the issuance security of the Company or any Company Subsidiary;
(b) split, combine, subdivide or reclassify any shares of capital stock of the Company or any Company Subsidiary, other than any such transaction by a Company Subsidiary that remains a Company Subsidiary after consummation of such transaction, in the ordinary course of business consistent with past practice;
(c) declare, set aside or pay any dividend or other distribution payable in cash, stock or property (or any combination thereof) with respect to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its ’s capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereofstock;
(bd) redeem, purchase or otherwise acquire, or propose offer to redeem, purchase or otherwise acquire, any outstanding SharesEquity Interests, except (i) for the acceptance of previously owned Shares in payment of all or a portion of the exercise price delivered by one or more optionees in the course of exercising all or portions of any Company Options, Warrants and (ii) for the withholding of otherwise deliverable Shares in the course of effecting one or more optionees’ tax withholding elections pursuant to the exercise of all or portions of any Company Options;
(e) issue, sell, pledge, deliver, transfer, dispose of or encumber any shares of, or securities convertible into or exchangeable for, or grant any Company Options, Restricted Stock or Warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class, or grant to any Person any right the value of which is based on the value of Shares or other capital stock, other than (i) the issuance of Shares reserved for issuance on the date hereof pursuant to the exercise of the Company Options disclosed in Section 4.2(b) of the Company Disclosure Schedule and outstanding on the date hereof or (ii) the issuance of shares of capital stock of the Company upon the exercise of Warrants;
(f) acquire (i) any Person (whether pursuant to merger, stock or asset purchase or otherwise) in one transaction or any series of related transactions or (ii) any equity interests in any Person or any business or division of any Person or any assets of any Person (or business or division thereof);
(g) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets or properties of the Company or any of the Company Subsidiaries having an aggregate value of more than $2,000,000;
(h) (i) incur or assume any long-term or short-term indebtedness except (A) short-term indebtedness made in the ordinary course of business consistent with past practice not to exceed $1,000,000 in the aggregate or (B) additional indebtedness under existing debt facilities or like replacement debt facilities for short-term working capital purposes not to exceed $5,000,000 outstanding at any time; (ii) issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any Company Subsidiaries, (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, other than with respect to Company Subsidiaries in the ordinary course of business consistent with past practice or (iv) make any loans, advances or capital contributions to, or investments in, any other Person, other than loans, advances or capital contributions to, or investments in, wholly owned Company Subsidiaries made in the ordinary course of business consistent with past practice;
(i) other than as required by applicable Law or the terms of this Agreement or any agreement existing on the date hereof make any change in, or accelerate the vesting of, the compensation or benefits payable or to become payable to, or grant any severance or termination pay to, any of its Subsidiariesofficers, directors, employees, agents or consultants or enter into or amend any employment, consulting, severance, retention, change in control, termination pay, collective bargaining or other agreement or any equity based compensation, pension, deferred compensation, welfare benefits or other employee benefit plan or arrangement, or make any loans to any of its officers, directors, employees, affiliates or agents or consultants make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to a Benefit Plan or otherwise take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan, take any action to accelerate the time of payment or vesting of any compensation or benefits under any Benefit Plan or make any material determination under any Benefit Plan, with respect to such determination, that is inconsistent with the ordinary course of business or past practice or that would result in a material liability to the Company; other than (i) by permitting the acceleration of any Company Options or Restricted Stock pursuant to the terms of agreements in existence on the date hereof which provide for such acceleration or (ii) as otherwise provided in Section 3.4 of this Agreement or Section 6.1 of the Company Disclosure Schedule;
(j) announce, implement or effect any material reduction in labor force, lay-off, early retirement program, severance program or other program or effort concerning the termination of employment of employees of the Company or any Company Subsidiary other than routine employee terminations;
(k) incur any capital expenditures or any obligations or liabilities in respect thereof, in excess of the aggregate of those contemplated in the capital expenditures budgets for the Company and the Company Subsidiaries previously made available to Parent and summarized in Section 6.1(k) of the Company Disclosure Schedule; provided that in respect of capital expenditures for which budgeted amounts are contemplated in the capital expenditures budgets to exceed $500,000, neither the Company nor the Company Subsidiaries shall incur capital expenditures or any obligations or liabilities in respect thereof in excess of such budgeted amounts without the prior written consent of Parent;
(l) enter into any agreement or arrangement that limits or otherwise restricts the Company, any Company Subsidiary, or upon completion of the Transactions, Parent or its Subsidiaries or any successor thereto from engaging or competing in any line of business or in any location;
(m) except as disclosed in Section 6.1(m) of the Company Disclosure Schedule, amend, modify, extend or terminate any Company Material Contract, including any Company Collective Bargaining Agreement, or otherwise waive, release or assign any rights, claims or benefits thereunder, or enter into any contract that, if existing on the date hereof, would be deemed to be a Company Material Contract, including any such contract that would be deemed to be a Company Collective Bargaining Agreement; provided, however, that this Agreement shall not prohibit the Company may or any of the Company Subsidiaries from entering into aircraft leases after the date hereof with the prior agreement of Parent (i) withhold Shares it being understood that Parent has or will agree to satisfy Tax obligations the entering into of the letters of intent with respect to Options, Restricted Stock Awards and RSUs granted prior such aircraft leases as are referred to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (iiin Section 6.1(m) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or WarrantsCompany Disclosure Schedule);
(cn) grant settle, pay or discharge any Optionsclaims, Restricted Stock Awardslitigation, RSUs investigation or other equity-based awards arbitration, in each case made or grant any options to purchase Shares under pending against the Company’s 2007 Employee Stock Purchase Plan, any of the Company Subsidiaries or any of their officers and directors in their capacities as such, other than the settlement, payment or discharge of claims, litigation, investigations or arbitrations in the ordinary course of business consistent with past practice;
(do) split, combine, subdivide fail to maintain insurance at levels comparable to current levels or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares a manner consistent with past practice or otherwise make permit any payments material insurance policy naming it as a beneficiary or distributions a loss payee to stockholders be cancelled or terminated without reasonable prior notice to Purchaser;
(p) change any of the Company accounting methods used by it, except for such changes required by GAAP or of Regulation S-X promulgated under the Exchange Act, as concurred in by its independent registered public accountants;
(q) revalue any of its Subsidiaries that is not wholly owned (directly material assets, including writing down the value of inventory or indirectly) writing down notes or accounts receivable, other than as may be required by Company in their capacity as suchGAAP or applicable Law;
(er) make or change any material Tax election, change an annual accounting period, adopt or change any accounting method, file any amended Tax Returns, enter into any closing agreement with respect to material Taxes, settle or consent to any material Tax Claim, take any affirmative action to surrender any right to claim a refund of Taxes, or consent to any extension or waiver of the limitation period applicable to any Tax Claim;
(s) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, (other than the Merger);
(ft) acquire take any action which would, directly or indirectly, restrict or impair the ability of Purchaser to vote, or otherwise to exercise the rights and receive the benefits of a stockholder with respect to, securities of the Company or any Company Subsidiary acquired or controlled or to be acquired or controlled by Parent or Purchaser;
(iu) except as required by purchaseapplicable Law, merger convene any regular or otherwisespecial meeting (or any adjournment or postponement thereof) of the stockholders of the Company other than the Special Meeting;
(v) fail to continue, any business or equity interest in respect of any Person or (ii) any asset or assetsall Company Aircraft, except for purchases of components, raw materials or supplies in the ordinary course of business all material maintenance programs consistent with past practice (except as required or permitted by applicable Law), including using reasonable best efforts to keep all such Company Aircraft in such condition as permitted may be necessary to enable the airworthiness certification of such Company Aircraft under Section 6.1(m)the FAA to be maintained in good standing at all times;
(gw) sell, lease, license, mortgage, sell and leaseback decrease or otherwise encumber defer in any material respect the level of training provided to the employees of the Company or dispose of any of its properties the Company Subsidiaries or other assets the level of cost expended in connection therewith prior to the date hereof;
(x) fail to keep in effect any governmental route authority used by the Company or any interests thereinCompany Subsidiary as of the date of this Agreement, except for sales of inventory and used equipment provided that the restrictions set forth in this Section 6.1(x) shall not apply to any such failure if such failure occurs in the ordinary course of business consistent with past practice;
(hy) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant material changes to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed flight routes flown by the Company or any Company Subsidiary as of its Subsidiaries);the date hereof; and
(rz) enter into any material joint venture or partnership;
(s) engage in any transactionswritten agreement, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoing, or otherwise authorize in writing or take any action in furtherance of any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. Except From the date hereof until the Effective Time, the Company and its Subsidiaries shall conduct their business in the ordinary course consistent with past practices and shall use all reasonable efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality of the foregoing, and except (i) as required by Lawto the extent Parent shall otherwise consent in writing, (ii) as consented to expressly contemplated in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iviii) as set forth in Section 6.1 6.02 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve its present relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at hereof until the Effective Time. In addition, and without limiting :
(a) the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (which consent Company shall not be unreasonably withheld, delayed adopt or conditioned), propose any change to its certificate of incorporation or bylaws;
(yb) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to, do any of the following:
(a) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of the Company or any of its Subsidiaries, Subsidiaries (other than a liquidation or dissolution of a wholly owned Subsidiary of the MergerCompany or a merger or consolidation between wholly owned Subsidiaries of the Company or of any wholly owned Subsidiary into the Company);
(fc) acquire (i) by purchasethe Company shall not, merger and shall not permit any of its Subsidiaries to make any equity investment in or otherwise, any business or equity interest acquisition of any Person or any amount of assets material to the Company and its Subsidiaries on a consolidated basis, except for (i) capital expenditures permitted by Section 6.02(h), (ii) equity investments in or capital contributions to any asset wholly owned Subsidiary of the Company or assets, except for purchases of components, raw materials or supplies (iii) investment activities in the ordinary course of business consistent with past practice practices; provided that the consent of Parent with respect to any action otherwise prohibited by this Section 6.02(c) shall not be unreasonably withheld or as permitted under Section 6.1(m)delayed;
(gd) the Company shall not, and shall not permit any of its Subsidiaries to, sell, lease, license, mortgage, sell and leaseback license or otherwise encumber or dispose of any of assets material to the Company and its properties or other assets or any interests thereinSubsidiaries on a consolidated basis, except for sales of inventory and used equipment (i) in the ordinary course of business consistent with past practicepractices or (ii) pursuant to existing contracts or commitments; provided that the consent of Parent with respect to any action otherwise prohibited by this Section 6.02(d) shall not be unreasonably withheld or delayed);
(e) the Company shall not, and shall not permit any of its Subsidiaries to, (i) split, combine, subdivide or reclassify any shares of capital stock of the Company or its Subsidiaries or (ii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock (other than, with respect to clause (ii), (A) dividends from its direct or indirect wholly owned Subsidiaries and (B) regular quarterly cash dividends paid by the Company on the Company Common Stock not in excess of $0.08 per share per quarter (appropriately adjusted to reflect any stock dividends, subdivisions, splits, combinations or other similar events relating to the Company Common Stock), with usual record and payment dates and in accordance with the Company’s past dividend policy);
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) issue, sell, transfer, pledge or dispose of any shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or series of the Company or its Subsidiaries (other than (i) issuances pursuant to the exercise of the Company Convertible Notes or issuances pursuant to stock options or stock-based awards granted pursuant to a Company Stock Plan and outstanding on the date hereof or granted pursuant to clause (ii) below, (ii) additional stock options or stock-based awards granted in the ordinary course consistent with past practices pursuant to a Company Stock Plan as in effect on the date hereof (provided, however, that any such stock option shall be granted in accordance with Section 6.02(s)), or (iii) issuances by any Subsidiary of the Company to the Company or to any wholly owned subsidiary of the Company) or (y) reduce the exercise or conversion price, extend the term or otherwise modify in any material respect the terms of any such securities of the Company or of any Subsidiary of the Company;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, redeem, purchase or otherwise acquire directly or indirectly any of the Company’s capital stock (other than in the ordinary course of business on behalf of or as fiduciary for third parties);
(h) incur the Company shall not, and shall not permit any indebtedness for borrowed money in addition of its Subsidiaries to, make or commit to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than expenditures that are material to the Company and its wholly owned SubsidiariesSubsidiaries on a consolidated basis, and other than to employees in respect of travel or other related expenses except in the ordinary course of business consistent with past practicepractices;
(i) except as required by Law or except as required by the terms Company shall not, and shall not permit any of a Benefit Plan in effect as of the date of this Agreementits Subsidiaries to, (i) enter into an employment agreement incur or assume any long-term or short-term debt or issue any debt securities (other than issuances of commercial paper in the ordinary course of business consistent with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, past practices); (ii) grant assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any current other Person, except (A) in the ordinary course of business consistent with past practices or former director(B) for obligations of the wholly owned Subsidiaries of the Company; (iii) make any loans or advances to or debt investments in any other Person, officer other than (x) loans, advances or employee debt investments in the Company’ wholly owned subsidiaries, (y) investment activities in the ordinary course of business consistent with past practices or (z) agency loans in the ordinary course of business consistent with past practices; (iv) pledge or otherwise encumber shares of capital stock of the Company or its Subsidiaries; or (v) mortgage or pledge any of its Subsidiariesmaterial assets, tangible or intangible, or create any increase material Lien thereupon, except in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases of business consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000practices;
(j) except as may be required by law or by existing agreements or arrangements, the Company shall not, and shall not permit any Benefit Plan in accordance with of its terms as of the date of this AgreementSubsidiaries to, take any action to fund or increase in any other way secure manner the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Company Employee Plan or materially change Company International Plan of any assumption used to calculate funding obligations director, employee or independent contractor or pay any benefit or compensation not required by any plan and arrangement as in effect as of the date hereof (including the granting of stock options, stock appreciation rights or other stock-based award), other than (i) increases in salary or performance bonuses consistent with respect to past practices in light of actual performance, (ii) arrangements for newly hired individuals that are consistent with existing policies and practices or (iii) increases of not more than $250,000 in the aggregate for any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determinedindividual;
(k) change except as otherwise provided herein, the Company shall not, and shall not permit any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP to, enter into any material contract, agreement, commitment or applicable Lawtransactions, other than in the ordinary course of business consistent with past practices;
(l) amend the Company’s certificate Company shall not, and shall not permit any of incorporation its Subsidiaries to, enter into any agreement that limits or otherwise restricts in any material respect the Company’s bylaws Company or other comparable charter or organizational documents any of any Subsidiary its Subsidiaries (or, following completion of the CompanyMerger, except as may be required by applicable Law and except for immaterial amendments under the charter Parent or organizational documents any of its Subsidiaries) or any Subsidiary successor thereto, from engaging or competing in any line of the Companybusiness or in any geographical area;
(m) authorize or make the Company shall not, and shall not permit any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal its Subsidiaries to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy (i) any claimsnon-insurance claim, liabilitiesliability or obligation (including extra-contractual obligations), other than (A) in the ordinary course of business for amounts not in excess of $100,000,000 in the aggregate (or, if in excess of $100,000,000 in the aggregate, with the consent of Parent, such consent not to be unreasonably withheld or delayed) or (B) pursuant to existing contractual obligations or litigation (ii) any insurance claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents () for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, $100,000,000 (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject if in excess of $100,000,000, with the consent of Parent, such consent not to the terms hereof, fail to enforce, be unreasonably withheld or consent to any matter with respect to which consent is required under, any standstill or similar contract to which delayed);
(n) the Company or shall not, and shall not permit any of its Subsidiaries is a party to, make, change or (v) waive revoke any material benefits of, Tax election or agree to modify in any change its method of accounting if such change would have a material respect, or, subject to the terms hereof, fail to enforce in any material respect, adverse impact on Taxes or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of change its Subsidiaries is a partyfiscal year;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or shall not, and shall not permit any of its Subsidiaries is to, enter into any new reinsurance transaction or ceding insurer (x) which does not contain market cancellation, termination and commutation provisions or (y) which materially changes the existing reinsurance profile of the Company and its Subsidiaries on a partyconsolidated basis outside of the ordinary course of business;
(p) the Company shall not, and shall not permit any of its Subsidiaries to, alter or amend in any material respect their existing underwriting, claim handling, loss control, investment, actuarial, financial reporting or accounting practices, guidelines or policies or any material assumption underlying an actuarial practice or policy, except as may be required by GAAP or applicable Tax Law, prepare SAP or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used the local equivalent in preparing or filing similar Tax Returns in prior periodsthe applicable jurisdictions;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or shall use its reasonable best efforts not to, and shall use its reasonable best efforts not to permit any of its Subsidiaries to, take any action (including products any action otherwise permitted by this Section 6.02) that would prevent or impede the Merger from qualifying as a reorganization under development and products licensed by Section 368(a) of the Company or any of its Subsidiaries)Code;
(r) enter into the Company shall not, and shall not permit any material joint venture of its Subsidiaries to, intentionally take any action (i) that would make any representation or partnershipwarranty of the Company hereunder inaccurate at, or as of any time prior to the Effective Time, subject to such exceptions as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect or (ii) that would, or would reasonably be expected to, result in any of the conditions to the Merger set forth in Article 8 not being satisfied;
(s) engage in The Company shall not, and shall not permit any transactionsof its Subsidiaries to, agreements, grant (i) any initial stock options with any option reload features and (ii) except as may be required by law or by existing agreements or arrangements or understandings is consistent with past practices, any reloaded stock options with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;further option reload features; and
(t) otherwise manage the Company shall not, and shall not permit any of its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter intoSubsidiaries, amend, renew, modify to authorize or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement an agreement to do any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. (a) Except (i) as required by Law, (ii) as consented to in writing by Parent with the prior written consent of Buyer (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), (iii) as specifically contemplated by this Agreement or (iv) as set forth in Section 6.1 of Schedule 5.6, the Company Disclosure Schedulehereby covenants to Buyer that, from during the period commencing on the date of this Agreement and ending on the earlier to occur of (i) the Effective Time Closing Date or (ii) the termination of this Agreement in accordance with ARTICLE VI, the business of the Company and its Subsidiaries shall be conducted in the ordinary course of business and the Company shall, and shall cause each of its Subsidiaries to, conduct its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable efforts Reasonable Efforts to (A) preserve intact the present business organization of the Company and its current business organizationSubsidiaries, (B) to keep available the services of its their current officers and key employees and (C) to preserve its present relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities distributors and others having business dealings with them them, in each case, except with respect to any COVID-19 Measures. Buyer acknowledges and agrees that the end that Company or any of its goodwill and ongoing Subsidiaries may determine it needs to take measures or will sustain impacts on its business shall be unimpaired at the Effective Time. In additionas a result of COVID-19, and without nothing herein shall prevent the Company or such Subsidiary from taking all reasonable measures (including any COVID-19 Measures) it deems fit in order to preserve its business as a result thereof, nor shall any such impact sustained by the Company be deemed as a breach of this Section 5.6.
(b) Without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent with the prior written consent of Buyer (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), (y) expressly permitted pursuant to as specifically contemplated by this Agreement (including any Divestiture Actions contemplated by Section 5.4(b)) or (z) as set forth in Section 6.1 of Schedule 5.6, the Company Disclosure Schedulehereby covenants to Buyer that, from during the period commencing on the date of this Agreement and ending on the earlier to occur of (i) the Effective TimeClosing Date or (ii) the termination of this Agreement in accordance with ARTICLE VI, the Company shall not, not and shall not permit any of cause its Subsidiaries to, do any of the followingto not:
(ai) except for Shares amend their respective Organizational Documents or waive material rights thereunder;
(ii) split, combine or reclassify any equity interests;
(iii) (A) prior to be issued or delivered the date that is seventy-five (75) days after the filing of a Notification and Report Form pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary HSR Act with respect to the CompanyTransaction pursuant to Section 5.4(a), (1) issue, deliver, deliver or sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, deliverydelivery or sale of, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, equity interests or any securities or rights instruments convertible intoor exchangeable into equity interests other than pursuant to the Company’s Equity Incentive Plan (as defined in the Existing Operating Agreement), exchangeable for, or evidencing the right to subscribe for (2) amend any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements term of any character existing equity interests, (3) repurchase or redeem any equity interests other than pursuant to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest Company’s Equity Incentive Plan (including “phantom” rights and stock appreciation rights), as defined in the Existing Operating Agreement) or (ii4) declare, accrue or pay any dividend or other securities distribution with respect to any equity interests, in the case of the foregoing clause (4) other than (x) distributions between and/or among the Company and its Subsidiaries Subsidiaries, (y) redemptions of Units pursuant to the Company’s Equity Incentive Plan (as defined in respect of, in lieu of, the Existing Operating Agreement) or in substitution for, Shares outstanding on (z) tax distributions to the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities members of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under practice; and (B) after the date that is seventy-five (75) days after the filing of a Notification and Report Form pursuant to the HSR Act with respect to the Transaction pursuant to Section 6.1(m5.4(a);
, (g1) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose amend any term of any of its properties existing equity interests, (2) repurchase or redeem any equity interests other than pursuant to the Company’s Equity Incentive Plan (as defined in the Existing Operating Agreement) or (3) declare, accrue or pay any dividend or other assets distribution with respect to any equity interests, in the case of the foregoing clause (3) other than (x) distributions between and/or among the Company and its Subsidiaries, (y) redemptions of Units pursuant to the Company’s Equity Incentive Plan (as defined in the Existing Operating Agreement) or any interests therein, except for sales (z) tax distributions to the members of inventory and used equipment the Company in the ordinary course of business consistent with past practice;
(hiv) incur commence any indebtedness proceeding or file any petition in any court, or enter into or adopt any plan, relating to bankruptcy, reorganization, insolvency, winding-up, dissolution, liquidation or relief for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or debtors, make any loansassignment for the benefit of creditors or apply for the appointment of a custodian, advances receiver or capital contributions trustee;
(v) enter into any line of business that is not a Covered Business (as defined in the Positioning Agreement);
(vi) lend money to, or investments inforgive any indebtedness of, any Person;
(vii) (A) prior to the date that is seventy-five (75) days after the filing of a Notification and Report Form pursuant to the HSR Act with respect to the Transaction pursuant to Section 5.4(a), (1) incur or modify any indebtedness (other Personthan borrowings under existing lines of credit) in an amount exceeding $50,000,000 individually or $100,000,000 in the aggregate or (2) grant or permit to exist any Lien on any assets, properties or rights with fair market value exceeding $50,000,000 individually or $100,000,000 in the aggregate; and (B) after the date that is seventy-five (75) days after the filing of a Notification and Report Form pursuant to the HSR Act with respect to the Transaction pursuant to Section 5.4(a), (1) incur or modify any indebtedness (other than borrowings under existing lines of credit) in an amount exceeding $500,000,000 individually or $1,000,000,000 in the aggregate or (2) grant or permit to exist any Lien on any assets, properties or rights with fair market value exceeding $500,000,000 individually or $1,000,000,000 in the aggregate;
(viii) (A) prior to the date that is seventy-five (75) days after the filing of a Notification and Report Form pursuant to the HSR Act with respect to the Transaction pursuant to Section 5.4(a), purchase, acquire (by merger, consolidation, acquisition of stock or assets or otherwise) or lease (as lessee), directly or indirectly, any businesses or assets, other than acquisitions with a purchase price that does not exceed $75,000,000 individually or $200,000,000 in the aggregate; and (B) after the date that is seventy-five (75) days after the filing of a Notification and Report Form pursuant to the Company and its wholly owned SubsidiariesHSR Act with respect to the Transaction pursuant to Section 5.4(a), and purchase, acquire (by merger, consolidation, acquisition of stock or assets or otherwise) or lease (as lessee), directly or indirectly, any businesses or assets, other than to employees in respect of travel acquisitions with a purchase price that does not exceed $500,000,000 individually or other related expenses $1,000,000,000 in the ordinary course of business consistent with past practiceaggregate;
(iix) (A) prior to the date that is seventy-five (75) days after the filing of a Notification and Report Form pursuant to the HSR Act with respect to the Transaction pursuant to Section 5.4(a), sell, lease (as lessor) or otherwise transfer any businesses or assets, other than in an amount with fair market value not to exceed $50,000,000 individually or $100,000,000 in the aggregate; and (B) after the date that is seventy-five (75) days after the filing of a Notification and Report Form pursuant to the HSR Act with respect to the Transaction pursuant to Section 5.4(a), sell, lease (as lessor) or otherwise transfer any businesses or assets, other than in an amount with fair market value not to exceed $500,000,000 individually or $1,000,000,000 in the aggregate;
(x) change methods of accounting, except as required by Law or except as required by the terms of a Benefit Plan concurrent changes in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000GAAP;
(jxi) except as otherwise required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any U.S. federal income Tax Return or other material income Tax Return inconsistent with past practice orpractice, on file any such amended U.S. federal income Tax Return or other material income Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to change any material Company Intellectual Property Rights, except Tax election in the ordinary course of business consistent a manner inconsistent with past practice, change any annual tax accounting period, adopt or (ii) to distributechange any material method of tax accounting, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any closing agreement with respect to a material joint venture amount of Taxes, or partnership;
(s) engage in settle any transactionsmaterial Tax claim, agreements, arrangements audit or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiaryassessment; or
(wxii) enter into any contract, agreement, commitment agree or arrangement commit to do any of the foregoing.
Appears in 1 contract
Samples: Class D Preferred Unit Purchase Agreement (Walgreens Boots Alliance, Inc.)
Interim Operations of the Company. Except Prior to the Closing Date or the earlier termination of this Agreement pursuant to Article IX (i) such period, the “Interim Period”), except as required set forth on Schedule 7.1 or as expressly contemplated by Lawthis Agreement, (ii) as unless Buyer has previously consented to in writing by Parent thereto (which consent shall will not be unreasonably withheld, delayed conditioned or conditioneddelayed), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 the Company agrees, and agrees to cause the Subsidiaries, to use commercially reasonable efforts to carry on the businesses of the Company Disclosure Schedule, from and the Subsidiaries in accordance with the expense plan delivered to Buyer on the date of this Agreement to the Effective Time the Company shall, hereof and shall cause each of its Subsidiaries to, conduct its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable efforts to preserve intact its the Company’s and Subsidiaries’ current business organization, keep available the services of its the Company’s and Subsidiaries’ current officers and employees and to preserve its present the Company’s and the Subsidiaries’ relationships with customerssuppliers, suppliersdistributors, licensors, licensees, distributors, Governmental Entities licensees and others having with which the Company and the Subsidiaries have business dealings (including, without limitation, shipping products, paying vendors and continuing marketing efforts, all in accordance with them the expense plan delivered to Buyer on the end that its goodwill and ongoing business shall be unimpaired at the Effective Timedate hereof). In addition, and without limiting the generality of the foregoing, during the Interim Period, except (w) as required set forth on Schedule 7.1 or as expressly contemplated by Lawthis Agreement, (x) as unless Buyer has previously consented to in writing by Parent thereto (which consent shall will not be unreasonably withheld, delayed conditioned or conditioneddelayed), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, not and shall not permit any of its the Subsidiaries to, do any of the following:
(a) except incur any indebtedness for Shares to be issued borrowed money or delivered pursuant to the exercise of Options issue any long-term debt securities or Warrantsassume, the settlement of RSUs guarantee or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock endorse such obligations of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assetsPerson, except for purchases of components, raw materials or supplies indebtedness incurred in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m)the Senior Credit Agreement; provided, the additional aggregate amount of such borrowed money under the Senior Credit Agreement shall not exceed $2,000,000;
(gb) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales the sale of inventory and used equipment products in the ordinary course of business consistent with past practice, (i) acquire, or dispose of, any property or assets, (ii) mortgage or encumber any property or assets other than Permitted Liens, or (iii) cancel any debts owed to or claims held by the Company or any Subsidiary;
(hc) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) Contracts that would constitute a material Contract except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are Contracts made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel terminate any indebtedness, material Contract or (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive amend any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a partyContract;
(od) waive enter into or amend any Contracts with any Affiliates of the benefits ofCompany, or agree except to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a partyextent required by Law;
(pe) except as to the extent required by applicable Tax Law, prepare enter into, adopt, amend or file terminate any Tax Return inconsistent with past practice or, on Contract relating to the compensation or severance of any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product employee of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner Subsidiary other than in the ordinary course of business consistent with past practicepractice or establish, adopt, enter into or amend any employee plan;
(uf) make any material change to its accounting (including Tax accounting) methods, principles or practices, except as may be required by GAAP, or make any Tax election;
(g) make any amendment to its certificate of incorporation or bylaws (or equivalent organizational documents);
(h) declare or pay any dividends or distributions (whether in cash, stock or property or any combination thereof) or repurchase any shares of capital stock or other equity interests;
(i) issue or sell any capital stock or other equity interests or options, warrants, calls, subscriptions or other rights to purchase any capital stock or other equity interests of the Company or any Subsidiary or split, combine or subdivide the capital stock or other equity interests of the Company or any Subsidiary;
(j) sell, transfer, license, sublicense or otherwise dispose of any material company intellectual property, or amend or modify any existing agreements with respect to any material intellectual property rights of the Company;
(k) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof or enter intointo any partnership arrangements, amendjoint development agreements or strategic alliances;
(l) initiate, renew, modify settle or consent agree to the termination of settle any Action (other than any such litigation, action, suit, proceeding, or arbitration involving a termination in accordance with its terms) claimed amount of less than $10,000 and not involving any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiaryequitable relief); or
(wm) enter into any contracttake, agreementor agree to take, commitment or arrangement to do any of the foregoingactions described in sub-clauses (a) through (l) above, or any action which would make any of the representations or warranties of the Company or the Sellers untrue or incorrect. If the Company wishes to obtain the consent of Buyer to take actions for which prior consent is required pursuant to this Section 7.1, the Company shall request such consent in a writing delivered to the attention of the Chief Executive Officer of Buyer. A consent signed by such officer(s) shall be deemed sufficient for purposes hereof.
Appears in 1 contract
Samples: Stock Purchase Agreement (U.S. Auto Parts Network, Inc.)
Interim Operations of the Company. Except (i) as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as otherwise set forth in Section 6.1 of the Company Disclosure ScheduleLetter, including but not limited to the list of capital expenditures of the Company for the years 2000 and 2001 set forth therein, the Company covenants and agrees as to itself and its Subsidiaries that, from the date of this Agreement hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed, and except as otherwise expressly contemplated by this Agreement or required by Law):
(i) the business of the Company shall, and shall cause each of its Subsidiaries to, conduct its business shall be conducted only in the usualordinary and usual course and, regular to the extent consistent therewith, it and ordinary course consistent with past practice and its Subsidiaries shall use all their respective reasonable best efforts to preserve intact its current business organization(a) subject to prudent management of workforce needs and ongoing programs currently in force, keep available the services of its current officers and employees and preserve its present relationships business organization intact and maintain its existing relations and goodwill with customers, suppliers, licensors, licensees, distributors, Governmental Entities creditors, lessors, employees and others having business dealings with them associates, (b) maintain and keep material properties and assets in good repair and condition, subject to ordinary wear and tear and (c) maintain in effect all existing governmental permits pursuant to which the end that Company or any of its goodwill and ongoing business Subsidiaries operates;
(ii) the Company shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except not (w) as required amend its certificate of incorporation or by-laws or the comparable governing instruments of any of its Subsidiaries except, in the case of its Subsidiaries, for such amendments that would not prevent or materially delay the consummation of the transactions contemplated by Law, this Agreement; (x) as consented to in writing by Parent (which consent shall not be unreasonably withheldsplit, delayed combine or conditioned), reclassify its outstanding shares of capital stock; (y) expressly permitted pursuant declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock (other than (A) dividends from its direct or indirect wholly owned Subsidiaries to this Agreement it or a wholly owned Subsidiary and (B) regular quarterly dividends on Shares with usual record and payment dates not to exceed $.225 per Share); or (z) as set forth in Section 6.1 repurchase, redeem or otherwise acquire any shares of the Company Disclosure Schedule, from the date its capital stock or any securities convertible into or exchangeable or exercisable for any shares of this Agreement to the Effective Time, the Company shall not, and shall not its capital stock or permit any of its Subsidiaries toto purchase or otherwise acquire, do any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock (other than for the purpose of funding or providing benefits under the existing terms of the Compensation and Benefit Plans and any other existing terms of the employee benefit plans, stock option and other incentive compensation plans, directors plans and stock purchase and dividend reinvestment plans);
(iii) neither the Company nor any of the following:
(a) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, its Subsidiaries shall issue, deliver, sell, pledge, dispose of or encumber any shares of, pledge or otherwise encumbersecurities convertible into or exchangeable or exercisable for, or authorize options, warrants, calls, commitments or propose the issuancerights of any kind to acquire, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock Voting Debt or any other ownership interest, property or any rights, warrants, options, calls, commitments assets (other than (A) Shares issuable pursuant to options (whether or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (iinot vested) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereofhereof under the Stock Plans and (B) issuances of additional options or rights to acquire not more than 1,000,000 Company Shares in any calendar year (it being understood that approximately 845,000 options have already been issued by the Company in the year 2000 and that those persons identified on Section 6.1(iii) of the Company Disclosure Letter have already been issued approximately 115,000 options in 2000) nor more than 2,000,000 Company Shares in the aggregate granted pursuant to the terms of the Stock Plans as in effect on the date hereof in the ordinary and usual course of the operation of such Stock Plans consistent with past practice and performance guidelines; provided that option issuances for each of the calendar years 2001 and 2002 for the persons identified on Section 6.1(iii) of the Company Disclosure Letter shall not exceed the option issuances to such persons in the year 2000 and shall not be included for purposes of the 1,000,000 and 2,000,000 option grant limitations set forth above, and issuances of Shares pursuant to options granted after the date hereof pursuant to such Stock Plans;
(biv) redeemneither the Company nor any of its Subsidiaries shall, purchase other than in the ordinary and usual course of business, and other than transactions not in excess of $125,000,000 in the aggregate in any calendar year, transfer, lease, license, guarantee, sell, xxxx- xxxx, pledge, dispose of or otherwise acquireencumber any property or assets (including capital stock of any of its Subsidiaries) or incur or modify any indebtedness for borrowed money or guarantee any such indebtedness;
(v) neither the Company nor any of its Subsidiaries shall, by any means, make any acquisition of, or propose to redeeminvestment in, purchase assets or otherwise acquirestock (whether by way of merger, any outstanding Sharesconsolidation, Optionstender offer, Warrants share exchange or other securities activity) in any transaction or any series of transactions (whether or not related), except for acquisitions not involving a merger, consolidation, tender offer or share exchange for an aggregate purchase price or prices, including the assumption of any debt, not in excess of $125,000,000 in any calendar year;
(vi) neither the Company nor any of its Subsidiaries shall, other than in the ordinary and usual course of business, (i) modify, amend, or terminate any material contract, (ii) waive, release, relinquish or assign any material contract (or any of the material rights of the Company or any of its Subsidiaries; providedSubsidiaries thereunder), howeverright or claim, that or (iii) cancel or forgive any material indebtedness owed to the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender any of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrantsits Subsidiaries;
(cvii) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of neither the Company or of nor any of its Subsidiaries that is not wholly owned will (directly or indirectly) by Company in their capacity as such;
(ei) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other similar reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoing.,
Appears in 1 contract
Samples: Merger Agreement (Nisource Inc)
Interim Operations of the Company. Except (i) The Company covenants and agrees as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of itself and its Subsidiaries that during the Company Disclosure Schedule, period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (w) disclosed in Section 5.1 of the Company Disclosure Letter, (x) expressly contemplated or permitted by this Agreement, (y) required by applicable Law, or (z) agreed to in writing by Parent, after the date of this Agreement and prior to the Effective Time Time:
(a) the business of the Company shall, and shall cause each of its Subsidiaries to, conduct its business shall be conducted only in the usual, regular and ordinary course consistent with past practice practice, and the Company shall use all its commercially reasonable efforts to preserve intact its current business organization, organization and goodwill and the business organization and goodwill of its Subsidiaries and keep available the services of its their current officers and employees and preserve its present relationships and maintain existing relations with customers, suppliers, licensorsofficers, licensees, distributors, Governmental Entities employees and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except creditors;
(wb) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and nor shall not it permit any of its Subsidiaries to, (i) enter into any new line of business, (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater, in the aggregate, than the amount in the Company's total capital budget for calendar year 2006 approved by the Company Board on January 26, 2006, which has been furnished to Parent prior to the date of this Agreement, plus (y) any other capital expenditure, obligations, liabilities or commitments made by the Company after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, the Company shall not commit to incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event the Company's share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions so long as such expenditures with respect to any individual acquisition do not exceed $1,000,000 or (iii) during any rolling three (3) month period, incur or commit to any capital expenditures contemplated by the Company's capital budget described in clause (ii) above in an amount that exceeds, by more than thirty percent (30%) the amounts contemplated by such budget to be incurred or committed to during such three (3) month period;
(c) the Company shall not, nor shall it permit any of the following:its Subsidiaries to, amend its certificate of incorporation or bylaws or similar organizational documents;
(ad) except for Shares the Company shall not, nor shall it permit any of its Subsidiaries (other than direct or indirect wholly owned Subsidiaries) to, declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to be issued its capital stock;
(e) the Company shall not, nor shall it permit any of its Subsidiaries to (i) adjust, split, combine or delivered pursuant reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to the exercise of Options or Warrantsacquire, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the any shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge class or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any such securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that other than (x) issuances of Company Common Stock pursuant to the Company may Options or Performance Stock Awards outstanding on the date of this Agreement (y) issuances of Company Stock Options or Company Stock Awards prior to the Effective Time to directors or new employees in the ordinary course of business and consistent with past practice, or (ii) except as required pursuant to the terms of the Company Plans in effect on the date of this Agreement, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) withhold Shares of this Section 5.1(e) other than pursuant to satisfy Tax obligations with respect to any "cashless" exercise provisions of existing Company Stock Options, Restricted Stock Awards and RSUs granted prior to the date hereof ;
(f) other than (i) as required pursuant to the Equity terms of the Company Plans or in effect on the Assumed Subsidiary Equity Plans and date of this Agreement (ii) acquire Shares as specifically described on Section 5.1(f) of the Company Disclosure Letter or (iii) grants of retention bonuses or adoption of retention plans in connection with the surrender transactions contemplated by this Agreement, provided that no such bonuses shall be granted and no awards will be made under any such plans unless the beneficiary thereof agrees to continue his or her employment through the Effective Time and thereafter for a transition period to be determined in the discretion of Shares by holders Parent but not to exceed a time period of Options 90 days after the Effective Time, and provided further that the aggregate amount of all payments pursuant to such grants, awards or Warrants in order to pay plans after the exercise price date hereof shall not exceed $250,000, the Company shall not, nor shall it permit any of the Options or Warrants;
its Subsidiaries to, (cx) grant any Optionsincrease in the compensation or benefits payable or to become payable by the Company or any of its Subsidiaries to any former or current director, Restricted Stock Awards, RSUs officer or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders employee of the Company or of any of its Subsidiaries other than to non-officer employees in the ordinary course of business consistent with past practice, (y) adopt, enter into, amend or otherwise increase, or accelerate the payment or vesting of the amounts, benefits or rights payable or accrued or to become payable or accrued under, any Company Plan (other than entry into employment agreements with new hires in the ordinary course of business consistent with past practice; provided that such employment agreement shall be terminable at will, without penalty to the Company or any of its Subsidiaries), or (z) grant any severance or termination pay to any officer, director or employee of the Company or any of its Subsidiaries except termination amounts paid to non-contract employees related to termination of such employee's employment in the Company's ordinary course of business and consistent with past practice;
(g) the Company shall not, nor shall it permit any of its Subsidiaries to, change its methods of accounting (other than Tax accounting, which shall be governed by clause (m) below) in effect as of the date of this Agreement, except in accordance with changes in GAAP as concurred to by the Company's independent auditors;
(h) the Company shall not, nor shall it permit any of its Subsidiaries to (i) other than in the ordinary course of business consistent with past practice acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or (ii) other than in the ordinary course of business consistent with past practice or pursuant to agreements in effect on the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, acquire any assets;
(i) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter or the sale of obsolete or other Company Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, the Company shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Company Assets and shall not, nor shall it permit any of its Subsidiaries to sell, lease exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of any material Company Assets;
(j) the Company shall not, nor shall it permit any of its Subsidiaries to, mortgage, pledge, hypothecate, grant any security interest in, or otherwise subject to any other Lien other than Permitted Liens, any of the Company Assets;
(k) the Company shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which the Company or any of its Subsidiaries is bound and except for any payments, discharges or settlements that do not wholly owned exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate;
(l) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, the Company shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in Section 3.9(a) or 3.18 of the Company Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly) by , any of the Company's affiliates; provided, that for the avoidance of doubt, for purposes of this clause (l), the term "affiliates" shall not include any employees of the Company in their capacity as suchor any of its Subsidiaries, other than the directors and executive officers thereof;
(em) except as set forth in Section 5.1(m) of the Company Disclosure Letter, the Company shall not, nor shall it permit any of its Subsidiaries to, make or change any material Tax election, change any material method of Tax accounting, grant any material extension of time to assess any Tax or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liability;
(n) the Company shall not intentionally, nor shall it permit any of its Subsidiaries to intentionally, take any action that would, or could reasonably be expected to, result in any of its representations and warranties set forth in this Agreement becoming untrue in a manner that would give rise to the failure of the closing condition set forth in Section 6.3(a);
(o) the Company shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its SubsidiariesSubsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of the Company) or any agreement relating to an Acquisition Proposal, except as provided for in Section 5.3;
(p) the Company shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Merger;
(f) acquire (i) by purchaseCompany Credit Agreement, merger or otherwise, any business or equity interest of any Person or (ii) incur or assume any asset or assets, except for purchases of components, raw materials or supplies short-term Indebtedness other than in the ordinary course of business consistent with past practice or as any short-term Indebtedness under the Company Credit Agreement, (iii) modify the terms of any Indebtedness to increase the Company's obligations with respect thereto, provided that the Company may increase the amount outstanding under the Company Credit Agreement and provided further that in addition to any obligations permitted by this section, the Company may incur long-term, short-term or increases in its obligation under Section 6.1(mexisting debt under items (i);
, (gii) selland (iii) in an aggregate amount not to exceed $20,000,000, lease(iv) assume, licenseguarantee, mortgage, sell and leaseback endorse or otherwise encumber become liable or dispose responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of its properties or other assets or any interests thereinthe Company), except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
practice and in no event exceeding $2,000,000 individually, (hv) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other PersonPerson (other than to wholly owned Subsidiaries of the Company), or by such Subsidiaries to the Company, other than to the Company and its wholly owned Subsidiaries, and other than customary loans or advances to employees in respect of travel accordance with past practice, or other related expenses (vi) enter into any material commitment or transaction, except in the ordinary course of business consistent with past practicepractice and except as otherwise authorized in Sections 5.2(b), 5.2(h) and 5.2(i);
(iq) except as required by Law or except as required by the terms Company shall not, nor shall it permit any of a Benefit Plan in effect as of the date of this Agreementits Subsidiaries to, (i) enter into an employment agreement with any Person agreement, understanding or grant to any Person any right to severancecommitment that materially restrains, retention, change in control limits or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of impedes the Company Company's or any of its Subsidiaries' ability to compete with or conduct any business or line of business, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to including geographic limitations on the Company’s President 's or any of its Subsidiaries' activities (other than confidentiality agreements and Chief Operating Officer, area of mutual interest agreements entered into in the ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000business);
(jr) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their termsas contemplated by this Agreement, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practiceshall not, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or nor shall it permit any of its Subsidiaries is a party to, modify or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce amend in any material respect, or consent to any matter with respect to which consent is required underterminate, any material confidentiality or similar contract to which the Company it is a party or waive in any material respect or assign any of its Subsidiaries is a party;
(o) waive the benefits of, material rights or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnershipclaims;
(s) engage the Company shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in any transactionsfull force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, agreementscasualties, arrangements risks and contingencies as is customary in the domestic or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;applicable foreign oil and gas exploration industry; and
(t) otherwise manage the Company shall not, nor shall it permit any of its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter intoSubsidiaries to, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any an agreement, contract, agreement, commitment or arrangement to do any of the foregoing. Notwithstanding anything in this Section 5.1 to the contrary, the Company shall not intentionally, nor shall it permit any of its Subsidiaries to intentionally, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on the Company.
Appears in 1 contract
Samples: Merger Agreement (KCS Energy Inc)
Interim Operations of the Company. Except (i) During the period from the date hereof to the earliest of the Board Control Date, the Effective Time and the date on which this Agreement is terminated, except as expressly contemplated or permitted by this Agreement, as necessary to effectuate the Transactions, as set forth on Section 7.1 of the Company Disclosure Schedule, as required by Lawcontractual obligations in existence on the date hereof, (ii) as consented to in writing required by applicable Law or Order or with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business only operate in the usualOrdinary Course of Business, regular and ordinary course consistent with past practice and use all its commercially reasonable efforts to preserve substantially intact its business organizations and its current business organization, beneficial commercial relationships with third parties (including customers and suppliers) and to keep available the services of its current officers and employees and preserve its present relationships with customerssenior managerial employee and, suppliers, licensors, licensees, distributors, Governmental Entities and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality limitation of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of cause its Subsidiaries not to, do any of the following:
(a) declare, set aside or pay any dividend or distribution (in cash, stock or otherwise) on any Shares or other equity or voting interest of the Company or purchase, redeem or repurchase any Shares or other equity or voting interest of the Company, except for the acquisition of Shares (i) from holders of Company Options, Company RSUs or Company Performance Unit Awards upon the exercise or settlement of Company Options, Company RSUs or Company Performance Unit Awards to the extent required or permitted under the terms of such Company Options, Company RSUs or Company Performance Unit Awards or to satisfy related Tax obligations or (ii) as required by the terms of any Benefit Plan or Benefit Agreement;
(b) except for (i) Company Common Stock to be issued or delivered pursuant to the exercise Company Equity Plan in respect of Options or Warrants, the settlement awards outstanding as of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or and (ii) the issuance of the shares of capital stock of by any Subsidiary of the Company to the Company or another Subsidiary of the Company, issue, deliver, sell, pledge, transfer or dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or other equity or voting interest of the Company or its Subsidiaries or securities exercisable or convertible into, or exchangeable or redeemable for, any such shares or other ownership equity or voting interest, or any rights, warrants, options, calls, calls or commitments or any other agreements of any character to purchase or acquire any such shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrantsequity interest;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares Company Common Stock or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders other equity interest of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as suchCompany;
(ed) adopt a plan (i) other than in the Ordinary Course of complete Business, incur any Indebtedness, except for (A) Indebtedness the aggregate amount of which does not exceed $5,000,000, (B) Indebtedness incurred solely between or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization among the Company and its Subsidiaries or other reorganization (C) guarantees of the Indebtedness of the Company or any Subsidiary of its Subsidiariesthe Company, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, Person other than to loans, advances or capital contributions or investments between or among the Company and its wholly owned SubsidiariesSubsidiaries and investments made in the Ordinary Course of Business in accordance with the Company’s current investment policies;
(e) amend the Company Charter or Company Bylaws or the equivalent organizational documents of any Subsidiary of the Company or adopt, and approve or implement any “poison pill” or similar stockholder rights plan that could adversely affect or materially delay the consummation of the Transactions;
(f) other than in the Ordinary Course of Business, (i) modify or amend in any material respect or terminate any of the Material Contracts (or any Contract which would have been, if entered into prior to employees in respect the date hereof, a Material Contract), or waive, release or assign any material rights or claims thereunder, or (ii) enter into any Contract which would have been, if entered into prior to the date hereof, a Material Contract;
(g) voluntarily adopt a plan of travel complete or partial liquidation or authorize or undertake a dissolution, consolidation, restructuring, recapitalization or other related expenses in the ordinary course reorganization;
(h) acquire or dispose of business consistent with past practice(by merger, consolidation or acquisition or disposition of stock or other equity or voting interest or of assets) any Person, business, division or material assets thereof or enter into any joint venture, partnership or similar arrangement;
(i) except make any capital expenditures or enter into any commitments for capital expenditures, capital additions or capital improvements in excess of $5,000,000 in the aggregate, other than as required by Law or except as required by to maintain the terms value of a Benefit Plan in effect the assets of the Company and its Subsidiaries as of the date hereof, or as otherwise set forth in the 2013 Capital Forecast or 2014 Capital Forecast, each as set forth on Section 7.1(i) of this Agreementthe Company Disclosure Schedule (without regard to any provision for the timing of such expenditure or commitment set forth therein); provided, that those items set forth on the first page of Section 7.1(i) of the Company Disclosure Schedule shall be dealt with as set forth on the first page of Section 7.1(i) of the Company Disclosure Schedule;
(j) settle any Action or waive any right thereto in excess of the $5,000,000 individually or $10,000,000 in the aggregate (in each case with respect to any Action, determined net of any amounts in respect of insurance coverage paid under the relevant insurance policy in respect of such Action);
(k) other than in the Ordinary Course of Business, (i) enter into an employment agreement with grant or provide any Person severance or grant termination payments or benefits to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus opportunity or other benefits of, or make any increase in compensation other thannew equity awards to, with respect to Persons who are not directors any employee or officers and do not report directly to service provider of the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, Company or its Subsidiaries or (iii) adopt or amend any Benefit Plan for the benefit of any employee or service provider of the Company or its Subsidiaries to the extent such adoption or amendment would create or increase in any material respect any liability on the part of the Company or its Subsidiaries, except as required by Law;
(l) enter into, adopt, amend or terminate any into a collective bargaining or other similar labor agreement or employee benefit planother labor union contract applicable to employees of the Company or its Subsidiaries other than to replace, program, policy, arrangement supplement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded extend a CBA that has expired or is reasonably expected to exceed $100,000expire before the Effective Time;
(jm) hire or terminate (except as required by for cause) the employment of any Benefit Plan in accordance with its terms as executive officer or other senior managerial employee, it being understood that the Company may fill vacancies of senior managerial employees (other than executive officers) that arise following the date of this Agreementhereof, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Planexcept that, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to filling any Benefit Plan such vacancies, the Company or change the manner in which contributions its Subsidiaries shall have reasonably consulted with Parent prior to any Benefit Plan are made or the basis on which taking such contributions are determinedaction;
(kn) change in any material respect any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or other applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a partyaccounting rules;
(o) waive other than in the benefits ofOrdinary Course of Business, (i) revoke or agree to modify in amend any material mannerTax election, (ii) change any Tax accounting method, policy or practice except as required by the Code or (iii) settle or compromise any material confidentiality agreement Tax liability or any standstill or similar agreement to which the Company or any of its Subsidiaries is a partyrefund;
(p) except fail to keep in force material insurance policies or replacement or revised provisions providing insurance in the Ordinary Course of Business with respect to the assets, properties and businesses of the Company and its Subsidiaries as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice currently conducted; or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. Except (ia) as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule, from From and after the date of this Agreement to until the Effective Time Time, except as contemplated by any other provision of this Agreement, unless the Company shallPurchaser has consented in writing thereto, and shall cause each of its Subsidiaries to, the Company:
(i) Shall conduct its business only in the operations according to its usual, regular and ordinary course consistent with past practice and in substantially the same manner as heretofore conducted;
(ii) Shall use all its reasonable efforts to preserve intact its current business organizationorganization and goodwill, keep available the services of its current officers and employees and preserve its present maintain satisfactory relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others those persons having business dealings relationships with them it;
(iii) Shall not amend its Articles of Incorporation or Bylaws or comparable governing instruments;
(iv) Shall promptly notify the Purchaser of any breach of any representation or warranty contained herein or any Material Adverse Effect with respect to the end that its goodwill Company;
(v) Shall promptly deliver to the Purchaser true and ongoing business shall be unimpaired at correct copies of any report, statement or schedule filed with the Effective Time. In addition, and without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented SEC subsequent to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall Agreement;
(A) Shall not, and shall not permit any of its Subsidiaries to, do any of the following:
(a) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrantsoptions, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awardswarrants, each outstanding conversion rights and other contractual rights existing on the date hereof or the issuance of the shares of capital stock of any Subsidiary and disclosed pursuant to the Companythis Agreement, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) issue any shares of its capital stock, effect any stock of split or otherwise change its capitalization as it existed on the date hereof and (B) shall not (x) grant, confer or award any class option, warrant, conversion right or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing right not existing on the right date hereof to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or grant, confer or award any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants bonuses or other securities forms of the Company cash incentives to any officer, director or any of its Subsidiaries; providedkey employee, however, that the Company may (iy) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice practice, increase any compensation with any present or as permitted under Section 6.1(mfuture officers, directors or key employees, grant any severance or termination pay to, or enter into any employment or severance agreement with any officer, director or key employee or amend any such existing agreement in any material respect (other than pursuant to severance agreements previously delivered to Purchaser), or (z) adopt any new employee benefit plan (including any stock option, stock benefit or stock purchase plan) or amend any existing employee benefit plan in any material respect;
(gvii) Shall not (i) declare, set aside or pay any dividend or make any other distribution or payment with respect to any shares of its capital stock or other ownership interests or (ii) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or make any commitment for any such action;
(viii) Shall not sell, lease, license, mortgage, sell and leaseback abandon or otherwise encumber or dispose of any of its properties assets or acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of or equity in, or by any other manner, any business or any corporation, partnership, association or other assets business organization or division thereof or otherwise acquire any interests thereinassets, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(hix) Shall not incur or guarantee any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Personperson, or issue or sell any debt securities other than borrowings under existing lines of credit and usual and customary advancement of expenses in the ordinary course of business;
(x) Shall not mortgage or otherwise encumber or subject to any Lien any of its properties or assets;
(xi) Shall not make any change to its accounting (including tax accounting) methods, principles or practices, except as may be required by generally accepted accounting principles and except, in the case of tax accounting methods, principles or practices, in the ordinary course of business of the Company;
(xii) Shall not make any commitment or enter into any contract or agreement or make any capital expenditure except for (x) customer purchase orders and purchases of raw materials used in the business of the Company and its wholly owned Subsidiaries, and other than agreed to employees in respect of travel or other related expenses made in the ordinary course of business consistent with past practice;
, (iy) except as required by Law any other commitment, contract and agreement involving aggregate payments to or except as required by the terms Company not in excess of a Benefit Plan in effect as of the date of this Agreement$100,000, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or providing for termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of without notice by the Company on 90 or any of its Subsidiariesfewer days' notice, any increase and made by the Company in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases of business consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, practice or (ivz) terminate capital expenditures that individually or in the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to aggregate do not exceed $100,000;
(jxiii) except as required by Shall not revalue any Benefit Plan of its assets, including, without limitation, writing down the value of its inventory or writing off notes or accounts receivable, other than in accordance with its terms as the ordinary course of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determinedbusiness;
(kxiv) change Shall not make any of the accounting methods used by the Company tax election except consistent with past practice or its Subsidiaries unless required by GAAP settle or applicable Lawcompromise any material income tax liability;
(lxv) amend Shall not settle or compromise any pending or threatened suit, action or claim relating to the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Companytransactions contemplated hereby;
(mxvi) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) Shall not pay, discharge, settle discharge or satisfy any claims, liabilities, liabilities or obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement discharge or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in in, or contemplated by, the most recent Financial Statements financial statements (or the notes thereto) of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, ; or
(iixvii) cancel Shall not agree or otherwise commit to take any indebtedness, (iii) waive of the foregoing actions or assign any claims or rights of substantial value, (iv) waive any benefits oftake, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required undertake, any standstill or similar contract to action which the Company or any of its Subsidiaries is would result in a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product failure of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiariescondition to Closing set forth in Section 6.3(a);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Lion Brewery Inc)
Interim Operations of the Company. Except The Company covenants and agrees that, except as (i) as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 5.1 of the Disclosure Schedule, (ii) required by applicable law, by any contracts or agreements of the Company disclosed in Section 3.14 of the Disclosure ScheduleSchedule or by any Plan or Employee Agreement disclosed in Section 3.8(a) of the Disclosure Schedule or (iii) agreed to in writing by Parent or Merger Subsidiary, from after the date of this Agreement hereof and prior to the Effective Time Time:
(a) the business of the Company shall, and shall cause each of its Subsidiaries to, conduct its business shall be conducted only in the usual, regular and ordinary course consistent with past practice and practices and, to the extent consistent therewith, the Company shall use all its reasonable efforts to preserve intact its current business organization, keep available organization and the services business organization of its current officers Subsidiaries intact and employees and preserve its present relationships maintain existing relations with customers, suppliers, licensors, licensees, distributors, Governmental Entities employees and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except creditors;
(wb) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any amend its Articles of Incorporation or Bylaws;
(c) neither the Company nor its Subsidiaries to, do any of the following:
(a) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of shall (i) any shares of its capital stock of any class split, combine or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for reclassify any shares of its capital stock or declare, set aside or pay any dividend or other ownership interestdistribution payable in cash, stock or property with respect to its capital stock other than dividends payable by Subsidiaries to the Company or payable from one Subsidiary to another Subsidiary; and neither the Company nor its Subsidiaries shall (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares of, or any rightssecurities convertible into or exchangeable for, or options, warrants, options, calls, commitments or any other agreements rights of any character kind to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe foracquire, any shares of its capital stock or of any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities class of the Company and or its Subsidiaries other than issuances of shares of Company Common Stock pursuant to securities, options, warrants, calls, commitments or rights existing at the date hereof and disclosed to Parent or Merger Subsidiary (including as disclosed in respect of, in lieu of, the Company Financial Documents); (iii) incur any long-term indebtedness or in substitution for, Shares outstanding incur short-term indebtedness other than under credit facilities existing on the date hereof;
hereof and other than financing and other equipment leases entered into in the ordinary course of business; (biv) redeem, purchase or otherwise acquireacquire directly or indirectly any of its capital stock; or (v) other than in the ordinary course of business and other than transactions among the Company and its Subsidiaries or among Subsidiaries, make loans or advances or assume, guarantee, endorse or otherwise as an accommodation become responsible for, the obligations of any other individual or entity; provided that the Company shall have the right (A) to pay at or prior to the Closing all accrued and unpaid dividends on outstanding shares of Company Preferred Stock as of the Closing Date to the extent such dividends have not been waived in writing by the holder of any such shares prior to the Closing Date and (B) to distribute to all shareholders, option holders and warrant holders interests in FRINC, LLC;
(d) neither the Company nor its Subsidiaries shall (i) except for normal increases in the ordinary course of business and fiscal year-end and discretionary bonuses consistent with past practice or to reflect promotions, grant any material increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any officer or director; (ii) adopt, amend or otherwise increase, or propose accelerate the payment or vesting of the amounts payable or to redeembecome payable to any officer or director of the Company or any of its Subsidiaries under any existing bonus, purchase or otherwise acquireincentive compensation, any outstanding Sharesdeferred compensation, Optionsseverance, Warrants profit sharing, stock option, stock appreciation right, restricted stock purchase, insurance, pension, retirement or other securities employee benefit plan, agreement or arrangement; or (iii) enter into or amend in any material respect any existing employment or severance agreement with, or, except in accordance with the existing written policies of the Company or existing contracts or agreements, grant any severance or termination pay to any officer or director of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt neither the Company nor its Subsidiaries shall (i) acquire or agree to acquire by merging or consolidating with, or by purchasing a plan of complete substantial equity interest in, or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization a substantial portion of the Company assets of, or by any other manner, any Person or business (other than inventory and other items in the ordinary course of business); or (ii) enter into any agreement with respect to any liquidation or disposition involving any Subsidiary, or any acquisition or disposition of all or substantially all of its assets or securities of any of the Subsidiaries, other than the Merger;
(f) acquire neither the Company nor its Subsidiaries shall change the accounting principles used by it unless required by GAAP or SAP or as a result of changes in GAAP or SAP;
(ig) by purchasethe Company shall not acquire, merger transfer, sell, lease, pledge or otherwiseencumber any assets material to any Subsidiary, any business other than such acquisitions, transfers, sales, leases, pledges or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies encumbrances in the ordinary course of business consistent with past practice of the Company or as permitted under Section 6.1(m)such Subsidiary and except for transactions involving investment assets;
(gh) sellexcept pursuant to Section 5.2, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose the Company shall not enter into an agreement with respect to the disposition of a material amount of assets of any of its properties or other assets Subsidiary, or any interests thereinrelease or relinquishment of any material contract rights of any Subsidiary, except for sales of inventory and used equipment other than any such agreements, releases or relinquishments entered into in the ordinary course of business consistent with past practiceof the Company or any Subsidiary and except for transactions involving investment assets;
(hi) incur the Company shall not permit any indebtedness for borrowed money Subsidiary to enter into any new material Contract (including, without limitation, any new Contract that would fit within the definition of Material Contract if in addition effect on the date hereof) or terminate, amend, modify or waive compliance of any provision in any respect adverse to that incurred as any of the date of this Agreement or guarantee Subsidiaries in any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Personexisting Material Contract, other than to the Company and its wholly owned Subsidiariessuch Contracts entered into, and other than to employees in respect of travel terminated, amended or other related expenses modified in the ordinary course of business consistent with past practice;
(i) except as required by Law and any renewals or except as required by the terms extensions of a Benefit Plan in effect as of any Contracts existing on the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000hereof;
(j) except as neither the Company nor any of its Subsidiaries shall make or change any Tax election, release, assign, settle or compromise any material Tax liability, or waive any statute of limitations for any Tax claim or assessment unless required by any Benefit Plan changes in accordance with its terms as of the date of this Agreement, take any action to fund tax laws or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determinedregulations;
(k) the Company shall not change any of the accounting Subsidiary's reserving methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law pricing and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner sales practices other than in the ordinary course of business consistent with past practice;of the Company or such Subsidiary; and
(ul) (i) enter into, amend, renew, modify or consent to neither the termination of (other than a termination in accordance with Company nor its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) Subsidiaries will enter into any an agreement, contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. Except During the period from the date of this Agreement to the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to section 8.1 (iexcept (w) as may be required by Law, (iix) as consented to in writing by Parent (with the prior written consent of Parent, which consent shall not be unreasonably withheld, delayed or conditioned), (iiiy) as contemplated or permitted by this Agreement or (ivz) as set forth in Section 6.1 the Schedules to this Agreement), the Company and Significant Shareholders covenant that the business of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business shall be conducted only in the usual, regular ordinary and ordinary usual course of business in all material respects consistent with past practice practice, and, to the extent consistent therewith, the Company and its Subsidiaries shall use all commercially reasonable efforts to (i) preserve intact its their current business organization, keep available the services of its current officers organization and employees and (ii) preserve its present their relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities suppliers and others having business dealings with them them; provided, however, that no action by the Company or any of its Subsidiaries with respect to the end that its goodwill and ongoing business matters addressed specifically by any provision of this section 6.1 shall be unimpaired at the Effective Timedeemed a breach of this sentence unless such action would constitute a breach of such specific provision. In addition, and without Without limiting the generality of the foregoing, except (w1) as may be required by Law, (x2) as consented to in writing by Parent (with the prior written consent of Parent, which consent shall not be unreasonably withheld, delayed or conditioned), (y3) expressly as contemplated or permitted pursuant to by this Agreement or (z4) as set forth in Section 6.1 of the Company Disclosure ScheduleSchedules to this Agreement, from the date of this Agreement prior to the Effective Time, neither the Company shall not, and shall not permit nor any of its Subsidiaries to, do any of the followingwill:
(a) amend its articles of incorporation or bylaws (or equivalent organizational documents);
(b) except for Shares Company Common Stock to be issued or delivered pursuant to the exercise of Company Options or Warrants, the settlement outstanding as of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Companythis Agreement, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interestinterest of the Company or any of its Subsidiaries, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interestinterest of the Company or any of its Subsidiaries, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest of the Company or any of its Subsidiaries or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights)of the Company or any of its Subsidiaries, or (ii) any other securities of the Company and or any of its Subsidiaries in respect of, in lieu of, or in substitution for, Shares Company Common Stock, Company Series A Preferred Stock and Company Series B Preferred Stock outstanding on as of the date hereofof this Agreement;
(bc) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding SharesCompany Common Stock, Options, Warrants Company Series A Preferred Stock or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase PlanSeries B Preferred Stock;
(d) split, combine, subdivide or reclassify any Shares Company Common Stock, Company Series A Preferred Stock and/or Company Series B Preferred Stock, or declare, set aside for payment or pay any dividend or other distribution in respect of any Shares of such securities or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company shareholders in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment than in the ordinary course of business consistent with past practice, acquire, sell, lease, dispose of, pledge or encumber any assets that, in the aggregate, are material to the Company and its Subsidiaries, taken as a whole;
(hg) other than in the ordinary course of business consistent with past practice, incur any material indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company or any wholly-owned Subsidiary of the Company;
(h) grant any material increases in the compensation of any employees of the Company and its wholly owned SubsidiariesSubsidiaries (the “Employees”) or directors, except in the ordinary course of business and other than in accordance with past practice, or enter into any material new employment or severance agreements with any such Employee or director, except for Retention Shares for Employees as set forth in Schedule 7.3(e) to employees in respect of travel this Agreement;
(i) except as may be contemplated by this Agreement or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law practices, terminate or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with materially amend any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee benefit plans of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;; or
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(rk) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. (a) Except (ias described in Section 5.1(a) of the Company Disclosure Letter, or as otherwise expressly required or permitted by Lawthis Agreement, (ii) as consented to Key Contract or any Transaction Document, the Company covenants and agrees that, during the period from the Execution Date until the Closing, unless Parent shall otherwise request in writing by Parent or approve in writing (which consent shall such approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed) and except as required by applicable Laws or required by any quarantine, “shelter-in-place”, “stay at home”, workforce reduction, social distancing, shutdown, closure, sequester or any other similar Law or Order, by any Governmental Entity in connection with or in response to COVID-19 (the “COVID-19 Measures”), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 the business of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business only be conducted in the usual, regular and ordinary course of business in all material respects consistent with past practice practice, including with respect to working capital practices and procedures, and the Company shall use all its reasonable best efforts to preserve its business organization substantially intact its current business organization, keep available the services of its current officers and employees and preserve its present relationships maintain existing relations with customers, suppliers, licensors, licenseescreditors, distributors, employees and Governmental Entities and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without Entities.
(b) Without limiting the generality of of, and in furtherance of, the foregoing, from the Execution Date until the Closing, except (w) as otherwise expressly required or permitted by Law, this Agreement or any Transaction Document; (x) as consented to described in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), the corresponding subsection of Section 5.1(a) of the Company Disclosure Letter; (y) expressly permitted pursuant as required by applicable Law (including any action required to this Agreement be taken prior to the Closing in order for Parent to be in compliance with the rules and regulations of the SEC and NASDAQ as of the Closing) or to comply with COVID-19 Measures; or (z) as set forth Parent may request in Section 6.1 of the Company Disclosure Schedulewriting or approve in writing (such approval not to be unreasonably withheld, from the date of this Agreement to the Effective Timeconditioned or delayed), the Company shall will not, and shall not permit any of its Subsidiaries to, do any of the following:
(ai) adopt any change in its or their Organizational Documents;
(ii) merge or consolidate with any other Person, except for Shares to be issued or delivered pursuant to the exercise any such transactions among wholly owned Subsidiaries of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issueor restructure, deliverreorganize, dissolve or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $250,000 or acquire any business or Person, by merger or consolidation, purchase of substantially all assets or equity interests or by any other manner, in each case, in any transaction or series of related transactions;
(iv) transfer, sell, dispose oflease, pledge license, sublicense, covenant not to assert, mortgage, pledge, surrender, encumber, divest, cancel, abandon, allow to lapse or expire or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or dispose of any of its Subsidiaries that is not wholly owned (directly material tangible or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete intangible assets, properties, intellectual property, licenses, operations, rights, product lines, businesses or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assetsinterests therein, except for purchases (A) sales or other dispositions of components, raw materials or supplies tangible assets in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
and (gB) sellsales, leaseleases, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties licenses or other dispositions of tangible assets or any interests therein, except for sales with a fair market value not in excess of inventory $250,000 in the aggregate; and used equipment (C) non-exclusive licenses of Company IP granted to customers in the ordinary course of business consistent with past practice;
(hv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any shares of capital stock of the Company, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock;
(vi) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(vii) declare, set aside, make or pay any non-cash dividend or other non-cash distribution with respect to any of its capital stock or enter into any agreement with respect to the voting of its capital stock;
(viii) create or incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than Lien material to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses Permitted Liens incurred in the ordinary course of business consistent with past practice;
(iix) except as required by Law make any loans, advances, guarantees or except as required by the terms of a Benefit Plan capital contributions to or investments in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of other than the Company or any direct or indirect wholly owned Subsidiary of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000);
(jx) except as required by incur any Benefit Plan in accordance with its terms as indebtedness for borrowed money or guarantee any such indebtedness of the date of this Agreementanother Person, take or issue or sell any action to fund debt securities or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws warrants or other comparable charter or organizational documents of rights to acquire any Subsidiary debt security of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (indebtedness for amounts not in excess of such reserves) or borrowed money incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree not to modify exceed $250,000 in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a partyaggregate;
(oxi) waive fail to make or authorize any budgeted capital expenditures or make or authorize any unbudgeted capital expenditures in excess of $250,000 in the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a partyaggregate;
(pxii) except as required by applicable Tax Lawenter into any Contract that, prepare or file any Tax Return inconsistent with past practice orif entered into prior to the Execution Date, on any such Tax Returnwould have constituted a Material Contract described in Section 3.12(a)(i), take any position(v), make any election(vii)-(xv), or adopt any method that is inconsistent with positions taken(xx), elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(qxxiv) sell, transfer or license to any person or modify any rights and (ixxv) to any material Company Intellectual Property Rights, except in (the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries“Restricted Contracts”);
(rxiii) enter into materially amend or modify or terminate any material joint venture or partnershipMaterial Contract that is a Restricted Contract;
(sxiv) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice, amend, modify, cancel, or waive any debts or claims held by it or waive any rights;
(uxv) make any changes with respect to its accounting policies or procedures, except as required by changes in Law or GAAP;
(ixvi) enter intosettle any Action against the Company, amendexcept for settlements involving solely the payment of monetary damages of less than $125,000, renewindividually, modify or $250,000, in the aggregate, in each case, in excess of the proceeds actually received from any insurance policies, subrogation or other third-party sources in connection with such payment;
(xvii) make, change or revoke any material Tax election, prepare any material Tax Return in a manner which is inconsistent with the past practices of the Company or any of its Subsidiaries with respect to the treatment of items on such Tax Returns, consent to any extension or waiver of the termination limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, file any amended material Tax Return or a claim for refund of material Taxes with respect to the income, assets or operations of the Company or any of its Subsidiaries or settle or compromise any material income Tax liability;
(other than a termination in accordance with its termsxviii) except as required pursuant to the terms of any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if Benefit Plan in effect on as of the date of this Agreement or as required pursuant to any collective bargaining agreement that the Company is required to assume or to which the Company is required to become a party, in each case, in accordance with a Key Contract, (iiA) increase in any manner the compensation or consulting fees, bonus, material fringe benefits, severance or termination pay of any Employee except, with respect to Employees who are not officers, increases in annual salary or wage rate in the ordinary course of business that do not exceed 5% individually or 3% in the aggregate, (B) become a party to, establish, adopt, amend, waivecommence participation in or terminate any Benefit Plan (or any arrangement that would have been a Benefit Plan had it been entered into prior to this Agreement) that provides cash incentive compensation, modifyequity-based compensation, nonqualified deferred compensation, defined benefit pension plan benefits, retiree welfare benefits, severance pay, or material fringe benefits, (C) grant any new incentive-based awards, or amend or modify the terms of any outstanding incentive-based awards, under any Benefit Plan, (D) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, (E) hire any employee or engage any independent contractor (who is a natural person) if such individual would receive an annual salary or wage rate or consulting fees in excess of $150,000 per annum, or (F) terminate the employment or engagement, other than for cause, of any Employee with an annual salary or wage rate in excess of $150,000; provided, that with respect to any action set forth in this Section 5.1(b)(xviii) that is required pursuant to any collective bargaining agreement that the Company is required to assume or to which the Company is required to become a party, in each case, in accordance with a Key Contract, the Company shall (1) provide advance written notice of such requirement to Parent as soon as reasonably practicable, (2) use its reasonable best efforts to update Parent of the status of negotiations or other material discussions in connection with such requirement, and (3) consider Parent’s input and comments in good faith;
(xix) become a party to, establish, adopt, amend, commence participation in or enter into any collective bargaining agreement or other labor union Contract;
(xx) fail to enforce pay or consent satisfy when due any material account payable or other material liability, other than in the ordinary course of business consistent with past practice or any such liability that is being contested in good faith by the Company;
(xxi) fail to keep current and in full force and effect, or to comply in all material respects with the requirements of, any material permit, approval, authorization, consent, license, registration or certificate issued to the termination Company by any Governmental Entity;
(xxii) take any steps for liquidation, winding-up, receivership, freeze of proceedings, arrangements with creditors (other than a termination extensions of trade payables agreed to in accordance with it termsthe ordinary course of business) its material rights thereunderor any similar action or proceeding by or in respect of the Company;
(vxxiii) create file any prospectus supplement or registration statement or consummate any offering of securities that requires registration under the Securities Act or that includes any actual or contingent commitment to register such securities under the Securities Act in the future;
(xxiv) take any actions or omit to take any actions that would, individually or in the aggregate, reasonably be expected to result in any of the conditions set forth in Article VI not being satisfied;
(xxv) form any Subsidiary;
(xxvi) except for those actions contemplated in, and permitted by, Section 5.29, materially amend or modify or terminate any Material Contract;
(xxvii) (A) subject any Company IP to Copyleft Terms; or (B) disclose any trade secrets and any other confidential information material to the Company or the conduct of the Business to any Person (other than pursuant to a written confidentiality agreement with provisions reasonably restricting the use and disclosure thereof);
(xxviii) take any action which would reasonably be expected to cause any of the Transactions to be a “covered transaction” as defined at 31 C.F.R. § 800.213; or
(wxxix) enter into any contractagree, agreement, commitment authorize or arrangement commit to do any of the foregoing.
(c) Nothing contained in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct any of the Company’s operations prior to the Closing Date.
Appears in 1 contract
Interim Operations of the Company. Except (ia) as required by LawPrior to the Effective Time, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) except as set forth in Section 6.1 5.2 of the Company Disclosure Schedule, from the date Schedule or as contemplated by any other provision of this Agreement to Agreement, unless Parent has consented in writing thereto, the Effective Time the Company Company: (i) shall, and shall cause each of its Subsidiaries Company Subsidiary to, conduct its business only in the operations according to their usual, regular and ordinary course consistent with past practice and in substantially the same manner as heretofore conducted; (ii) shall use all its reasonable efforts to preserve intact its current business organizationorganizations and goodwill, keep available the services of its current officers and employees and preserve its present maintain satisfactory relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others those persons having business dealings relationships with them them; (iii) shall not amend its Certificate of Incorporation or Bylaws or the charter documents of Company Subsidiary; (iv) shall promptly notify Parent of (A) any material adverse change in its condition (financial or otherwise), business, properties, assets, liabilities or the normal course of its business or of its properties, (B) any material litigation or, to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to, do any of the following:
(a) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary extent known to the Company, issueany material governmental complaints, deliver, sell, dispose of, pledge investigations or hearings against or otherwise encumber, involving the Company or authorize Company Subsidiary (or propose communications indicating that the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rightssame may be contemplated), or (iiC) the breach of any other securities Company representation or warranty contained herein; (v) shall promptly deliver to Parent true and correct copies of any report, statement or schedule filed by the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order Commission subsequent to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, ; (ivi) shall not enter into an employment agreement or amend any employment, severance or similar agreements or arrangements with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not or Company Subsidiary's directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Companyexecutive officers, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(mA) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (iiB) as otherwise provided in this Agreement; (vii) shall not, and shall not permit Company Subsidiary to, authorize, propose or announce an intention to distributeauthorize or propose, license or co-promote enter into negotiations or an agreement with respect to any product acquisition of the Company assets or securities, any disposition of assets or securities or any release or relinquishment of its Subsidiaries (including products under development and products licensed by the Company any contract rights, which acquisitions, dispositions, releases or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that relinquishments would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in outside the ordinary course of business consistent and would involve aggregate consideration in excess of $500,000; (viii) shall not issue any shares of capital stock or securities, except upon exercise of Company Options outstanding as of the date hereof, or effect any stock split or otherwise change its capitalization; (ix) shall not grant, confer or award any options, appreciation rights, warrants, conversion rights, restricted stock, stock units, performance shares or other rights, not existing on the date hereof, with past practice;
respect to any shares of its capital stock or other securities of the Company; (ux) shall not take any actions which would, or would be reasonably likely to, prevent the Merger from qualifying as a reorganization within the meaning of Section 368 of the Code; (ixi) enter intoshall not take any actions which would, amendor would be reasonably likely to, renew, modify or consent prevent the Merger from qualifying as a transaction to the termination be accounted for as a pooling of (other than a termination interests in accordance with its termsXXX Xx. 00; (xii) except as required by applicable law (in which case prompt notice shall be given by the Company to Parent), shall not amend in any Material material respect the terms of the Company Contract over $250,000 Benefit Plans, including without limitation any employment, severance or Contract over $250,000 that would be a Material Company Contract if similar agreements or arrangements in effect existence on the date of this Agreement hereof, or (ii) amendadopt any new employee benefit plans, waiveprograms or arrangements or any employment, modify, fail to enforce severance or consent to the termination of (other than a termination in accordance with it terms) its material rights thereundersimilar agreements or arrangements;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Advanced Energy Industries Inc)
Interim Operations of the Company. Except (i) From the date of this Agreement until the Closing Date or the earlier termination of this Agreement, except as required set forth in Schedule 7.1 or as contemplated by Lawthis Agreement or the Ancillary Agreements, (ii) as unless the Buyer has previously consented to in writing by Parent thereto (which consent shall will not be unreasonably withheld, delayed conditioned or conditioneddelayed), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve its present relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries the Subsidiary to, do any of the following:
(a) except incur any indebtedness for Shares to be issued borrowed money or delivered pursuant to the exercise of Options issue any long-term debt securities or Warrantsassume, the settlement of RSUs guarantee or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock endorse such obligations of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assetsPerson, except for purchases of components, raw materials or supplies indebtedness incurred in the ordinary course of business consistent with past practice under either lines of credit existing on the date hereof or as permitted under Section 6.1(m)capitalized lease obligations;
(gb) sellexcept in the ordinary course of business consistent with past practice, lease(i) acquire, license, mortgage, sell and leaseback or otherwise encumber or dispose of of, any of its properties material property or assets, (ii) mortgage or encumber any property or assets other assets than Permitted Liens, or (iii) cancel any material debts owed to or claims held by the Company or the Subsidiary;
(c) incur any capital expenditures or any interests thereinobligations or liabilities in respect thereof, except for sales of inventory any budgeted capital expenditures and used equipment other unbudgeted capital expenditures not to exceed $50,000 individually or $200,000 in the aggregate;
(d) amend or terminate any Contracts that would constitute a Material Contract, except in the ordinary course of business consistent with past practice;
(he) incur commence, settle or offer to propose to settle, (i) any indebtedness for borrowed money in addition to that incurred as of material Proceeding involving or against the date of this Agreement Company or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, the Subsidiary (other than any Proceeding involving a settlement of $50,000 or less as its sole remedy), (ii) any stockholder litigation or dispute against the Company or the Subsidiary or any of their officers or directors or (iii) any Proceeding that relates to the transactions contemplated hereby;
(f) fail to keep in force insurance policies or replacement or revised provisions providing insurance coverage with respect to the assets, properties and activities of the Company and its wholly owned Subsidiaries, and other than to employees the Subsidiary as are currently in respect of travel or other related expenses in the ordinary course of business consistent with past practiceeffect;
(ig) engage in any transactions with, or enter into any Contracts with, any Affiliates of the Company, except as to the extent required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, any existing Contracts;
(h) (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement Employee Plan or employee benefit plan, program, policy, arrangement other Contract relating to the compensation or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment severance of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any employee of the accounting methods used by the Company or its Subsidiaries unless the Subsidiary, except to the extent required by GAAP Law or applicable Law;
(l) amend any existing agreements, other than a Contract for a new hire employee of the Company’s certificate of incorporation Company or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary that is terminable at the will of the CompanyCompany or the Subsidiary without liability and provides for annual compensation that is less than $100,000, except as may be required by applicable Law and except for immaterial amendments under (ii) increase the charter compensation or organizational documents of fringe benefits of, or pay any Subsidiary of the Company;
(m) authorize or make any commitment with respect bonus to, any capital expenditure director, executive officer, employee or other expenditures (including in respect service provider of research and development), the Company or the Subsidiary other than those which, individually, are less than any increases or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction payments in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against practices that do not exceed $100,000 in the most recent Financial Statements aggregate or $25,000 individually or (iii) terminate the employment of Xxxxx Xxxx, the Company included Subsidiary’s Chief Executive Officer;
(i) make any material change to its accounting methods, principles or practices, except as may be required by GAAP;
(j) make any amendment to its certificate of incorporation or bylaws (or equivalent documents);
(k) make or change any Tax election; settle or compromise any claim, notice, audit report or assessment in the Filed SEC Documents (for amounts not in excess respect of such reserves) Taxes; change any annual Tax accounting period; adopt or incurred since the date change any method of such Financial Statements Tax accounting; file any amended Tax Return; enter into any tax allocation agreement, tax sharing agreement, tax indemnity agreement or closing agreement relating to any material Tax, other than any Contract entered into in the ordinary course of business consistent with past practice, (ii) cancel the principal purpose of which is not related to Taxes; surrender any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree right to modify in any respect, or, subject to the terms hereof, fail to enforce, claim a material Tax refund; or consent to any matter extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(l) declare or pay any dividends or distributions or repurchase any shares of capital stock or other equity interests, other than in accordance with respect the Company Stockholders Agreement in the event of an employee’s termination prior to which consent is required underthe Closing;
(m) issue or sell any capital stock or options, warrants or other rights to purchase any standstill or similar contract to which capital stock of the Company or any the Subsidiary, other than the issuance of its Subsidiaries is a party or (v) waive any material benefits ofCommon Stock upon exercise of Options outstanding as of the date of this Agreement, or agree to modify in any material respectsplit, or, subject to combine or subdivide the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which capital stock of the Company or the Subsidiary other than the issuance of shares of Common Stock upon the exercise of Options currently outstanding;
(n) form or acquire any of its Subsidiaries is a party;subsidiaries; or
(o) waive the benefits ofagree, resolve or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement commit to do any of the foregoing.
Appears in 1 contract
Samples: Stock Purchase Agreement (Watts Water Technologies Inc)
Interim Operations of the Company. Except From the date hereof until the Effective Time, the Company and its Subsidiaries shall conduct their business in the ordinary course consistent with past practices and shall use all reasonable efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality of the foregoing, and except (i) as required by Lawto the extent Parent shall otherwise consent in writing, (ii) as consented to expressly contemplated in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iviii) as set forth in Section 6.1 6.02 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve its present relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at hereof until the Effective Time. In addition, and without limiting :
(a) the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (which consent Company shall not be unreasonably withheld, delayed adopt or conditioned), propose any change to its certificate of incorporation or bylaws;
(yb) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to, do any of the following:
(a) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of the Company or any of its Subsidiaries, Subsidiaries (other than a liquidation or dissolution of a wholly owned Subsidiary of the MergerCompany or a merger or consolidation between wholly owned Subsidiaries of the Company or of any wholly owned Subsidiary into the Company);
(fc) acquire (i) by purchasethe Company shall not, merger and shall not permit any of its Subsidiaries to make any equity investment in or otherwise, any business or equity interest acquisition of any Person or any amount of assets material to the Company and its Subsidiaries on a consolidated basis, except for (i) capital expenditures permitted by Section 6.02(h), (ii) equity investments in or capital contributions to any asset wholly owned Subsidiary of the Company or assets, except for purchases of components, raw materials or supplies (iii) investment activities in the ordinary course of business consistent with past practice practices; provided that the consent of Parent with respect to any action otherwise prohibited by this Section 6.02(c) shall not be unreasonably withheld or as permitted under Section 6.1(m)delayed;
(gd) the Company shall not, and shall not permit any of its Subsidiaries to, sell, lease, license, mortgage, sell and leaseback license or otherwise encumber or dispose of any of assets material to the Company and its properties or other assets or any interests thereinSubsidiaries on a consolidated basis, except for sales of inventory and used equipment (i) in the ordinary course of business consistent with past practicepractices or (ii) pursuant to existing contracts or commitments; provided that the consent of Parent with respect to any action otherwise prohibited by this Section 6.02(d) shall not be unreasonably withheld or delayed);
(e) the Company shall not, and shall not permit any of its Subsidiaries to, (i) split, combine, subdivide or reclassify any shares of capital stock of the Company or its Subsidiaries or (ii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock (other than, with respect to clause (ii), (A) dividends from its direct or indirect wholly owned Subsidiaries and (B) regular quarterly cash dividends paid by the Company on the Company Common Stock not in excess of $0.08 per share per quarter (appropriately adjusted to reflect any stock dividends, subdivisions, splits, combinations or other similar events relating to the Company Common Stock), with usual record and payment dates and in accordance with the Company's past dividend policy);
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) issue, sell, transfer, pledge or dispose of any shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or series of the Company or its Subsidiaries (other than (i) issuances pursuant to the exercise of the Company Convertible Notes or issuances pursuant to stock options or stock-based awards granted pursuant to a Company Stock Plan and outstanding on the date hereof or granted pursuant to clause (ii) below, (ii) additional stock options or stock-based awards granted in the ordinary course consistent with past practices pursuant to a Company Stock Plan as in effect on the date hereof (provided, however, that any such stock option shall be granted in accordance with Section 6.02(s)), or (iii) issuances by any Subsidiary of the Company to the Company or to any wholly owned subsidiary of the Company) or (y) reduce the exercise or conversion price, extend the term or otherwise modify in any material respect the terms of any such securities of the Company or of any Subsidiary of the Company;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, redeem, purchase or otherwise acquire directly or indirectly any of the Company's capital stock (other than in the ordinary course of business on behalf of or as fiduciary for third parties);
(h) incur the Company shall not, and shall not permit any indebtedness for borrowed money in addition of its Subsidiaries to, make or commit to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than expenditures that are material to the Company and its wholly owned SubsidiariesSubsidiaries on a consolidated basis, and other than to employees in respect of travel or other related expenses except in the ordinary course of business consistent with past practicepractices;
(i) except as required by Law or except as required by the terms Company shall not, and shall not permit any of a Benefit Plan in effect as of the date of this Agreementits Subsidiaries to, (i) enter into an employment agreement incur or assume any long-term or short-term debt or issue any debt securities (other than issuances of commercial paper in the ordinary course of business consistent with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, past practices); (ii) grant assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any current other Person, except (A) in the ordinary course of business consistent with past practices or former director(B) for obligations of the wholly owned Subsidiaries of the Company; (iii) make any loans or advances to or debt investments in any other Person, officer other than (x) loans, advances or employee debt investments in the Company' wholly owned subsidiaries, (y) investment activities in the ordinary course of business consistent with past practices or (z) agency loans in the ordinary course of business consistent with past practices; (iv) pledge or otherwise encumber shares of capital stock of the Company or its Subsidiaries; or (v) mortgage or pledge any of its Subsidiariesmaterial assets, tangible or intangible, or create any increase material Lien thereupon, except in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases of business consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000practices;
(j) except as may be required by law or by existing agreements or arrangements, the Company shall not, and shall not permit any Benefit Plan in accordance with of its terms as of the date of this AgreementSubsidiaries to, take any action to fund or increase in any other way secure manner the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Company Employee Plan or materially change Company International Plan of any assumption used to calculate funding obligations director, employee or independent contractor or pay any benefit or compensation not required by any plan and arrangement as in effect as of the date hereof (including the granting of stock options, stock appreciation rights or other stock-based award), other than (i) increases in salary or performance bonuses consistent with respect to past practices in light of actual performance, (ii) arrangements for newly hired individuals that are consistent with existing policies and practices or (iii) increases of not more than $250,000 in the aggregate for any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determinedindividual;
(k) change except as otherwise provided herein, the Company shall not, and shall not permit any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP to, enter into any material contract, agreement, commitment or applicable Lawtransactions, other than in the ordinary course of business consistent with past practices;
(l) amend the Company’s certificate Company shall not, and shall not permit any of incorporation its Subsidiaries to, enter into any agreement that limits or otherwise restricts in any material respect the Company’s bylaws Company or other comparable charter or organizational documents any of any Subsidiary its Subsidiaries (or, following completion of the CompanyMerger, except as may be required by applicable Law and except for immaterial amendments under the charter Parent or organizational documents any of its Subsidiaries) or any Subsidiary successor thereto, from engaging or competing in any line of the Companybusiness or in any geographical area;
(m) authorize or make the Company shall not, and shall not permit any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal its Subsidiaries to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy (i) any claimsnon-insurance claim, liabilitiesliability or obligation (including extra-contractual obligations), other than (A) in the ordinary course of business for amounts not in excess of $100,000,000 in the aggregate (or, if in excess of $100,000,000 in the aggregate, with the consent of Parent, such consent not to be unreasonably withheld or delayed) or (B) pursuant to existing contractual obligations or litigation (ii) any insurance claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents () for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, $100,000,000 (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject if in excess of $100,000,000, with the consent of Parent, such consent not to the terms hereof, fail to enforce, be unreasonably withheld or consent to any matter with respect to which consent is required under, any standstill or similar contract to which delayed);
(n) the Company or shall not, and shall not permit any of its Subsidiaries is a party to, make, change or (v) waive revoke any material benefits of, Tax election or agree to modify in any change its method of accounting if such change would have a material respect, or, subject to the terms hereof, fail to enforce in any material respect, adverse impact on Taxes or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of change its Subsidiaries is a partyfiscal year;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or shall not, and shall not permit any of its Subsidiaries is to, enter into any new reinsurance transaction or ceding insurer (x) which does not contain market cancellation, termination and commutation provisions or (y) which materially changes the existing reinsurance profile of the Company and its Subsidiaries on a partyconsolidated basis outside of the ordinary course of business;
(p) the Company shall not, and shall not permit any of its Subsidiaries to, alter or amend in any material respect their existing underwriting, claim handling, loss control, investment, actuarial, financial reporting or accounting practices, guidelines or policies or any material assumption underlying an actuarial practice or policy, except as may be required by GAAP or applicable Tax Law, prepare SAP or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used the local equivalent in preparing or filing similar Tax Returns in prior periodsthe applicable jurisdictions;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or shall use its reasonable best efforts not to, and shall use its reasonable best efforts not to permit any of its Subsidiaries to, take any action (including products any action otherwise permitted by this Section 6.02) that would prevent or impede the Merger from qualifying as a reorganization under development and products licensed by Section 368(a) of the Company or any of its Subsidiaries)Code;
(r) enter into the Company shall not, and shall not permit any material joint venture of its Subsidiaries to, intentionally take any action (i) that would make any representation or partnershipwarranty of the Company hereunder inaccurate at, or as of any time prior to the Effective Time, subject to such exceptions as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect or (ii) that would, or would reasonably be expected to, result in any of the conditions to the Merger set forth in Article 8 not being satisfied;
(s) engage in The Company shall not, and shall not permit any transactionsof its Subsidiaries to, agreements, grant (i) any initial stock options with any option reload features and (ii) except as may be required by law or by existing agreements or arrangements or understandings is consistent with past practices, any reloaded stock options with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;further option reload features; and
(t) otherwise manage the Company shall not, and shall not permit any of its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter intoSubsidiaries, amend, renew, modify to authorize or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement an agreement to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Travelers Property Casualty Corp)
Interim Operations of the Company. Except The Company covenants and agrees as to itself and its Subsidiaries that during the period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (iw) as set forth in Section 5.1 of the Company Disclosure Letter, (x) expressly permitted by this Agreement, including Section 5.3 of this Agreement, (y) required by applicable Law, or (iiz) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule, from after the date of this Agreement and prior to the Effective Time Time:
(a) the business of the Company shall, and shall cause each of its Subsidiaries to, conduct its business shall be conducted only in the usual, regular and ordinary course consistent with past practice practice, and the Company shall use all reasonable best efforts to preserve intact its current business organization, organization and goodwill and the business organization and goodwill of its Subsidiaries and to keep available the services of its their current officers and key employees and preserve its present relationships and maintain existing relations with customers, suppliers, licensorsofficers, licenseesemployees, distributors, Governmental Entities creditors and others other Persons having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except them;
(wb) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and nor shall not it permit any of its Subsidiaries to, (i) enter into any new line of business or (ii) in any fiscal quarter in the 2010 calendar year incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures, other than capital expenditures and obligations or liabilities incurred or committed that do not exceed in the aggregate 110% of the amount budgeted for such fiscal quarter in the 2010 capital budget attached as Section 5.1(b) of the Company Disclosure Letter;
(c) the Company shall not, nor shall it permit any of the following:its Subsidiaries to, amend any of their respective certificates of incorporation or bylaws or similar organizational documents;
(ad) except for Shares the Company shall not, nor shall it permit any of its Subsidiaries (other than direct or indirect wholly-owned Subsidiaries) to, declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to be issued its capital stock or delivered pursuant other equity interests; and the Company shall not, nor shall it permit any of its Subsidiaries to, (i) adjust, split, combine or reclassify any capital stock or other equity interests or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind, including phantom stock, phantom stock rights, stock appreciation rights or stock based performance units, to the exercise of Options or Warrantsacquire, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the any shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge class or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any such securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries, other than issuances (A) of shares of Company Common Stock pursuant to the Company Options outstanding on the date of this Agreement and disclosed in Section 3.3 of the Company Disclosure Letter, (B) by a wholly-owned Subsidiary of the Company of such Subsidiary’s capital stock or other equity interests to the Company or any other wholly-owned Subsidiary of the Company, or (C) pursuant to the Company Rights or the Company Rights Agreement in effect on the date of this Agreement, or (ii) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) of this Section 5.1(d), except as contemplated by any Company Employee Benefit Plan existing on the date of this Agreement and included in Section 3.14(a) of the Company Disclosure Letter;
(e) the Company shall not, nor shall it permit any of its Subsidiaries to, (i) grant any increase in the compensation (including base salary and target bonus) or benefits payable to any officer of the Company or any of its Subsidiaries, (ii) except in the ordinary course of business on a basis consistent with past practice, grant any increase in the compensation or benefits payable to any non-officer of the Company or any of its Subsidiaries, (iii) except as required to comply with applicable Law or any agreement in existence on the date of this Agreement or as expressly provided in this Agreement, adopt, enter into, amend or otherwise increase, or accelerate the payment or vesting of the amounts, benefits or rights payable or accrued or to become payable or accrued under any bonus, incentive compensation, deferred compensation, severance, termination, change in control, retention, hospitalization or other medical, life, disability, insurance or other welfare, profit sharing, stock option, stock appreciation right, restricted stock or other equity based, pension, retirement or other employee compensation or benefit plan, program agreement or arrangement, or (iv) enter into or amend any employment agreement or, except in accordance with existing contracts or agreements, grant any severance or termination pay to any officer, director or employee of the Company or any of its Subsidiaries;
(f) the Company shall not, nor shall it permit any of its Subsidiaries to, revalue any of its material assets or change its methods of accounting in effect at December 31, 2009, except changes in accordance with and required by GAAP (or, if applicable with respect to foreign Subsidiaries, international financial reporting standards or other relevant foreign generally accepted accounting principles), applicable Law or regulatory guidelines as concurred with by the Company’s independent auditors;
(g) the Company shall not, nor shall it permit any of its Subsidiaries to, acquire or invest in, by merging or consolidating with, by purchasing an equity interest in or all or a material portion of the assets of, or by any other manner, any Person or other business organization, division or business of such Person or, other than in the ordinary course of business consistent with past practice, any material assets;
(h) the Company shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any assets of the Company or its Subsidiaries, except for inventory and equipment in the ordinary course of business consistent with past practice;
(i) the Company shall not, nor shall it permit any of its Subsidiaries to, mortgage, pledge, hypothecate, sell and leaseback, grant any security interest in, or otherwise subject to any other Lien other than Permitted Liens, any assets of the Company or its Subsidiaries;
(j) except for Taxes, to which Section 5.1(l) shall apply, the Company shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, pay, discharge or satisfy any material Claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any material payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of the Company Material Contracts as in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which the Company or any of its Subsidiaries is a party; provided, however, that nothing in this Section 5.1(j)(i) shall prohibit the Company or any of its Subsidiaries from paying, discharging or satisfying accounts payable existing on or arising after, in each case in the ordinary course of business consistent with past practice, the date of this Agreement, or (ii) compromise, settle or grant any waiver or release relating to any Litigation, other than settlements or compromises of Litigation fully covered by insurance or where the amount paid or to be paid does not exceed $250,000 in the aggregate for all Claims; provided, however, that the Company may (iis permitted to settle all Litigation set forth on Section 5.1(j)(ii) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options Company Disclosure Letter, regardless of whether the amount paid or Warrantsto be paid exceeds $250,000, with Parent’s prior written consent, which shall not be unreasonably withheld;
(ck) grant the Company shall not, nor shall it permit any Optionsof its Subsidiaries to, Restricted Stock Awardsengage in any transaction with (except pursuant to agreements in effect at the time of this Agreement insofar as such agreements are disclosed in Section 3.20 of the Company Disclosure Letter), RSUs or other equity-based awards enter into any agreement, arrangement, or grant understanding, directly or indirectly, with any options to purchase Shares under of the Company’s 2007 Employee Stock Purchase Plan;
affiliates; provided, that for the avoidance of doubt, for purposes of this clause (d) splitk), combine, subdivide or reclassify the term “affiliates” shall not include any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders employees of the Company or any of its Subsidiaries, other than the directors and executive officers thereof and employees who share the same household with such directors and executive officers;
(l) the Company shall not, nor shall it permit any of its Subsidiaries that to, enter into any closing agreement with respect to material Taxes, make any change to any material Tax method of accounting, fail to prepare all Returns using Tax principles consistent with those used for preceding tax periods, unless a change is not wholly owned required by applicable law, make, revoke or change any material Tax election, authorize any indemnities for Taxes, extend any period for assessment of any Tax, file any request for a ruling or determination, amend any material Return (directly including by way of a claim for refund) or indirectly) by Company in their capacity as suchsettle or compromise any material Tax liability or any material Tax refund;
(em) the Company shall not, nor shall it permit any of its Subsidiaries to, take any action that could reasonably be expected to (i) result in any of the conditions to the Merger set forth in Article VI not being satisfied, (ii) result in a Material Adverse Effect or (iii) materially impair or delay consummation of the Merger or the other transactions contemplated hereby;
(n) the Company shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, Subsidiaries (other than the Merger) or any agreement relating to an Acquisition Proposal;
(fo) acquire the Company shall not, nor shall it permit any of its Subsidiaries to, (i) by purchaseincur or assume any indebtedness for borrowed money except borrowings under and letters of credit issued under the Company Credit Agreement in the ordinary course of business, merger or otherwise, any business or equity interest of any Person or (ii) modify any asset material indebtedness or assetsother liability to increase the Company’s (or any of its Subsidiaries’) obligations with respect thereto, (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a wholly-owned Subsidiary of the Company), except for purchases of components, raw materials or supplies in the ordinary course of business and consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in no event exceeding $250,000 in the ordinary course of business consistent with past practice;
aggregate at any time outstanding, (hiv) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, Person (other than to wholly-owned Subsidiaries of the Company and its wholly owned SubsidiariesCompany, and other than or by such Subsidiaries to the Company, or customary loans or advances to employees in respect consistent with past practice or short-term investments of travel or other related expenses cash in the ordinary course of business in accordance with the Company’s cash management procedures), or (v) without Parent’s prior written consent, which shall not be unreasonably withheld, enter into any material commitment or transaction, except in the ordinary course of business and consistent with past practicepractice and in no event exceeding $250,000 in the aggregate, except as permitted under Section 5.1(b); provided, however, that the restrictions in this Section 5.1(o) shall not prohibit the incurrence of any long-term debt or short-term indebtedness or other liability or obligation by the Company that is owed solely to one or more wholly-owned Subsidiaries of the Company or by any wholly-owned Subsidiary of the Company that is owed solely to the Company or one or more wholly-owned Subsidiaries of the Company;
(ip) except as required by Law the Company shall not, nor shall it permit any of its Subsidiaries to, enter into any agreement, understanding or except as required by commitment that materially restrains, limits or impedes the terms of a Benefit Plan in effect as ability of the date Company or any Subsidiary of this Agreementthe Company, or would limit the ability of the Surviving Entity or any affiliate of the Surviving Entity after the Effective Time, to compete in or conduct any line of business or to solicit customers or employees;
(iq) the Company shall not, nor shall it permit any of its Subsidiaries to, enter into an employment agreement with any Person agreement, understanding or grant to commitment containing any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee restriction on the ability of the Company or any of its SubsidiariesSubsidiaries to assign its rights, any increase in compensation other thaninterests or obligations thereunder, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded unless such restriction excludes or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect not applicable to any Benefit Plan or change the manner in which contributions assignment to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company Parent or any of its Subsidiaries in connection with or following the consummation of the transactions contemplated by this Agreement;
(r) the Company shall not, nor shall it permit any of its Subsidiaries to, enter into any material joint venture, partnership or other similar arrangement or materially amend or modify in an adverse manner the terms of (or waive any material rights under) any existing material joint venture, partnership or other similar arrangement (other than any such action between the Company’s wholly-owned Subsidiaries);
(s) the Company shall not, nor shall it permit any of its Subsidiaries to, terminate any Company Material Contract to which it is a party or (v) waive any material benefits ofwaive, release, relinquish or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or assign any of its Subsidiaries rights or Claims under any Company Material Contract in a manner that is a party;
(o) waive the benefits of, or agree materially adverse to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, modify or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into amend in any material joint venture or partnership;
(s) engage in respect any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities ActCompany Material Contract;
(t) otherwise manage the Company shall not, and shall not permit any of its working capital in Subsidiaries to, take any action that would give rise to a manner other than claim under the WARN Act or any similar state law or regulation because of a “plant closing” or “mass layoff” (each as defined in the ordinary course of business consistent WARN Act) without in good faith attempting to comply with past practicethe WARN Act or such state law or regulation;
(u) (i) the Company shall not enter into, amendamend or otherwise change the terms of any agreements with brokers, renewfinders or investment bankers (including the Company Financial Advisor) referred to in Sections 3.4(e) and 3.26, modify or consent except to the termination of (other than a termination extent that any such amendment or change would result in accordance terms more favorable to the Company; provided, however, that the Company may enter into an agreement, on commercially reasonably terms, with its termsan investment banker engaged to provide the Company with the consultation services set forth in Sections 5.3(a) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date and 5.3(e) of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination and with advice and assistance in accordance connection with it terms) its material rights thereunder;discussions and negotiations permitted by Section 5.3(a); and
(v) create the Company shall not, nor shall it permit any Subsidiary; or
(w) of its Subsidiaries to, enter into any an agreement, contract, agreement, commitment or arrangement to do any of the foregoing, or take any action that would make any of the Company’s representations or warranties untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants under this Agreement.
Appears in 1 contract
Interim Operations of the Company. Except (i) as required by LawThe Company shall, (ii) as consented to in writing by Parent (which consent and shall not be unreasonably withheldcause each of its Subsidiaries to, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of during the Company Disclosure Schedule, period from the date of this Agreement until the Effective Time, except as expressly provided by this Agreement, as required by applicable Law, or with the prior written consent of Parent, conduct its business in the ordinary course of business consistent with past practice, and, to the Effective Time extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, conduct its business only in the usual, regular and ordinary course consistent with past practice and use all commercially reasonable efforts to preserve intact its current and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees employees, to maintain the Governmental Permits in full force and effect and timely comply with all applicable Laws with respect thereto, and to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees, distributorscreditors, Governmental Entities business partners and others other Persons having business dealings relationships with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Timeit. In addition, and without Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except (w) as required otherwise expressly contemplated by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 5.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective TimeLetter or as required by applicable Law, the Company shall not, and nor shall not it permit any of its Subsidiaries to, do any without the prior written consent of the followingParent:
(a) except for Shares (i) fail to file all Tax Returns required to be issued filed by it and pay all of its debts and Taxes when due or delivered (ii) fail to pay or perform its other liabilities when due, in each case, subject to good faith disputes over such debts, Taxes or liabilities;
(b) amend or propose to amend any Company Charter Document or any Subsidiary Charter Document;
(c) (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to, or enter into any Contract with respect to the voting of, the capital stock of the Company or any of its Subsidiaries; (ii) issue, sell, transfer, pledge, dispose of or encumber, or agree to issue, sell, transfer, pledge, dispose of or encumber, any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, puts, collars, commitments or rights of any kind to acquire or sell (or stock appreciation rights with respect to), any shares of capital stock of the Company or any of its Subsidiaries (including treasury stock), other than in respect of the Common Shares reserved for issuance on the date of this Agreement pursuant to the exercise of Options or Warrantsoutstanding on the date hereof, the settlement vesting of RSUs or the lapsing of forfeiture restrictions of Company Restricted Stock Awards, each Shares outstanding on the date hereof or and the issuance conversion of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Preferred Shares outstanding on the date hereof;
hereof into Company Common Stock, (biii) split, combine or reclassify any of the outstanding capital stock of the Company or any of the Subsidiaries of the Company (including the Common Shares) or (iv) redeem, purchase or otherwise acquire, or propose offer to redeem, purchase or otherwise acquire, directly or indirectly, any outstanding Sharesof the Company’s or any of its Subsidiaries’ capital stock;
(d) except as required by applicable Law: (i) make any changes in the compensation payable or to become payable to any of its officers, Optionsdirectors, Warrants employees, agents, consultants or other securities Persons providing management services (other than changes in wages in the ordinary course of business and consistent with past practice to employees of the Company or its Subsidiaries who are not officers, directors or Affiliates of the Company); (ii) adopt, enter into or amend (including acceleration of vesting) any employment, severance, retention, consulting, termination, deferred compensation, “change in control” or other employee benefit agreement (collectively, “Employment Agreements”) including, without limitation, any Company Plan, except that the Company and its Subsidiaries may, in the ordinary course of business consistent with past practice, enter into in any such agreement in connection with the hiring of new employees who are not executive officers or direct reports to an executive officer; (iii) promote any officers or employees, except in connection with the Company’s annual or quarterly compensation review cycle or as the result of the termination or resignation of any officer or employee; (iv) make any loans (other than travel and payroll advances to non-officer employees in the ordinary course of business consistent with past practice) to any of its officers, directors, employees, Affiliates, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any such Persons pursuant to a Company Plan or otherwise; or (v) take (or omit to take) any action which could reasonably be expected to result in a “good reason,” “constructive termination,” or similar event, for purposes of any Employment Agreement;
(e) except as required by applicable Law or under the terms of any Company Plan, (i) pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan or agreement to any officer, director, employee or Affiliate, other than in the ordinary course of business consistent with past practice, (ii) pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or Affiliates of the Company of any amount relating to unused vacation days, or (iii) adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any Company Plan, or any employment or consulting agreement with or for the benefit of any director, officer, employee, agent or consultant;
(f) (i) incur or assume any long-term or short-term Indebtedness (other than an aggregate net increase of up to Two Million Dollars ($2,000,000.00) in short-term Indebtedness incurred in the ordinary course of business between the date of this Agreement and August 31, 2013; provided, however, that if the Closing has not occurred by August 31, 2013, the Company and Parent will work together to determine a new limit on short-term Indebtedness that may be incurred by the Company in the ordinary course of business during the period beginning on August 31, 2013 and continuing until the Effective Time) (including without limitation drawing down any amounts under the Credit Facility), (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, or (iii) make any loans, advances or capital contributions to, or investments in, any other Person or enter into any material commitment or transaction (including, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(g) make or authorize any initial capital expenditure, other than capital expenditures contemplated by the Company’s existing capital budget, a copy of which has been attached to Section 5.1(g) of the Company Disclosure Letter;
(h) pay, discharge, waive or satisfy any rights, claims, liabilities or obligations, other than the payment, discharge, waiver, settlement or satisfaction of any such rights, claims, liabilities or obligations, in the ordinary course of business consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the Financial Statements (or the notes to the Financial Statements);
(i) (i) change any of the accounting methods used by it or any of its methods of reporting income or deductions for Tax purposes unless required by a change in GAAP or Law, (ii) settle any material Tax claim, assessment, audit or investigation, (iii) consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such claim or assessment, (iv) make, revoke or change any Tax election, (v) request a Tax ruling, (vi) amend any Tax Return or (vii) file any Tax Return in a manner that is materially inconsistent with past custom and practice with respect to the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares Subsidiaries unless required by holders of Options or Warrants in order to pay the exercise price of the Options or Warrantsapplicable Law;
(cj) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(ei) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, (other than the Merger;
(fthis Agreement) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assetsacquire, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) selltransfer, lease, license, sell, mortgage, sell and leaseback or otherwise encumber or pledge, dispose of or encumber any of its properties or material assets, other assets or any interests therein, except for sales of than inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any acquire (by merger, consolidation, acquisition of the accounting methods used by the Company stock or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent assets or otherwise), other than the payment, discharge, settlement directly or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required underindirectly, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or assets (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practicepractices), securities, properties, interests or businesses;
(ul) sell, lease, license, or otherwise transfer any of its material assets, securities, properties, interests, Governmental Permits or businesses, other than the sale of inventory in the ordinary course of business;
(m) other than in the ordinary course of business consistent with past practices, (i) enter into, amend, renewsupplement, modify or consent terminate any Material Contract or (ii) enter into any Contract that would have been required to be disclosed in Section 3.9(a) of the Company Disclosure Letter as a Material Contract had it been entered into prior to the termination date hereof;
(n) place or allow the creation of any material Encumbrance (other than a termination in accordance with its termsPermitted Encumbrance) on any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereundertheir respective assets and properties;
(vo) create terminate or cancel any Subsidiarymaterial insurance policy;
(p) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(q) initiate, settle or compromise any material Action;
(r) knowingly take any action or knowingly omit to take any action, which action or omission could reasonably be expected to result in any loss, impairment or adverse modification of any Governmental Permit;
(s) make any bonus payment nor any payment pursuant to the 2013 Short-Term Incentive Plan, except for payments made in the ordinary course to Employees other than Jxxxx X. Xxxxxx, Sxxxx X. Xxxx, Mxxxx Xxxxxx, Kxxx Xxxxxxx, or Axxxx Xxxxx, for whom no bonus payments or payments pursuant to the 2013 Short-Term Incentive Plan may be made prior to the Effective Time; or
(wt) enter into any an agreement, contract, agreement, commitment or arrangement to do any of the foregoing, or to authorize or announce an intention to do any of the foregoing. None of the covenants contained in this Section 5.1 is intended to give Parent or Merger Sub the right to control or direct the Company’s or any of its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company and its Subsidiaries shall exercise, in accordance with the terms and conditions of this Agreement, operational control over their respective businesses, assets and properties.
Appears in 1 contract
Samples: Merger Agreement (Multiband Corp)
Interim Operations of the Company. Except (i) as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) otherwise contemplated by this Agreement or (iv) as set forth in Section 6.1 of Agreement, prior to the Closing Date, the Stockholders shall cause the Company Disclosure Schedule, from and the date of this Agreement Subsidiaries to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its their business only in the usualordinary course, regular and ordinary course consistent with past practice practice, preserve intact all rights, privileges, franchises and use all their reasonable best efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve its present maintain satisfactory relationships with customers, suppliers, licensors, licensees, suppliers, contractors, distributors, Governmental Entities customers and others having business dealings a material relationship with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Timethem. In addition, and without Without limiting the generality of the foregoing, prior to the Closing Date or the earlier termination of this Agreement, except (w) as required by Lawwith respect to the payment of the Management Bonuses, (x) as unless Buyer has previously consented to in writing by Parent thereto (which consent shall will not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and Stockholders shall not permit any of its Subsidiaries to, do the Company or any of the followingSubsidiaries to:
(a) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of incur any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assetsIndebtedness, except for purchases of components, raw materials or supplies Indebtedness incurred in the ordinary course of business consistent with past practice under lines of credit existing on the date hereof; provided, however, that such Indebtedness is repaid or as permitted under Section 6.1(m)otherwise retired in full at the Closing;
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(ib) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are the T-Connect Option (which shall not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not have a purchase price in excess of such reserves$400,000) or incurred since the date of such Financial Statements and in the ordinary course of business consistent with past practice, (i) acquire, or dispose of, any material property or assets (including, without limitation, Intellectual Property) or (ii) cancel mortgage or encumber any indebtednessproperty or assets except for Permitted Liens, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter each case with respect to which consent is required under, any standstill or similar contract clauses (i) and (ii) in an aggregate amount not to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a partyexceed $500,000;
(oc) waive the benefits ofenter into any agreements, commitments or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any contracts (including leases and licenses of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property RightsProperty), except agreements, commitments or contracts made in the ordinary course of business consistent with past practice; provided, however, that no derivative contracts, joint venture or (ii) amendments to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries)Material Contracts shall be made;
(r) enter into any material joint venture or partnership;
(sd) engage in any transactionstransactions with, agreementsor enter into or modify any Contracts with, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 Affiliates of Regulation S-K under the Securities ActCompany;
(te) otherwise manage its working capital in a manner enter into, adopt, amend or terminate any agreement or plan relating to the compensation, employee benefits (including, without limitation, pension and retirement benefits) or severance of any employee associated with the Company other than in the ordinary course of business consistent with past practicebusiness, except to the extent required by Law or any existing agreements;
(uf) make any material change to its accounting (including tax accounting) methods, principles or practices, except as may be required by GAAP;
(g) make any amendment to its certificate of incorporation or bylaws;
(h) declare or pay any dividends or distributions or repurchase any Shares;
(i) enter intoissue or sell any capital stock or options, amendwarrants, renewcalls, modify subscriptions or other rights to purchase any capital stock of the Company or any of the Subsidiaries or split, combine or subdivide the capital stock of the Company or any of the Subsidiaries other than the issuance of shares of Common Stock upon the exercise of Warrants currently outstanding;
(j) permit any of its current material insurance (or reinsurance) policies to be canceled or terminated or any coverage thereunder to lapse;
(k) voluntarily consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement waive or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its release any material rights thereunderrights;
(vl) create make any Subsidiarycapital expenditure other than maintenance capital expenditures in the aggregate amount not to exceed $500,000; or
(wm) enter into any contract, agreement, commitment or arrangement agree to do take any of the foregoingactions described in sub-clauses (a) through (l) above.
Appears in 1 contract
Samples: Stock Purchase Agreement (Commonwealth Disposition LLC)
Interim Operations of the Company. Except The Company agrees that, during the period from the date hereof through the earlier of the Effective Time or the date of termination of this Agreement, to use commercially reasonable efforts to conduct the operations of the Acquired Companies in the ordinary course of business consistent with past practice in all material respects and to use its best efforts to maintain its status as a REIT for U.S. federal income tax purposes. Without limiting the foregoing, except (i) as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule, from (ii) as contemplated or permitted by this Agreement, (iii) as may be necessary or appropriate to carry out the date Transactions, (iv) as may be required to facilitate compliance with any Law or Contract, or (v) as required by the rules or regulations of this Agreement to the Effective Time NYSE, the Company shallshall not, and nor shall cause each it permit any of its Subsidiaries to, conduct its business only in the usualdo or offer or become bound to do, regular and ordinary course consistent with past practice and use all reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve its present relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality any of the foregoing, except (w) as required by Law, (x) as consented to in writing by following without the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed conditioned or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to, do any of the following:delayed):
(a) except for Shares to be issued or delivered pursuant to amend the exercise Company Articles of Options or WarrantsAmendment and Restatement, the settlement Company Bylaws or other comparable charter or Organizational Documents of RSUs the Acquired Companies (whether by merger, consolidation or otherwise);
(b) (i) split, combine or reclassify any capital stock of the lapsing of forfeiture restrictions of Restricted Stock AwardsCompany or any Acquired Company (other than such split, each outstanding combination or reclassification that would not reasonably have an adverse effect on Parent, the date hereof Surviving Company or any Acquired Company), (ii) except as otherwise provided in this Section 6.1, issue or authorize the issuance of the any other securities in respect of, in lieu of or in substitution for, shares of capital stock of any Subsidiary to the Acquired Company, or (iii) purchase, redeem or otherwise acquire any Company securities, except for acquisitions of shares of Company Common Stock by the Company in satisfaction by holders of Company Compensatory Awards of the applicable exercise price and/or withholding taxes;
(i) issue, deliverdeliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), sell, grant, pledge, transfer, subject to any lien or dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class Company securities or Operating Partnership securities or any other ownership interestsecurities convertible into or exchangeable for Company securities or Operating Partnership securities, other than (v) the issuance of shares of Company Common Stock in exchange for OP Units pursuant to the terms of the Operating Partnership’s limited partnership agreement, (w) the issuance of shares of Company Common Stock upon the settlement of Company Performance RSU Awards that are outstanding on the date hereof, in accordance with the terms of any such awards as in effect on the date hereof, (x) grants or awards of Company securities made in the ordinary course of business, (y) grants or awards of Company securities to new hires made in the ordinary course of business, or any (z) grants or awards of Company securities required to be made pursuant to the terms of existing employment or rights convertible into, exchangeable for, other compensation agreements or evidencing arrangements in effect as of the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights)date hereof, or (ii) amend any other securities term of any security of the Company and its Subsidiaries Acquired Companies (in respect ofeach case, in lieu ofwhether by merger, consolidation or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Planotherwise);
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of or agreement of, or resolutions providing for or authorizing, complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of reorganization, each with respect to the Company or any of its Subsidiaries, other than the MergerAcquired Companies;
(fe) acquire (i) by purchaseany business, merger assets or otherwise, any business or equity interest capital stock of any Person or division thereof, whether in whole or in part (ii) any asset or and whether by purchase of stock, purchase of assets, except for purchases of componentsmerger, raw materials consolidation, or supplies otherwise), other than one or more acquisitions in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m)that, individually, involve a purchase price of not more than $500,000;
(gf) sell, lease, license, mortgagepledge, sell and leaseback transfer, subject to any lien or otherwise encumber or dispose of any of its properties or other material assets or material properties except (i) pursuant to existing Contracts or commitments; (ii) pursuant to any interests thereinExcluded Asset Purchase Agreement, except for sales of inventory and used equipment or (iii) Permitted Encumbrances incurred in the ordinary course of business consistent with past practicebusiness;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(kg) change any of the accounting methods used by the Company materially affecting its assets, liabilities or its Subsidiaries unless business, except for such changes that are required by GAAP or applicable LawRegulation S-X promulgated under the Exchange Act or as otherwise specifically disclosed in the Company SEC Documents filed prior to the date of this Agreement;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(nh) (i) payincur, dischargerefinance, settle guarantee or satisfy assume any claims, liabilities, obligations long-term or litigation short-term indebtedness except (absolute, accrued, asserted or unasserted, contingent or otherwise), other than x) for borrowings under the payment, discharge, settlement or satisfaction Company’s current credit facilities in the ordinary course of business consistent with past practice or (y) in accordance with their terms, respect of liabilities reserved against in the most recent Financial Statements indebtedness owing by any wholly owned Subsidiary of the Company included in to the Filed SEC Documents Company or another wholly owned Subsidiary of the Company or (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for amounts not in excess the obligations of such reservesany other Person (other than any Acquired Company);
(i) or incurred since the date of such Financial Statements enter into, terminate, or, other than in the ordinary course of business consistent with past practicebusiness, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify amend in any respect, or, subject material respect any Material Contract or any Contract which if entered into prior to the terms hereofdate hereof would be a Material Contract, fail except that prior to enforcethe Closing Date the Company shall, and shall cause the Acquired Companies to, take all actions necessary to terminate all Contracts evidencing or consent relating to Indebtedness and such other Contracts specified in writing by Parent no less than 30 days prior to the anticipated Closing Date;
(j) settle or compromise any matter with respect to which consent is required under, pending or threatened Legal Proceeding against the Company or any standstill Acquired Company (or similar contract to for which the Company or any of its Subsidiaries is a party Acquired Company would have any Liability), whether or (v) waive any material benefits of, or agree to modify in any material respect, or, subject not commenced prior to the terms hereofdate of this Agreement, fail to enforce other than settlements of any pending or threatened Legal Proceeding (A) in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries Acquired Company is named as a party;
nominal defendant, (oB) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practicebusiness, (C) providing solely for payment of amounts less than $250,000 in cash individually, or $500,000 in cash in the aggregate (net of any amount covered by insurance) or (D) reflected or reserved against in the Most Recent Balance Sheet for an amount not materially in excess of the amount so reflected or reserved (excluding any amount that may be paid under insurance policies or indemnification agreements); provided, that the Company may settle or agree to settle any legal Proceeding without Parent’s prior written consent if such settlement or compromise (i) includes an unconditional release of the Parent Parties and their directors, officers, employees, agents and Affiliates from all liability in respect of such claim, (ii) does not include any statement as to, or any admission of, fault, culpability or a failure to distribute, license or co-promote any product act on the part of the any Company Party, Parent Party or any of their respective directors, officers, employees, agents or Affiliates, (iii) does not contain any equitable order, judgment or term that in any manner affects, restrains or interferes with the business of any Parent Party or any of its Subsidiaries (including products under development and products licensed by the Surviving Company or the Acquired Companies following the Effective Time), and (iv) consists solely of the payment of monetary relief that is either paid in full prior to, or reserved against in, the calculation of the Closing Dividend Amount and would not provide for any other Liabilities or restrictions on the business of its Subsidiaries)the Company;
(rk) enter into (i) make any material joint venture capital expenditures other than capital expenditures set forth in the capital expenditure budget set forth on Section 6.1(m) of the Company Disclosure Schedule, or partnership(ii) fail to make capital expenditures set forth in the capital expenditure budget set forth on Section 6.1(m) of the Company Disclosure Schedule; provided, however, in each case that the Company shall not commit capital of $250,000 or more to any project referred to in such capital expenditure budget without the prior written consent of Parent;
(sl) engage fail to maintain in any transactionsfull force and effect material insurance policies or comparable replacement policies covering the Acquired Companies and their respective properties, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital assets and businesses in a manner other than in the ordinary course of business form and amount consistent with past practice;
(um) (i) change any method of Tax accounting, (ii) make, change or rescind any election with respect to Taxes, (iii) amend any Tax Return, (iv) settle or compromise any Tax liability, claim or assessment, (v) enter intointo any closing or other agreement with a Governmental Authority related to Taxes, amend, renew, modify or (vi) consent to any extension or waiver of a statute of limitations with respect to any Tax Return or surrender any right to claim a refund of Taxes, except, in each case, (A) in the termination ordinary course of business or (other than B) to the extent necessary to preserve the Company’s qualification as a termination in accordance with its termsREIT under the Code or the status of any Subsidiary as a partnership or disregarded entity for U.S. federal income tax purposes or as a qualified REIT subsidiary, a taxable REIT subsidiary or a REIT under the applicable provision of Section 856 of the Code, as the case may be;
(n) take any Material action, or fail to take any action, which could reasonably be expected to cause (i) the Company Contract over $250,000 or Contract over $250,000 that would be to fail to qualify as a Material Company Contract if in effect on the date of this Agreement REIT or (ii) amendany of the Company Subsidiaries to cease to be treated as a partnership or disregarded entity for U.S. federal income tax purposes or as a qualified REIT subsidiary, waivea taxable REIT subsidiary or a REIT under the applicable provision of Section 856 of the Code, modify, fail to enforce or consent to as the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiarycase may be; or
(wo) enter into any contractauthorize, agreement, commitment commit or arrangement agree to do take any of the foregoing actions; provided, that none of the foregoing provisions of this Section 6.1 shall in any way restrict the ability of the Company or any of the Company Subsidiaries to consummate the Excluded Asset Transactions pursuant to the express terms of the Excluded Asset Purchase Agreements. In addition, notwithstanding the foregoing, (i) nothing contained in this Agreement shall give to any Parent Party, directly or indirectly, rights to control or direct the operations of the Company or the Acquired Companies prior to the Effective Time, and (ii) nothing in this Section 6.1 shall restrict the Company and the Acquired Companies from, or require the consent of Parent prior to, engaging in any transaction or entering into any agreement exclusively among the Company and the Acquired Companies.
Appears in 1 contract
Interim Operations of the Company. Except (i) as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of During the Company Disclosure Schedule, period from the date hereof through the earlier of the Effective Time and the date of termination of this Agreement to the Effective Time in accordance with its terms, the Company shall, and shall cause each of its Subsidiaries to, conduct its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve its present relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Timepractice. In addition, and without Without limiting the generality of the foregoing, except (wA) as required by Law, (x) as consented to in writing by Parent with Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), (y) expressly permitted pursuant to this Agreement or (zB) as set forth in Section 6.1 5.1 of the Company Disclosure Schedule, (C) as expressly permitted or expressly required by this Agreement, or (D) as required to comply with any quarantine, “shelter in place,” “stay at home,” social distancing, shut down, closure, sequester or any other Law, Order or directive issued by any Governmental Entity in connection with or in response to the COVID-19 pandemic (provided that any such actions that cause deviations from the date business of this Agreement to any Acquired Company being conducted in the Effective Timeordinary course consistent with past practice shall be terminated, and such ordinary course conduct shall be resumed, as soon as reasonably practicable after compliance with such Law, Order or directive is no longer required), the Company shall not, and nor shall not it permit any of its Subsidiaries to, do any of the following:
(a) except for Shares to be issued amend the Company Certificate of Incorporation, the Company Bylaws or delivered pursuant other comparable charter or Organizational Documents of the Company’s Subsidiaries (whether by merger, consolidation or otherwise);
(b) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any Company Securities, Company Subsidiary Securities, or Company Compensatory Awards other than (A) dividends and distributions by a direct or indirect wholly owned Subsidiary of the Company to its equity holders and (B) distributions directly resulting from the vesting or exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each Company Compensatory Awards that are outstanding on the date hereof, in accordance with the terms of the Company Compensatory Award as in effect on the date hereof and as set forth on Section 3.3(e) of the Company Disclosure Schedule; (ii) split, combine or reclassify any capital stock of the Acquired Companies; (iii) other than as permitted pursuant to Section 5.1(d), issue or authorize the issuance of the any Company Securities or Company Subsidiary Securities; or (iv) purchase, redeem or otherwise acquire any Company Securities or Company Subsidiary Securities, except for acquisitions of shares of capital stock Company Common Stock by the Company in satisfaction of the applicable exercise price or withholding Taxes with respect to any Subsidiary to the Company, Company Compensatory Awards;
(c) (i) issue, deliver, sell, grant, pledge, transfer, subject to any Lien or dispose ofof any Company Securities or Company Subsidiary Securities, pledge or otherwise encumber, or authorize or propose other than the issuance, delivery, sale, disposition or pledge or other encumbrance issuance of (i) any shares of its capital stock Company Common Stock upon the exercise or settlement of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares Compensatory Awards that are outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities in accordance with the terms of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to Compensatory Award as in effect on the date hereof pursuant and as set forth on Section 3.3(e) of the Company Disclosure Schedule (but not issue any additional Company Compensatory Awards to any party except to the Equity Plans extent owed under any Company Benefit Plan existing as of the date hereof); or the Assumed Subsidiary Equity Plans and (ii) acquire Shares amend any term of any Company Securities or Company Subsidiary Securities (in connection with the surrender each case, whether by merger, consolidation or otherwise) or of Shares by holders of Options any award under any Company Benefit Plan based on any Company Securities or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase PlanCompany Subsidiary Securities;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of or agreement of, or resolutions providing for or authorizing, complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of reorganization, each with respect to the Company or any of its Subsidiaries, other than the MergerAcquired Companies;
(fe) acquire (i) by purchasematerially increase the salary, merger wages, benefits, bonuses or otherwise, other compensation payable or to become payable to any business employee or equity interest non-employee service provider of any Person or (ii) any asset or assetsAcquired Company, except for purchases of components, raw materials or supplies material increases in annual base cash compensation made in the ordinary course of business consistent with past practice practice; or (ii) except as permitted under Section 6.1(mrequired by applicable Law, adopt, enter into, terminate or amend in any material respect any collective bargaining agreement or Company Benefit Plan or any arrangement that would be a Company Benefit Plan if it were in existence on the date of this Agreement, except with respect to any amendment or new agreement in which the Company enters as part of the Company’s ordinary course contract renewal process;
(f) acquire any business, assets or capital stock of any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, or otherwise), other than supplies or inventory in the ordinary course of business consistent with past practice;
(g) sell, lease, license, mortgagepledge, sell and leaseback transfer, assign, abandon, allow to lapse or expire, fail to maintain, covenant not to assert, subject to any Lien or otherwise encumber or dispose of any of its properties or other Company Intellectual Property, assets or any interests thereinproperties except (i) in the ordinary course of business pursuant to Contracts existing as of the date hereof and made available to Parent, except (ii) non-exclusive licenses that are merely incidental to the transaction contemplated by a Contract entered into in the ordinary course of business consistent with past practice and to the extent permitted by this Section 5.1, the commercial purpose of which is primarily for something other than such license, (iii) sales of inventory and or used equipment in the ordinary course of business consistent with past practice, (iv) Permitted Liens incurred in the ordinary course of business consistent with past practice;
(h) incur except with respect to certain trademark registrations no longer material to the Acquired Companies (i) extend, amend, waive, cancel or modify any indebtedness rights in or to the Company Intellectual Property in a manner that is adverse to any Acquired Company, (ii) fail to diligently prosecute any Intellectual Property application or registration or licensed rights to Intellectual Property for borrowed money in addition to that incurred which an Acquired Company controls the prosecution thereof as of the date of this Agreement Agreement, except for such issuances, registrations or guarantee any applications that the applicable Acquired Company permits to expire or cancel or abandon in its reasonable business judgment, and do not constitute, or have not constituted, Intellectual Property material to the business of such indebtedness Acquired Company or (iii) divulge, furnish or make accessible any loans, advances or capital contributions to, or investments in, any other PersonCompany Intellectual Property that constitute Trade Secrets, other than in the ordinary course of business consistent with past practice to any Third Party that is subject to an enforceable written agreement to maintain the confidentiality of such Trade Secrets;
(i) amend in any material respect or voluntarily terminate any Material Contract, or enter into any new Contract that would have been a Material Contract had it been in effect as of the date hereof; provided that the foregoing shall not include (i) elections not to renew any Material Contract by its terms and (ii) renewals of existing Contracts (to the extent the same shall have been disclosed in the Company and its wholly owned Subsidiaries, and other than Disclosure Schedule or the Company SEC Documents) on substantially similar (or more favorable to employees in respect of travel or other related expenses the Company) terms made in the ordinary course of business consistent with past practice;
(ij) except as required by Law or except as required fail to keep in full force and effect all material insurance policies maintained by the Acquired Companies, other than such policies that expire by their terms of a Benefit Plan (in effect as of which event the date of this Agreementapplicable Acquired Company shall use commercially reasonable efforts to renew, (ireplace or extend such policies) enter into an employment agreement with any Person or grant changes to any Person any right to severance, retention, change such policies made in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless Company, except for such changes that are required by GAAP or applicable LawRegulation S-X promulgated under the Exchange Act, in each case as agreed to by its independent public accountants;
(li) amend except for ordinary course draws on the Company’s certificate of incorporation existing credit facility, create, incur, assume, suffer to exist or the Company’s bylaws otherwise become liable with respect to any Indebtedness for borrowed money or guarantees thereof, or issue or sell any debt securities or options, warrants, calls or other comparable charter or organizational documents rights to acquire any debt securities of any Acquired Company, except in respect of Indebtedness owing by any wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company; (ii) assume, except as may be required by applicable Law and except guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for immaterial amendments under the charter or organizational documents obligations of any Subsidiary other Person (other than any Acquired Company); or (iii) enter into any amendment or other modification to the material terms of any material Indebtedness for borrowed money of the CompanyAcquired Companies;
(m) authorize or make any commitment with respect to, incur any capital expenditure or other expenditures (including or any obligations or liabilities in respect thereof) in excess of research and development), other than those which, individually, are less than $300,000 individually or equal to $200,000 or, 2,000,000 in the aggregate, are less than or equal to $1,000,000aggregate per calendar quarter;
(n) settle, or offer or propose to settle, (i) payany dispute, dischargeclaim or Legal Proceeding (except with respect to matters in which the amount in controversy is less than $500,000, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwiseand for which commercial insurance is not available), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive Legal Proceeding by any stockholder of the Company or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which other dispute against the Company or any of its Subsidiaries is a party officers or directors and its stockholders or (viii) waive any material benefits ofTransaction Litigation, or agree to modify other than in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter accordance with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a partySection 5.12;
(o) waive change or rescind any material Tax election, change any annual Tax accounting period, change any material method of Tax accounting, amend any material Tax Returns except to the benefits ofextent otherwise required by Law, extend the statute of limitations with respect to any income or other material Tax Return (other than pursuant to extensions of time to file such Tax Returns obtained in the ordinary course of business), enter into any closing agreement with respect to a material Tax, settle or compromise any material Tax claim, or agree surrender any right to modify in any claim a material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a partyTax refund;
(p) except as required by applicable Tax Law, prepare or file effect any Tax Return extraordinary transactions that are inconsistent with past custom and practice oror that could result in Tax liability to Parent, on the Company, any such Acquired Company or any of their respective Affiliates in a Taxable period (or portion thereof) beginning after the Closing Date in excess of Tax Return, take any position, make any election, or adopt any method that is inconsistent liability associated with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except the conduct of its business in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(uq) (i) enter into, amend, renew, modify or consent voluntarily terminate any payor agreement to which any Acquired Company is a party representing revenue to the termination Company for 2021 in excess of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend1,000,000, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(wr) enter into any contractauthorize, agreement, commitment commit or arrangement agree to do take any of the foregoing actions. Notwithstanding the foregoing, nothing contained in this Agreement shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the operations of the Acquired Companies prior to the Effective Time.
Appears in 1 contract
Samples: Merger Agreement (Diversicare Healthcare Services, Inc.)
Interim Operations of the Company. Except as (i) as required by Lawset forth in Section 6.01 of the Company Disclosure Letter, (ii) as consented required by Applicable Law, (iii) required pursuant to or expressly authorized by this Agreement, (iv) contemplated by the Company’s 2017 Annual Operating Budget referred to in Section 6.01(iv) of the Company Disclosure Letter (the “2017 Budget”) previously made available to Parent or (v) agreed in writing by Parent (which consent agreement shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date hereof until the earlier of the valid termination of this Agreement to in accordance with Article 10 and the Effective Time Time, the Company shall, and shall cause each of its Subsidiaries to, (a) conduct its business only their businesses in all material respects in the usual, regular and ordinary course consistent with past practice and practice, (b) use all commercially reasonable efforts to preserve intact its current their present business organizationorganizations, (c) use commercially reasonable efforts to maintain satisfactory relations with and keep available the services of its their current officers and other key employees and (d) use commercially reasonable efforts to preserve its present existing relationships with material customers, lenders, suppliers, licensors, licensees, distributors, Governmental Entities distributors and others having material business dealings relationships with them to the end that Company and its goodwill Subsidiaries, in the case of clauses (b), (c) and ongoing (d) above in all material respects in the ordinary course of business shall be unimpaired at the Effective Timeconsistent with past practice. In addition, and without Without limiting the generality of the foregoing, except (w) as set forth in Section 6.01 of the Company Disclosure Letter, as required by Applicable Law, (x) as consented required pursuant to or expressly authorized by this Agreement, or as agreed in writing by Parent (which consent agreement shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date hereof until the earlier of the valid termination of this Agreement to in accordance with Article 10 and the Effective Time, the Company shall not, and nor shall not it permit any of its Subsidiaries to, do any Subsidiary of the followingCompany to:
(a) except for Shares to be issued amend the Company Governing Documents or delivered pursuant to Subsidiary Governing Documents or amend the exercise terms of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each any outstanding on the date hereof or the issuance security of the Company or any Subsidiary of the Company;
(b) split, combine, subdivide or reclassify any shares of capital stock of the Company or any Subsidiary to of the Company, issueother than any such transaction by a wholly owned Subsidiary of the Company that remains a wholly owned Subsidiary of the Company after consummation of such transaction;
(c) authorize, deliverdeclare, sell, dispose of, pledge set aside or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge pay any dividend or other encumbrance of (i) any shares of its capital stock of any class distribution payable in cash, stock, other ownership interests or other securities, property or otherwise, with respect to the Company Stock or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereofEquity Interest;
(bd) redeem, purchase or otherwise acquire, or propose offer to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities Equity Interests of the Company, except repurchases or acquisitions of Company or any of its Subsidiaries; provided, however, that the Stock issued under Company may (i) withhold Shares Stock Plans pursuant to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to agreements already in effect on the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as suchhereof;
(e) adopt a plan of complete issue any Equity Interests, except for Company Stock issued (i) under the Pamplona Warrant or partial liquidationunder Company Stock Plans pursuant to agreements already in effect on the date hereof, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of and (ii) under the Company Stock Purchase Plan with respect to any Purchase Date (as defined in the Company Stock Purchase Plan) that is on or any of its Subsidiaries, other than before the MergerEffective Time;
(f) acquire (whether pursuant to merger, stock or asset purchase or otherwise) in one transaction or any series of related transactions (i) by purchase, merger or otherwise, any business enterprise or equity interest any material assets of any Person or (ii) any asset Equity Interests in any Person or any business;
(g) transfer, lease, license, sell, mortgage, pledge, dispose of, abandon, fail to maintain or encumber any of its material assets, except for purchases of components, raw materials rights or supplies properties other than (i) sales or non-exclusive licenses in the ordinary course of business consistent with past practice for an amount not exceeding $2,000,000 in the aggregate and (ii) dispositions of equipment and property no longer used in, or as permitted under Section 6.1(m)material to, the operation of the business;
(gh) sellexcept for (i) transactions among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, lease, license, mortgage, sell and leaseback (ii) the incurrence of Indebtedness by the Company or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales Subsidiaries of inventory and used equipment the type described in clause (iv) of the definition of Indebtedness in the ordinary course of business consistent with past practicepractice and (iii) the incurrence of Indebtedness that does not exceed $1,000,000 in aggregate principal amount outstanding at any time, so long as such Indebtedness is prepayable without premium, penalty or other cost, incur, assume, issue, modify, renew, syndicate, guarantee, prepay, refinance or otherwise become liable for any long-term or short-term Indebtedness, or enter into any swap, cap, floor, collar, futures contract, forward contract, option or any other derivative financial instrument, or hedging or off balance sheet financing arrangements, or assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the Indebtedness of any other Person;
(hi) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any material loan, advance or capital contribution to, or investment in, any other Person, other than (i) loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as Subsidiaries of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights theretoCompany, (ii) grant any current or former director, officer or employee advances to employees of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or expenses incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights extensions of substantial value, (iv) waive any benefits of, or agree credit to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except customers incurred in the ordinary course of business consistent with past practice, or (iv) loans, advances or capital contributions in the aggregate of less than $1,000,000;
(j) except as required by Applicable Law or the terms of any Company Employee Plan existing on the date hereof or as contemplated under this Agreement, (i) make any change in, or accelerate the vesting of, the compensation or benefits payable or to become payable or provided to, or grant any severance or termination pay to, any of its Company Employees, directors or independent contractors, (ii) establish, adopt, enter into, terminate or amend any Company Employee Plan (or any plan, trust, fund, policy or arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement) or make any loans to distributeany Company Employee, license director or co-promote independent contractor (other than reasonable and normal advances to Company Employees, directors or independent contractors for bona fide expenses that are incurred in the ordinary course of business consistent with past practice), (iii) hire or terminate the employment of any product Company Employee who has an annual base salary in excess of $200,000 (“Management Employees”), (iv) increase the funding obligation or contribution rate of any Company Employee Plan subject to Title IV of ERISA or (v) grant any cash bonus or any cash incentive compensation outside the ordinary course of business consistent with past practice; provided, however, that the foregoing shall not prevent the Company or any Subsidiary of its Subsidiaries (including products under development and products licensed by the Company from doing the following in the ordinary course of business consistent with past practice (A) entering into at-will offer letters with new employees who are non-Management Employees and that are terminable on no more than sixty (60) days’ notice without penalty or expense, (B) promoting Company Employees, (C) changing the compensation or benefits to Company Employees who are non-Management Employees, or (D) paying severance to Company Employees under any Company Employee Plan in effect on the date of its Subsidiaries)this Agreement;
(rk) other than as permitted as described in Item 2 of Section 6.01(k) of the Company Disclosure Letter, incur any capital expenditures or any obligations or liabilities in respect thereof;
(l) enter into any Company Contract that would have constituted a Company Material Agreement if entered into prior to the date hereof, amend or modify in any material joint venture respect or partnershipterminate any such Company Contract or Company Material Agreement (other than permitting expiration of such Company Contract or Company Material Agreement in accordance with its terms) or otherwise waive, release or assign any material rights, claims, benefits or obligations of the other party thereunder other than in the ordinary course of business consistent with past practice; provided, that Company shall not be permitted to enter into any Company Contract that will require Success-Based Capital Expenditures unless such Success-Based Capital Expenditures are permitted pursuant to clause (k) above;
(sm) engage mortgage, encumber or otherwise create any Liens with respect to any material property or material assets, other than Liens of the type referred to in clauses (ii) – (vii) of the definition of Permitted Liens;
(n) enter into any transactions, agreements, arrangements or understandings with any Affiliate or other Person new line of business that would be required material to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage Company and its working capital in Subsidiaries, taken as a manner whole, outside the businesses being conducted by the Company and its Subsidiaries on the date hereof and any reasonable extensions thereof, other than in the ordinary course of business consistent with past practice;
(uo) compromise, settle, pay or discharge any litigation, investigations or arbitrations (including any settlement or consent to settlement of any material Tax Claim), other than the payment, discharge or satisfaction of such claims, liabilities or obligations (i) enter into, amend, renew, modify disclosed or consent reserved against in the Financial Statements in amounts no greater than the amount reserved with respect to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or relevant liability therein, (ii) amend, waive, modify, fail to enforce with any telecommunications vendor in the ordinary course of business consistent with past practice or consent to the termination (iii) requiring payment of (other less than a termination in accordance with it terms) its material rights thereunder$1,000,000;
(vp) create change any Subsidiaryof the accounting methods used by it materially affecting its assets, liabilities or business, except for such changes required by GAAP or Regulation S-X promulgated under the 1934 Act, as concurred in by its independent registered public accountants;
(q) make, change or rescind any material Tax election, change an annual Tax accounting period, adopt or change any accounting method in respect of Taxes, file any amended material Tax Returns, enter into any Tax allocation agreement, Tax sharing agreement or closing agreement with respect to any material Taxes, or take any affirmative action to surrender any right to claim a refund of material Taxes; or
(wr) enter into any agreement, contract, agreement, commitment or arrangement to do any of the foregoing, or authorize any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. Except (a) During the period from the Agreement Date to the Share Acceptance Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 8.1 (except (i) as may be required by Law, (ii) as consented to in writing by Parent (which with the prior written consent shall not be unreasonably withheld, delayed or conditioned)of the Parent, (iii) as contemplated or permitted by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule), from the date business of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business shall be conducted only in the usual, regular ordinary and ordinary usual course of business in all material respects consistent with past practice practice, and, to the extent consistent therewith, the Company and its Subsidiaries shall use all reasonable best efforts to (1) preserve intact its their current business organization, keep available the services of its current officers and employees and preserve its present (2) maintain their relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities suppliers and others having business dealings with them them, (3) notify and consult with Parent promptly (A) after receipt of any material communication from any Governmental Entity or inspections of any manufacturing or clinical trial site and before giving any material submission to a Governmental Entity and (B) prior to making any material change to a study protocol, adding new trials, making any material change to a manufacturing plan or process, or making a material change to the end development timeline for any of its product candidates or programs, (4) preserve intact and keep available the services of present employees of the Company and its Subsidiaries, (5) keep in effect casualty, product liability, workers’ compensation and other insurance policies in coverage amounts substantially similar to those in effect at the date of this Agreement, and (6) preserve and protect the Intellectual Property owned by the Company and its Subsidiaries; provided, however, that no action by the Company or any of its goodwill and ongoing business Subsidiaries with respect to matters addressed specifically by any provision of this Section 6.1(a) shall be unimpaired at the Effective Timedeemed a breach of this sentence unless such action would constitute a breach of such specific provision. In addition, and without Without limiting the generality of the foregoing, except (wA) as may be required by Law, (xB) as consented to in writing by Parent (with the prior written consent of the Parent, which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement conditioned or (zC) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement prior to the Effective Timetime when, pursuant to Section 1.3(a), the Parent’s designees for director constitute the majority of the Company Board, the Company shall not, and shall not permit any of its Subsidiaries to, do any of the following:
(ai) except for Shares to be issued amend its certificate of incorporation or delivered pursuant to the exercise of Options bylaws (or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, equivalent organizational documents);
(ii) issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (ix) any shares of its capital stock of any class or any other ownership interestinterest of the Company or any of its Subsidiaries, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interestinterest of the Company or any of its Subsidiaries, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest of the Company or any of its Subsidiaries or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights)of the Company or any of its Subsidiaries, or (iiy) any other securities of the Company and or any of its Subsidiaries in respect of, in lieu of, or in substitution for, Shares Company Common Stock outstanding on the date hereofAgreement Date, except for (1) Company Common Stock to be issued or delivered (A) pursuant to the Company Equity Plans, (B) in connection with acquisitions consistent with past practice or (C) pursuant to the Chestnut Merger Agreement, (2) the issuance, grant or delivery of up to an aggregate amount of 750,000 Company Stock Options, Company Restricted Stock and Company RSUs to certain of its employees, directors and consultants or (3) the exercise of the Top-Up Option;
(biii) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding SharesCompany Common Stock, Options, Warrants other than (x) from holders of Company Stock Options in full or other securities partial payment of the Company exercise price, or any of its Subsidiaries; provided, however, that the Company may (iy) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender withholding of Shares Taxes payable by holders any holder of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Company Stock Options, Company Restricted Stock Awardsor Company RSUs upon the exercise, settlement or vesting thereof, in each case to the extent required or permitted under the terms of such Company Stock Options, Company Restricted Stock or Company RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase applicable Company Equity Plan;
(div) split, combine, subdivide or reclassify any Shares Company Common Stock or declare, set aside for payment or pay any dividend or other distribution in respect of any Shares Company Common Stock or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such; provided that this Section 6.1(a)(iv) shall not apply to dividends or distributions declared, set aside for payment or paid by wholly owned Subsidiaries of the Company to the Company or any other wholly owned Subsidiary of the Company;
(ev) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the MergerTransactions;
(fvi) acquire acquire, sell, lease, dispose of, pledge or encumber any assets, other than (ix) by purchaseacquisitions in existing or related lines of business of the Company or any of its Subsidiaries as to which the aggregate consideration for all such acquisitions does not exceed $2,000,000, merger (y) sales, leases, dispositions, pledges or otherwiseencumbrances of assets with an aggregate fair market value of less than $2,000,000, any business or equity interest of any Person or (iiz) any asset sales or assets, except for purchases transfers of components, raw materials or supplies inventory in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m)business;
(gx) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment than in the ordinary course of business consistent with past practice;
(h) , incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement Date or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than (A) to the Company and its or any wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee Subsidiary of the Company or any of its Subsidiaries, any increase in compensation other than, with respect (B) strategic investments as to Persons who are which the aggregate consideration for all such investments does not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreementexceed $2,000,000, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (iy) pay, discharge, settle discharge or satisfy any material claims, liabilities, liabilities or obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement discharge or satisfaction of (1) in the ordinary course of business and consistent with past practice, liabilities reflected or reserved against in the Company’s consolidated balance sheet as of the Balance Sheet Date, (2) liabilities incurred in the ordinary course of business since the Balance Sheet Date, or (3) all amounts under the Loan Agreement, in accordance with Section 6.8(b)(iii);
(viii) change the compensation payable to any officer, director, employee, agent or consultant, or enter into any employment, severance, retention or other agreement or arrangement with any officer, director, employee, agent or consultant of the Company or any of its Subsidiaries, or adopt, or increase the benefits (including fringe benefits) under, any employee benefit plan or otherwise, except (A), in each case, as required by Law or in accordance with existing agreements provided to Parent and disclosed in the Company Disclosure Schedule and (B), in the case of compensation for employees, agents or consultants who are not officers or directors, in the ordinary course of business consistent with past practice unless the total compensation payable to such employee, agent or in accordance with their termsconsultant (including base, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents bonus opportunity at target, equity, sign-on bonus and relocation) equals or exceeds two hundred thousand dollars (for amounts not in excess of such reserves$200,000) US; or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel make any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree loans to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party directors, officers or (v) waive any material benefits ofemployees, agents or consultants, or agree to modify make any change in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, its existing borrowing or consent to any matter with respect to which consent is required under, any material confidentiality lending arrangements for or similar contract to which the Company or any on behalf of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, persons pursuant to an employee benefit plan or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periodsotherwise;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Ev3 Inc.)
Interim Operations of the Company. Except (i) From the date hereof until the Closing or the earlier termination of this Agreement, except as set forth on Section 5.1 of the Company Disclosure Letter or as required or contemplated by this Agreement or as required by applicable Law, (ii) as unless Parent has previously consented to in writing by Parent thereto (which consent shall will not be unreasonably withheld, delayed conditioned or conditioneddelayed), (iiix) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business only and operations in all material respects in the usual, regular and ordinary course of business consistent with past practice and practice, use all commercially reasonable efforts to preserve intact its current existence and business organization, organization and keep available the services of its current officers and employees and to preserve its the goodwill and present relationships (contractual or otherwise) with all customers, suppliers, licensorsresellers, licenseesretailers, distributors, Governmental Entities employees, licensors and others having significant business dealings with them the Xxxxxxxx Companies; provided, however, that no action by the Company or its Subsidiaries with respect to the end that its goodwill and ongoing business matters specifically permitted by any provision of this Section 5.1 shall be unimpaired at the Effective Time. In addition, deemed a breach of clause (x) unless such action would constitute a breach of such specific provision; and (y) without limiting the generality of the foregoing, except (w) as required by Law, foregoing clause (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of cause its Subsidiaries not to, do any of the following:
(a) incur, assume, endorse, guarantee or otherwise become liable for, or amend or modify in any material respect the terms of any Contract to increase any commitment or capacity under any Indebtedness, or issue or arrange for the issuance of any letters of credit, surety bonds or similar instruments for the account of any Xxxxxxxx Company, except for Shares to be issued or delivered pursuant to the exercise incurrence of Options or Warrants, any Indebtedness (i) in the settlement ordinary course of RSUs or business under the lapsing Company Credit Agreements as in effect as of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose owed to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards wholly owned Subsidiaries and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares incurred in connection accordance with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrantsexisting intercompany agreements between any Xxxxxxxx Companies;
(cb) grant any Optionsexcept in the ordinary course of business consistent with past practice, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for including purchases of components, raw materials or supplies inventory in the ordinary course of business consistent with past practice or as permitted under contemplated by the Company’s budget set forth in Section 6.1(m);
5.1(b) of the Company Disclosure Letter, acquire any Person or any material interest therein or any business or division or material assets thereof (gby merger, consolidation, purchase or sale of shares or assets or otherwise) sell, lease, license, mortgage, sell other than (i) acquisitions with collective purchase prices not exceeding $10,000,000 in the aggregate and leaseback (ii) any acquisition from the Company or otherwise encumber one or dispose of any more of its properties or other assets or any interests therein, except for sales of inventory and used equipment wholly owned Subsidiaries in the ordinary course of business consistent with past practice;
(hc) incur subject to any indebtedness Lien, other than Permitted Liens, any material property or assets;
(d) expressly cancel any debts owed to or claims held by the Xxxxxxxx Companies, except debts or claims cancelled in the ordinary course of business consistent with past practice that are not, individually or in the aggregate, material to the Xxxxxxxx Companies;
(e) sell, divest, assign, transfer or otherwise dispose of any tangible assets, except for borrowed money in addition to that incurred as sales of products of the date Xxxxxxxx Companies, other than (i) dispositions with collective sales prices not exceeding $10,000,000 in the aggregate, (ii) in the ordinary course of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions tobusiness consistent with past practice, or investments (iii) fixed assets that are surplus or obsolete;
(f) sell, transfer, license, or grant any rights in, any other material Company Owned Intellectual Property to any Person, or otherwise dispose of any material Company Owned Intellectual Property other than any license or grant of rights in connection with the sale, marketing, or other commercialization of any products or services of the Xxxxxxxx Companies or otherwise granted in the ordinary course of business or in Contracts in which the license grant is incidental to the primary business purpose of the Contract, or cause or permit any material Company and its wholly owned SubsidiariesOwned Intellectual Property that is Registered Intellectual Property to lapse, and other than to employees be abandoned or canceled, in respect of travel or other related expenses each case, except in the ordinary course of business consistent with past practice;
(i) except as required by Law make any loans, advances to, guarantees for the benefit of or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefitscapital contributions to, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiariesinvestments in, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the CompanyPerson, except as may be required by applicable Law for (A) loans and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal advances from one Xxxxxxxx Company to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction another Xxxxxxxx Company in the ordinary course of business consistent with past practice and (B) expense and travel advances in the ordinary course of business consistent with past practice to employees and other service providers of the Company or any of its Subsidiaries or (ii) forgive any loans to any of the Company’s Affiliates or any of its or their directors, officers, employees of the Company or any of their respective Affiliates;
(h) enter into, terminate, materially amend or modify, renew (other than automatic renewals in accordance with their terms, the terms of liabilities reserved against any Material Contract as in effect on the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reservesdate hereof) or incurred since waive any material rights under, any Material Contract or any Contract that, if entered into prior to the date of such Financial Statements hereof, would have constituted a Material Contract, in each case, other than (i) in the ordinary course of business consistent with past practice, (ii) cancel any indebtednessa customer Contract concerning the sale and purchase of Xxxxxxxx products, or (iii) waive Contracts entered into in connection with actions expressly permitted under this Section 5.1 (and not otherwise prohibited by any other clause of this Section 5.1);
(i) enter into, amend or assign any claims modify, renew or rights of substantial value, (iv) waive any benefits ofrights under any Affiliate Agreement, or agree enter into any other transaction with any officer, director, stockholder, equityholder or Affiliate of any Xxxxxxxx Company, except to modify the extent required by Law;
(j) except (i) to the extent required by Law or any Employee Plan as in effect on the date hereof that is set forth on Section 3.11(a) of the Company Disclosure Letter (as modified after the date hereof to the extent such modification is implemented in accordance with this Agreement) or as expressly contemplated by this Agreement, or (ii) as would not result in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company liability for Parent or any of its Subsidiaries (including any retention bonus and similar compensation that is a party included in Transaction Expenses) or impact Parent’s obligations under Section 5.10(a) of this Agreement, (vA) waive other than Permitted Plan Modifications (as defined below), enter into, adopt, amend or terminate any material Employee Plan (it being understood that any Employee Plan that provides severance, retention, bonus, sales, commission or equity compensation shall constitute a material Employee Plan and any offer letter or agreement with employees of the Xxxxxxxx Companies that do not contain individual severance commitments and are entered into with employees at levels below “Vice President” shall not constitute a material Employee Plan), (B) increase the compensation or benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent payable to any matter with respect to which consent is required undercurrent or former officer, employee or director of any material confidentiality Xxxxxxxx Company, other than (w) annual merit-based increases in base salary or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except wage rate in the ordinary course of business consistent with past practicepractice that do not in the aggregate exceed more than seven percent (7%) of the aggregate cost of annual base salaries and annualized wage rate in effect as of the date hereof, (x) annual modifications to health and welfare plans and arrangements in the ordinary course of business consistent with past practice that do not result in the provision of any material benefit that is not provided as of the date hereof (“Permitted Plan Modifications”), and (z) issuance of RSU Awards consistent with past practice in connection with Permitted Hires (as defined below); provided that any such awards shall not provide for accelerated vesting upon termination of employment (except as set forth in this Agreement), (C) other than as contemplated by this Agreement, accelerate the vesting or time of payment of any compensation or benefits of any current or former officer, employee or director of any Xxxxxxxx Company, (D) take any action to fund any trust or similar funding vehicle with respect to compensation or benefits under any Employee Plan, (E) hire, promote or terminate any employee, other than (x) hires, promotions and terminations of employees in the ordinary course of business to a position with an annual base salary or annualized base wage rate of less than $250,000, (y) hires or promotions to fill vacant positions (the hires and promotions described in subsection (x) and (y), “Permitted Hires”) and (z) terminations for cause (including for failure to satisfactorily perform duties and responsibilities), or (iiF) enter into, modify, amend or terminate any material collective bargaining or works council agreement;
(k) make any change to distributeits financial accounting methods, license principles or co-promote any product of the Company practices, except as may be required by Law or GAAP (or any of its Subsidiaries (including products under development and products licensed by the Company interpretation or any of its Subsidiariesenforcement thereof);
(rl) enter into make, change or revoke any material joint venture election in respect of Taxes, change any Tax accounting period or partnership;
adopt or change any material method of Tax accounting, file any amended material Tax Return, settle or compromise any material Tax claim, investigation, audit or proceeding, agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of material Taxes (s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice), enter into any “closing agreement” described in Section 7121 of the Code (or any similar provision of state, local or foreign Tax Law) with respect to a material amount of Taxes or apply for any Tax ruling from any Taxing Authority, or surrender any right to claim a material refund of Taxes;
(um) make any amendment to its certificate of incorporation, certificate of formation, bylaws or operating agreement (or equivalent organizational documents) of any Xxxxxxxx Company, as applicable, except as required by the current Organizational Documents of such Xxxxxxxx Company;
(n) except as permitted under any Employee Plan (or award agreement thereunder) in each case, as may be adopted, entered into or modified after the date hereof, to the extent such adoption, entry into or modification is implemented in accordance with this Agreement, or in connection with the termination of an employee, advisor, consultant or other service provider of a Xxxxxxxx Company, repurchase or redeem any shares of capital stock or other securities or equity interests or options, warrants, calls, subscriptions or other rights to purchase any capital stock or other securities or equity interests of a Xxxxxxxx Company or securities convertible or exchangeable into or exercisable for shares of capital stock or other securities or equity interests of a Xxxxxxxx Company;
(o) issue, sell, pledge, dispose of, transfer (other than to the Company or any of its wholly owned Subsidiaries) or subject to any Lien any capital stock or other securities or equity interests or options, warrants, calls, subscriptions or other rights to purchase any capital stock or other securities or equity interests of a Xxxxxxxx Company or securities convertible or exchangeable into or exercisable for shares of capital stock or other securities or equity interests of a Xxxxxxxx Company, or split, combine, subdivide or reclassify the capital stock or other securities or equity interests of a Xxxxxxxx Company, other than (i) enter intoas required under the Company Credit Agreements, amend, renew, modify (ii) the issuance of shares of Common Stock upon the exercise or consent to the termination of (other than a termination vesting in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if the terms of such awards as in effect on the date of this Agreement or (ii) amendor, waive, modify, fail to enforce or consent for RSU Awards granted to the termination extent permitted by Section 5.1(j), the terms of such awards as in effect on the date of grant) of (other than a termination A) Options or RSU Awards or Performance Unit Awards, in each case, outstanding as of the date hereof or otherwise granted in accordance with it this Agreement (including Section 5.1(j)), or (B) Company Warrants currently outstanding in accordance with their terms or pursuant to any exercise under a Company Warrant Agreement in accordance with its terms) its material rights thereunder;
(vp) create waive, release, assign, settle or compromise any Subsidiary; orAction or any rights or claims with a total value in excess of $500,000;
(wq) enter into take any contractaction for the winding up, agreementliquidation, dissolution or reorganization of a Xxxxxxxx Company or for the appointment of a receiver, administrator or administrative receiver, trustee or similar officer of its assets or revenues;
(r) commit or authorize any commitment to make any capital expenditures in excess of the aggregate capital expenditures set forth in Company’s capital expenditure plan for 2019 and 2020 set forth in Section 5.1(r) of the Company Disclosure Letter other than expenditures that the Company reasonably determines are necessary to avoid a material business interruption or arrangement maintain the safety and integrity of any asset or property, provided, that the Company will use its reasonable best efforts to do consult with Parent prior to making or agreeing to make any such capital expenditure;
(s) agree, offer, authorize or commit (whether in writing or otherwise) to take any of the foregoingactions described in clauses (a) through (r) of this Section 5.1.
Appears in 1 contract
Interim Operations of the Company. Except (i) as required by Lawotherwise expressly contemplated or permitted hereby, (ii) as consented to or unless otherwise approved in writing by Parent (Parent, which consent approval shall not be unreasonably withheld, delayed withheld or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Scheduledelayed, from the date of this Agreement to hereof until the Effective Time Time, the Company shall, and shall cause each of its the Company Subsidiaries to, conduct its business only in the usual, regular and ordinary course consistent with past practice and shall (i) use all commercially reasonable efforts to preserve intact its current present business organizationorganization and goodwill, keep available the services of its current officers and other key employees and preserve its present relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others those persons having business dealings with them the Company and its Subsidiaries, (ii) use commercially reasonable efforts to maintain in effect all material governmental licenses, approvals and authorizations, including, without limitation, all material governmental licenses and permits that are required for the end that Company or any Company Subsidiary to carry on its goodwill business and ongoing business shall (iii) promptly notify Parent of any event if such event has or could reasonably be unimpaired at the Effective Timeexpected to have a Company Material Adverse Affect. In addition, and without Without limiting the generality of the foregoing, except (w) as required otherwise expressly contemplated or permitted by Lawthis Agreement, (x) as consented to in writing by Parent (from the date hereof until the Effective Time, without the prior written consent of Parent, which consent shall not be unreasonably withheld, delayed withheld or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Timedelayed, the Company shall not, and nor shall not it permit any of its Subsidiaries Company Subsidiary to, do any of the following:
(a) except for Shares to be issued amend its certificate of incorporation or delivered pursuant to the exercise of Options bylaws or Warrantsother similar organizational documents;
(b) split, the settlement of RSUs combine or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the reclassify any shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend or make any other actual, constructive or deemed distribution (whether in cash, stock or property or any combination thereof) in respect of any Company Common Shares or any other Company capital stock, or redeem, repurchase or otherwise make acquire or offer to redeem, repurchase or otherwise acquire any payments Company equity or distributions to stockholders equity-related securities or any equity or equity-related securities of any Company Subsidiary;
(c) issue, deliver or sell or authorize the issuance, delivery or sale of, any shares of the Company or any Company Subsidiary capital stock of any class or series or any securities convertible into or exercisable for, or any rights, warrants or options to acquire, any such capital stock or any such convertible or exchangeable securities, other than in connection with the issuance of its Subsidiaries that is not wholly owned Company Common Shares upon the exercise of Company Options outstanding on the date hereof in accordance with their terms as of the date hereof or, until March 31, 2004, in connection with the SPP;
(directly d) amend any term of any outstanding security of the Company or indirectly) by any Company in their capacity as suchSubsidiary;
(e) adopt a plan of complete incur any capital expenditures or partial liquidationany obligations or liabilities in respect thereof, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of except for those (i) contemplated by the capital expenditure budget for the Company or any of its and the Company Subsidiaries, other than which budget is included in or attached to the MergerCompany Disclosure Schedule or (ii) not otherwise described in clause (i) which, in the aggregate, do not exceed $1 million;
(f) authorize, propose or announce an intention to authorize or propose, or enter into an agreement to acquire (whether under merger, stock or asset purchase or otherwise) in one transaction or a series of related transactions (i) by purchase, merger or otherwise, any business or assets (including any equity interest interests) outside of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m)(ii) all or substantially all of the equity interests of any person or any business or division of any person;
(g) sell, lease, license, mortgage, sell and leaseback encumber or otherwise encumber or dispose of any of its properties or material assets, other assets or any interests therein, except for than sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officercontracts terminable upon no more than 30 days’ notice without penalty, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate into any collective bargaining agreement or employee benefit plan, program, policy, arrangement new contract or agreement, or (iv) modify, amend, terminate the employment of or hire renew any Person whose annual compensation exceeded existing contract or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract agreement to which the Company or any of its Subsidiaries is a party or by which any of them or their properties may be bound, other than (vi) waive any material benefits ofin the ordinary course of business or (ii) if the dollar value of such new contract or agreement, or agree existing contract or agreement as so amended, modified, terminated or renewed, is or would be less than $100,000 (or $500,000 in the aggregate);
(i) incur, assume or prepay any indebtedness for borrowed money or guarantee any such indebtedness or issue, sell or redeem any debt securities or warrants or rights to modify in acquire any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which debt securities of the Company or any Company Subsidiary or assume or guarantee any debt securities of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rightsothers, except in the ordinary course of business consistent with past practicepractice (which shall include, without limitation, seasonal borrowings made in the ordinary course of business under existing credit facilities of the Company within the borrowing capacity thereunder as of the date hereof);
(j) except in the ordinary course of business, amend, modify or (ii) to distributeterminate any material contract, license agreement or co-promote any product arrangement of the Company or any Company Subsidiary, or otherwise waive, release or assign any material rights, claims or benefits of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries)Company Subsidiary thereunder;
(ri) enter into except as required by law or contract in effect as of the date hereof, increase the amount of compensation of any director or executive officer or make any increase in or commitment to increase any employee health, welfare or retirement benefits, (ii) except as required by law or contract in effect as of the date hereof, grant any severance or termination pay or rights to any director, officer or employee of the Company or any Company Subsidiary, (iii) adopt any additional Company Employee Plan or, except in the ordinary course of business or as required by law, make any contribution to any existing such plan or (iv) except as may be required by law, amend in any material joint venture or partnershiprespect any Company Employee Plan;
(sl) engage change the Company’s (x) accounting policies or methods of accounting in any transactionseffect at June 30, agreements2003, arrangements except as required by changes in GAAP or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of by Regulation S-K X under the Securities Exchange Act, as concurred in by its independent public accountants or (y) fiscal year;
(tm) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, contingent or otherwise) other than: (i) the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the Company Balance Sheet, (ii) those incurred in the ordinary course of business or (iii) those incurred as otherwise manage its working capital in a manner permitted by this Section 5.1;
(n) make payments or distributions (other than normal salaries and other compensation in the ordinary course of business consistent with past practice, including bonuses for the nine-month period ending March 31, 2004 in accordance with existing bonus plans described in Section 3.15 of the Company Disclosure Schedule, except that due to the change in the Company’s fiscal year, such bonuses will be not more than 75% of what they otherwise would have been) to any affiliate of the Company;
(uo) (i) enter into, amend, renew, modify permit any insurance policy naming the Company or consent any of its Subsidiaries as a beneficiary or loss payable payee to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 be cancelled or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunderterminated;
(vp) create knowingly do any Subsidiaryact or omit to do any act that would result in a breach of any representation, warranty or covenant by the Company set forth in this Agreement or, except as permitted by Section 5.3, otherwise materially impair or delay the ability of the Company to consummate the Offer or the Merger; or
(wq) enter into any contractagree, agreementresolve, commitment commit or arrangement publicly announce an intention to do any of the foregoing. In addition, the Company shall not submit to a vote of stockholders of the Company any proposal, whether at an annual or special meeting of stockholders or by action in lieu of a meeting of stockholders by written consent, to approve any agreement or agreements or transaction or series of transactions, which together with certain subsequent transactions would in effect reorganize the Company as a Canadian corporation, including the agreement and plan of merger and subsequent steps described in the Registration Statement on Form S-4 originally filed with the SEC by NexxTech Inc., a Canadian corporation, on February 27, 2004 (the transactions contemplated by the Form S-4, collectively referred to as the “S-4 Transactions”).
Appears in 1 contract
Interim Operations of the Company. Except (i) Prior to the Effective Time, except as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by any other provision of this Agreement or (iv) as set forth in Section 6.1 6.2 of the Company Disclosure ScheduleMemorandum, from the date of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve its present relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except (w) as required by Law, (x) as unless Acquiror has previously consented to in writing by Parent thereto (which consent shall not may be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 withheld only after substantive discussions with representatives of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, Company) the Company shall not, and shall not permit any of its the Material Company Subsidiaries to, do any of the following:
(a) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs general increase in compensation or other equity-based awards benefits to its employees or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assetsofficers, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of required by law; pay any of its properties or other assets or any interests therein, bonus compensation except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, the provisions of liabilities reserved against in any applicable program or plan adopted by the most recent Financial Statements Board of Directors of the Company included or such Material Company Subsidiary prior to the date hereof; enter into or amend the terms of any severance agreements with its officers; or effect any change in retirement benefits for any class of its employees or officers (unless such change is required by applicable law) that would materially increase the retirement benefit liabilities of the Company and the Material Company Subsidiaries on a consolidated basis; PROVIDED, HOWEVER, that nothing in this subsection (a) shall prevent the payment or other performance of any award or grant made prior to the date hereof and disclosed in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since Company Reports filed prior to the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail the Company Disclosure Memorandum or pursuant to enforcethis Agreement;
(b) amend, alter or consent to revise any matter with respect to which consent is required underexisting employment contract, any standstill understanding, arrangement or similar contract to which agreement between the Company or any of its the Material Company Subsidiaries is a party or and any Person receiving compensation (vincluding salary and bonus) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent excess of $150,000 per year (unless such amendment is required underby law) to increase the compensation (including bonus) or benefits payable thereunder or pursuant thereto or enter into any new employment contract, understanding, arrangement or agreement with any material confidentiality or similar contract to which Person having a salary thereunder in excess of $150,000 that the Company or such Material Company Subsidiary does not have the unconditional right to terminate without liability (other than liability for services already rendered) at any of its Subsidiaries is a partytime on or after the Effective Time;
(oc) waive the benefits of, adopt any new employee benefit plan or agree make any change in or to modify in any material manner, any material confidentiality agreement existing Company ERISA Plans or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on Benefit Arrangements other than any such Tax Return, take any position, make any election, or adopt any method change that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rightsis required by law, except (ii) in the ordinary course opinion of business consistent with past practicecounsel is necessary or advisable to maintain the tax qualified status of any such, plan, or (iiiii) to distributewould not materially increase, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter intoaggregate, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoing.employee benefit
Appears in 1 contract
Samples: Merger Agreement (Citicasters Inc)
Interim Operations of the Company. Except The Selling Parties covenant and agree that, except (i) as required by Law, expressly provided in this Agreement; or (ii) as consented with the prior written consent of the Purchaser, after the date hereof and prior to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 the Closing Date:
a. The business of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business be conducted only in the usual, regular ordinary and ordinary customary course consistent with past practice and and, to the extent consistent therewith, the Company shall use all its reasonable best efforts to preserve its business organization intact and maintain its current business organization, keep available the services of its current officers and employees and preserve its present relationships existing relations with customers, suppliers, licensorsemployees, licensees, distributors, Governmental Entities and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In additioncreditors, and without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (which consent business partners;
b. The Company shall not be unreasonably withheldtransfer, delayed or conditioned)lease, (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to, do any of the following:
(a) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliverlicense, sell, mortgage, pledge, dispose of, pledge or otherwise encumber, or authorize or propose encumber any material assets other than in the issuance, delivery, sale, disposition or pledge or other encumbrance ordinary and usual course of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights business and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiariesconsistent with past practice; provided, however, that in no event may the Company may undertake any such action involving an amount greater than $5,000;
c. The Company shall not modify, amend, or terminate any of the Company's Agreements or waive, release, or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
d. The Company shall not pay, discharge, or satisfy any claims, liabilities, or obligations (iabsolute, accrued, asserted or unasserted, contingent or otherwise) withhold Shares to satisfy Tax obligations with respect to Optionsin an aggregate amount greater than $5,000, Restricted Stock Awards without the written consent of the Purchaser;
e. Unless and RSUs granted prior to the date hereof until this Agreement shall have been terminated pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender provisions of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any OptionsArticle XII hereof, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is shall not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization recapitalization, or other reorganization of the Company or any of its Subsidiaries, other than the MergerCompany;
(f) acquire (i) by purchasef. The Selling Parties shall not knowingly take, merger or otherwiseknowingly agree to take, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to action that incurred as of the date of this Agreement or guarantee any such indebtedness or would make any loans, advances representation or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee warranty of the Company or contained herein inaccurate in any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreementat, or (iv) terminate as of any time prior to, the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000Closing Date;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the g. The Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts shall not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits ofvoluntarily make, or agree to modify make, any changes in any respecttax accounting methods, or, subject waive or consent to the terms hereof, fail extension of any statute of limitations with respect to enforcetaxes, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any assessment of its Subsidiaries is a party or (v) waive any material benefits oftaxes, or agree to modify in settle any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the judicial proceeding affecting taxes; and
h. The Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) shall not enter into any material joint venture or partnership;
(s) engage in any transactionsan agreement, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreementcommitment, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose, or announce an intention to do any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. (a) Except (i) as required by Law, (ii) as consented to in writing by Parent with the prior written consent of each of the Buyers (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), (iii) as specifically contemplated by this Agreement, the Merger Agreement or (iv) the Summit Offering or as set forth in Section 6.1 Schedule 5.6, the Company hereby covenants to Buyers that, during the period commencing on the Agreement Date and ending on the earlier to occur of (i) the Closing Date or (ii) the valid termination of this Agreement in accordance with Article VI, the business of the Company Disclosure Schedule, from and its Subsidiaries shall be conducted in the date ordinary course of this Agreement to the Effective Time business and the Company shall, and shall cause each of its Subsidiaries to, conduct its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable efforts Reasonable Efforts to (A) preserve intact the present business organization of the Company and its current business organizationSubsidiaries, (B) to keep available the services of its their current officers and key employees and (C) to preserve its present relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities distributors and others having business dealings with them them, in each case, except with respect to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without any COVID-19 Measures.
(b) Without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent with the prior written consent of each of the Buyers (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), as specifically contemplated by this Agreement, the Merger Agreement or the Summit Offering or as set forth in Schedule 5.6, the Company hereby covenants to the Buyers that, during the period commencing on the Agreement Date and ending on the earlier to occur of (i) the Closing Date or (ii) the valid termination of this Agreement in accordance with Article VI (the “Pre-Closing Period”), the Company shall not and shall cause its Subsidiaries to not:
(i) amend their respective Organizational Documents or waive material rights thereunder;
(ii) split, combine or reclassify any equity interests;
(iii) (1) issue, grant, deliver or sell, or authorize the issuance, grant, delivery or sale of, any equity interests or any securities or instruments convertible or exchangeable into equity interests other than (i) pursuant to the Equity Incentive Plan in the ordinary course, and (ii) issuances of equity interests in a Covered Subsidiary in connection with capital contributions by the Company or another Covered Subsidiary or in connection with the funding of a transaction permitted pursuant to clause (viii) below, (2) amend any term of any existing equity interests, (3) repurchase or redeem any equity interests other than pursuant to the Equity Incentive Plan or (4) declare, accrue or pay any dividend or other distribution (including with respect to any equity interests), in the case of the foregoing clause (4) other than (x) distributions between and/or among the Company and its wholly owned Subsidiaries, (y) expressly permitted redemptions of Units pursuant to this Agreement the Equity Incentive Plan or (z) as set forth in Section 6.1 tax distributions to the members of the Company Disclosure Schedulein accordance with the terms of the Existing Operating Agreement or by Subsidiaries to its members in accordance with the terms of their Organizational Documents;
(iv) commence any Proceeding or file any petition in any court, from or enter into or adopt any plan, in each case relating to bankruptcy, reorganization, insolvency, winding-up, dissolution, liquidation or relief for debtors, make any assignment for the date benefit of this Agreement to creditors or apply for the Effective Timeappointment of a custodian, the Company shall not, and shall not permit receiver or trustee;
(v) enter into any new line of its Subsidiaries business;
(vi) lend money to, do or forgive any of the following:
(a) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose indebtedness of, pledge or otherwise encumberany Person, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of than (i) any shares advances of its capital stock business expenses to employees and forgiveness of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies such expenses in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m)and (ii) loans made to Managed Practices;
(gvii) other than with respect to the Debt Financing as otherwise permitted by this Agreement, (1) incur or modify any indebtedness (other than borrowings under existing lines of credit) in an amount exceeding $50,000,000 individually or $100,000,000 in the aggregate or (2) grant or permit to exist any Lien on any assets, properties or rights with fair market value exceeding $50,000,000 individually or $100,000,000 in the aggregate;
(viii) other than the Summit Transaction, purchase, acquire (by merger, consolidation, acquisition of stock or assets or otherwise) or lease (as lessee), directly or indirectly, any businesses or assets, other than acquisitions with a purchase price that does not exceed $500,000,000 individually or $750,000,000 in the aggregate;
(ix) sell, lease, license, mortgage, sell and leaseback lease (as lessor) or otherwise encumber transfer any businesses or dispose of any of its properties assets, other than in an amount with fair market value not to exceed $100,000,000 individually or other assets or any interests therein, except for sales of inventory and used equipment $250,000,000 in the ordinary course of business consistent with past practiceaggregate;
(hx) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, Person (other than to the Company and its wholly owned Subsidiaries, and other than to employees or in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee member of the Company or any of its SubsidiariesGroup), any increase in compensation other than, with respect except for loans to Persons who are not directors current or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as former members of the date Board, employees or other service providers of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP in amounts not to exceed $100,000,000 individually or applicable Law$250,000,000 in the aggregate;
(lxi) amend the Company’s certificate change methods of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Companyaccounting, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax concurrent changes in GAAP;
(xii) except as otherwise required by Law, prepare or file any U.S. federal income Tax Return or other material income Tax Return inconsistent with past practice orpractice, on file any such amended U.S. federal income Tax Return or other material income Tax Return, take any positionmake, make any electionrevoke, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to change any material Company Intellectual Property Rights, Tax election (except in the ordinary course of business consistent with past practice), change any annual tax accounting period, adopt or change any material method of tax accounting, enter into any closing agreement with respect to a material amount of Taxes, or settle any material Tax claim, audit or assessment;
(iixiii) take any action that the Company is prohibited from taking pursuant to distribute, license or co-promote any product the terms and conditions of the Company Merger Agreement prior to the Merger Agreement Closing;
(xiv) enter into any Affiliated Transactions with WBA or any of its Subsidiaries Affiliates (including products under development other than (x) the Debt Financing Commitment Letter, the related fee letter and products licensed the Definitive Debt Financing Documentation, in each case subject to the requirements and restrictions set forth in this Agreement and (y) Affiliated Transactions that are on arms’ length terms and are approved by the Company Walgreens Transaction Committee (as defined in the Existing Operating Agreement) and that do not relate to the transactions contemplated by this Agreement, the Merger Agreement or any of its Subsidiariesthe Debt Financing Commitment Letter);
(rxv) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person Contract that would be required limit or prohibit the ability of the Company to be disclosed under Item 404 of Regulation S-K under pay the Securities Act;
(t) otherwise manage its working capital Accruing Dividends in a manner other than in cash on the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination Class F Preferred Units in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date terms and conditions of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any SubsidiaryAmended and Restated Operating Agreement; or
(wxvi) enter into any contract, agreement, commitment agree or arrangement commit to do any of the foregoing.
(c) Notwithstanding anything to the contrary herein (but subject to Section 5.6(e)), the Company agrees that the Company shall not, and shall cause Merger Sub not to, amend, supplement, waive or modify, or agree to amend, supplement, waive or modify, the Merger Agreement or any Ancillary Document (as defined in the Merger Agreement) or any term thereof in a manner that relates to the economic terms contained therein or that is otherwise materially adverse to the interests of any Buyer (except that the Company may (subject to Section 5.6(e)) seek Permitted Alternative Financing to the extent required by Section 5.15(b) of the Merger Agreement) without the prior written consent of such Buyer (such consent not to be unreasonably withheld, conditioned or delayed); provided that such Buyer shall be deemed to have consented to such amendment, supplement, waiver or modification unless it shall object in writing thereto within five (5) Business Days of being notified in writing thereof by the Company; provided further that it is acknowledged and agreed that the consent of the Buyers shall not be required for waivers or consents by the Company of the provisions of Section 5.1 of the Merger Agreement.
(d) Without limiting the foregoing Section 5.6(c), the Company shall keep the Buyers reasonably informed regarding the transactions contemplated by the Merger Agreement, including the expected timing of the consummation of the Merger and any developments that would reasonably be expected, individually or in the aggregate, to materially delay the consummation of the Merger or make the Closing unlikely to occur; provided, however, that in any event the Company shall provide the Buyers with no less than five (5) Business Days’ written notice of the Closing Date. The Company shall (x) upon the request of Cigna from time to time prior to the Closing Date, update Cigna on the material developments of the Company’s efforts to arrange and obtain the Debt Financing, including by providing copies of all Definitive Debt Financing Documentation (and copies of final offering documents and marketing materials) related to the Debt Financing, and any amendments, modifications or replacements to the Debt Financing Commitment Letter (or Permitted Alternative Financing Commitment Letter) but excluding, for the avoidance of doubt, any ordinary course negotiations with respect to the terms of the Debt Financing and the Definitive Debt Financing Documentation, (y) provide Cigna with copies of all notices and material correspondence exchanged with the other parties to the Merger Agreement and (z) upon Cigna’s request, provide Cigna with all information and all information access rights that would be available to Cigna under the Amended and Restated Operating Agreement as if the Closing had occurred.
(e) Notwithstanding anything to the contrary herein, the Company hereby agrees that the Company (on behalf of itself and Merger Sub) shall not amend, supplement, waive or modify, or agree to amend, supplement, waive or modify, (x) the Debt Financing Commitment Letter or (y) the terms, conditions and provisions in the Merger Agreement relating to the Debt Financing, in each case, in any manner relating to economic terms or that is adverse to Cigna or its Affiliates, without the prior written consent of Cigna (such consent not to be unreasonably withheld, conditioned or delayed); provided that (A) the Company may amend the Debt Financing Commitment Letter to add lenders who are controlled Affiliates of WBA who had not executed the Debt Financing Commitment Letter (provided, further that WBA is not relieved, released or novated from its obligations under the Debt Financing Commitment Letter in connection therewith) and (B) the Company may seek a Permitted Alternative Financing and enter into a Permitted Alternative Financing Commitment Letter; provided, further that, in the case of this clause (B), the Company shall afford Cigna a reasonable opportunity to review and comment on the terms of such Permitted Alternative Financing and Permitted Alternative Financing Commitment Letter and the Company shall give due consideration to all reasonable additions, deletions or changes suggested thereto by Cigna that are (1) consistent with the Merger Agreement or this Agreement and (2) timely communicated to the Company (it being understood that any comments received within forty eight (48) hours of Cigna’s receipt of a draft of such Permitted Alternative Financing Commitment Letter shall be deemed timely communicated); and provided further that the parties hereto agree that the failure to incorporate any or all such additions, deletions or changes shall not constitute a breach of this Section 5.6(e)). The Definitive Debt Financing Documentation shall be on the terms set forth in the Debt Financing Commitment Letter or Permitted Alternative Financing Commitment Letter (or on such other terms subject to compliance with this Agreement), which the Buyers agree and acknowledge will be assigned to and assumed by the Issuer pursuant to the Restructuring.
(f) Anything to the contrary set forth in this Agreement notwithstanding, the Company shall not, and shall cause its Affiliates not to, directly or indirectly (whether by merger, consolidation, tender offer, business combination or otherwise), acquire, purchase, lease or license or otherwise enter into a transaction with (or agree to acquire, purchase, lease or license or otherwise enter into a transaction with) any business, corporation, partnership, association or other business organization or division or part thereof or take any other action during the period commencing on the Agreement Date and ending on the earlier to occur of (i) the Closing Date or (ii) the valid termination of this Agreement in accordance with Article VI, in each case, if doing so would reasonably be expected to (x) impose any material delay in the satisfaction of, or increase materially the risk of not satisfying the conditions set forth in Section 5.1(a)(i) or Sections 7.1(a) or 7.1(b) of the Merger Agreement; (y) materially increase the risk of any Governmental Authority entering an Order prohibiting or enjoining the consummation of the Transaction or the Summit Transaction; or (z) otherwise prevent or materially delay the consummation of the Transaction (including the Debt Financing) or the Summit Transaction.
(g) For purposes of this Section 5.6, references to the “Company” shall be deemed to include both the Company and the Issuer as if such covenants were made by the Company and the Issuer, mutatis mutandis.
(h) Notwithstanding anything contained in this Section 5.6(b) to the contrary, nothing in this Section 5.6(b) shall prohibit or restrict the Company and the Issuer from completing the Restructuring.
Appears in 1 contract
Interim Operations of the Company. Except (ia) as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule, from From and after the date of this Agreement to until the Effective Time Time, except as set forth in Schedule 5.2 to this Agreement or as contemplated by any other provision of this Agreement, unless the Company shallPurchaser has consented in writing thereto, the Company:
(i) Shall, and shall cause each of its Subsidiaries to, conduct its business only in the operations according to its usual, regular and ordinary course consistent with past practice in substantially the same manner as heretofore conducted;
(ii) Shall use its reasonable efforts, and shall cause each of its Subsidiaries to use all its reasonable efforts efforts, to preserve intact its current respective business organizationorganizations and goodwill, keep available the services of its current their respective officers and employees and preserve its present maintain satisfactory relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others those persons having business dealings relationships with them it;
(iii) Shall not amend its Certificate of Incorporation or Bylaws or comparable governing instruments;
(iv) Shall promptly notify the Purchaser of any breach of any representation or warranty contained herein or any Material Adverse Effect with respect to the end that its goodwill Company;
(v) Shall promptly deliver to the Purchaser true and ongoing business shall be unimpaired at correct copies of any report, statement or schedule filed with the Effective Time. In addition, and without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented SEC subsequent to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement Agreement;
(A) Shall not, except pursuant to the Effective Timeexercise of options, warrants, conversion rights and other contractual rights existing on the Company date hereof and disclosed pursuant to this Agreement, issue any shares of its capital stock, effect any stock split or otherwise change its capitalization as it existed on the date hereof and (B) shall not, and shall not permit any of its Subsidiaries to, do (x) grant, confer or award any of the following:
(a) except for Shares to be issued option, warrant, conversion right or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding other right not existing on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or grant, confer or award any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants bonuses or other securities forms of the Company cash incentives to any officer, director or key employee, (y) increase any of its Subsidiaries; providedcompensation with any present or future officers, howeverdirectors or key employees, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs severance or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or termination pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; employment or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Worth John R)
Interim Operations of the Company. Except (ia) as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule, from From and after the date of this Agreement to until the Effective Time Time, except as set forth in Schedule 5.2 to this Agreement or as contemplated by any other provision of this Agreement, unless the Company shallPurchaser has consented in writing thereto, the Company:
(i) Shall, and shall cause each of its Subsidiaries to, conduct its business only in the operations according to its usual, regular and ordinary course consistent with past practice in substantially the same manner as heretofore conducted;
(ii) Shall use its reasonable efforts, and shall cause each of its Subsidiaries to use all its reasonable efforts efforts, to preserve intact its current respective business organizationorganizations and goodwill, keep available the services of its current their respective officers and employees and preserve its present maintain satisfactory relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others those persons having business dealings relationships with them it;
(iii) Shall not amend its Certificate of Incorporation or Bylaws or comparable governing instruments;
(iv) Shall promptly notify the Purchaser of any breach of any representation or warranty contained herein or any Material Adverse Effect with respect to the end that its goodwill Company;
(v) Shall promptly deliver to the Purchaser true and ongoing business shall be unimpaired at correct copies of any report, statement or schedule filed with the Effective Time. In addition, and without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented SEC subsequent to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement Agreement;
(A) Shall not, except pursuant to the Effective Timeexercise of options, warrants, conversion rights and other contractual rights existing on the Company date hereof and disclosed pursuant to this Agreement, issue any shares of its capital stock, effect any stock split or otherwise change its capitalization as it existed on the date hereof and (B) shall not, and shall not permit any of its Subsidiaries to, do (x) grant, confer or award any of the following:
(a) except for Shares to be issued option, warrant, conversion right or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding other right not existing on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or grant, confer or award any bonuses or other forms of cash incentives to any officer, director or key employee, (y) increase any compensation with any present or future officers, directors or key employees, grant any severance or termination pay to, or enter into any employment or severance agreement with any officer, director or key employee or amend any such existing agreement in any material respect (other than pursuant to severance agreements previously delivered to Purchaser), or (z) adopt any new employee benefit plan (including any stock option, stock benefit or stock purchase plan) or amend any existing employee benefit plan in any material respect;
(vii) Shall not (i) declare, set aside or pay any dividend or make any other ownership interest distribution or any securities or rights convertible into, exchangeable for, or evidencing the right payment with respect to subscribe for, any shares of its capital stock or any other ownership interest interests (including “phantom” rights and stock appreciation rights)other than regular, quarterly dividends not exceeding $0.03 per share of Common Stock) or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, directly or in substitution for, Shares outstanding on the date hereof;
(b) indirectly redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, acquire any outstanding Shares, Options, Warrants or other securities of the Company or any shares of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans capital stock or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender capital stock of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Mergeror make any commitment for any such action;
(fviii) Shall not, and shall not permit any of its Subsidiaries to, sell, lease, abandon or otherwise dispose of any of its assets (including capital stock of Subsidiaries) or acquire (i) by purchasemerging or consolidating with, merger or otherwiseby purchasing a substantial portion of the assets of or equity in, or by any other manner, any business or equity interest of any Person corporation, partnership, association or (ii) other business organization or division thereof or otherwise acquire any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(hix) Shall not, and shall not permit any of its Subsidiaries to, incur or guarantee any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Personperson, or issue or sell any debt securities, other than to the Company and its wholly or any wholly-owned Subsidiaries, Company Subsidiary and other than borrowings under existing lines of credit in the ordinary course of business and other borrowings not exceeding $250,000 in the aggregate;
(x) Shall not, and shall not permit any of its Subsidiaries to, mortgage or otherwise encumber or subject to employees any lien any of its properties or assets;
(xi) Shall not, and shall not permit any of its Subsidiaries to, make any change to its accounting (including tax accounting) methods, principles or practices, except as may be required by generally accepted accounting principles and except, in respect the case of travel tax accounting methods, principles or other related expenses practices, in the ordinary course of business of the Company or any of its Subsidiaries;
(xii) Shall not, and shall not permit any of its Subsidiaries to, make any commitment or enter into any contract or agreement or make any capital expenditure except for (x) customer purchase orders and purchases of raw materials used in the business of the Company and its Subsidiaries agreed to or made in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (iy) enter into an employment any other commitment, contract and agreement with any Person involving aggregate payments to or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of by the Company or any the Subsidiary not in excess of its Subsidiaries$100,000, any increase providing for termination without notice by the Company on 90 or fewer days' notice, and made by the Company or the Subsidiary in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases of business consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, practice or (ivz) terminate capital expenditures that individually or in the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to aggregate do not exceed $100,000;
(jxiii) except as required by Shall not, and shall not permit any Benefit Plan in accordance with of its terms as of the date of this AgreementSubsidiaries to, take any action to fund alter through merger, liquidation, reorganization, restructuring or in any other way secure fashion the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting corporate structure or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents ownership of any Subsidiary of the Company;
(mxiv) authorize or make Shall not, and shall not permit any commitment with respect of its Subsidiaries to, revalue any capital expenditure of its assets, including, without limitation, writing down the value of its inventory or other expenditures (including in respect of research and development)writing off notes or accounts receivable, other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000ordinary course of business;
(nxv) Shall not, and shall not permit any of its Subsidiaries to, make any tax election or settle or compromise any material income tax liability;
(ixvi) Shall not, and shall not permit any of its Subsidiaries to, settle or compromise any pending or threatened suit, action or claim relating to the transactions contemplated hereby;
(xvii) Shall not, and shall not permit any of its Subsidiaries to, pay, discharge, settle discharge or satisfy any claims, liabilities, liabilities or obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement discharge or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in in, or contemplated by, the most recent Financial Statements financial statements (or the notes thereto) of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice;
(xviii) Shall not, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or and shall not permit any of its Subsidiaries is a party to, except in connection with the exercise of its fiduciary duties by the Board of Directors of the Company as set forth in Section 5.1, waive, amend or (v) waive allow to lapse any material benefits of, term or agree to modify in condition of any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar "standstill" agreement to which the Company or any of its Subsidiaries is a party;; or
(pxix) except as required by applicable Tax LawShall not, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or and shall not permit any of its Subsidiaries (including products under development and products licensed by the Company to, agree or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required otherwise commit to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do take any of the foregoingforegoing actions or take, or agree to take, any action which would result in a failure of the condition to Closing set forth in Section 6.3(a).
Appears in 1 contract
Samples: Merger Agreement (Alberto Culver Co)
Interim Operations of the Company. Except (iw) as may be required by applicable Law, (iix) as consented to in writing by Parent (with the prior written consent of Parent, which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve its present relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) as permitted or otherwise expressly permitted pursuant to contemplated by this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, during the period from the date of this Agreement to the Effective Time, the business of the Company and its Subsidiaries shall be conducted only in the ordinary course of business in all material respects consistent with past practice, and, to the extent consistent therewith, the Company and its Subsidiaries shall use reasonable best efforts to (i) preserve intact their current business organization and (ii) preserve their relationships with customers, distributors, suppliers, employees and other business partners; provided, however, that no action by the Company or any of its Subsidiaries with respect to matters addressed specifically by any provision of this Section 6.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such specific provision. Without limiting the generality of the foregoing, except (w) as may be required by Law, (x) with the prior written consent of Parent, which consent shall not be unreasonably withheld, delayed or conditioned, (y) as contemplated or permitted by this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, during the period from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to, do any of the following:
(a) amend its certificate of incorporation or bylaws (or equivalent organizational documents);
(b) except for Shares (x) Common Stock to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement outstanding as of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or and (y) the issuance or transfer by a wholly-owned Subsidiary of the shares Company of capital stock of any Subsidiary or other equity interests to the CompanyCompany or another wholly-owned Subsidiary, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights)Equity Rights, or (ii) any other securities of the Company and or any of its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereofCommon Stock or any other Equity Rights;
(bc) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants Common Stock (except for withholding of shares subject to Options or other securities Company Stock-Based Awards for tax withholding purposes) or any Equity Rights of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares Common Stock or any Equity Rights of the Company or its Subsidiaries or declare, set aside for payment or pay any dividend or other distribution in respect of any Shares Common Stock or any Equity Rights of the Company or its Subsidiaries or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as suchsuch (excluding dividends made by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary of the Company);
(e) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the MergerSubsidiaries (including any segment or business thereof);
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment than in the ordinary course of business consistent with past practice, sell, lease, dispose of, pledge or encumber (other than the imposition of any Permitted Lien) any assets;
(g) acquire any corporation, partnership or other business organization or entity (including any division or unit thereof), whether by merger, consolidation or other business combination, or acquisition of stock or assets, license, joint venture or similar transaction;
(h) other than draws on any existing credit facility or line of credit of the Company or any of its Subsidiaries, or on any credit facility or line of credit that replaces all or part of any existing credit facility or line of credit on material terms that are the same or more favorable to the Company and its Subsidiaries, taken as a whole, than those of the replaced credit facility or line of credit and in a principal amount not greater than the principal amount of the existing credit facility or line of credit (or on any other credit facility or line of credit the entry into which is approved by Parent pursuant to this Section 6.1), in the ordinary course of business consistent with past practice, incur or become liable for any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement Agreement, issue any debt securities or guarantee rights with respect thereof or guarantee, assume or become liable for any such indebtedness or liabilities of another Person or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company or any wholly-owned Subsidiary of the Company;
(i) grant any increases in the compensation of its directors, officers or key employees, except for increases required under offer letters, other employment agreements or Benefit Plans existing on the date hereof, or enter into any material new employment or severance protection agreements with any such directors, officers or key employees;
(j) except as may be contemplated by this Agreement or required by applicable Law (including as necessary to comply with or conform to applicable Laws), adopt or amend any Benefit Plans;
(k) engage in a reduction of force or lay-off affecting more than 100 employees, in the aggregate, of the Company and its wholly owned Subsidiaries;
(l) change any of the accounting methods used by the Company, and other than to employees unless required by GAAP, the SEC or applicable Law or as formally recommended by the Company’s independent registered public accounting firm;
(m) make or change any material Tax election, settle or compromise any material Tax liability, change in any respect any accounting method in respect of travel Taxes, file any amendment to a material Tax Return, enter into any closing agreement with respect to material Taxes, settle any claim or other related expenses assessment in respect of material Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of material Taxes, except, in each case, in the ordinary course of business consistent with past practice;
(in) except as required by Law waive, settle, satisfy or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, compromise (i) enter into an employment agreement with any Person pending or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of threatened Action against the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required brought by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or institute any new Action (x) involving amounts that exceed $500,000 individually or $2,000,000, in the aggregate, or (vy) waive involving the incurrence of any material benefits of, obligation or agree to modify in restriction (other than the payment of money) on the Company and its Subsidiaries following the Effective Time or (ii) any material respect, or, subject to the terms hereof, fail to enforce in any material respect, pending or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which threatened Action against the Company or any of its Subsidiaries is a partyCompany Representatives with respect to this Agreement or the transactions contemplated by this Agreement;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) assign, transfer, license or sublicense, grant any security interest in, to or under, abandon, disclaim or dedicate to the public any material Company Intellectual Property RightsProperty, except for non-exclusive licenses or sublicenses entered into in the ordinary course of business consistent with past practice, or (ii) fail to distributepay any fee, license take any action or co-promote make any product filing in each case reasonably necessary to maintain the ownership of the or protect its interest in any material Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries)Intellectual Property;
(rp) enter into any material joint venture or partnership;
(s) engage in any transactionsexchange traded, agreements, arrangements or understandings with any Affiliate over-the-counter or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner swap, cap, floor, collar, futures contract, forward contract, option or other similar derivative financial instrument, other than currency xxxxxx entered into in the ordinary course of business consistent with past practice;
(uq) make or authorize capital expenditures, other than in respect of those capital expenditure projects that (i) enter into, amend, renew, modify are contemplated by the Company’s fiscal year 2012 or consent to 2013 forecast that is set forth in Section 6.1 of the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement Disclosure Schedule or (ii) amend, waive, modify, fail otherwise up to enforce or consent to $1,000,000 in the termination of (other than a termination in accordance with it terms) its material rights thereunderaggregate;
(vr) create renew, terminate (including by failing to renew), amend, modify or waive any SubsidiaryMaterial Contract or enter into any new Material Contract (except as permitted by Section 6.1(h)), except for (i) with respect to Material Contracts described in clause (vii), (ix), or (x) of Section 4.8 (a), new customer or supplier Material Contracts entered into in the ordinary course of business consistent with past practice and on terms that in the discretion of the Company are not reasonably expected to be materially adverse to the Company and its Subsidiaries, taken as a whole, and (ii) renewal of any ordinary course license of Company Intellectual Property which, by its terms, renews automatically unless terminated by either party thereto; provided that, with respect to entering into a new Material Contract, for purposes of determining whether the dollar thresholds in clause (vii), (ix) or (x) of Section 4.8 (a) are satisfied, the revenues recognized or payments made shall be deemed to be amounts reasonably expected to be recognized or paid over the twelve-month period starting on the effective date of such Contract;
(s) fail to timely make any filings required to be filed by the Company under the Exchange Act or the Securities Act; or
(wt) enter into any contract, agreement, binding commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Intermec, Inc.)
Interim Operations of the Company. Except Each Seller shall procure that, and covenant and agree that, after September 25, 2005 and until the Closing Date, except (i) as required by Lawexpressly provided in this Agreement, or (ii) as consented to may be agreed in writing by Parent Purchaser:
(which consent shall not be unreasonably withheld, delayed or conditioned), (iiia) contemplated by this Agreement or (iv) as set forth in Section 6.1 the business of the Company Disclosure Scheduleand its Subsidiaries shall be conducted in the same manner as heretofore conducted and in a prudent manner (en bon père de famille), from in the date ordinary course, and each of this Agreement to the Effective Time Sellers, the Company shall, and shall cause each of its Subsidiaries to, conduct shall use its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable best efforts to preserve intact the business organization of the Company and its current business organizationSubsidiaries intact, keep available the services of its the current officers of the Company and employees its Subsidiaries and preserve its present relationships maintain the existing relations with material franchisees, customers, suppliers, licensorscreditors, licensees, distributors, Governmental Entities business partners and others having material business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, or its Subsidiaries. Neither the Company shall not, and shall not permit nor any of its Subsidiaries toshall institute any new methods of purchase, do sale, lease, management, accounting or operation or engage in any transaction or activity other than minor changes in the ordinary course of the following:business and consistent with past practice;
(ab) except for Shares to be issued or delivered the changes resulting from the increase of the share capital of the Company pursuant to the exercise of Options the BCEs and BSAs, neither the Company nor any of its Subsidiaries shall amend their certificates of incorporation or Warrantsby-laws or other constituent or governing document, to the settlement extent any such modification is not required by law, or by the rules or regulations of RSUs or any Governmental Entity;
(c) except for the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on changes resulting from the date hereof or the issuance increase of the shares share capital of the Company pursuant to the exercise of the BCEs and BSAs, neither the Company nor any of its Subsidiaries shall alter the Company or its Subsidiaries’ outstanding capital stock of or declare, set aside, make or pay any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge dividend; or otherwise encumber, purchase or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) redeem any shares of the Company or its Subsidiaries’ capital stock stock;
(d) except for the changes resulting from the increase of the share capital of the Company pursuant to the exercise of the BCEs and BSAs, neither the Company nor any class of its Subsidiaries shall issue or sell any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments warrants or any other agreements of any character rights to purchase or acquire any such shares of its capital stock or any other ownership interest or any securities convertible into or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as suchsuch shares;
(e) adopt a plan neither the Company nor any of complete its Subsidiaries shall: (i) incur or partial liquidationassume any long-term debt, dissolutionor except in the ordinary course of business, mergerincur or assume short-term Indebtedness or finance leases exceeding twenty-five thousand euros (€25,000) in the aggregate from September 25, consolidation2005 until the Closing; (ii) pay, restructuringrepay, recapitalization discharge, purchase, repurchase or other reorganization of satisfy any Indebtedness issued or guaranteed by the Company or any of its Subsidiaries, except as required by the terms thereof; (iii) modify the terms of any Indebtedness, other than modifications of short term debt in the Merger;
ordinary and usual course of business and consistent with past practice; (fiv) acquire assume, guarantee, endorse or otherwise become liable or responsible (i) by purchasewhether directly, merger contingently or otherwise, any business or equity interest ) for the obligations of any Person or (ii) any asset or assetsother Person, except for purchases of components, raw materials or supplies as described in the Disclosure Schedule as being in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
; (hv) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person; (vi) enter into any material commitment or transaction (including any capital expenditure or purchase, other than sale or lease of material assets or real estate); (vii) write down the value of any inventory or write off as uncollectible, any material notes or accounts receivable, (viii) dispose of, abandon or permit to lapse any rights to any Intellectual Property;
(f) neither the Company and nor any of its wholly owned SubsidiariesSubsidiaries shall permit or allow any of their material properties or assets (real, and other than personal or mixed, tangible or intangible) to employees be subjected to any liens;
(g) neither the Company nor any of its Subsidiaries shall cancel any debts;
(h) neither the Company nor any of its Subsidiaries shall be a party to any acquisition (except for the acquisition of the shares held by Xxxx Xxx in respect Musiwave Asia Ltd), merger, spin-off, consolidation, purchase of travel stock or interest in any corporation, partnership, association or other related expenses business organization or enter into or form any material joint-venture or enter into any agreement leading to any of the foregoing;
(i) neither the Company nor any of its Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors, or employees, or enter into or amend any employment (providing for an annual gross compensation in excess of sixty thousand euros (€60,000)), severance, termination or other agreement with, or employee benefit plan for, or make any loan or advance to, any of its officers, directors, or employees or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to an employee benefit plan or otherwise (except in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000practices);
(j) except as required by neither the Company nor its Subsidiaries shall make any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action changes to fund their severance policy or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determinedpractices;
(k) change neither the Company nor any of its Subsidiaries shall (i) pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director or employee or pay or agree to pay or make any accrual or arrangement for payment to any officer, director or employee of any amount relating to unused vacation days, except to the accounting methods used by extent the Company or its Subsidiaries unless a Subsidiary is required by GAAP to do so on September 25, 2005, (ii) adopt or applicable Lawpay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any director, officer, employee, agent or consultant, whether past or present, except to the extent the Company or Subsidiary is required to do so on September 25, 2005, or (iii) amend any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing;
(l) amend neither the Company’s certificate of incorporation Company nor its Subsidiaries shall enter into any contract that contains a “most-favored nation” or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;similar provision.
(m) authorize neither the Company nor any of its Subsidiaries shall (i) grant to any third party a right to sublicense or make distribute any commitment with respect to, any capital expenditure or other expenditures of the Intellectual Property except for a grant (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than ordinary course of business) by the Company to a customer allowing such customer to sublicense and distribute the Intellectual Property; (ii) grant to any third party a license to the Intellectual Property outside the ordinary course of business; (iii) grant to any third party a license to the Software in source code form; or equal (iv) assign or otherwise transfer ownership of any Intellectual Property or any Software to $1,000,000any third party;
(n) (i) neither the Company nor any of its Subsidiaries shall pay, dischargerepurchase, settle discharge or satisfy any of its claims, liabilities, liabilities or obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement discharge or satisfaction in the ordinary course of business consistent with past practice or in accordance with their termsbusiness, of claims, liabilities or obligations reflected or reserved against in in, or contemplated by, the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the Balance Sheet date of such Financial Statements in the ordinary course of business consistent with past practice, business;
(o) neither the Company nor any of its Subsidiaries shall (i) change any of the accounting methods used by it unless required by French GAAP or (ii) cancel make any indebtednesselection relating to Taxes, change any election relating to Taxes already made, adopt any accounting method relating to Taxes, change any accounting method relating to Taxes unless required by French GAAP, enter into any closing agreement relating to Taxes, settle any claim or assessment relating to Taxes or consent to any claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment;
(iiip) waive neither the Company nor any of its Subsidiaries shall loan or assign advance any claims amount to, or rights sell, transfer or lease any material properties or assets (real, personal or mixed, tangible or intangible) to, or enter into any agreement or arrangement with, any of substantial valuetheir respective officers, directors or shareholders or associate of any of their officers, directors or shareholders except for (ivx) waive directors’ fees, and compensation to officers at rates not inconsistent with the Company or the Subsidiaries’ past practice or agreements in force and for (y) the Musiwave Asia Agreements;
(q) neither the Company nor any benefits ofof its Subsidiaries shall take, or agree to modify or commit to take, any action that would or is reasonably likely to result in any respect, or, subject of the conditions to the terms hereof, fail to enforceClosing set forth in ARTICLE VI not being satisfied, or consent (including any action that would make any representation or warranty of the Sellers contained herein inaccurate in any respect at, or as of any time prior to, the Closing Date) that would materially impair the ability of Sellers, the Company or Purchaser to consummate the Closing in accordance with the terms hereof or materially delay such consummation; and
(r) neither the Company nor any matter with respect of its Subsidiaries shall enter into any agreement, contract, commitment or arrangement (whether in writing or otherwise) to which consent is required under, do any standstill or similar contract to which of the foregoing. In the case where the Company or any of its Subsidiaries is shall wish to take any of the actions listed in Section 5.1(a) to (r) above, it shall notify its intention to Purchaser. Purchaser shall have a party seven (7) day period following actual receipt of the notice to answer such request and to authorize or (v) waive any material benefits of, not to authorize the Company or agree the relevant Subsidiary to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or take such action provided that Purchaser’s consent shall not be unreasonably withheld with respect to any matter with respect relating to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product current operations of the Company or any of its Subsidiaries the Subsidiaries. Failing sending an answer by Purchaser within the seven (including products under development and products licensed by the Company or any of its Subsidiaries);
(r7) enter into any material joint venture or partnership;
(s) engage in any transactionsday period mentioned above, agreements, arrangements or understandings with any Affiliate or other Person that would Purchaser’s consent shall be required deemed to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoinghave been obtained.
Appears in 1 contract
Interim Operations of the Company. Except (i) as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as otherwise set forth in Section 6.1 of the Company Disclosure ScheduleLetter, including but not limited to the list of capital expenditures of the Company for the years 2000 and 2001 set forth therein, the Company covenants and agrees as to itself and its Subsidiaries that, from the date of this Agreement hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed, and except as otherwise expressly contemplated by this Agreement or required by Law):
(i) the business of the Company shall, and shall cause each of its Subsidiaries to, conduct its business shall be conducted only in the usualordinary and usual course and, regular to the extent consistent therewith, it and ordinary course consistent with past practice and its Subsidiaries shall use all their respective reasonable best efforts to preserve intact its current business organization(a) subject to prudent management of workforce needs and ongoing programs currently in force, keep available the services of its current officers and employees and preserve its present relationships business organization intact and maintain its existing relations and goodwill with customers, suppliers, licensors, licensees, distributors, Governmental Entities creditors, lessors, employees and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except (w) as required by Lawassociates, (xb) as consented maintain and keep material properties and assets in good repair and condition, subject to ordinary wear and tear and (c) maintain in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted effect all existing governmental permits pursuant to this Agreement or (z) as set forth in Section 6.1 of which the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit or any of its Subsidiaries to, do operates;
(ii) the Company shall not (w) amend its certificate of incorporation or by-laws or the comparable governing instruments of any of its Subsidiaries except, in the following:
(a) except case of its Subsidiaries, for Shares to be issued such amendments that would not prevent or delivered pursuant to materially delay the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance consummation of the transactions contemplated by this Agreement; (x) split, combine or reclassify its outstanding shares of capital stock; (y) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock (other than (A) dividends from its direct or indirect wholly owned Subsidiaries to it or a wholly owned Subsidiary and (B) regular quarterly dividends on Shares with usual record and payment dates not to exceed $.225 per Share); or
(iii) neither the Company, Company nor any of its Subsidiaries shall issue, deliver, sell, pledge, dispose of or encumber any shares of, pledge or otherwise encumbersecurities convertible into or exchangeable or exercisable for, or authorize options, warrants, calls, commitments or propose the issuancerights of any kind to acquire, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock Voting Debt or any other ownership interest, property or any rights, warrants, options, calls, commitments assets (other than (A) Shares issuable pursuant to options (whether or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (iinot vested) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereofhereof under the Stock Plans and (B) issuances of additional options or rights to acquire not more than 1,000,000 Company Shares in any calendar year (it being understood that approximately 845,000 options have already been issued by the Company in the year 2000 and that those persons identified on Section 6.1(iii) of the Company Disclosure Letter have already been issued approximately 115,000 options in 2000) nor more than 2,000,000 Company Shares in the aggregate granted pursuant to the terms of the Stock Plans as in effect on the date hereof in the ordinary and usual course of the operation of such Stock Plans consistent with past practice and performance guidelines; provided that option issuances for each of the calendar years 2001 and 2002 for the persons identified on Section 6.1(iii) of the Company Disclosure Letter shall not exceed the option issuances to such persons in the year 2000 and shall not be included for purposes of the 1,000,000 and 2,000,000 option grant limitations set forth above, and issuances of Shares pursuant to options granted after the date hereof pursuant to such Stock Plans;
(biv) redeemneither the Company nor any of its Subsidiaries shall, purchase other than in the ordinary and usual course of business, and other than transactions not in excess of $125,000,000 in the aggregate in any calendar year, transfer, lease, license, guarantee, sell, mortgage, -45- 50 pledge, dispose of or otherwise acquireencumber any property or assets (including capital stock of any of its Subsidiaries) or incur or modify any indebtedness for borrowed money or guarantee any such indebtedness;
(v) neither the Company nor any of its Subsidiaries shall, by any means, make any acquisition of, or propose to redeeminvestment in, purchase assets or otherwise acquirestock (whether by way of merger, any outstanding Sharesconsolidation, Optionstender offer, Warrants share exchange or other securities activity) in any transaction or any series of transactions (whether or not related), except for acquisitions not involving a merger, consolidation, tender offer or share exchange for an aggregate purchase price or prices, including the assumption of any debt, not in excess of $125,000,000 in any calendar year;
(vi) neither the Company nor any of its Subsidiaries shall, other than in the ordinary and usual course of business, (i) modify, amend, or terminate any material contract, (ii) waive, release, relinquish or assign any material contract (or any of the material rights of the Company or any of its Subsidiaries; providedSubsidiaries thereunder), howeverright or claim, that or (iii) cancel or forgive any material indebtedness owed to the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender any of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrantsits Subsidiaries;
(cvii) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of neither the Company or of nor any of its Subsidiaries that is not wholly owned will (directly or indirectly) by Company in their capacity as such;
(ei) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other similar reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, (ii) accelerate or delay collection of notes or accounts receivable in advance of or beyond their regular due dates, other than in the usual and ordinary course of business, or (iii) change any accounting principle, practice or method in a manner that is inconsistent with past practice, except to the extent required by U.S. GAAP as advised by the Company's regular independent accountants;
(viii) neither the Company nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans (other than issuances of additional Shares or options or rights to acquire Shares granted pursuant to the terms of the Stock Plans as in effect on the date hereof in the ordinary and usual course of the operation of such Stock Plans, subject
(ix) other than in the ordinary and usual course of business, neither the Company nor any of its Subsidiaries shall settle or compromise any material claims or litigation or regulatory proceeding;
(x) neither the Company nor any of its Subsidiaries shall make any material Tax election or, except as required by applicable Law, permit any insurance policy naming it as a beneficiary or loss-payable payee to be canceled or terminated except in the ordinary and usual course of business or as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the CompanyLaw;
(mxi) authorize or make any commitment with respect to, any except for (x) capital expenditure or other expenditures (including set forth in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(nSection 6.1(xi) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents Disclosure Letter and (for amounts not in excess of such reservesy) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practiceacquisitions permitted under clause (v) above, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which neither the Company or nor any of its Subsidiaries is a party shall make, or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail extent the Company has not previously committed to enforce in any material respect, or consent making such expenditures) commit to any matter with respect to which consent is required undermake, any material confidentiality or similar contract to which capital expenditures; and
(xii) neither the Company or nor any of its Subsidiaries is a party;
(o) waive the benefits of, will authorize or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar enter into an agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required do anything prohibited by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. Except Seller covenants and agrees that, except (i) as required contemplated by Law, this Agreement; (ii) as consented to disclosed in writing by Parent the Company Disclosure Schedule or (iii) with the prior written consent of Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned), after the date hereof and prior to the Closing Date: (a) the business of the Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business; (b) neither the Company nor any Company Subsidiary shall amend its articles of incorporation or by-laws; (c) neither the Company nor any Company Subsidiary shall (i) split, combine or reclassify the Shares; (ii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to the Shares; (iii) contemplated by this Agreement issue or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve its present relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit sell any of its Subsidiaries to, do any of the following:
(a) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the additional shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, securities convertible into or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rightsoptions, warrants, options, calls, commitments or any other agreements rights of any character kind to purchase or acquire any shares of acquire, its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(biv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock; (d) neither the Company nor any Company Subsidiary shall (i) adopt any new employee benefit plan or employee welfare or amend any existing employee benefit plan in any material respect, except for changes which are less favorable to participants in such plans or as may be required by applicable law or (ii) increase any compensation or enter into or amend any employment, severance, termination or similar agreement with any of its present or future officers or directors, except for normal increases in the ordinary and usual course of business and the payment of cash bonuses to employees pursuant to and consistent with existing plans or programs; (e) neither the Company nor any Company Subsidiary shall, except as may be required or contemplated by this Agreement or in the ordinary and usual course of business acquire, sell, lease or propose dispose of any assets which, in the aggregate, exceed $500,000.00; (f) neither the Company nor any Company Subsidiary, and with respect to redeemclause (iv) below none of Seller, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may Subsidiary shall (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans incur or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options assume any long-term or Warrants in order to pay the exercise price of the Options short-term debt or Warrants;
(c) grant issue any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, debt securities except for purchases borrowings under existing lines of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment credit in the ordinary course of business consistent with past practice;
; (hii) incur assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the material obligations of any indebtedness for borrowed money other person except in addition the ordinary and usual course of business consistent with past practice in an amount not material to that incurred the Company and the Company Subsidiaries taken as of the date of this Agreement or guarantee any such indebtedness or a whole; (iii) make any material loans, advances or capital contributions to, or investments in, any other Person, person other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary and usual course of business consistent with past practice;
; (iiv) except as required by Law pledge or except as required by otherwise encumber the terms of a Benefit Plan in effect as of the date of this Agreement, Shares or (iv) enter into an employment agreement with any Person mortgage or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or pledge any of its Subsidiariesmaterial assets, any increase in compensation other than, with respect to Persons who are not directors tangible or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreementintangible, or (iv) terminate the employment of create any material mortgage, lien, pledge, charge, security interest or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment encumbrance of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations kind with respect to any Benefit Plan such asset; (g) neither the Company nor any Company Subsidiary shall acquire (by merger, consolidation or change acquisition of stock or assets) any corporation, partnership or other business organization or division thereof or any equity interest therein; (h) neither the manner in which contributions to Company nor any Benefit Plan are made Company Subsidiary shall adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or other reorganization; (i) neither the basis on which such contributions are determined;
(k) Company nor any Company Subsidiary shall materially change any of the accounting methods used by the Company or its Subsidiaries it unless required by GAAP or applicable Law;
law; and (lj) amend neither the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of Company nor any Company Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) shall authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement an agreement to do any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. Except (i) as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed From the Effective Date until the Closing Date or conditioned), (iii) contemplated by the earlier valid termination of this Agreement or pursuant to Article IX, the Company will, and will cause the Company Subsidiaries to, operate and carry on the Company’s and the Company Subsidiaries’ operations in the Ordinary Course of Business and use commercially reasonable efforts to (iv1) as set forth in Section 6.1 preserve the present business operations, organization and goodwill of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time and the Company shallSubsidiaries, and shall cause each of its Subsidiaries to, conduct its business only in (2) preserve the usual, regular and ordinary course consistent with past practice and use all reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve its present relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others those Persons having material business dealings relationships with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective TimeCompany or any such Company Subsidiaries. In addition, and without Without limiting the generality of the foregoing, except (wx) as set forth in Schedule 7.1, (y) as expressly contemplated by this Agreement or any Ancillary Agreement, or (z) with the prior consent of the Buyer (which consent, other than in the case of Sections 7.1(b), (h), (i), (j), (s), (t) and, solely with respect to the foregoing clauses, Section 7.1(u), shall not be unreasonably withheld, conditioned or delayed), the Company will not and will not permit any Company Subsidiary to take any of the following actions:
(a) (i) acquire, or dispose of, any property or assets having a fair market value in excess of $2,000,000 individually or $5,000,000 in the aggregate, except in the Ordinary Course of Business and for fair value, (ii) mortgage or encumber any property or assets (other than Permitted Liens), except in the Ordinary Course of Business, or (iii) cancel any debts owed to or claims held by the Company or the Company Subsidiaries, except in the Ordinary Course of Business;
(b) borrow any amount or incur any liability or obligation in excess of $2,500,000 other than borrowings under lines of credit existing on such date, obligations under customer contracts or other liabilities incurred in the Ordinary Course of Business that do not exceed $10,000,000 in the aggregate;
(c) enter into any agreement that would constitute a Material Contract, except agreements made in the Ordinary Course of Business;
(d) terminate or amend in a manner adverse to the Company any Material Contract except as required by the terms of such Material Contract;
(e) acquire any real estate or enter into any new lease with an annual cost greater than $1,000,000 per year;
(f) engage in any transactions or enter into any agreement (or amend or modify any existing agreement) with any Affiliates of the Company (excluding any intercompany agreements or Employee Plans), except to the extent required by Law or any existing agreement as of the Effective Date;
(g) make any material change to its accounting methods, principles or practices, except as may be required by GAAP or other applicable Law;
(h) make any amendment to, waive or, to the extent the Company is aware of a breach or threatened breach of a material provision of its Organizational Documents or fail to seek to enforce such material provision pursuant to the terms of its Organizational Documents;
(i) make any distributions of assets (other than cash) to the Sellers or any of their Affiliates;
(j) issue or sell any equity interests or options, warrants or other rights to purchase any equity interests of the Company or the Company Subsidiaries or split, combine or subdivide the equity interests of the Company or the Company Subsidiaries;
(k) make any new commitments for capital expenditure (other than capitalized software in the Ordinary Course of Business) in excess of $2,000,000 individually or $5,000,000 in the aggregate;
(i) enter into any agreement with any Taxing Authority with respect to any Tax or Tax Returns of the Company or the Company Subsidiaries, (ii) surrender a right of the Company or any Company Subsidiary to a Tax refund, (iii) change an accounting period of the Company or any Company Subsidiary with respect to any Tax except as required by Law, (xiv) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed file an amended Tax Return for the Company or conditioned)any Company Subsidiary, (yv) expressly permitted pursuant to this Agreement or make (z) as set forth other than in Section 6.1 the Ordinary Course of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to, do any of the following:
(a) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (iBusiness) any shares of its capital stock of any class election with respect to Taxes or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities Tax Returns of the Company or any of its Subsidiaries; providedCompany Subsidiary, however, that the Company may (ivi) withhold Shares to satisfy Tax obligations change or revoke any election with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans Taxes or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price Tax Returns of the Options Company or Warrantsany Company Subsidiary except as required by Law, or (vii) extend the applicable statute of limitations with respect to any Tax of the Company or any Company Subsidiary other than in the Ordinary Course of Business, in the case of each of clauses (i)-(vii), if such action could reasonably be expected to have an adverse Tax impact on the Buyer or any of its Affiliates;
(cm) grant waive, release, compromise, settle or make any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend payments in respect of any Shares pending or otherwise make any payments threatened Actions except for Actions (i) with respect to which an insurer has the right to control the decision or distributions settle or (ii) as to stockholders which the settlement does not materially restrict the operations of the Company or the Company Subsidiaries and involves the monetary payment, prior to the Closing, of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as suchless than $2,000,000;
(en) write down the value of any tangible asset or assets in excess of $1,000,000 individually or $5,000,000 in the aggregate other than in the Ordinary Course of Business;
(o) except as required by Law or required by any existing Contract or Employee Plan, (i) increase the salary or other compensation (including any bonuses paid, other than any bonuses paid in connection with this Transaction or bonus amounts paid in the Ordinary Course of Business based on 2018 year-end performance) of any corporate officer, manager, consultant or employee who was paid or is expected to be paid more than $175,000 annually, in each case other than any field employees, operational personnel, project managers or operational managers, (ii) make or grant any increase in any Employee Plan, or amend or terminate any existing material Employee Plan, or adopt any new material Employee Plan or (iv) make any commitment or incur any liability to any labor organization;
(p) amend or terminate any collective bargaining agreement or adopt any new Employee Plan or collective bargaining agreement or, in either case, otherwise agree to do so in the future;
(q) hire any corporate officer, manager or other employee with an annual base salary greater than $200,000, in each case other than any field employees, operational personnel, project managers, or operational managers;
(r) terminate the employment of any executive officer for any reason other than for cause;
(s) make, or commit to make, any acquisition (including, by merger, consolidation or acquisition of stock or assets) of any corporation, partnership or other business organization or entity or division thereof or otherwise enter into a new line of business or abandon or discontinue an existing line of business;
(t) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;; or
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(ru) enter into any material joint venture agreement or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoing, or knowingly take any action or fail to take any action that would result in any of the foregoing.
Appears in 1 contract
Samples: Transaction Agreement and Plan of Merger (Sentinel Energy Services Inc.)
Interim Operations of the Company. (a) Except (ias set forth on Schedule 6.1(a) or as expressly contemplated by this Agreement or as required by Law, (ii) as consented to in writing by Parent Seller covenants and agrees that, between the date of this Agreement and the Closing Date, without the prior written consent of Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned), (iiii) contemplated by this Agreement or (iv) as set forth in Section 6.1 the Business of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business be conducted only in the usual, regular and ordinary course consistent with past practice of business in all material respects and (ii) the Company shall use all its commercially reasonable efforts to preserve intact its current business organization, keep available the services of organization and maintain in all material respects its current officers existing relationships and employees and preserve its present relationships goodwill with customers, distributors, suppliers, licensors, licensees, distributors, Governmental Entities labor unions and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without employees.
(b) Without limiting the generality of the foregoingSection 6.1(a) and in furtherance thereof, except (was set forth on Schedule 6.1(b) or as expressly contemplated by this Agreement or as required by Law, (x) as consented to in writing by Parent Seller covenants and agrees that between the date of this Agreement and the Closing Date, without the prior consent of Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned), ):
(yi) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, not amend its certificate of formation or limited liability company agreement or similar organizational documents and the Company shall not permit any of its Subsidiaries to, do any of the following:
(aA) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, transfer, pledge, dispose of, pledge of or otherwise encumberencumber any membership interests, or authorize securities convertible into or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rightsoptions, warrants, options, calls, commitments or any other agreements rights of any character kind to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe foracquire, any shares of its capital stock membership interests, (B) split, combine or reclassify any other ownership interest (including “phantom” rights and stock appreciation rights)membership interests, or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(bC) redeem, purchase or otherwise acquireacquire directly or indirectly any membership interests, or propose any instrument or security which consists of or includes a right to redeem, purchase acquire such membership interests;
(ii) neither Seller nor the Company shall make any material increase in the compensation payable or otherwise acquire, to become payable to any outstanding Shares, Options, Warrants or other securities employees of the Company or any employee that is reasonably likely to become an Affected Employee prior to the Closing Date other than (A) increases in the ordinary course of its Subsidiariesbusiness consistent with past practice for employees other than senior executives reporting directly to the General Manager of the Company, (B) pursuant to the terms of the Affected Benefit Plans existing on the date hereof or as required by or advisable to comply with Law or the terms of any Collective Bargaining Agreement; provided, however, that the Company Seller may (i) withhold Shares make changes to satisfy Tax obligations with respect to OptionsBenefit Plans, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrantsso long as such changes are not specifically directed at Affected Employees;
(ciii) grant the Company shall not acquire any Optionscorporation, Restricted Stock Awardspartnership, RSUs limited liability company, other business organization or division thereof by merger or consolidation or any purchase of substantially all of its capital stock or substantially all of its assets (other equity-based awards than inventory) or grant any options to purchase Shares under real property involving the Company’s 2007 Employee Stock Purchase Planpayment of consideration by the Company in such acquisition of U.S.$1,875,000 or more;
(div) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is shall not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company;
(v) the Company shall not change in any material respect any of the accounting methods used by it except as required by applicable GAAP or by applicable Law;
(vi) except as set forth in Schedule 6.1(b)(vi), the Company shall not become legally committed to any new capital expenditure requiring expenditures after the Closing in excess of (A) U.S.$750,000, individually or (B) aggregate capital expenditures that are in excess of U.S.$3,750,000 per month;
(vii) the Company shall not knowingly subject any of its Subsidiariesmaterial properties, other than assets, rights, claims, Contracts and liabilities related to any Encumbrance that would have been required to be set forth in Schedule 4.6(e) if existing on the Mergerdate of this Agreement;
(fviii) acquire (i) by purchaseneither Seller nor the Company shall sell, merger lease, license or otherwise, any business or equity interest otherwise dispose of any Person or (ii) any asset or assetsthat is material to the Business, taken as a whole, except (A) inventory held for purchases sale and all raw materials, packaging and supply materials, finished goods and products and works in process and obsolete or excess equipment sold or disposed of componentsin the ordinary course of business consistent with past practice, raw materials or supplies (B) leases entered into in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
with aggregate annual lease payments not in excess of U.S.$187,500 and (gC) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory distribution rights and used equipment related assets by Seller or the Company in the ordinary course of business consistent with past practice;
(hix) incur neither Seller nor the Company shall enter into any indebtedness for borrowed money lease of real property to be included in addition to that incurred the properties, assets, rights, claims, Contracts and liabilities of the Company as of the date Closing Date or any renewals of this Agreement existing Real Property Leases or guarantee modify or terminate any such indebtedness or Real Property Lease;
(x) the Company shall not make any loansloans or advances to any Person other than employee travel advances and other loans or advances made in the ordinary course of business consistent with past practice;
(xi) the Company shall not (A) incur or assume any Financial Debt, other than loans made to the Company in the ordinary course of business consistent with past practice, or (B) make any material advances or capital contributions to, or investments in, any other Person;
(xii) the Company shall not forgive any loans to employees, officers or directors of the Company or any of its Affiliates;
(xiii) the Company shall not (A) enter into any new, or amend, terminate or renew any existing, employment, severance, change in control, consulting or salary continuation agreements or arrangements with or for the benefit of any of its employees, or grant any new awards to or material increases in the compensation, perquisites or benefits to employees and consultants or (B) accelerate the vesting or payment of the compensation payable or the benefits provided or to become payable or provided to any of its current or former employees, consultants or service providers, or otherwise pay any amounts not due such individual, including with respect to severance, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses (w) increases in the ordinary course of business consistent with past practice,, (x) pursuant to the terms of the Benefit Plans existing on the date hereof or as required by or advisable to comply with Law or the terms of any Collective Bargaining Agreement existing on the date hereof and neither Seller nor the Company shall take any of the foregoing actions with regard to any employee who is reasonably likely to become an Affected Employee prior to the Closing Date, (y) changes in connection with 2012 annual enrollment; or (z) modifications set forth in Schedule 4.15(j);
(ixiv) except the Company shall not (A) terminate, other than for cause (as required by Law or except as required reasonably determined by the terms Company), the employment or service of a Benefit Plan in effect as of any senior executive reporting directly to the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee General Manager of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iiiB) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded employee at the level of director or is reasonably expected above, other than for the purpose of filling existing vacant positions, provided that Seller consults with Purchaser prior to exceed $100,000filling any such vacant position;
(jxv) except as required by the Company shall not make any Benefit Plan in accordance with its terms as deposits or contributions of the date of this Agreement, cash or other property to or take any other action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under the Affected Benefit Plans or agreements subject to the Affected Benefit Plans or any Benefit Plan other plan, agreement, contract or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any arrangement of the accounting methods used Company except as otherwise required by the Company or its Subsidiaries unless required by GAAP terms of the Affected Benefit Plans, the terms of any applicable Collective Bargaining Agreement or applicable Law;
(lxvi) amend neither Seller nor the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the CompanyCompany shall, except as may be required by applicable Law and Law, (A) enter into negotiations to amend or extend any Collective Bargaining Agreement, any agreement that would, if entered into, be a Collective Bargaining Agreement or any other labor agreement or (B) adopt, amend, increase the benefits under or terminate any Affected Benefit Plan or adopt or enter into any other employee benefit plan or arrangement that would be considered an Affected Benefit Plan if it were in existence on the date of this Agreement, in either case, without prior consultation with Purchaser, except for immaterial amendments under as required by the charter or organizational documents terms of any Subsidiary of the CompanyCollective Bargaining Agreement;
(mxvii) authorize or make any commitment neither Seller, with respect toto the Business, nor the Company shall amend any capital expenditure or other expenditures (including Material Contract in any respect of research that would adversely affect the use and development)enjoyment thereof by Purchaser in any material respect, other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy terminate any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents Material Contracts (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements except with respect to purchase orders in the ordinary course of business consistent with past practice, ) or materially and intentionally default in the performance of any covenant or obligation thereunder or (ii) cancel any indebtedness, (iii) waive except for Material Contracts entered into by Seller or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject its Affiliates that do not relate solely to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(rBusiness) enter into any material joint venture or partnership;
(s) engage in any transactionsContract which, agreementsif entered into prior to the date hereof, arrangements or understandings with any Affiliate or other Person that would be have been a Material Contract required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
pursuant to Section 4.7(a) (t) otherwise manage its working capital in a manner Material Contracts), other than in the ordinary course of business consistent with past practice;
(uxviii) (i) enter intoneither Seller, amend, renew, modify or consent with respect to the termination of (Business, nor the Company shall amend existing pricing, purchasing, sales, leasing, marketing and promotional practices and operations with respect to products sold in connection with the Business other than a termination in accordance the ordinary course of business consistent with its termspast practice;
(xix) the Company shall not enter into any Material material line of business or offer any services other than those in which the Company Contract over $250,000 is engaged or Contract over $250,000 provides as of the date of execution of this Agreement;
(xx) neither Seller, with respect to the Business, nor the Company shall settle or compromise any pending or threatened Proceeding (A) with executory terms that would be a Material required to be fulfilled after the Closing by the Company Contract to another party, or (B) for consideration payable by or to the Company either (x) in excess of U.S.$75,000 (exclusive of any amounts, if in effect any, actually received and/or reasonably likely to be received from insurance carriers) or (y) less than U.S.$75,000 if the non-monetary aspects of such settlement or compromise could reasonably be likely to have any adverse impact on the date operations of this Agreement the Company;
(xxi) none of Seller or the Company or their respective Affiliates shall license, grant any rights to or transfer any of the Company Intellectual Property, other than grants of non-exclusive licenses in the ordinary course of business consistent with past practice;
(iixxii) amendnone of Seller or the Company or their respective Affiliates shall abandon, waivecancel, modifylet lapse, fail to enforce renew, fail to continue to prosecute, protect, or consent to the termination defend, or otherwise dispose of (other than a termination in accordance with it terms) its material rights thereunderany Company Intellectual Property;
(vxxiii) create the Company shall not (A) make, change, or rescind a material express or deemed election relating to Taxes, (B) settle or compromise any Subsidiary; or
material claim, action, suit, litigation, audit, or controversy relating to Taxes, (wC) surrender any right or claim to a refund of material Taxes, (D) amend any material Tax Return, or (E) enter into any contractclosing agreements with respect to a material amount of Taxes; provided that, agreement(I) the restrictions described in (A) through (E) shall not apply with respect to U.S. federal income taxes and income taxes imposed by state and local jurisdictions which recognize the purchase of the Securities as an asset purchase for income tax purposes and (II), commitment to the extent such Tax elections, claims, Tax Returns, closing agreements, and transactions described in (A) through (E) relate to a business that is not the Business, Seller may take any such actions to the extent that such actions could not reasonably be expected to adversely affect the Company following the Closing Date;
(xxiv) the Company shall not: (A) enter into (1) any purchase or arrangement hedging agreement for any Ingredient having a term that is reasonably expected to expire more than seven (7) months after Closing or (2) any purchase or hedging agreement for any Energy Commodity having a term that is reasonably expected to expire more than twelve (12) months after Closing; or (B) except in the ordinary course of business, allow its committed supply of Ingredients to drop below an amount reasonably expected to be sufficient to meet the need of the Business for a period of at least four (4) months after the Closing;
(xxv) during the period beginning on the date hereof and ending on the Closing Date, Seller and its Affiliates shall continue to administer its workers compensation program with respect to Affected Employees in the ordinary course of business, consistent with past practice and shall not make any material changes to such program without the prior consent of Purchaser;
(xxvi) Seller shall not, directly or indirectly, solicit for employment or employ any senior management employees of the Company; provided, however, that Seller shall not be prohibited from hiring any person who is responding to a general advertisement or posting for employment that is not directed or targeted to any of such employees; and
(xxvii) the Company shall not enter into any Contract to do any of the foregoing. Notwithstanding anything to the contrary contained herein, nothing shall prohibit Seller from time to time (i) sweeping cash from the accounts of the Company, including making any distributions or dividends in furtherance thereof, and retaining such cash for its own account or the account of any of its Affiliates, (ii) paying, pre-paying, reducing or otherwise discharging any Financial Debt of the Company up until the completion of the Closing or (iii) managing the Intercompany Accounts in compliance with Section 6.6.
Appears in 1 contract
Samples: Securities Purchase Agreement (Ralcorp Holdings Inc /Mo)
Interim Operations of the Company. Except During the period from the date of this Agreement through the Closing or the date, if any, on which this Agreement is earlier terminated pursuant to Section 8.1 (ithe “Pre-Closing Period”), except (v) as may be required by Law, (iiw) as consented to in writing by with the prior written consent of Parent (which consent shall not be unreasonably withheldconditioned, delayed withheld or conditioneddelayed), (iiix) as required or specifically contemplated by this Agreement or Agreement, (ivy) as set forth in Section 6.1 of the Company Disclosure ScheduleLetter or (z) with respect to actions or omissions taken by or at the direction of any Purchaser Party, from the date of this Agreement to the Effective Time the Company shallshall ensure that the business and operations of the Acquired Companies shall be conducted in the ordinary course of business and in accordance with past practices, and shall cause each in compliance with all applicable Law and the requirements of its Subsidiaries to, conduct its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve its present relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective TimeCompany Material Contracts. In addition, and without Without limiting the generality of the foregoing, except (wv) as may be required by Law, (xw) as consented to in writing by with the prior written consent of Parent (which consent shall not be unreasonably withheldconditioned, delayed withheld or conditioneddelayed), (x) as required or specifically contemplated by this Agreement, (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure ScheduleLetter or (z) with respect to actions or omissions taken by or at the direction of any Purchaser Party, from the date including in such person’s capacity as a director, officer or employee of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to, do any of the followingAcquired Companies, during the Pre-Closing Period, none of the Acquired Companies will:
(a) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Companyoffer, issue, deliver, sell, grant, dispose of, pledge or otherwise encumberEncumber, or authorize or propose the offering, issuance, delivery, sale, disposition or grant, disposition, pledge or other encumbrance of (i) except pursuant to a Benefits Plan or awards outstanding under the Company Equity Plan on the date hereof, any shares of its capital stock of any class or any other ownership interestinterest of any of the Acquired Companies, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interestinterest of any of the Acquired Companies, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest of any of the Acquired Companies or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest of any of the Acquired Companies (including collectively, the “phantom” rights and stock appreciation rights), Equity Interests”) or (ii) any other securities of any of the Company and its Subsidiaries Acquired Companies in respect of, in lieu of, or in substitution for, Shares Common Stock outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants shares of capital stock or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or WarrantsAcquired Companies;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares capital stock or other Equity Interests of any of the Acquired Companies or declare, accrue, set aside for payment or pay any dividend in respect of any Shares outstanding capital stock or other Equity Interests of any of the Acquired Companies or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company such holders in their capacity as such;
(ed) adopt a plan of complete or partial liquidationacquire, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgagefarmout, sell and leaseback or otherwise encumber transfer, Encumber or dispose of of, or agree to acquire, sell, lease, license, farmout, transfer, Encumber or dispose of, any of its material assets, properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practicerights;
(he) incur (i) incur, create, issue or assume any indebtedness or guarantee or otherwise become liable for borrowed money any indebtedness (including increasing the indebtedness under Contracts in addition to that incurred existence as of the date hereof) or create any Encumbrances on any property or assets of this Agreement any of the Acquired Companies; or guarantee any such indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any wholly owned Subsidiary of the Company;
(mA) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, increase the compensation or (ii) other benefits payable or to distributebecome payable to current or former employees, license directors or co-promote officers of any product of the Company Acquired Companies, (B) grant any rights to severance or termination pay or other termination benefit, or enter into or amend any employment or severance agreement with, any current or former employees, directors, or officers of any of its Subsidiaries the Acquired Companies, (including products under development and products licensed by the Company or any of its Subsidiaries);
(rC) enter into any consulting, bonus, retention, retirement or similar agreement with any employee, officer or director of the Company (including any change to performance targets associated therewith), (D) establish, adopt, enter into or amend any collective bargaining agreement, plan, trust, fund, policy or arrangement for the benefit of any current or former employees, directors or officers or any of their beneficiaries, except, in each case, such action with respect to current or former employees that would not result in an increase to the Company in the cost of maintaining such collective bargaining agreement, plan, trust, fund, policy or arrangement; (E) amend or adopt any material joint venture Benefits Plans (other than any such adoption or partnershipamendment that is not material to and does not materially increase the cost to the Company of maintaining such material Benefits Plan or is required pursuant to the terms of such material Benefits Plan in effect as of the date of this Agreement) or the Company Equity Plan; (F) accelerate the vesting, exercisability or payment of (or waive any performance conditions with respect to), any compensation or benefit (including any equity-based awards), except as otherwise expressly set forth in this Agreement; or (G) grant any additional awards under the Company Equity Plan;
(sg) engage in enter into or become bound by, terminate, modify, assign or amend, or waive or assign any transactionsmaterial rights under, agreementsany Company Material Contract, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(uh) change any of its accounting principles, practices or methods unless required by Law, GAAP or IFRS;
(i) amend or permit the adoption of any amendment to the Organizational Documents or to the charter or other organizational documents of any of the other Acquired Companies, or form any Subsidiary;
(j) acquire any equity interest or other interest in any other Entity or effect or become a party to any merger, consolidation, plan of arrangement, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split, issuance of bonus shares, division or subdivision of shares, consolidation of shares or similar transaction;
(k) authorize or make any commitment with respect to any material capital expenditure that is not budgeted in the Company’s current plan approved by the Board as of the date hereof;
(l) except in the ordinary course of business, (i) make or change any material Tax election, (ii) adopt or change any material method of Tax accounting, (iii) file any material amended Tax Return, (iv) enter intointo any tax allocation agreement, amendtax sharing agreement or tax indemnity agreement relating to any material Tax, renew(v) surrender the right to claim a material Tax refund, modify (vi) settle or compromise any claim, notice, audit report, or assessment in respect of any material Tax, (vii) consent to any waiver of the termination statute of limitations period applicable to any material Tax claim or assessment, (viii) request any material Tax ruling, (ix) fail to pay any material Tax when dues and payable, (x) incur any material Taxes, or (xi) prepare any Tax Returns in a manner which is not consistent with the past custom and practice with respect to the treatment of such items on such Tax Returns;
(m) commence any Legal Proceeding, except (A) as required with respect to continuation of Legal Proceedings previously commenced and routine collection matters and other than a termination matters in accordance the ordinary course of business consistent with its termspast practices; (B) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on Legal Proceedings to enforce the date terms of this Agreement or the Support Agreement or (iiC) amendLegal Proceedings in connection with this Agreement, the Support Agreement and the Contemplated Transactions;
(n) subject to Section 6.12, waive, modifyrelease, assign, settle or compromise or offer or propose to waive, release, assign, settle or compromise any material Legal Proceeding;
(o) extend, renew or enter into any Contracts containing non-compete or exclusivity provisions that (A) would restrict or limit the operations of any of the Acquired Companies or (B) apply to any current or future affiliates of the Company, the Surviving Corporation or Parent;
(p) other than in the ordinary course of business consistent with past practice, materially reduce the amount of insurance coverage or fail to enforce renew any material existing insurance policies;
(q) amend in a manner that adversely impacts in any material respect the ability to conduct its business, terminate or consent allow to the termination lapse any material permits;
(r) authorize, recommend, propose, enter into, adopt a plan or announce an intention to adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization, merger (other than the Merger), consolidation or other reorganization (other than reorganizations involving only wholly owned subsidiaries of the Company which would not result in a termination material increase in accordance with it terms) its material rights thereunderthe Tax liability of any of the Acquired Companies);
(vs) create take any Subsidiaryaction or omit to take any action that is reasonably likely to cause any of the conditions to the Merger set forth in Article VII not to be satisfied; or
(wt) enter into any contract, agreement, commitment or arrangement Contract to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Isramco Inc)
Interim Operations of the Company. Except Each of the Guarantors shall procure that, and covenant and agree that, after the date hereof and until the Initial Closing Date, except (i) as required by Lawexpressly provided in this Agreement, or (ii) as consented to may be agreed in writing by Parent Purchaser:
(which consent shall not be unreasonably withheld, delayed or conditioned), (iiia) contemplated by this Agreement or (iv) as set forth in Section 6.1 the business of the Company Disclosure Scheduleand Company Subsidiaries shall be conducted in the same manner as heretofore conducted and in a prudent manner (en bon père de famille), from in the date ordinary course, and each of this Agreement to the Effective Time Guarantors, the Company shall, and Company Subsidiaries shall cause each of use its Subsidiaries to, conduct its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable best efforts to preserve intact its current the business organizationorganization of the Company and Company Subsidiaries intact, keep available the services of its the current officers and employees of the Company and preserve its present relationships Company Subsidiaries and maintain the existing relations with franchisees, customers, suppliers, licensorscreditors, licensees, distributors, Governmental Entities business partners and others having business dealings with them the Company or Company Subsidiaries, to the end that its the goodwill and ongoing business of the Company and Company Subsidiaries shall be unimpaired at the Effective TimeClosing Date. In addition, and without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of Neither the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit nor any of its Company Subsidiaries to, do shall institute any new methods of the following:
(a) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, deliverypurchase, sale, disposition lease, management, accounting or pledge operation or other encumbrance of (i) engage in any shares of its capital stock of any class transaction or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, activity other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies minor changes in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(hb) except as set forth in Section 6.1 (b) of the Guarantors Disclosure Schedule neither the Company nor any of Company Subsidiaries shall amend their certificates of incorporation or by-laws or other constituent or governing document, to the extent any such modification is not required by law, or by the rules or regulations of any Governmental Entity;
(c) except as set forth in Section 6.1 (b) of the Guarantors Disclosure Schedule neither the Company nor any of Company Subsidiaries shall alter the Company or Company Subsidiaries' outstanding capital stock or declare, set aside, make or pay any dividend; or purchase or redeem any shares of the Company or Company Subsidiaries' capital stock;
(d) neither the Company nor any of Company Subsidiaries shall issue or sell any of its capital stock or any options, warrants or other rights to purchase any such shares or any securities convertible into or exchangeable for such shares;
(e) neither the Company nor any of Company Subsidiaries shall: (i) incur or assume any indebtedness for borrowed money long-term Indebtedness, or except in addition to that incurred as the ordinary course of business, incur or assume short-term Indebtedness exceeding twenty-five thousand euros (€25,000) in the aggregate from the date hereof until the Initial Closing; (ii) pay, repay, discharge, purchase, repurchase or satisfy any Indebtedness issued or guaranteed by the Company or any of Company Subsidiaries, except as required by the terms thereof; (iii) modify the terms of any Indebtedness or other liability, other than modifications of short term debt in the ordinary and usual course of business and consistent with past practice and except for the conversion of certain bonds as contemplated by this Agreement Agreement; (iv) assume, guarantee, endorse or guarantee otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any such indebtedness or other Person, except as described in the Guarantors Disclosure Schedule as being in the ordinary course of business and consistent with past practice and except for the conversion of certain bonds as contemplated herein; (v) make any loans, advances or capital contributions to, or investments in, any other Person; (vi) enter into any material commitment or transaction (including any capital expenditure or purchase, other than sale or lease of assets or real estate); (vii) write down the value of any inventory or write-off as uncollectible, any notes or accounts receivable, (viii) dispose of, abandon or permit to lapse any rights to any Company Intellectual Property or (ix) change any of the existing banking or safe deposit arrangements, described or referred to in the Guarantors Disclosure Schedule;
(f) neither the Company and its wholly owned Subsidiariesnor any of Company Subsidiaries shall permit or allow any of their properties or assets (real, and other than personal or mixed, tangible or intangible) to employees be subjected to any liens;
(g) neither the Company nor any of Company Subsidiaries shall cancel any Indebtedness;
(h) neither the Company nor any of Company Subsidiaries shall be a party to any acquisition, merger, spin-off, consolidation, purchase of stock or interest in respect of travel any corporation, partnership, association or other related expenses in business organization or enter into or form any material joint-venture or enter into any agreement leading to any of the ordinary course of business consistent with past practiceforegoing;
(i) neither the Company nor any of Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors, employees, agents or consultants or to Persons providing management services, or, except as required by Law or except as required by for the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with Xxxxx Gallera, enter into or amend any Person or grant to any Person any right to employment, severance, retentionconsulting, change in control termination or termination compensation or benefitsother agreement with, or increase employee benefit plan for, or make any Person’s rights theretoloan or advance to, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiariesofficers, directors, employees, Affiliates, agents or consultants or make any increase change in compensation other than, with respect its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or an employee benefit plan, program, policy, arrangement plan or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000otherwise;
(j) except as required by neither the Company nor Company Subsidiaries shall make any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action changes to fund their severance policy or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determinedpractices;
(k) change neither the Company nor any of Company Subsidiaries shall (i) pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or Affiliate or pay or agree to pay or make any accrual or arrangement for payment to any officer, director, employee or Affiliate of any amount relating to unused vacation days, except to the accounting methods used by extent the Company or its Subsidiaries unless required by GAAP a Company Subsidiary is unconditionally obligated to do so on the date hereof, (ii) adopt or applicable Lawpay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any director, officer, employee, agent or consultant, whether past or present, or (iii) amend any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing;
(l) amend neither the Company’s certificate Company nor any of incorporation Company Subsidiaries shall enter into or terminate any Contract or transaction outside the Company’s bylaws or other comparable charter or organizational documents ordinary course of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Companybusiness;
(m) authorize neither the Company nor any of Company Subsidiaries shall (i) grant to any third party a license to the Intellectual Property outside the ordinary course of business; (ii) grant to any third party a license to the Software in source code form; or make (iii) assign or otherwise transfer ownership of any commitment with respect to, Intellectual Property or any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal Company Software to $200,000 or, in the aggregate, are less than or equal to $1,000,000any third party;
(n) (i) neither the Company nor any of Company Subsidiaries shall pay, dischargerepurchase, settle discharge or satisfy any of its claims, liabilities, liabilities or obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement discharge or satisfaction in the ordinary course of business and consistent with past practice or in accordance with their termspractice, of claims, liabilities or obligations reflected or reserved against in in, or contemplated by, the most recent Company Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the Company Balance Sheet date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a partybusiness;
(o) waive neither the benefits ofCompany nor any of Company Subsidiaries shall (i) change any of the accounting methods used by it unless required by French GAAP or the applicable Foreign GAAP or (ii) make any election relating to Taxes, or agree change any election relating to modify in Taxes already made, adopt any material manneraccounting method relating to Taxes, change any material confidentiality agreement accounting method relating to Taxes unless required by French GAAP, the applicable Foreign GAAP or any standstill Requirements of Law, enter into any closing agreement relating to Taxes, settle any claim or similar agreement assessment relating to which the Company Taxes or consent to any claim or assessment relating to Taxes or any waiver of its Subsidiaries is a partythe statute of limitations for any such claim or assessment, without prior consent of the Purchaser;
(p) except as required by applicable Tax Lawfor the existing agreements which have been disclosed neither the Company nor any of Company Subsidiaries shall pay, prepare loan or file advance any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any electionamount to, or adopt sell, transfer or lease any method that is inconsistent material properties or assets (real, personal or mixed, tangible or intangible) to, or enter into any agreement or arrangement with, any of their respective officers, directors or shareholders or any Affiliate or associate of any of their officers, directors or shareholders except for directors' fees, and compensation to officers at rates consistent with positions takenthe Company, elections made or methods used in preparing or filing similar Tax Returns in prior periodsthe Company Subsidiaries' past practice;
(q) sell, transfer or license to neither the Company nor any person or modify any rights (i) to any material of Company Intellectual Property Rights, except in the ordinary course of business consistent with past practiceSubsidiaries shall take, or (ii) agree to distributeor commit to take, license any action that would or co-promote is reasonably likely to result in any product of the conditions to the Closing set forth in ARTICLE VII not being satisfied, or would make any representation or warranty of Guarantors contained herein inaccurate in any respect at, or as of any time prior to, the Closing Date, or that would materially impair the ability of Sellers, the Company or any of its Subsidiaries (including products under development and products licensed by Purchaser to consummate the Company Closing in accordance with the terms hereof or any of its Subsidiaries);materially delay such consummation; and
(r) neither the Company nor any of Company Subsidiaries shall enter into any material joint venture or partnership;
(s) engage in any transactionsagreement, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement (whether in writing or otherwise) to do any of the foregoing, or authorize, recommend, propose or announce an intention to do, any of the foregoing.
Appears in 1 contract
Samples: Share Purchase and Contribution Agreement (Paradigm Ltd.)
Interim Operations of the Company. Except (i) The Company covenants and agrees as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of itself and its Subsidiaries that during the Company Disclosure Schedule, period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (w) disclosed in Section 5.1 of the Company Disclosure Letter, (x) expressly contemplated or permitted by this Agreement, (y) required by applicable Law, or (z) agreed to in writing by Parent, after the date of this Agreement and prior to the Effective Time Time:
(a) the business of the Company shall, and shall cause each of its Subsidiaries to, conduct its business shall be conducted only in the usual, regular and ordinary course consistent with past practice practice, and the Company shall use all its reasonable best efforts to preserve intact its current business organization, organization and goodwill and the business organization and goodwill of its Subsidiaries and keep available the services of its their current officers and employees and preserve its present relationships and maintain existing relations with customers, suppliers, licensorsofficers, licensees, distributors, Governmental Entities employees and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except creditors;
(wb) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and nor shall not it permit any of its Subsidiaries to, do (i) enter into any new line of business, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2004 other than capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than, and during the same time period set forth in, the Company's current capital budget approved by the Company Board in February 2004 and October 2004, the amount of which has been furnished to Parent prior to the date of this Agreement, or (iii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2005 other than capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than, and during the same time period set forth in, the Company's total capital budget for calendar year 2005 approved by the Company Board in December 2004, which has been furnished to Parent prior to the date of this Agreement;
(c) the Company shall not, nor shall it permit any of the following:its Subsidiaries to, amend its certificate of incorporation or bylaws or similar organizational documents;
(ad) except for Shares to be issued the Company shall not, nor shall it permit any of its Subsidiaries (other than direct or delivered pursuant to indirect wholly owned Subsidiaries) to, declare, set aside or pay any dividend (other than, in the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance case of the Company, regular quarterly dividends consistent with past practice and in no event exceeding $0.06 per share per quarter) or other distribution, whether payable in cash, stock or any other property or right, with respect to its capital stock;
(e) the Company shall not, nor shall it permit any of its Subsidiaries to (i) adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly other such securities or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization agreements of the Company or any of its Subsidiaries, other than the Merger;
issuances (f) acquire (iA) by purchasethe Company of Company Options and Company Common Stock to employees and directors of the Company in the ordinary course of the Company's annual compensation procedures, merger consistent with past practice and in accordance with Section 5.1(e)(i)(A) of the Company Disclosure Letter; (B) of Company Options to new hires or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies promoted employees in the ordinary course of business consistent with past practice or as permitted under and in accordance with Section 6.1(m);
5.1(e)(i)(B) of the Company Disclosure Letter; (gC) sell, lease, license, mortgage, sell pursuant to the Company Warrants and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of Company Options outstanding on the date of this Agreement or guarantee any such indebtedness issued after the date of this Agreement in accordance with clauses (A) or make any loans, advances (B) hereof or capital contributions to, or investments in, any other Person, other than (D) pursuant to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel Rights or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan Company Rights Agreement in effect as of on the date of this Agreement, or (ii) except as required pursuant to the terms of the Company Plans in effect on the date of this Agreement, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) enter into an employment agreement with of this Section 5.1(e);
(f) except as required pursuant to the terms of the Company Plans in effect on the date of this Agreement, the Company shall not, nor shall it permit any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights theretoof its Subsidiaries to, (iii) grant any increase in the compensation or benefits payable or to become payable by the Company or any of its Subsidiaries to any former or current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction such increases in the ordinary course of business the Company's annual compensation procedures, consistent with past practice or and in accordance with their terms, of liabilities reserved against in the most recent Financial Statements Section 5.1(f)(i) of the Company included in Disclosure Letter; (ii) adopt, enter into, amend or otherwise increase, or accelerate the Filed SEC Documents payment or vesting of the amounts, benefits or rights payable or accrued or to become payable or accrued under, any Company Plan (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements other than entry into employment agreements with new hires in the ordinary course of business consistent with past practice; provided that such employment agreement shall be terminable at will, without penalty (iiother than severance obligations that accrue under the Company's Amended and Restated Change in Control Plan as in effect on the date of this Agreement (the "CIC Plan")) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practiceSubsidiaries, or (iiiii) grant any severance or termination pay to distributeany officer, license director or co-promote any product employee of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than grants to new hires in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent practice pursuant to the termination CIC Plan); (g) the Company shall not, nor shall it permit any of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if Subsidiaries to, change its methods of accounting in effect on as of the date of this Agreement or (ii) amendAgreement, waive, modify, fail to enforce or consent to the termination of (other than a termination except in accordance with it terms) its material rights thereunderchanges in GAAP as concurred to by the Company's independent auditors;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Noble Energy Inc)
Interim Operations of the Company. Except During the period from the date of this Agreement to the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 8.1, except (iw) as may be required by Law, (iix) as consented to in writing by Parent (with the prior written consent of Parent, which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve its present relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) as expressly contemplated or permitted pursuant to by this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date business of the Company and its Subsidiaries shall be conducted only in the ordinary and usual course of business in all material respects consistent with past practice, and, to the extent consistent therewith, the Company and its Subsidiaries shall use commercially reasonable efforts to (i) preserve intact their current business organization and (ii) preserve their relationships with customers, suppliers and others having business dealings with them. Without limiting the generality of the foregoing, except (w) as may be required by Law, (x) with the prior written consent of Parent, which consent shall not be unreasonably withheld, delayed or conditioned, (y) as expressly contemplated or permitted by this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, prior to the Effective Time, the Company shall not, and shall not permit any of cause its Subsidiaries not to, do any of the following:
(a) (i) adopt any amendment to or other change in the certificate of incorporation or bylaws of the Company or (ii) adopt any material amendment or other material change in the certificate of incorporation or bylaws or other applicable governing instruments of any of the Company’s Subsidiaries, except, in the case of each of the foregoing clauses (i) and (ii), as may be required by the rules and regulations of the New York Stock Exchange;
(b) except for Shares Common Stock to be issued or delivered pursuant to the exercise of Company Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary pursuant to the Company’s Benefit Plans as in effect on the date hereof with respect to new hires consistent with past practice and in an amount that does not exceed 20,000 shares of Common Stock (or options or other equity based awards) in the aggregate, issue, grant, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, deliverygrant, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interestinterest of the Company or any of its Subsidiaries, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interestinterest of the Company or any of its Subsidiaries, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest of the Company or any of its Subsidiaries or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), of the Company or any of its Subsidiaries or (ii) any other securities of the Company and or any of its Subsidiaries in respect of, in lieu of, or in substitution for, Shares Common Stock outstanding on the date hereof;
(bc) except pursuant to the Company’s Benefit Plans as in effect on the date hereof, redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase PlanCommon Stock;
(d) split, combine, subdivide or reclassify any Shares Common Stock or declare, set aside for payment or pay any dividend in respect of any Shares Common Stock or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such, other than dividends by a wholly owned Subsidiary of the Company;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment than in the ordinary course of business consistent with past practice, acquire, sell, lease or dispose of, or grant any Lien on, any assets that, in the aggregate, are material to the Company and its Subsidiaries, taken as a whole;
(g) other than in the ordinary course of business consistent with past practice, enter into, amend in any material respect or terminate any Material Contract or any Contract that would, if in effect on the date hereof, constitute a Material Contract;
(h) except as contemplated in the Company’s capital expenditure budget for the current fiscal year previously provided to Parent or as required for health, safety or environmental regulatory requirements, authorize, or make (i) during 2010, any commitment with respect to any single capital expenditure which is in excess of $10,000,000 or capital expenditures which are, in the aggregate, in excess of $50,000,000 and (ii) during 2011, any capital expenditures during any calendar month which are, in the aggregate, in excess of $10,000,000;
(i) other than borrowings under its revolving credit facilities and accounts receivable securitization facility as such facilities are in effect on the date hereof made in the ordinary course of business consistent with past practice, incur any indebtedness for borrowed money, except for indebtedness for borrowed money in addition an amount up to $25,000,000 that incurred as of the date of this Agreement can be repaid at any time without premium or penalty, or assume or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its or any wholly owned SubsidiariesSubsidiary of the Company, and other than provided that this clause (i) shall not prohibit any extension, replacement or refinancing of revolving credit facilities or the accounts receivable securitization facility, or any borrowings thereunder to employees the extent any replacement or refinancing facility can be repaid at any time without premium or penalty;
(j) (i) grant any material increases in respect the compensation of travel any of the Company’s directors, officers or other related expenses key employees, except in the ordinary course of business consistent with past practice;
(ipractice and in accordance with past practice or pursuant to any collective bargaining agreement listed on Section 4.15(b) except as required by Law of the Company Disclosure Schedule or except as required by the terms of a any Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights theretohereof, (ii) grant enter into any current new employment, change in control, retention, bonus or former severance agreements with any director, officer or employee of the Company key employee, or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreementestablish, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under adopt any Benefit Plan, take any action to accelerate collective bargaining agreement, plan, trust, fund, policy or arrangement for the vesting or payment benefit of any compensation current or benefits under former employees or any Benefit Plan of their beneficiaries, except in the ordinary course of business consistent with past practice or materially change any assumption used as would not result in a material increase in cost to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determinedCompany;
(k) except as may be contemplated by this Agreement or in the ordinary course of business consistent with past practices, terminate or materially amend any of its Benefit Plans;
(l) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) paymake, discharge, settle change or satisfy revoke any claims, liabilities, obligations material Tax election or litigation (absolute, accrued, asserted take any position on a material Tax Return filed on or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since after the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, this Agreement or adopt any method therein that is inconsistent with elections made, positions taken, elections made taken or methods used in preparing or filing similar Tax Returns returns in prior periodsperiods unless such position or election is required by applicable Law or the Code, (ii) enter into any settlement or compromise of any material Tax liability, (iii) file any amended Tax Return that would result in a change in any material Tax liability, taxable income or loss, (iv) change any annual Tax accounting period, (v) enter into any closing agreement relating to any material Tax liability or (vi) surrender any claim for a material refund of Taxes;
(q) sell, transfer or license to any person or modify any rights (i) settle or compromise any litigation except if it does not involve a grant of injunctive relief against the Company or one of its Subsidiaries and any amount paid to any material the other party (including as reimbursement of legal fees and expenses) does not exceed $5,000,000 or, if greater, the total incurred case reserve amount for such matter, as of the date of this Agreement, maintained by the Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) make any voluntary contribution to distribute, license or co-promote any product of the Company Company’s pension plans or any of its Subsidiaries (including products under development and products licensed by the Company other commitment or any of its Subsidiaries);
(r) enter into any material joint venture concession to or partnership;
(s) engage in any transactions, agreements, arrangements or understandings agreement with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent Governmental Entity with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiaryrespect thereto; or
(wo) enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Pactiv Corp)
Interim Operations of the Company. Except (ia) as required by LawPrior to the Effective Time, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) except as set forth in Section 6.1 5.2 of the Company Disclosure Schedule, from the date Schedule or as contemplated by any other provision of this Agreement to and except as contemplated by the Effective Time Logicon Merger Agreement, unless Parent has consented in writing thereto, the Company Company:
(i) shall, and shall cause each of its Subsidiaries to, conduct its business only in the operations according to their usual, regular and ordinary course consistent with past practice in substantially the same manner as heretofore conducted;
(ii) shall use its reasonable efforts, and shall cause each of its Subsidiaries to use all its reasonable efforts efforts, to preserve intact its current their business organizationorganizations and goodwill, keep available the services of its current their respective officers and employees and preserve its present maintain satisfactory relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others those persons having business dealings relationships with them them;
(iii) shall not, and shall cause its Subsidiaries not to, amend their respective Certificates of Incorporation or Bylaws or comparable governing instruments (other than amendments which are not material to the end that its goodwill and ongoing business shall be unimpaired at Company or to the Effective Time. In addition, and without limiting the generality consummation of the foregoing, except transactions contemplated by this Agreement);
(wiv) as required by Law, shall promptly notify Parent of (x) as consented to any material change in writing by Parent its condition (which consent shall not be unreasonably withheldfinancial or otherwise), delayed business, properties, assets, liabilities or conditioned)the normal course of its business or of its properties, (y) expressly permitted pursuant to this Agreement any material litigation or material governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated), or (z) as set forth in Section 6.1 the breach of any representation or warranty contained herein;
(v) shall promptly deliver to Parent true and correct copies of any report, statement or schedule filed with the Company Disclosure Schedule, from SEC subsequent to the date of this Agreement to the Effective Time, the Company Agreement;
(vi) shall not, and shall not permit any of its Subsidiaries to, do any of the following:
except (ax) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (iiy) cancel as otherwise provided in this Agreement, enter into or amend any indebtednessemployment, severance or similar agreements or arrangements with any of their respective directors or executive officers;
(iiivii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereofprovisions of Section 5.1, fail to enforceshall not, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or and shall not permit any of its Subsidiaries is a party to, authorize, propose or (v) waive any material benefits ofannounce an intention to authorize or propose, or agree to modify enter into an agreement with respect to, any merger, consolidation or business combination (other than the Merger), any acquisition of assets or securities, any disposition of assets or securities or any release or relinquishment of any contract rights in which, in any material respectsuch case, orthe aggregate consideration for such transaction is in excess of $100 million or which would have an adverse impact on the Company's ability to consummate the Merger;
(viii) shall not, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or and shall not permit any of its Subsidiaries is a partyto, issue any shares of their capital stock or securities, except upon exercise of options outstanding as of the date hereof to purchase up to 914,000 shares of Company Common Stock under Company Stock Option Plans, or effect any stock split or otherwise change its capitalization;
(oix) waive the benefits ofshall not, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or and shall not permit any of its Subsidiaries is a partyto, grant, confer or award any options, appreciation rights, warrants, conversion rights, restricted stock, stock units, performance shares or other rights, not existing on the date hereof, with respect to any shares of its capital stock or other securities of the Company or its Subsidiaries;
(px) except as required by applicable Tax Lawshall not, prepare or file and shall not permit any Tax Return inconsistent with past practice or, on any such Tax Returnof its Subsidiaries to, take any positionactions which would, make or would be reasonably likely to, prevent the Merger from qualifying as a reorganization within the meaning of Section 368 of the Code;
(xi) shall not, and shall not permit any electionof its Subsidiaries to, amend in any material respect the terms of the Company Benefit Plans, including, without limitation, any employment, severance or similar agreements or arrangements in existence on the date hereof, or adopt any method that is inconsistent with positions takennew employee benefit plans, elections made programs or methods used in preparing arrangements or filing any employment, severance or similar Tax Returns in prior periodsagreements or arrangements;
(qxii) sellshall not, transfer and shall not permit any of its Subsidiaries to, (x) incur, create, assume or license otherwise become liable for borrowed money or assume, guarantee, endorse or otherwise become responsible or liable for the obligations of any other individual, corporation or other entity or (y) make any loans or advances to any person or modify any rights (i) to any material Company Intellectual Property Rightsother person, except in each case in the ordinary course of business consistent with past practicebusiness;
(xiii) shall not, or (ii) to distribute, license or co-promote any product of the Company or and shall not permit any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into to, make any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner tax election other than in the ordinary course course, or without the consent of business consistent with past practiceParent, which shall not unreasonably be withheld, settle or compromise any material tax liability;
(uxiv) shall not, and shall not permit any of its Subsidiaries to, (iy) enter intodeclare, amend, renew, modify set aside or consent pay any dividend or make any other distribution or payment with respect to the termination any shares of its capital stock or other ownership interests (other than a termination in accordance with regular quarterly cash dividends not to exceed $0.40 per share of Company Common Stock and dividends and distributions from Subsidiaries of the Company to the Company or another of its termsSubsidiaries) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (iiz) amenddirectly or indirectly redeem, waivepurchase or otherwise acquire any shares of its capital stock or capital stock of any of its Subsidiaries, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;make any commitment for any such action; and
(vxv) create shall not, and shall not permit any Subsidiary; or
(w) enter into any contractof its Subsidiaries to, agreementagree, commitment in writing or arrangement otherwise, to do take any of the foregoingforegoing actions or take any action which would make any representation or warranty in Article 3 hereof untrue or incorrect as of the Closing Date.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Northrop Grumman Corp)
Interim Operations of the Company. Except (i) as required by Law, (ii) expressly provided herein or as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure ScheduleBuyer, from and after the date of this Agreement to until the Effective Time earlier of the termination of this Agreement in accordance with its terms or the Closing, the Company shall, and shall cause each of its the Company Subsidiaries to, conduct act and carry on its business only in the usual, regular and ordinary course of business consistent with the past customs and practices of the Company and the Company Subsidiaries (including past practice with respect to quantity, amount, magnitude and frequency, standard employment and payroll policies and past practice with respect to management of working capital), and use commercially reasonable efforts, consistent with past practice practices, to maintain and use all reasonable efforts to preserve intact its current and each Company Subsidiary's business organization, assets and properties, continue funding the operations and capital expenditures of the Company and the Company Subsidiaries in accordance with the cumulative capital expenditures schedule attached as Exhibit F hereto (with an appropriate proportional adjustment for the month in which the Closing takes place reflecting (on a straight-line basis) the number of days in such month prior to Closing), keep available the services of its current present officers and key employees and preserve its present business relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities material suppliers and others having material business dealings with them to it; provided, that, the end that its goodwill and ongoing business Company shall be unimpaired at permitted to consummate the Effective Time. In additionC-B Closing (as defined in Section 2.7) in accordance with the C-B Agreement (as in effect on September 29, 2003) (provided that the C-B Agreement shall not be amended, and no provision thereof waived, without the prior written consent of the Buyer (not to be unreasonably withheld). Without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from and after the date of this Agreement to until the Effective Timeearlier of the termination of this Agreement in accordance with its terms or the Closing, the Company shall not, and shall not permit any of its the Company Subsidiaries to, directly or indirectly, do any of the following:
(a) except for Shares to be issued or delivered pursuant to following without the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance prior written consent of the shares Buyer: (i) amend its Certificate of Incorporation or By-laws or similar organizational documents; (ii) split, combine or reclassify any of its capital stock of any Subsidiary to the Company, stock; (iii) issue, deliver, sell, pledge, dispose of or encumber any additional shares of, pledge or otherwise encumbersecurities convertible into or exchangeable for, or authorize options, warrants, calls, commitments or propose the issuance, delivery, sale, disposition or pledge or other encumbrance rights of (i) any kind to acquire any shares of its of, capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect ofor any Company Subsidiary (provided, in lieu ofthat, or in substitution for, Shares the Company shall be permitted to issue shares of Common Stock upon (1) the exercise of options outstanding on under the Option Plan as of the date hereof;
hereof and (b2) the exercise of any Warrants, and provided further that upon any such exercise and issuance the parties shall promptly amend Section 4.2(a) of the Disclosure Schedule to reflect the issuance of such shares and the elimination of such options or Warrants, as applicable); (iv) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, acquire any outstanding Shares, Options, Warrants or other securities shares of capital stock of the Company or any Company Subsidiary, other than pursuant to the terms of its Subsidiariesthe Option Plan, any option agreement thereunder or any employment or similar agreement; (v) declare or pay any cash dividend or make any other cash distribution to stockholders of the Company, other than cash dividends paid from and after the date of this Agreement to the Closing Date in an aggregate amount not to exceed the Maximum Cash Amount set forth opposite the week in which the Closing occurs on Exhibit D; provided, however, that any excess of the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards Minimum Cash Amount set forth opposite the week in which the Closing occurs over the aggregate amount of cash dividends paid from and RSUs granted prior after the date of this Agreement to the date hereof pursuant Closing Date shall be the "Cash Shortfall" for purposes of Section 2.6(b); (vi) permit to occur any transaction with, or for the Equity Plans benefit of, any Stockholder or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect affiliate of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned Stockholder (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f1) acquire (i) by purchasepayments of wages and salaries made to officers, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies directors and employees in the ordinary course of business consistent with past practice or business, (2) ordinary course payments under the Management Agreement as permitted under Section 6.1(min effect on the date hereof and (3) regularly scheduled mandatory interest payments on the 11-5/8% Notes and the 11% CBI Notes);
; (gvii) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of permit to occur any of its properties or other assets or any interests therein, except for sales of inventory and used equipment increase in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement compensation payable or guarantee any such indebtedness paid, whether conditionally or make any loansotherwise, advances or capital contributions to, or investments inany amendment, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel modification or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment waiver of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits provision of, or agree to modify supplement to, in any respectemployment, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill management or similar agreement to which the Company with, (1) any employee, consultant or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner agent other than in the ordinary course of business consistent with past practice;
or (u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms2) any Material director or officer or any Stockholder or any affiliate of any Stockholder (provided, that, the Company Contract over $250,000 or Contract over $250,000 that would shall be a Material Company Contract if in effect on permitted to establish the date of this Agreement Success Bonus Plan, all amounts owing under which shall be paid and which shall be terminated at the Closing as contemplated by Sections 2.4(a) and 7.2(p)); or (iiviii) amend, waive, modify, fail agree in writing to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do take any of the foregoingforegoing actions.
Appears in 1 contract
Interim Operations of the Company. Except The Shareholder shall use its best efforts to ensure that, and the Company covenants and agrees that, after the date hereof and prior to the Closing Date, except (i) as required expressly provided or contemplated by Lawin this Agreement, (ii) as consented to set forth in the Disclosure Schedule, or (iii) as may be agreed in writing by Parent Purchaser:
(which consent shall not be unreasonably withheld, delayed or conditioned), (iiia) contemplated by this Agreement or (iv) as set forth in Section 6.1 the business of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time and the Company shall, Subsidiaries shall be conducted in the same manner as heretofore conducted and shall cause each of its Subsidiaries to, conduct its business only in the usualordinary course, regular and ordinary course consistent with past practice the Shareholder, the Company and the Company Subsidiaries shall each use all reasonable its best efforts to preserve intact its current the business organizationorganization of the Company and the Company Subsidiaries intact, keep available the services of its the current officers and employees of the Company and preserve its present relationships the Company Subsidiaries and maintain the existing relations with customers, suppliers, licensorscreditors, licensees, distributors, Governmental Entities business partners and others having business dealings with them the Company or the Company Subsidiaries, to the end that its the goodwill and ongoing business of the Company and the Company Subsidiaries shall be unimpaired at the Effective TimeClosing Date. In additionNeither the Company nor any Company Subsidiary shall institute any new methods of purchase, sale, lease, management, accounting or operation or engage in any transaction or activity other than minor changes in the ordinary course of business and without limiting consistent with past practice or to conform with applicable law (and as to which Purchaser shall be notified);
(b) neither the generality Company nor any Company Subsidiary shall: (i) amend its certificate of incorporation or by-laws or similar organizational documents, (ii) except to the extent legally obligated under the terms of the foregoing, except (w) Company's Series A Convertible Preferred Stock in effect as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to, do any of the following:
(a) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Companyhereof, issue, deliver, sell, transfer, pledge, dispose of, pledge of or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) encumber any shares of its capital stock of any class or any other ownership interestseries of its capital stock, or any securities convertible into or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rightsoptions, warrants, options, calls, commitments or any other agreements rights of any character kind to purchase or acquire acquire, any shares of any class or series of its capital stock except to the extent legally obligated under the terms of the Company's Series A Convertible Stock, (iii) except to the extent legally obligated under the terms of the Company's Series A Convertible Preferred Stock in effect as of the date hereof, declare, set aside or pay any dividend or other ownership interest distribution payable in cash, stock or any securities or rights convertible into, exchangeable for, or evidencing the right property with respect to subscribe for, any shares of any class or series of its capital stock stock; (iv) split, combine or reclassify any other ownership interest (including “phantom” rights and stock appreciation rights), shares of any class or series of its stock; or (iiv) any other securities except as legally obligated under the terms of the Company Company's Series A Convertible Preferred Stock and its Subsidiaries in respect ofERISA, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquireacquire directly or indirectly any shares of any class or series of its capital stock, or propose any instrument or security which consists of or includes a right to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrantssuch shares;
(c) grant neither the Company nor any Options, Restricted Stock Awards, RSUs Company Subsidiary shall organize any new Subsidiary or acquire any capital stock or other equity-based awards equity securities, or grant equity or ownership interest in the business, of any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Planother Person;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of neither the Company nor any Company Subsidiary shall modify, amend or of terminate any of its Subsidiaries that is not wholly owned (directly contracts or indirectly) by Company waive, release or assign any rights or claims, except in their capacity as suchthe ordinary course of business and consistent with past practice;
(e) neither the Company nor any of the Company Subsidiaries shall: (i) incur or assume any long-term debt, or except in the ordinary course of business, incur or assume short-term Indebtedness exceeding $10,000 in the aggregate from the date hereof until the Closing; (ii) pay, repay, discharge, purchase, repurchase or satisfy any Indebtedness issued or guaranteed by the Company or any Company Subsidiary, except as required by the terms thereof; (iii) modify the terms of any Indebtedness or other liability, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except as described in the Disclosure Schedule as being in the ordinary course of business and consistent with past practice; (v) make any loans, advances or capital contributions to, or investments in, any other Person; (vi) enter into any material commitment or transaction (including any capital expenditure or purchase, sale or lease of assets or real estate); (vii) write off as uncollectible any accounts receivable, (viii) dispose of or permit to lapse any rights to any Intellectual Property or (ix) change any of the banking or safe deposit arrangements described or referred to in the Disclosure Schedule;
(f) neither the Company nor any Company Subsidiary shall lease, license, mortgage, pledge or encumber any assets other than in the ordinary and usual course of business and consistent with the past practice or transfer, sell or dispose of any assets other than in the ordinary and usual course of business and consistent with past practice;
(g) neither the Company nor any Company Subsidiary shall make any change in the compensation payable or to become payable to any of its officers, directors, employees, agents or consultants (other than normal recurring increases in the ordinary course of business of wages payable to employees who are not officers or directors or Affiliates of the Company) or to Persons providing management services, or enter into or amend any employment, severance, consulting, termination or other agreement with, or employee benefit plan for, or make any loan or advance to, any of its officers, directors, employees, Affiliates, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to an employee benefit plan or otherwise;
(h) neither the Company nor any Company Subsidiary shall (i) pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or Affiliate or pay or agree to pay or make any accrual or arrangement for payment to any officer, director, employee or Affiliate of any amount relating to unused vacation days, except to the extent the Company or a Company Subsidiary is unconditionally obligated to do so on the date hereof, (ii) adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any director, officer, employee, agent or consultant, whether past or present, except to the extent the Company or a Company Subsidiary is unconditionally obligated to do so on the date hereof, or amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing;
(i) neither the Company nor any Company Subsidiary shall permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated other than any expiration of such policies in accordance with the terms thereof, provided, that, in any such event, the Company shall procure equivalent replacement coverage at a comparable cost;
(j) neither the Company nor any of the Company Subsidiaries shall enter into any contract or transaction relating to the purchase of assets other than in the ordinary course of business and consistent with past practice;
(k) neither the Company nor any Company Subsidiary shall pay, repurchase, discharge or satisfy any of its claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice, of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the Financial Statements or incurred since the Balance Sheet Date in the ordinary course of business;
(l) neither the Company nor any of the Company Subsidiaries shall adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the MergerCompany Subsidiary;
(fm) acquire neither the Company nor any Company Subsidiary shall (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries it unless required by GAAP or applicable Law;
(lii) amend the Company’s certificate of incorporation make any election relating to Taxes, change any election relating to Taxes already made, adopt any accounting method relating to Taxes, change any accounting method relating to Taxes unless required by GAAP, enter into any closing agreement relating to Taxes, settle any claim or the Company’s bylaws assessment relating to Taxes or other comparable charter consent to any claim or organizational documents of assessment relating to Taxes or any Subsidiary waiver of the Company, except as may be required by applicable Law and except statute of limitations for immaterial amendments under the charter any such claim or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000assessment;
(n) (i) pay, discharge, settle or satisfy neither the Company nor any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits ofSubsidiaries shall take, or agree to modify or commit to take, any action that would or is reasonably likely to result in any respect, or, subject of the conditions to the terms hereof, fail to enforceClosing set forth in Article VI not being satisfied, or consent to would make any matter with respect to which consent is required under, any standstill representation or similar contract to which warranty of the Company or contained herein inaccurate in any of its Subsidiaries is a party or (v) waive any material benefits ofrespect at, or agree as of any time prior to, the Closing Date, or that would materially impair the ability of the Company, Purchaser or the Shareholder to modify consummate the Closing in any material respect, or, subject to accordance with the terms hereof, fail to enforce in any material respect, hereof or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;materially delay such consummation; and
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which neither the Company or nor any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) shall enter into any material joint venture or partnership;
(s) engage in any transactionsagreement, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoing, or authorize, recommend, propose or announce an intention to do, any of the foregoing.
Appears in 1 contract
Samples: Stock Purchase Agreement (American United Global Inc)
Interim Operations of the Company. (a) Except as set forth on Schedule 4.2, each of the Company, Holdings and Banner covenants and agrees that, after the date hereof and prior to the Closing Date (i) as required by Lawunless the Acquiror shall otherwise approve in writing, (ii) as consented to in writing by Parent (which consent approval shall not be unreasonably withheldwithheld or delayed, delayed or conditioned), (iii) and except as otherwise expressly contemplated by this Agreement or Agreement):
(ivi) as set forth the Business shall be conducted in Section 6.1 of the ordinary and usual course and, to the extent consistent therewith, the Company Disclosure Schedule, from the date of this Agreement to the Effective Time the Company shall, and shall cause each of use its Subsidiaries to, conduct its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable best efforts to preserve its business organization intact and maintain its current business organization, keep available the services of its current officers existing relations and employees and preserve its present relationships goodwill with customers, suppliers, licensors, licensees, distributors, Governmental Entities creditors, lessors, employees and others having business dealings with them to associates;
(ii) the end that its goodwill and ongoing business Company shall be unimpaired at the Effective Time. In additionnot sell, and without limiting the generality transfer, mortgage, encumber or otherwise dispose of the foregoingAssets or the Assumed Contracts, except (w) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 for sales of the Company Disclosure Schedule, from Assets in the date ordinary course of this Agreement to the Effective Time, business;
(iii) the Company shall not, and shall not permit any of its Subsidiaries to, do any of the following:
(a) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary and usual course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adoptmodify, amend or terminate any collective bargaining agreement of the Assumed Contracts or employee benefit planwaive, program, policy, arrangement release or agreement, assign any material rights or claims relating thereto;
(iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company shall not permit any insurance policy naming it as a beneficiary or its Subsidiaries unless required by GAAP loss-payable payee covering the Assets to be cancelled or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, terminated except in the ordinary and usual course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunderbusiness;
(v) create the Company shall not take any Subsidiary; oraction or omit to take any action that would cause any of the representations and warranties of the Company herein to become untrue in any material respect;
(wvi) the Company shall not take any action to change its accounting policies as in effect at December 31, 1997, including, without limitation, charge-off policies (i.e., with respect to skips and stolens); and
(vii) the Company shall not authorize or enter into any contract, agreement, commitment or arrangement an agreement to do any of the foregoing.
(b) The Company shall not modify or amend the Note Repurchase Agreements without the prior written consent of the Acquiror, such consent to be in the sole discretion of Acquiror.
Appears in 1 contract
Interim Operations of the Company. (a) Except (i) as required otherwise expressly contemplated by Lawthis Agreement, (ii) as set forth in the Company Disclosure Schedule or as consented to in writing by Parent (which consent shall not be unreasonably withheldParent, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of during the Company Disclosure Schedule, period from the date of this Agreement to the Effective Time earliest to occur of the date of the termination of this Agreement and the Control Date, the Company shall, and shall cause each of its Subsidiaries subsidiaries to, (i) conduct its business only in the usual, regular and operations according to its ordinary course of business consistent with past practice and in compliance in all material respects with all applicable Laws, (ii) use all its reasonable best efforts to preserve intact its current business organizationorganizations and goodwill, keep available the services of its current officers and officers, employees and preserve its present consultants, and maintain satisfactory relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others those Persons having business dealings relationships with them them, (iii) not take any action that would reasonably be expected to result in any of the end that its goodwill and ongoing business shall be unimpaired at conditions set forth in Annex I hereto or the Effective Time. In additionconditions set forth in Article 7 hereof not being satisfied or could result in a material delay or material additional regulatory burdens to, and without or otherwise impede or prevent consummation of, the transactions contemplated by this Agreement.
(b) Without limiting the generality of the foregoing, and except (w) as required otherwise expressly contemplated by Lawthis Agreement, (x) as set forth in the Company Disclosure Schedule or as consented to in writing by Parent (which consent shall not be unreasonably withheldParent, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of during the Company Disclosure Schedule, period from the date of this Agreement to the Effective Timeearliest to occur of the date of the termination of this Agreement and the Control Date, the Company shall not, and shall not permit any cause each of its Subsidiaries subsidiaries not to, do any of the following:
(ai) except for Shares to be issued or delivered pursuant to the exercise extent required to comply with applicable Law, amend its certificate of Options incorporation or Warrants, the settlement of RSUs bylaws (or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, similar organizational documents);
(ii) issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition sell or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or other ownership interest in the Company or its subsidiaries, or any other securities convertible into or exchangeable for any such shares or ownership interest, or any rights, warrantswarrants or options to acquire or with respect to any such shares of capital stock, optionsownership interest or convertible or exchangeable securities (or derivative instruments in respect of the foregoing) other than (A) the issuance of shares of Company Common Stock pursuant to the current purchase period in progress under the Company ESPP or upon the exercise of Company Options outstanding on the date hereof or (B) issuances by a direct or indirect wholly owned subsidiary of the Company to its parent or another wholly owned subsidiary of the Company;
(iii) effect any stock split or otherwise change its capitalization as it exists on the date hereof, callsor directly or indirectly redeem, commitments or any other agreements of any character to purchase or otherwise acquire any shares of its capital stock or capital stock of its subsidiaries;
(iv) (A) grant, confer or award any option, warrant, convertible security or other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, acquire or award relating to any shares of its capital stock or take any other ownership interest action to cause to be exercisable any otherwise unexercisable option under any Company Stock Plan, (including “phantom” rights and stock appreciation rights), B) accelerate or (ii) waive any other securities or all of the goals, restrictions or conditions imposed under any Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants Option or other securities award under a Company Stock Plan, (C) grant any stock options or other equity-based compensation to any officer, employee or director of the Company or any of its Subsidiaries; providedsubsidiaries, however, that the Company may (iD) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans enter into any new Employment Agreement or the Assumed Subsidiary Equity Plans and amend any existing Employment Agreement or (iiE) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant hire any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization executive officer of the Company or any of its Subsidiariessubsidiaries;
(v) declare, set aside or pay any dividend or make any other distribution or payment with respect to any shares of its capital stock or other ownership interests (other than such payments by the subsidiaries to the Company);
(vi) mortgage or otherwise encumber or subject to any Lien, or sell, lease or otherwise dispose of any of its property or assets (including capital stock of its subsidiaries), other than (A) Liens that are incurred in the Mergerordinary course of business consistent with past practice, (B) the sale or disposition of inventory in the ordinary course of business consistent with past practice, and (C) the sale, lease, encumbrance or other disposition of assets that, individually or in the aggregate, are obsolete or not material to the Company and its subsidiaries taken as a whole;
(fvii) (A) acquire (i) by purchasemerger, merger purchase or otherwiseany other manner, any business or equity interest of entity or any Person division thereof or (iiB) otherwise acquire any asset assets which would be material, individually or assetsin the aggregate, to the Company and its subsidiaries taken as a whole, except for purchases of componentsinventory, raw materials supplies or supplies capital equipment in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m)and the acquisition of assets for consideration which does not exceed $100,000 in the aggregate;
(gviii) sellexcept for borrowings under existing credit facilities and excepting transactions between the Company and any subsidiary, leaseincur or assume any long-term or short-term debt or issue any debt securities or assume, license, mortgage, sell and leaseback guarantee or otherwise encumber become liable or dispose responsible (whether directly, contingently or otherwise) for the debt or other obligations of any other Person, other than obligations (other than debt) of its properties or other assets or any interests therein, except for sales of inventory and used equipment subsidiaries incurred in the ordinary course of business consistent with past practicebusiness;
(hA) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, Person (other than subsidiaries), except with respect to commitments outstanding as of the Company and its wholly owned Subsidiariesdate hereof, and or (B) forgive any loans, advances or capital contributions to, or investments in, any other Person (other than subsidiaries), for an aggregate amount in excess of $100,000 (as to employees in respect of travel clauses (A) and (B) collectively);
(x) except as contemplated by this Agreement or as required by applicable Law, (A) increase the salaries, wages or other related expenses compensation or benefits payable or to become payable to its directors, officers or employees except for increases in salary or wages of any of its employees in the ordinary course of business consistent with past practice;
, (iB) except as required by Law other than in accordance with existing agreements and policies, grant any severance pay or except as required by the terms of a Benefit Plan bonuses to its officers, directors or employees other than in effect as accordance with Section 6.2(b)(x) of the date of this AgreementCompany Disclosure Schedule or (C) establish, (i) adopt, enter into an employment agreement with or amend any Person Company Employee Benefit Plan, Company Stock Plan, collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, termination, severance or grant to other plan, agreement, trust, fund, policy or arrangement for the benefit of any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee or award any bonuses to any officer or employee of the Company or any of its SubsidiariesCompany, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to than an amendment under the Company’s President 401(k) plan and Chief Operating OfficerQ-One Biotech, ordinary course annual increases consistent with past practice, (iiiInc.’s 401(k) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate Plan to provide for acceleration of vesting of all account balances of Continuing Employees whose employment is terminated without cause within one year of the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000Effective Time;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(kxi) change any of the accounting methods principles or practices used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the CompanyGAAP;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (ixii) pay, discharge, settle discharge or satisfy any material claims, liabilities, material liabilities or material obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement discharge or satisfaction (A) of any such material claims, material liabilities or material obligations in the ordinary course of business consistent with past practice or in accordance with their terms(B) of material claims, of material liabilities or material obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained in the most recent Financial Statements Company Reports;
(xiii) agree to the settlement of any claim or litigation, which settlement would have a Company Material Adverse Effect;
(xiv) except to the Company included extent required under existing employee and director benefit plans, agreements or arrangements as in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since effect on the date of such Financial Statements in this Agreement or as contemplated by this Agreement, accelerate the ordinary course payment, right to payment or vesting of business consistent with past practiceany bonus, (ii) cancel any indebtednessseverance, (iii) waive profit sharing, retirement, deferred compensation, stock option, insurance or assign any claims other compensation or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a partybenefits;
(oxv) waive enter into any agreement, understanding or commitment that restrains, limits or impedes the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product ability of the Company or any of its Subsidiaries (subsidiaries to compete with or conduct any business or line of business, including products under development and products licensed by geographic limitations on the activities of the Company or any of its Subsidiaries)subsidiaries;
(rxvi) enter into materially modify, amend or terminate any material joint venture Material Contract, or partnership;
(s) engage waive, relinquish, release or terminate any right or claim, in any transactionseach case, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than except in the ordinary course of business consistent with past practice;
(uxvii) other than with respect to commitments outstanding as of the date hereof, make any capital expenditures in the aggregate for the Company and its subsidiaries in excess of $3,000,000, in the aggregate;
(ixviii) take any action to cause the shares of Company Common Stock to be delisted from the Nasdaq prior to the consummation of the Merger;
(xix) make or change any material Tax election, file any material amended Tax Return, enter intointo any closing agreement, amendsettle or compromise any material liability with respect to Taxes, renewagree to any material adjustment of any Tax attribute, modify file any claim for a refund of Taxes, or consent to any extension or waiver of the termination of (other than a termination in accordance with its terms) limitation period applicable to any Material Company Contract over $250,000 Tax claim or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiaryassessment; or
(wxx) enter into any contract, agreement, commitment agree in writing or arrangement otherwise to do take any of the foregoingforegoing actions.
Appears in 1 contract
Samples: Merger Agreement (Bioreliance Corp)
Interim Operations of the Company. Except From the date hereof until the Effective Time, the Company and its Subsidiaries shall conduct their business in the ordinary course consistent with past practices and shall use all reasonable efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality of the foregoing, and except (i) as required by Lawto the extent Parent shall otherwise consent in writing, (ii) as consented to expressly contemplated in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iviii) as set forth in Section 6.1 6.02 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve its present relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at hereof until the Effective Time. In addition, and without limiting :
(a) the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (which consent Company shall not be unreasonably withheld, delayed adopt or conditioned), propose any change to its certificate of incorporation or bylaws;
(yb) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to, do any of the following:
(a) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of the Company or any of its Subsidiaries, Subsidiaries (other than a liquidation or dissolution of a wholly owned Subsidiary of the MergerCompany or a merger or consolidation between wholly owned Subsidiaries of the Company or of any wholly owned Subsidiary into the Company);
(fc) acquire (i) by purchasethe Company shall not, merger and shall not permit any of its Subsidiaries to make any equity investment in or otherwise, any business or equity interest acquisition of any Person or any amount of assets material to the Company and its Subsidiaries on a consolidated basis, except for (i) capital expenditures permitted by Section 6.02(h), (ii) equity investments in or capital contributions to any asset wholly owned Subsidiary of the Company or assets, except for purchases of components, raw materials or supplies (iii) investment activities in the ordinary course of business consistent with past practice practices; provided that the consent of Parent with respect to any action otherwise prohibited by this Section 6.02(c) shall not be unreasonably withheld or as permitted under Section 6.1(m)delayed;
(gd) the Company shall not, and shall not permit any of its Subsidiaries to, sell, lease, license, mortgage, sell and leaseback license or otherwise encumber or dispose of any of assets material to the Company and its properties or other assets or any interests thereinSubsidiaries on a consolidated basis, except for sales of inventory and used equipment (i) in the ordinary course of business consistent with past practicepractices or (ii) pursuant to existing contracts or commitments; provided that the consent of Parent with respect to any action otherwise prohibited by this Section 6.02(d) shall not be unreasonably withheld or delayed);
(e) the Company shall not, and shall not permit any of its Subsidiaries to, (i) split, combine, subdivide or reclassify any shares of capital stock of the Company or its Subsidiaries or (ii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock (other than, with respect to clause (ii), (A) dividends from its direct or indirect wholly owned Subsidiaries and (B) regular quarterly cash dividends paid by the Company on the Company Common Stock not in excess of $0.08 per share per quarter (appropriately adjusted to reflect any stock dividends, subdivisions, splits, combinations or other similar events relating to the Company Common Stock), with usual record and payment dates and in accordance with the Company’s past dividend policy);
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) issue, sell, transfer, pledge or dispose of any shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or series of the Company or its Subsidiaries (other than (i) issuances pursuant to the exercise of the Company Convertible Notes or issuances pursuant to stock options or stock-based awards granted pursuant to a Company Stock Plan and outstanding on the date hereof or granted pursuant to clause (ii) below, (ii) additional stock options or stock-based awards granted in the ordinary course consistent with past practices pursuant to a Company Stock Plan as in effect on the date hereof (provided, however, that any such stock option shall be granted in accordance with Section 6.02(s)), or (iii) issuances by any Subsidiary of the Company to the Company or to any wholly owned subsidiary of the Company) or (y) reduce the exercise or conversion price, extend the term or otherwise modify in any material respect the terms of any such securities of the Company or of any Subsidiary of the Company;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, redeem, purchase or otherwise acquire directly or indirectly any of the Company’s capital stock (other than in the ordinary course of business on behalf of or as fiduciary for third parties);
(h) incur the Company shall not, and shall not permit any indebtedness for borrowed money in addition of its Subsidiaries to, make or commit to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than expenditures that are material to the Company and its wholly owned SubsidiariesSubsidiaries on a consolidated basis, and other than to employees in respect of travel or other related expenses except in the ordinary course of business consistent with past practicepractices;
(i) except as required by Law or except as required by the terms Company shall not, and shall not permit any of a Benefit Plan in effect as of the date of this Agreementits Subsidiaries to, (i) enter into an employment agreement incur or assume any long-term or short-term debt or issue any debt securities (other than issuances of commercial paper in the ordinary course of business consistent with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, past practices); (ii) grant assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any current other Person, except (A) in the ordinary course of business consistent with past practices or former director(B) for obligations of the wholly owned Subsidiaries of the Company; (iii) make any loans or advances to or debt investments in any other Person, officer other than (x) loans, advances or employee debt investments in the Company’ wholly owned subsidiaries, (y) investment activities in the ordinary course of business consistent with past practices or (z) agency loans in the ordinary course of business consistent with past practices; (iv) pledge or otherwise encumber shares of capital stock of the Company or its Subsidiaries; or (v) mortgage or pledge any of its Subsidiariesmaterial assets, tangible or intangible, or create any increase material Lien thereupon, except in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases of business consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000practices;
(j) except as may be required by law or by existing agreements or arrangements, the Company shall not, and shall not permit any Benefit Plan in accordance with of its terms as of the date of this AgreementSubsidiaries to, take any action to fund or increase in any other way secure manner the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Company Employee Plan or materially change Company International Plan of any assumption used to calculate funding obligations director, employee or independent contractor or pay any benefit or compensation not required by any plan and arrangement as in effect as of the date hereof (including the granting of stock options, stock appreciation rights or other stock-based award), other than (i) increases in salary or performance bonuses consistent with respect to past practices in light of actual performance, (ii) arrangements for newly hired individuals that are consistent with existing policies and practices or (iii) increases of not more than $250,000 in the aggregate for any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determinedindividual;
(k) change except as otherwise provided herein, the Company shall not, and shall not permit any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP to, enter into any material contract, agreement, commitment or applicable Lawtransactions, other than in the ordinary course of business consistent with past practices;
(l) amend the Company’s certificate Company shall not, and shall not permit any of incorporation its Subsidiaries to, enter into any agreement that limits or otherwise restricts in any material respect the Company’s bylaws Company or other comparable charter or organizational documents any of any Subsidiary its Subsidiaries (or, following completion of the CompanyMerger, except as may be required by applicable Law and except for immaterial amendments under the charter Parent or organizational documents any of its Subsidiaries) or any Subsidiary successor thereto, from engaging or competing in any line of the Companybusiness or in any geographical area;
(m) authorize or make the Company shall not, and shall not permit any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal its Subsidiaries to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy (i) any claimsnon-insurance claim, liabilitiesliability or obligation (including extra-contractual obligations), other than (A) in the ordinary course of business for amounts not in excess of $100,000,000 in the aggregate (or, if in excess of $100,000,000 in the aggregate, with the consent of Parent, such consent not to be unreasonably withheld or delayed) or (B) pursuant to existing contractual obligations or litigation (ii) any insurance claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents () for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, $100,000,000 (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject if in excess of $100,000,000, with the consent of Parent, such consent not to the terms hereof, fail to enforce, be unreasonably withheld or consent to any matter with respect to which consent is required under, any standstill or similar contract to which delayed);
(n) the Company or shall not, and shall not permit any of its Subsidiaries is a party to, make, change or (v) waive revoke any material benefits of, Tax election or agree to modify in any change its method of accounting if such change would have a material respect, or, subject to the terms hereof, fail to enforce in any material respect, adverse impact on Taxes or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of change its Subsidiaries is a partyfiscal year;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or shall not, and shall not permit any of its Subsidiaries is to, enter into any new reinsurance transaction or ceding insurer (x) which does not contain market cancellation, termination and commutation provisions or (y) which materially changes the existing reinsurance profile of the Company and its Subsidiaries on a partyconsolidated basis outside of the ordinary course of business;
(p) the Company shall not, and shall not permit any of its Subsidiaries to, alter or amend in any material respect their existing underwriting, claim handling, loss control, investment, actuarial, financial reporting or accounting practices, guidelines or policies or any material assumption underlying an actuarial practice or policy, except as may be required by GAAP or applicable Tax Law, prepare SAP or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used the local equivalent in preparing or filing similar Tax Returns in prior periodsthe applicable jurisdictions;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or shall use its reasonable best efforts not to, and shall use its reasonable best efforts not to permit any of its Subsidiaries to, take any action (including products any action otherwise permitted by this Section 6.02) that would prevent or impede the Merger from qualifying as a reorganization under development and products licensed by Section 368(a) of the Company or any of its Subsidiaries)Code;
(r) enter into the Company shall not, and shall not permit any material joint venture of its Subsidiaries to, intentionally take any action (i) that would make any representation or partnershipwarranty of the Company hereunder inaccurate at, or as of any time prior to the Effective Time, subject to such exceptions as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect or (ii) that would, or would reasonably be expected to, result in any of the conditions to the Merger set forth in Article 8 not being satisfied;
(s) engage in the Company shall not, and shall not permit any transactionsof its Subsidiaries to, agreements, grant (i) any initial stock options with any option reload features and (ii) except as may be required by law or by existing agreements or arrangements or understandings is consistent with past practices, any reloaded stock options with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;further option reload features; and
(t) otherwise manage the Company shall not, and shall not permit any of its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter intoSubsidiaries, amend, renew, modify to authorize or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement an agreement to do any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. (a) Except as described in the Company Disclosure Schedule or as otherwise expressly permitted by this Agreement, the Company covenants and agrees as to itself and its Subsidiaries that, after the Execution Date and prior to the Closing (i) unless Parent shall otherwise approve in writing and except as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditionedapplicable Legal Requirements), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 the business of the Company Disclosure Scheduleand its Subsidiaries shall be conducted in the Ordinary Course of Business and, from the date of this Agreement to the Effective Time the Company shallextent consistent therewith, it and shall cause each of its Subsidiaries to, conduct its business only in the usual, regular and ordinary course consistent with past practice and shall use all their respective reasonable efforts endeavors to preserve their business organizations intact its current and maintain existing relations and goodwill with Governmental Authorities, customers, suppliers, distributors, creditors, lessors, licensors, employees and significant business organizationassociates, keep available the services of its current officers and its Subsidiaries’ present employees and preserve its agents and maintain the present relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities character and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Timequality of their business. In addition, and without Without limiting the generality of of, and in furtherance of, the foregoing, from the Execution Date until the Closing, except (wi) as otherwise expressly required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (zii) as Parent may approve in writing, the Company will not and will not permit its Subsidiaries to:
(i) amend any of its organizational documents;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire (including by lease, license or otherwise) assets outside of the Ordinary Course of Business from any other Person with a value or purchase price in the aggregate in excess of $50,000 in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the Execution Date as set forth in Section 6.1 on Part 6.1(a)(iii) of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to, do any of the following:;
(aiv) except for Shares to be issued issue, sell, pledge, dispose of, grant, transfer, encumber, or delivered pursuant to authorize the exercise of Options issuance, sale, pledge, disposition, grant, transfer or Warrantsencumbrance of, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the any shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its SubsidiariesSubsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, other than the issuance of the Company Shares upon the exercise of the Company Options outstanding as of the Execution Date in accordance with the terms of such Company Option; provided, however, that if such issuance would result in a Person who is not a party to this Agreement owning Company Shares, such Person shall be required to execute a Joinder Agreement in the Company may (i) withhold Shares to satisfy Tax obligations form of Exhibit H simultaneously with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrantssuch exercise;
(cv) grant create or incur any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options Encumbrance material to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than Subsidiaries not incurred in the MergerOrdinary Course of Business;
(fvi) acquire (i) by purchasemake any loans, merger advances, guarantees or otherwise, any business capital contributions to or equity interest of investments in any Person (other than (A) to the Company or any direct or indirect wholly owned Subsidiary of the Company, (iiB) any asset or assets, except for purchases advances of components, raw materials or supplies travel and other out-of-pocket expense to employees in the ordinary course of business consistent with past practice practices or as permitted under (C) loans to Optionholders solely to fund the exercise of Company Options pursuant to Section 6.1(m6.5(a));
(gvii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any Company Shares (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary and (B) declaration of the Pre-Closing Dividend) or enter into any agreement with respect to the voting of the Company Shares except as set forth on Part 6.1(a)(vii) of the Company Disclosure Schedule;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of the Company Shares or securities convertible or exchangeable into or exercisable for any Company Shares except as set forth on Part 6.1(a)(viii) of the Company Disclosure Schedule;
(ix) incur any Indebtedness for borrowed money or guarantee for such Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries;
(x) increase user acquisition spend in a manner inconsistent with the Company’s approved budget for 2014;
(xi) materially change the Company’s Published Company Products or pipeline of New Products;
(xii) other than in the Ordinary Course of Business, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, or amend, modify or terminate any Material Contract, or cancel, modify or waive any material debts or claims held by it or waive any material rights under any such Material Contract;
(xiii) make any changes with respect to accounting policies or procedures (including the Accounting Principles), except as required by changes in Legal Requirements or U.K. GAAP;
(xiv) transfer, sell, lease, license, mortgage, sell and leaseback pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise encumber dispose of any Intellectual Property or Intellectual Property Rights, or grant any license, covenant not to xxx, release, waiver or other right under any Intellectual Property or Intellectual Property Rights;
(xv) settle any litigation or other Proceedings other than exclusively for an amount of cash not in excess of $10,000 individually or in the aggregate;
(xvi) make or rescind any material election relating to Taxes or settle or compromise any material Proceeding relating to Taxes, or make any change to any of their methods of reporting income or deductions for Tax purposes (including any adoption of any such new method) from those employed in the preparation of the most recently filed Tax Returns;
(xvii) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries (other than Intellectual Property or Intellectual Property Rights), including capital stock of any of its properties Subsidiaries other than in an amount not to exceed $20,000 individually or other assets or any interests therein, except for sales of inventory and used equipment $50,000 in the ordinary course of business consistent with past practiceaggregate;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(ixviii) except as required by Law or except as required by the terms of a Benefit Plan pursuant to existing written, binding agreements in effect as of prior to the date of this Agreementthe Execution Date and set forth in Part 4.16(a) of the Company Disclosure Schedule, or as otherwise required by applicable Legal Requirement, (iA) enter into an employment agreement with grant or provide any Person or grant to any Person any right to severance, retention, change in control severance or termination compensation payments or benefits, or increase any Person’s rights thereto, (ii) grant benefits to any current or former director, officer director or employee of the Company or any of its Subsidiaries; (B) increase the compensation, commission, bonus or pension, welfare, severance or other benefits of, or pay any bonus to, any increase current or former director or employee of the Company, except for increases in cash compensation other than, with respect made in the Ordinary Course of Business to Persons employees who are not directors Key Employees or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, Founder; (iiiC) enter intoestablish, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its or amend the terms as of the date of this Agreement, any outstanding equity-based awards or grant any new equity awards; (D) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment payment, of compensation and or benefits under any Benefit Plan, take to the extent not already provided in any action to accelerate the vesting such Benefit Plan; (E) enter into or payment of establish any (1) employment, severance, change in control, termination, deferred compensation or benefits under other similar agreement with any contractor, director or employee of the Company or (2) other agreement, program or policy that would otherwise qualify as a Benefit Plan or materially had it been in place as of the Execution Date; (F) change any assumption actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to any Benefit Plan such plans are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter U.K. GAAP; or organizational documents (G) forgive any loans to current or former directors or employees of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party Subsidiaries;
(xix) (A) hire any employee or individual independent contractor, other than to replace departed Company Employees, departing in the Ordinary Course of Business, with compensation terms that are substantially equivalent to the departed Company Employee’s compensation terms; or (vB) waive terminate any material benefits ofcurrent Company Employee other than in the Ordinary Course of Business; provided, or agree to modify that in any material respect, or, subject to each of clause (A) and (B) the terms hereof, fail to enforce in any material respect, or Company shall obtain the prior written consent to any matter of Parent before taking such action with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a partysenior employee;
(oxx) waive take any actions or omit to take any actions that would, individually or in the benefits ofaggregate, or agree reasonably be expected to modify result in any material mannerof the conditions set forth in Section 7 not being satisfied; or
(xxi) agree, any material confidentiality agreement authorize or any standstill or similar agreement commit to which the Company or do any of its Subsidiaries is a party;the foregoing.
(pb) except as required by applicable Tax Law, prepare Prior to making any written or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, oral communications to the directors or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product employees of the Company or any of its Subsidiaries (including products under development and products licensed pertaining to compensation or benefit matters that are affected by the Transactions, the Company or any shall provide Parent with a copy of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactionsthe intended communication, agreements, arrangements or understandings with any Affiliate or other Person that would be required Parent shall have a reasonable period of time to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect review and comment on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to communication and Parent and the termination of (other than a termination Company shall cooperate in accordance with it terms) its material rights thereunder;
(v) create providing any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoingsuch mutually agreeable communication.
Appears in 1 contract
Samples: Share Purchase Agreement (Zynga Inc)
Interim Operations of the Company. Except (i) The Company covenants and agrees as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of itself and its Subsidiaries that during the Company Disclosure Schedule, period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1 hereof, except as (i) expressly contemplated by this Agreement, (ii) required by applicable law or by any contract or agreement disclosed in the Disclosure Letter, (iii) described in Section 5.1 of the Disclosure Letter or (iv) agreed to in writing by Merger Company, after the date hereof and prior to the Effective Time Time:
(a) the business of the Company shall, and shall cause each of its Subsidiaries to, conduct its business will be conducted only in the usual, regular and ordinary course and, to the extent consistent with past practice and therewith, the Company will use all its commercially reasonable efforts to preserve intact its current business organization, organization and goodwill and the business organization and goodwill of its Subsidiaries and keep available the services of its their current officers and employees and preserve its present relationships and maintain existing relations with customers, suppliers, licensorsofficers, licensees, distributors, Governmental Entities employees and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except creditors;
(wb) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall will not, and shall not nor will it permit any of its Subsidiaries to, do enter into any significant new line of business outside the building products industry, or incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures other than capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the Capital Budget plus an additional $5,000,000 in the aggregate;
(c) neither the Company nor its Subsidiaries will amend its certificate of incorporation, by-laws or similar organizational documents, except as contemplated by the transactions contemplated hereby;
(d) the Company shall not and shall not permit its Subsidiaries to declare, set aside or pay (other than dividends paid by Subsidiaries to the Company or other wholly-owned Subsidiaries of the following:Company) any dividend or other distribution payable in cash, stock or property with respect to its capital stock (other than the payment of regular quarterly dividends consistent with past practice which dividends shall not in any quarter exceed the amount of dividends paid per share of Company Common Stock in the first quarter of the year 2000 and provided that the record date for the third quarter of the year 2000 dividend may not be earlier than September 25, 2000 and the record date for the fourth quarter of the year 2000 dividend may not be earlier than December 26, 2000);
(ae) except for Shares the TM Exchange Agreement (as defined in Section 5.14), neither the Company nor its Subsidiaries shall (i) adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to be issued or delivered pursuant to the exercise of Options or Warrantsacquire, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the any shares of capital stock of any Subsidiary to class of the CompanyCompany or its Subsidiaries, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance than issuances of (i) any shares of its capital stock of any class or any other ownership interestCompany Common Stock pursuant to securities, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rightsoptions, warrants, options, calls, commitments or any other agreements of any character rights existing at the date hereof and disclosed to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest Merger Company (including “phantom” rights and stock appreciation rightsas disclosed in the Company SEC Documents), or ; (ii) incur any other indebtedness for money borrowed or issue or sell any debt securities or warrants or rights to acquire any debt securities of the Company and or its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding guarantee any indebtedness for money borrowed other than under credit facilities existing on the date hereof;
hereof in the ordinary course of business and other borrowings in the ordinary course of business that can be repaid at any time without prepayment penalty or other similar fees; or (biii) redeem, purchase or otherwise acquireacquire directly or indirectly any of its capital stock;
(f) other than in the ordinary course of business consistent with past practice, the Company shall not, nor shall it permit any of its Subsidiaries to, sell, lease, mortgage, encumber or otherwise dispose of, any assets (including capital stock of Subsidiaries) with an aggregate value of more than $5,000,000, other than sales of obsolete assets;
(g) the Company shall not, nor permit any of its Subsidiaries to, merge or consolidate with, or propose purchase any equity interest in all or substantially all of the assets of, any Person or other business organization or any division or business thereof, if the aggregate amount of the consideration paid or transferred by the Company in connection with all such transactions would exceed $5,000,000; provided however, this Section 5.1(g) shall not prohibit the Company from purchasing inventory in the ordinary course of business;
(h) neither the Company nor its Subsidiaries shall
(i) except for normal increases in the ordinary course of business consistent with past practice or to redeemreflect promotions or new hires, purchase grant any material increase in the fringe benefits or compensation payable or to become payable by the Company or any of its Subsidiaries to any officer or director; (ii) adopt, amend or otherwise acquirematerially increase, or accelerate the payment or vesting of the amounts payable or to become payable to any outstanding Sharesofficer or director of the Company or any of its Subsidiaries under any existing bonus, Optionsincentive compensation, Warrants deferred compensation, severance, profit sharing, stock option, stock appreciation right, restricted stock purchase, insurance, pension, retirement or other securities employee benefit plan, agreement or arrangement; or (iii) enter into or amend in any material respect any existing employment or severance agreement with, or, except in accordance with the existing written policies of the Company or existing contracts or agreements, grant any severance or termination pay to any officer or director of the Company or any of its Subsidiaries; provided, however, that the Company may ;
(i) withhold Shares the Company shall file all reports required to satisfy Tax obligations be filed by it with the SEC or New York Stock Exchange between the date of this Agreement and the Effective Time;
(j) neither the Company nor its Subsidiaries shall change the accounting principles used by it in effect as of the date hereof unless required by GAAP (or, if applicable with respect to OptionsSubsidiaries, Restricted Stock Awards and RSUs granted foreign generally accepted accounting principles) or applicable law;
(k) except in the ordinary course of business consistent with past practice, the Company shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (iii) below, pay, discharge or satisfy any material claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any material payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of Identified Contracts as in effect on the date hereof, (ii) modify, amend or terminate any Identified Contract in any material respect or waive or release any material right or claim thereunder or (iii) settle or compromise any litigation (whether or not commenced prior to the date hereof pursuant of this Agreement) other than settlements or compromises of litigation where the aggregate amount paid (after giving effect to the Equity Plans or the Assumed Subsidiary Equity Plans and (iiinsurance proceeds) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrantsdoes not exceed $5,000,000;
(cl) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of shall not, nor shall it permit any of its Subsidiaries that is not wholly owned (directly to, enter into or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete commit to enter into, or partial liquidationassume, dissolution, merger, consolidation, restructuring, recapitalization any operating or other reorganization of the Company or any of its Subsidiariescapital lease, other than the Merger;
(f) acquire (i) any such lease contemplated by purchase, merger or otherwise, any business or equity interest of any Person the Capital Budget or (ii) any asset or assetssuch operating lease which is not material to the Company and its Subsidiaries, taken as a whole;
(m) except for purchases the agreements listed in Section 5.1(m) of componentsthe Disclosure Letter, raw materials the Company shall not, nor shall it permit any of its Subsidiaries to, enter into or supplies modify any collective bargaining agreement or any successor collective bargaining agreement to any collective bargaining agreement. With respect to the agreements listed on Section 5.1(m) of the Disclosure Letter, the Company agrees to keep Merger Company reasonably informed as to the status of negotiations with respect to any collective bargaining agreements listed thereon;
(n) the Company shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with, or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Company's affiliates, including any transaction, agreement, arrangement or understanding with any affiliate or other person covered under Item 404 of SEC Regulation S-K that would be required to be disclosed under such Item 404 other than such transactions of the same general nature, scope and magnitude as are disclosed in the Company SEC Documents;
(o) other than in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sellrequired by law, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with Subsidiaries shall not make any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adoptTax election, amend any Return or terminate settle or compromise any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize Tax liability or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;Tax payments; and
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of neither the Company or any of nor its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) will enter into any material joint venture or partnership;
(s) engage in any transactionsan agreement, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do that if completed would be in contravention of any of the foregoing.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Johns Manville Corp /New/)
Interim Operations of the Company. Except (i) as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as otherwise set forth in Section 6.1 of the Company Disclosure ScheduleLetter, including but not limited to the list of capital expenditures of the Company for the years 2000 and 2001 set forth therein, the Company covenants and agrees as to itself and its Subsidiaries that, from the date of this Agreement hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed, and except as otherwise expressly contemplated by this Agreement or required by Law):
(i) the business of the Company shall, and shall cause each of its Subsidiaries to, conduct its business shall be conducted only in the usualordinary and usual course and, regular to the extent consistent therewith, it and ordinary course consistent with past practice and its Subsidiaries shall use all their respective reasonable best efforts to preserve intact its current business organization(a) subject to prudent management of workforce needs and ongoing programs currently in force, keep available the services of its current officers and employees and preserve its present relationships business organization intact and maintain its existing relations and goodwill with customers, suppliers, licensors, licensees, distributors, Governmental Entities creditors, lessors, employees and others having business dealings with them associates, (b) maintain and keep material properties and assets in good repair and condition, subject to ordinary wear and tear and (c) maintain in effect all existing governmental permits pursuant to which the end that Company or any of its goodwill and ongoing business Subsidiaries operates;
(ii) the Company shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except not (w) as required amend its certificate of incorporation or by-laws or the comparable governing instruments of any of its Subsidiaries except, in the case of its Subsidiaries, for such amendments that would not prevent or materially delay the consummation of the transactions contemplated by Law, this Agreement; (x) as consented to in writing by Parent (which consent shall not be unreasonably withheldsplit, delayed combine or conditioned), reclassify its outstanding shares of capital stock; (y) expressly permitted pursuant declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock (other than (A) dividends from its direct or indirect wholly owned Subsidiaries to this Agreement it or a wholly owned Subsidiary and (B) regular quarterly dividends on Shares with usual record and payment dates not to exceed $.225 per Share); or (z) as set forth in Section 6.1 repurchase, redeem or otherwise acquire any shares of the Company Disclosure Schedule, from the date its capital stock or any securities convertible into or exchangeable or exercisable for any shares of this Agreement to the Effective Time, the Company shall not, and shall not its capital stock or permit any of its Subsidiaries toto purchase or otherwise acquire, do any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock (other than for the purpose of funding or providing benefits under the existing terms of the Compensation and Benefit Plans and any other existing terms of the employee benefit plans, stock option and other incentive compensation plans, directors plans and stock purchase and dividend reinvestment plans);
(iii) neither the Company nor any of the following:
(a) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, its Subsidiaries shall issue, deliver, sell, pledge, dispose of or encumber any shares of, pledge or otherwise encumbersecurities convertible into or exchangeable or exercisable for, or authorize options, warrants, calls, commitments or propose the issuancerights of any kind to acquire, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock Voting Debt or any other ownership interest, property or any rights, warrants, options, calls, commitments assets (other than (A) Shares issuable pursuant to options (whether or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (iinot vested) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereofhereof under the Stock Plans and (B) issuances of additional options or rights to acquire not more than 1,000,000 Company Shares in any calendar year (it being understood that approximately 845,000 options have already been issued by the Company in the year 2000 and that those persons identified on Section 6.1(iii) of the Company Disclosure Letter have already been issued approximately 115,000 options in 2000) nor more than 2,000,000 Company Shares in the aggregate granted pursuant to the terms of the Stock Plans as in effect on the date hereof in the ordinary and usual course of the operation of such Stock Plans consistent with past practice and performance guidelines; provided that option issuances for each of the calendar years 2001 and 2002 for the persons identified on Section 6.1(iii) of the Company Disclosure Letter shall not exceed the option issuances to such persons in the year 2000 and shall not be included for purposes of the 1,000,000 and 2,000,000 option grant limitations set forth above, and issuances of Shares pursuant to options granted after the date hereof pursuant to such Stock Plans;
(biv) redeemneither the Company nor any of its Subsidiaries shall, purchase other than in the ordinary and usual course of business, and other than transactions not in excess of $125,000,000 in the aggregate in any calendar year, transfer, lease, license, guarantee, sell, xxxx- xxxx, pledge, dispose of or otherwise acquireencumber any property or assets (including capital stock of any of its Subsidiaries) or incur or modify any indebtedness for borrowed money or guarantee any such indebtedness;
(v) neither the Company nor any of its Subsidiaries shall, by any means, make any acquisition of, or propose to redeeminvestment in, purchase assets or otherwise acquirestock (whether by way of merger, any outstanding Sharesconsolidation, Optionstender offer, Warrants share exchange or other securities activity) in any transaction or any series of transactions (whether or not related), except for acquisitions not involving a merger, consolidation, tender offer or share exchange for an aggregate purchase price or prices, including the assumption of any debt, not in excess of $125,000,000 in any calendar year;
(vi) neither the Company nor any of its Subsidiaries shall, other than in the ordinary and usual course of business, (i) modify, amend, or terminate any material contract, (ii) waive, release, relinquish or assign any material contract (or any of the material rights of the Company or any of its Subsidiaries; providedSubsidiaries thereunder), howeverright or claim, that or (iii) cancel or forgive any material indebtedness owed to the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender any of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrantsits Subsidiaries;
(cvii) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of neither the Company or of nor any of its Subsidiaries that is not wholly owned will (directly or indirectly) by Company in their capacity as such;
(ei) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other similar reorganization of the Company or any Subsidiary of its Subsidiariesthe Company, (ii) accelerate or delay collection of notes or accounts receivable in advance of or beyond their regular due dates, other than in the Mergerusual and ordinary course of business, or (iii) change any accounting principle, practice or method in a manner that is inconsistent with past practice, except to the extent required by U.S. GAAP as advised by the Company's regular independent accountants;
(fviii) acquire (i) by purchaseneither the Company nor any of its Subsidiaries shall terminate, merger establish, adopt, enter into, make any new grants or otherwiseawards under, amend or otherwise modify, any business Compensation and Benefit Plans (other than issuances of additional Shares or equity interest options or rights to acquire Shares granted pursuant to the terms of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies the Stock Plans as in effect on the date hereof in the ordinary and usual course of the operation of such Stock Plans, subject to the limitations set forth in clause (iii) of this Section 6.1) or enter into any material consulting agreements or arrangements, or increase the salary, wage, bonus or other compensation of any employees except for (A) grants or awards or increases to employees who are not persons set forth in Section 6.1(iii) of the Company Disclosure Letter under existing Compensation and Benefit Plans as in effect as of the date hereof occurring in the ordinary and usual course of business consistent with past practice (which shall include normal periodic performance reviews and related compensation and benefit increases), (B) annual reestablishment of Compensation and Benefit Plans and the provision of individual compensation or as permitted benefit plans and agreements for newly hired or appointed officers and employees of the Company and its Subsidiaries who are not executive officers or (C) actions necessary to satisfy existing contractual obligations under Section 6.1(m);
(g) sell, lease, license, mortgage, sell Compensation and leaseback Benefit Plans or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred agreements existing as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, hereof;
(ix) other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary and usual course of business consistent with past practicebusiness, neither the Company nor any of its Subsidiaries shall settle or compromise any material claims or litigation or regulatory proceeding;
(ix) neither the Company nor any of its Subsidiaries shall make any material Tax election or, except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend , permit any insurance policy naming it as a beneficiary or loss-payable payee to be canceled or terminated except in the Company’s certificate ordinary and usual course of incorporation business or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the CompanyLaw;
(mxi) authorize or make any commitment with respect to, any except for (x) capital expenditure or other expenditures (including set forth in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(nSection 6.1(xi) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents Disclosure Letter and (for amounts not in excess of such reservesy) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practiceacquisitions permitted under clause (v) above, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which neither the Company or nor any of its Subsidiaries is a party shall make, or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail extent the Company has not previously committed to enforce in any material respect, or consent making such expenditures) commit to any matter with respect to which consent is required undermake, any material confidentiality or similar contract to which capital expenditures; and
(xii) neither the Company or nor any of its Subsidiaries is a party;
(o) waive the benefits of, will authorize or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar enter into an agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required do anything prohibited by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Nisource Inc)
Interim Operations of the Company. Except The Company agrees that, during the period from the date hereof through the earlier of the Effective Time or the date of termination of this Agreement pursuant to Section 7.1, except (i) as required by Law, (ii) as consented to the extent Parent shall otherwise consent in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (ivii) as set forth in Section 6.1 5.1 of the Company Disclosure Schedule, from the date of (iii) as may be expressly contemplated or permitted pursuant to this Agreement to the Effective Time Agreement, or (iv) as required by applicable Law: (x) the Company shall, and shall cause each of its Subsidiaries to, conduct its business only in all material respects in the usual, regular and ordinary course and in a manner consistent with past practice since January 1, 2015, and use all its commercially reasonable efforts to (A) maintain its material assets and properties in their current condition (normal wear and tear excepted), (B) preserve intact in all material respects its current business organization, goodwill, ongoing businesses and significant business relationships, (C) provided it does not require additional compensation, keep available the services of its current officers present officers, (D) maintain all of the material insurance policies held by any Acquired Company as of the date hereof, and employees (E) maintain the status of the Company and preserve its present relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities each Subsidiary REIT as a REIT; (y) the Company shall cause each Subsidiary that is taxable as a partnership for U.S. federal income tax purpose to make a timely and others having business dealings with them valid election pursuant to Section 754 of the Code to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In additionextent any such Subsidiary does not already have such a valid election in effect, and (z) without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and nor shall not it permit any of its Subsidiaries to, do any of the following:
(a) except for Shares to be issued amend the Company Articles of Amendment and Restatement, the Company Bylaws or delivered pursuant other comparable Organizational Documents of the Company’s Subsidiaries (in each case, whether by merger, consolidation or otherwise);
(i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the exercise of Options or Warrantsvoting of, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of any capital stock of any Acquired Company, other than (A) the regular, quarterly cash dividend at a rate not in excess of $0.075 per share of Company Common Stock, declared on May 31, 2017 and paid in accordance with past practice for the second quarter of the Company’s fiscal year (which, for the avoidance of doubt, shall be paid during the third quarter of the Company’s fiscal year and prior to Closing), (B) dividends or distributions, declared, set aside or paid by any Company Subsidiary to the Company or any Company Subsidiary that is, directly or indirectly, wholly owned by the Company, issue, deliver, sell, dispose of, pledge (C) distributions required for the Company or otherwise encumber, any Subsidiary REIT to maintain its status as a REIT under the Code or authorize or propose avoid the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock incurrence of any class income or excise Taxes by the Company or any other ownership interestSubsidiary REIT pursuant to Section 5.16, (D) distributions on preferred shares or units by Subsidiary REITs, (E) distributions resulting from the vesting or exercise of Company Compensatory Awards set forth on Section 3.3(a) of the Company Disclosure Letter, and (F) monthly distributions declared, set aside or paid by any securities or rights convertible intoCompany Subsidiary to the venture partners in any Joint Venture as required by agreement, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) split, combine or reclassify any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities capital stock of the Company or any of its Subsidiaries; provided, however(iii) except as otherwise provided in Section 5.1(c), that issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of any Acquired Company, (iv) purchase, redeem or otherwise acquire any Company securities, except for acquisitions of shares of Company Common Stock by the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares satisfaction by holders of Options or Warrants in order to pay Company Compensatory Awards of the applicable exercise price and/or withholding taxes, or (v) enter into any amendment or other modification to the material terms of any indebtedness for borrowed money of the Options or WarrantsAcquired Companies;
(c) grant (i) issue, deliver, sell, grant, pledge, transfer, subject to any Optionslien or dispose of any Company securities, Restricted other than (A) the issuance of shares of Company Common Stock Awardsupon the settlement of Company RSU Awards or Company Performance RSU Awards that are outstanding on the date of this Agreement, RSUs in accordance with the equity award’s terms as in effect on the date of this Agreement or (B) grants or awards of Company securities required to be made pursuant to the terms of existing employment or other equity-based awards compensation agreements or grant arrangements in effect as of the date hereof, or (ii) amend any options to purchase Shares under term of the Company’s 2007 Employee Stock Purchase PlanCompany Benefit Plan or amend any term of any security of the Acquired Companies (in each case, whether by merger, consolidation or otherwise);
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of or agreement of, or resolutions providing for or authorizing, complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization reorganization, each with respect to the Acquired Companies;
(e) increase the salary, wages, benefits, bonuses, severance or termination payments or other compensation payable or to become payable to the Company’s current or former directors or executive officers, except for (i) increases required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (ii) increases in salary or wages of not more than $50,000 in the aggregate for any single individual in the ordinary course of business consistent with past practices, or (iii) increases required under any Company Benefit Plan or any of its Subsidiaries, other than the Mergerunder applicable Law;
(f) acquire (i) by purchaseany business, merger assets or otherwise, any business or equity interest capital stock of any Person or division thereof, whether in whole or in part (ii) any asset or and whether by purchase of stock, purchase of assets, except for purchases of componentsmerger, raw materials consolidation, or supplies otherwise), other than one or more acquisitions in the ordinary course of business consistent with past practice that, individually, or as permitted under Section 6.1(m)in the aggregate, involve a purchase price of not more than $1,000,000;
(g) make or undertake, or enter into any new commitments obligating the Company or any Subsidiary of the Company to make or undertake, capital expenditures; provided, however, that the Company and the applicable Subsidiaries of the Company may make capital expenditures pursuant to the terms of Contracts that have been executed prior to the date hereof and up to the total amounts set forth in the applicable capital expenditure plans set forth in Section 5.1(g) of the Company Disclosure Schedule (the “Capital Budgets”) with respect to the Company Properties and on the timetables set forth therein;
(h) sell, lease, license, mortgage, sell and leaseback pledge, transfer, surrender, encumber, divest, cancel, subject to any Encumbrance or otherwise encumber or dispose of any material assets, licenses, operations, rights or material properties, including the Company Properties, or agree to allow any of its properties or other assets or any interests thereinthe aforementioned, except for sales of inventory and used equipment (i) pursuant to existing Contracts, (ii) Permitted Encumbrances incurred in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practicepractices, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreementin connection with capital expenditures permitted under Section 5.1(g), or (iv) terminate sales of Company Properties disclosed on Section 5.1(h) of the employment Company Disclosure Schedule but only to the extent such sale is consistent with the terms expressly set forth in the applicable sale agreement or letter of intent listed on Section 5.1(h) of the Company Disclosure Schedule or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000otherwise permitted therein;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(ki) change any of the accounting methods used by the Company materially affecting its assets, liabilities or its Subsidiaries unless business, except for such changes that are required by GAAP or Regulation S-X promulgated under the Exchange Act or as otherwise specifically disclosed in the Company SEC Documents;
(j) (i) incur or assume any indebtedness except (A) for borrowings under the Company’s current credit facilities in the ordinary course of business (including to the extent necessary to pay dividends permitted by Section 5.1(b)) or (B) in respect of indebtedness owing by any wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company, or (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than any Acquired Company);
(k) enter into or amend in any material respect (i) any Material Contract (other than terminations or renewals in accordance with the terms of any existing Material Contract), (ii) any Contract which if entered into prior to the date hereof would be a Material Contract, (iii) any retail Leases of over 5,000 square feet (each, a “Material Lease”), or (iv) residential Leases that are not on the form of lease approved for such Company Property that have terms of longer than 18 months or less than 30 days or that are for rental rates below rates that are customary for the applicable Lawmarket and apartment class where the Property is located, or amend, modify or terminate any of the Lease Documents or enter any new lease, sublease or license agreement (including renewals) where the Company or a Subsidiary of the Company is the tenant, sublessee or licensee;
(l) modify, amend the Company’s certificate of incorporation or the Company’s bylaws terminate, or other comparable charter or organizational documents of grant any material consent (including any “Major Decision”) under, any Contract with any Subsidiary of the Company, except as may be required by applicable Law including any Joint Venture or modify any material relationship between the Company and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company, including any Joint Venture, and including the manner in which the Company and the Subsidiaries of the Company own or hold their respective assets;
(m) authorize or except as set forth on Section 5.1(m) of the Company Disclosure Schedule, (i) other than as otherwise expressly required pursuant to this Agreement, make any commitment material Tax election, enter into any material closing agreement with a Tax authority, file any amended federal or state income Tax Return or other Tax Return with respect toto any material Tax or change any material method of accounting for Tax purposes or annual Tax accounting period, any capital expenditure or other expenditures except in each case (including in respect of research and development)A) if required by Law, other than those which, individually, are less than or equal to $200,000 or, (B) in the aggregateordinary course of business, are less than or equal (C) if necessary (x) to $1,000,000preserve the Company’s or any Subsidiary REIT’s qualification as a REIT under the Code or (y) to qualify or preserve the status of any Subsidiary as a disregarded entity or partnership for United States federal income tax purposes or as a Qualified REIT Subsidiary or a Taxable REIT Subsidiary under the applicable provisions of Section 856 of the Code, as the case may be, or (ii) fail to contest Tax assessments to the extent customary in the jurisdiction in which the property to which such Tax assessment applies is located;
(n) other than as set forth on Section 5.1(n) of the Company Disclosure Schedule, invest proceeds received in connection with transactions conducted in accordance with Section 1031 of the Code, including purchases of property with funds held by a qualified intermediary or other agent serving in a similar capacity;
(io) payexcept as set forth on Section 5.1(o) of the Company Disclosure Schedule, dischargewaive, settle or satisfy any rights, claims, liabilities, liabilities or obligations or litigation (absolute, accrued, asserted or asserted, unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts individually not in excess of such reserves$750,000, or in the aggregate, not to exceed $2,500,000, in each case, in excess of applicable insurance proceeds;
(p) fail to maintain in full force and effect material insurance policies or incurred since comparable replacement policies covering the date Company and its Subsidiaries and their respective properties, assets and businesses in a form and amount consistent with past practice; or
(q) authorize, commit or agree to take any of the foregoing actions. Notwithstanding the foregoing (i) nothing contained in this Agreement shall give to Parent or Acquisition Sub, directly or indirectly, rights to control or direct the operations of the Acquired Companies prior to the Effective Time and (ii) the Company and each Subsidiary will take, and cause each Subsidiary to take, any actions, or forbear from taking any actions, as necessary to ensure that the Company and each Subsidiary REIT will be classified as a REIT for the taxable year of such Financial Statements entity that includes the Closing Date, and will take, and cause each of its Subsidiaries to take, any action which is consistent with such REIT qualification for such taxable year or any prior taxable year; provided that (a) the Company shall not be required to take (or forbear from taking) any action to preserve REIT status where the failure to qualify as a REIT is attributable to any Additional Transactions and (b) the failure of any entity to satisfy the distribution requirements of Section 857(a) for any period beginning after December 31, 2016 shall not be deemed a breach of this Section 5.1 or of any other obligation of the Company or a Subsidiary REIT to maintain REIT status. Nothing in Section 5.1 shall restrict the Company and its Subsidiaries from engaging in any capital call transactions exclusively among the Company and its Subsidiaries in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Monogram Residential Trust, Inc.)
Interim Operations of the Company. Except The Company covenants and agrees as to itself and its Subsidiaries that during the period from the date of this Agreement until the earlier of the Effective Time or the date, if any, on which this Agreement is terminated pursuant to Section 7.1, the business of the Company and its Subsidiaries shall be conducted only in the ordinary course of business consistent in all material respects with past practices, and the Company shall use its reasonable best efforts to preserve intact its business organization and goodwill and the business organization and goodwill of its Subsidiaries, and keep available the services of their current officers and employees and preserve and maintain existing relations with customers, suppliers, officers, employees and creditors; and, except (i1) as expressly contemplated by this Agreement, (2) for transactions between or among the Company and its wholly owned Subsidiaries, (3) as required by applicable Law, (ii4) as consented to in writing by with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), and (iii) contemplated by this Agreement or (iv5) as set forth in Section 6.1 5.1 of the Company Disclosure ScheduleLetter, from after the date of this Agreement to until the earlier of the Effective Time or the Company shalldate, and shall cause each of its Subsidiaries toif any, conduct its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve its present relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (on which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted this Agreement is terminated pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time7.1, the Company shall not, and nor shall not it permit any of its Subsidiaries to, do any of the following:
(a) except for Shares enter into any new line of business material to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company it and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereoftaken as a whole;
(b) redeem, purchase make or otherwise acquire, or propose commit to redeem, purchase or otherwise acquire, make capital expenditures in any outstanding Shares, Options, Warrants or other securities fiscal quarter exceeding its capital expenditure budget (copies of which have been previously provided to Parent and the annual budgeted amount of which is set forth in Section 5.1(b) of the Company or any of its SubsidiariesDisclosure Letter) for such fiscal quarter by more than $1,000,000; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior accelerate or defer any quarterly budgeted capital expenditure to the date hereof pursuant to immediately preceding or succeeding fiscal quarter so long as the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrantsaggregate original budgeted capital expenditures for all affected fiscal quarters is not exceeded;
(c) grant any Optionsamend its certificate of incorporation, Restricted Stock Awards, RSUs bylaws or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plansimilar organizational documents;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend or other distribution, whether payable in cash, stock or any other property or right, with respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as suchcapital stock;
(e) (i) adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any shares of capital stock of any class, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or of any other such securities or agreements, other than issuances of shares of Company Common Stock pursuant to Company Options outstanding on the date of this Agreement and disclosed in Section 3.2(a) of the Company Disclosure Letter, or (ii) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) of this Section 5.1(e), except shares of Company Common Stock that are withheld to satisfy applicable tax withholding requirements;
(f) (i) enter into, adopt, amend (except for such amendments as may be required by Law), renew or terminate any Company Benefit Plan or any other benefit plan or arrangement of the Company or any of its Subsidiaries, (ii) except as required by the terms of any Company Benefit Plan as in effect as of the date hereof, and except with respect to non-executive officer employees, independent contractors and consultants in the ordinary course of business consistent with past practices, increase in any manner the compensation, bonus or fringe or other benefits of, or pay any bonus of any kind or amount whatsoever to, any current or former director, officer, employee, independent contractor or consultant; provided, that no equity or equity-based grants shall be made, (iii) pay any benefit or amount not required under any Company Benefit Plan or any other benefit plan or arrangement of the Company or any of its Subsidiaries as in effect on the date of this Agreement, (iv) grant or pay any severance or termination pay or increase in any manner the severance or termination pay of any current or former directors, officer, employee, independent contractor or consultant, (v) except as required to comply with any agreement or policy in existence as of the date of this Agreement in the ordinary course of business consistent with past practices, (A) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Company Benefit Plan (including the grant of any equity or equity-based awards), (B) take any action to fund or in any other way secure the payment of compensation or benefits under any employee plan, agreement, contract or arrangement or Company Benefit Plan, or (C) take any action to accelerate the vesting or payment of any compensation or benefit under any Company Benefit Plan.
(g) change in any material respect its methods of accounting in effect at December 31, 2009, except in accordance with changes in GAAP as concurred with by its independent auditors;
(h) acquire an amount of assets material to the Company by merging or consolidating with, or by purchasing an equity interest in or all or a portion of the assets or business of, any Person, or by any other means, other than in the ordinary course of business consistent with past practices;
(i) sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any assets, except for (A) the sale of inventory or the leasing of equipment in the ordinary course of business consistent with past practices and (B) sales to non-affiliated Persons in arms-length transactions for not less than fair market value, not less than book value, and not in excess of $1,000,000 individually or $3,000,000 in the aggregate, other than sales of assets in the ordinary course of business resulting from equipment lost in hole;
(j) mortgage, pledge, hypothecate, grant any security interest in, or otherwise subject to any other Lien other than Permitted Liens, any of the Company Assets;
(k) (i) pay, discharge or satisfy any material claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) if such payment, discharge or satisfaction would require any material payment, other than the payment, discharge or satisfaction of liabilities or obligations (A) in accordance with the terms of any Company Material Contract as in effect on the date of this Agreement or (B) in accordance with the following clause (ii), or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of Litigation in which the full amount to be paid is covered by insurance or in which the amount to be paid in excess of the applicable insurance coverage does not exceed $500,000 individually or $1,500,000 in the aggregate;
(l) except pursuant to the terms of any Company Material Contract as in effect on the date of this Agreement insofar as such agreement is disclosed in Section 3.19, engage in any transaction with, or enter into any agreement, arrangement, or understanding with, directly or indirectly, any affiliate (provided that for the purpose of this clause (l) only, the term “affiliate” shall not include any employee of the Company or its Subsidiaries (as the case may be) other than directors and executive officers thereof and any employees who share the same household as any such directors and executive officers);
(m) make or change any election relating to Taxes, amend any Return, settle or compromise any Tax liability or change its method of tax accounting, in each case in any material respect;
(n) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, (other than the Merger);
(fo) acquire (i) by purchase, merger incur or otherwise, assume any business or equity interest of any Person or (ii) any asset or assetsIndebtedness, except for purchases of components, raw materials or supplies any Indebtedness: (x) contemplated by the Company 2010/2011 Budget and incurred in the ordinary course of business consistent with past practice practices, (y) incurred under any credit agreement to which it or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties Subsidiaries is a party and that is outstanding on the date hereof and disclosed in Section 5.1(o) of the Company Disclosure Letter, or (z) in an amount not exceeding $14,000,000 in the aggregate, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other assets or any interests thereinPerson, except for sales of inventory and used equipment in the ordinary course of business and consistent with past practice;
practice and in no event exceeding $5,000,000 in the aggregate, (hiii) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, Person (other than to the Company and its wholly owned Subsidiaries, and other than customary loans or advances to employees in respect of travel or other related expenses and customers in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by practices and in no event exceeding $1,000,000 in the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreementaggregate), or (iv) terminate the employment of enter into any material commitments or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
transactions, except (jA) except as required by any Benefit Plan set forth in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law 2010/2011 Budget and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice practices or in accordance with their terms, of liabilities reserved against (B) involving amounts not exceeding $1,000,000 in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a partyaggregate;
(p) except as required by applicable Tax Lawenter into any agreement, prepare understanding or file commitment that materially restrains, limits or impedes its or any Tax Return inconsistent of its Subsidiaries’ ability to compete with past practice oror conduct any business or line of business, including geographic limitations on its or any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periodsof its Subsidiaries’ activities;
(q) sell, transfer or license to any person or modify any rights (i) to enter into any material Company Intellectual Property Rights, except Contract other than in the ordinary course of business consistent with past practice, or (ii) modify or amend in any material respect, waive in any material respect or assign any of its rights or claims under, or terminate any material Contract to distribute, license or co-promote any product of the Company which it or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries)is a party;
(r) enter into any fail to maintain in full force and effect the existing insurance policies covering it and its Subsidiaries or their respective properties, assets and businesses or replacement policies that are comparable in all material joint venture or partnership;respects, except to the extent such policies cease to be available on commercially reasonable terms; or
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment Contract or arrangement obligation to do any of the foregoing. Notwithstanding anything in this Section 5.1 to the contrary, the Company shall not, nor shall it permit any of its Subsidiaries to, take or fail to take any action, which actions or failures to act, individually or in the aggregate, are intended to, or would reasonably be expected to, prevent, materially delay or materially impede the consummation of the Merger and the other transactions contemplated by this Agreement.
Appears in 1 contract
Interim Operations of the Company. Except The Selling Parties covenant and agree that, except (i) as required by Law, expressly provided in this Agreement; or (ii) as consented with the prior written consent of the Purchaser, after the date hereof and prior to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 the Closing Date:
a. The business of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business be conducted only in the usual, regular ordinary and ordinary customary course consistent with past practice and and, to the extent consistent therewith, the Company shall use all its reasonable best efforts to preserve its business organization intact and maintain its current business organization, keep available the services of its current officers and employees and preserve its present relationships existing relations with customers, suppliers, licensorsemployees, licensees, distributors, Governmental Entities and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In additioncreditors, and without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (which consent business partners;
b. The Company shall not be unreasonably withheldtransfer, delayed or conditioned)lease, (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to, do any of the following:
(a) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliverlicense, sell, mortgage, pledge, dispose of, pledge or otherwise encumber, or authorize or propose encumber any material assets other than in the issuance, delivery, sale, disposition or pledge or other encumbrance ordinary and usual course of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights business and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiariesconsistent with past practice; provided, however, that in no event may the Company may undertake any such action involving an amount greater than $25,000;
c. The Company shall not modify, amend, or terminate any of the Company's Agreements or waive, release, or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
d. The Company shall not pay, discharge, or satisfy any claims, liabilities, or obligations (iabsolute, accrued, asserted or unasserted, contingent or otherwise) withhold Shares to satisfy Tax obligations with respect to Optionsin an aggregate amount greater than $25,000, Restricted Stock Awards without the written consent of the Purchaser;
e. Unless and RSUs granted prior to the date hereof until this Agreement shall have been terminated pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender provisions of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any OptionsArticle XII hereof, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is shall not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization recapitalization, or other reorganization of the Company or any of its Subsidiaries, other than the MergerCompany;
(f) acquire (i) by purchasef. The Selling Parties shall not knowingly take, merger or otherwiseknowingly agree to take, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to action that incurred as of the date of this Agreement or guarantee any such indebtedness or would make any loans, advances representation or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee warranty of the Company or contained herein inaccurate in any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreementat, or (iv) terminate as of any time prior to, the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000Closing Date;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the g. The Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts shall not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits ofvoluntarily make, or agree to modify make, any changes in any respecttax accounting methods, or, subject waive or consent to the terms hereof, fail extension of any statute of limitations with respect to enforcetaxes, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any assessment of its Subsidiaries is a party or (v) waive any material benefits oftaxes, or agree to modify in settle any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the judicial proceeding affecting taxes; and
h. The Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) shall not enter into any material joint venture or partnership;
(s) engage in any transactionsan agreement, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreementcommitment, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose, or announce an intention to do any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. Except (i) as set forth in Section 5.1 of the Company Disclosure Schedule, as required by Lawchanges in applicable laws, (ii) as consented required pursuant to this Agreement or as agreed in writing by Parent (which consent agreement shall not be unreasonably withheld, delayed withheld or conditioneddelayed), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date hereof until the earlier of the valid termination of this Agreement to in accordance with Article VIII hereto and the Effective Time Time, the Company shall, and shall cause each of its the Company Subsidiaries to, (i) conduct its business only their businesses in all material respects in the usual, regular and ordinary course consistent with past practice and practice, (ii) use all commercially reasonable efforts to preserve intact its current their present business organizationorganizations, (iii) use commercially reasonable efforts to maintain satisfactory relations with and keep available the services of its their current officers and employees other key employees, (iv) use commercially reasonable efforts to maintain in effect all material foreign, federal, state and local licenses, approvals and authorizations that are required for the Company or any Company Subsidiary to carry on its business and (v) use commercially reasonable efforts to preserve its present existing relationships with material customers, lenders, suppliers, licensors, licensees, distributors, Governmental Entities distributors and others having material business dealings relationships with them to the end that its goodwill Company and ongoing business shall be unimpaired at the Effective TimeCompany Subsidiaries. In addition, and without Without limiting the generality of the foregoing, except (w) as set forth in Section 5.1 of the Company Disclosure Schedule, as required by Lawchanges in applicable law, (x) as consented required pursuant to this Agreement or as agreed in writing by Parent (which consent agreement shall not be unreasonably withheld, delayed withheld or conditioneddelayed), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date hereof until the earlier of the valid termination of this Agreement to in accordance with Article VIII hereto and the Effective Time, the Company shall not, and nor shall not it permit any of its Subsidiaries Company Subsidiary to, do any of the following:
(a) except for Shares to be issued amend the Company Governing Documents or delivered pursuant equivalent documents of any Company Subsidiary or amend the terms of any outstanding security of the Company or any Company Subsidiary (provided however that nothing in this Section 5.1 shall preclude the dissolution of any Subsidiary that is not material to the exercise of Options or WarrantsCompany and the Company Subsidiaries, the settlement of RSUs taken as a whole, or the lapsing merger or reorganization of forfeiture restrictions any Subsidiary with another Subsidiary provided that such the surviving entity of Restricted Stock Awardssuch transaction remains a Company Subsidiary);
(b) split, each outstanding on the date hereof combine, subdivide or the issuance of the reclassify any shares of capital stock of the Company or any Company Subsidiary, other than any such transaction by a Company Subsidiary that remains a Company Subsidiary after consummation of such transaction;
(c) declare, set aside or pay any dividend or other distribution payable in cash, stock or property (or any combination thereof) with respect to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its ’s capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereofstock;
(bd) redeem, purchase or otherwise acquire, or propose offer to redeem, purchase or otherwise acquire, any outstanding SharesEquity Interests of the Company, except (i) repurchases of Shares issued under Company Stock Plans pursuant to agreements already in effect on the date hereof, and (ii) repurchases of unvested Shares in connection with the withholding of Shares upon vesting or settlement of stock awards issued under the Company Stock Plans;
(e) issue, sell, pledge, deliver, transfer, dispose of or encumber any shares of, or securities convertible into or exchangeable for, or grant any Company Options, Warrants other forms of stock awards under the Company Stock Plans, or warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class, or grant to any Person any right the value of which is based on the value of Shares or other securities capital stock, other than (i) the issuance of Shares reserved for issuance on the date hereof pursuant to the exercise of the Company Options disclosed in Section 3.2(b) of the Company Disclosure Schedule and outstanding on the date hereof, (ii) the issuance of Shares pursuant to the ESPP, and (iii) the grant of Company Options and the issuance of other forms of stock awards under the Company Stock Plans with respect to an aggregate of 750,000 Shares (collectively, “New Company Options”), at an exercise or purchase price per share equal to the fair market value of the common stock of the Company as of the date of grant, to employees of the Company hired after the date of this Agreement or pursuant to commitments by the Company in connection with the promotion of employees of the Company, in the ordinary course of business, in amounts consistent with past practice;
(f) acquire (whether pursuant to merger, stock or asset purchase or otherwise) in one transaction or any series of related transactions (i) except in the ordinary course of business consistent with past practice, any assets having a fair market value in the aggregate in excess of $5 million or (ii) any equity interests in any Person or any business or division of any Person or all or substantially all of the assets of any Person (or business or division thereof);
(g) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any of its Subsidiariesmaterial assets, other than (i) sales or licenses in the ordinary course of business consistent with past practice, and (ii) dispositions of equipment and property no longer used in the operation of the business;
(h) (i) incur or assume any long-term or short-term indebtedness except (A) accounts payable to trade creditors, (B) short-term indebtedness incurred in the ordinary course of business consistent with past practice, or (C) additional indebtedness under existing debt facilities or like replacement debt facilities; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, other than with respect to Company Subsidiaries in the ordinary course of business consistent with past practice; or (iii) make any loans, advances or capital contributions to, or investments in, any other Person, other than loans, advance or capital contributions to, or investments in, wholly owned Company Subsidiaries made in the ordinary course of business consistent with past practice;
(i) except as required by applicable law or the terms of any agreement existing on the date hereof or as contemplated under this Agreement, make any change in, or accelerate the vesting of, the compensation or benefits payable or to become payable to, or grant any severance or termination pay to, any of its officers, directors, employees, agents or consultants or enter into or amend any employment, consulting, severance, retention, change in control, termination pay, collective bargaining or other agreement or any equity based compensation, pension, deferred compensation, welfare benefits or other employee benefit plan or arrangement, or make any loans to any of its officers, directors, employees, affiliates or agents or consultants (other than reasonable and normal advances to employees for bona fide expenses that are incurred in the ordinary course of business) or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to a Benefit Plan or otherwise; provided, however, that the Company may this paragraph (i) withhold Shares shall not prevent the Company or any Company Subsidiary from entering into at-will offer letters with new non-officer employees in the ordinary course of business.
(j) other than in the ordinary course of business consistent with past practice, or except as required by applicable law or the terms of any agreement or plan existing on the date hereof, or except as contemplated pursuant to satisfy Tax this Agreement, (i) pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or affiliates of the Company or any Company Subsidiary of any amount relating to unused vacation days or (ii) adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, Company Stock Plan, stock purchase, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment agreement with or for the benefit of any Company or any Company Subsidiary director, officer, employee or agent, whether past or present, or amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing;
(k) announce, implement or effect any material reduction in labor force, lay-off, early retirement program, severance program or other program or effort concerning the termination of employment of employees of the Company or any Company Subsidiary other than routine employee terminations;
(l) other than in the ordinary course of business, incur any capital expenditures or any obligations or liabilities in respect thereof in excess of $1 million, in the aggregate, except those contemplated in the capital expenditures budgets for the Company and the Company Subsidiaries previously made available to Parent;
(m) enter into any agreement or arrangement that limits or otherwise restricts the Company, any Company Subsidiary, or upon completion of the Merger, Parent or its Subsidiaries or any successor thereto from engaging or competing in any line of business or in any location;
(n) except with respect to Options(i) customer or distributor contracts or (ii) licenses granted to the Company or any of the Company Subsidiaries for generally commercially available Intellectual Property that has a cost of not more than $100,000 per copy, Restricted Stock Awards and RSUs granted in each case that are in effect as of the date hereof or that are entered into after the date hereof in the ordinary course of business consistent with past practice, amend or modify in any material respect or terminate any Company Material Agreement (other than permitting expiration of such Company Material Agreement in accordance with its terms) or otherwise waive, release or assign any material rights, claims, benefits or obligations of the other party thereunder, or enter into any contract that would be a Company Material Agreement;
(o) compromise, settle, pay or discharge any litigation, investigations or arbitrations, other than (A) the payment, discharge or satisfaction, in the ordinary course of business consistent with past practice, of such claims, liabilities or obligations disclosed or reserved against in the Financial Statements included in the Company SEC Documents filed prior to the date hereof pursuant in amounts no greater than the amount reserved with respect to the Equity Plans or the Assumed Subsidiary Equity Plans relevant liability therein, and (iiB) acquire Shares settlements, payments or discharges in connection with exchange for a general release and a dismissal of claims where the surrender of Shares by holders of Options amount paid (after giving effect to insurance proceeds actually received) paid in settlement or Warrants compromise does not exceed $1 million in order to pay the exercise price of the Options or Warrantsaggregate;
(cp) grant permit any Options, Restricted Stock Awards, RSUs material insurance policy naming it as a beneficiary or other equity-based awards a loss payee to be cancelled or grant any options terminated without reasonable prior notice to purchase Shares under the Company’s 2007 Employee Stock Purchase PlanPurchaser;
(dq) splitchange any of the accounting methods used by it materially affecting its assets, combineliabilities or business, subdivide except for such changes required by GAAP or reclassify Regulation S-X promulgated under the Exchange Act, as concurred in by its independent registered public accountants;
(r) revalue in any Shares material respect any of its material assets, including writing down the value of inventory or declarewriting down notes or accounts receivable, set aside for payment other than in the ordinary course of business consistent with past practice;
(s) make or pay change or rescind any dividend material Tax election, change an annual Tax accounting period, adopt or change any accounting method in respect of Taxes, file any Shares amended material Tax Returns, enter into any material tax allocation agreement, tax sharing agreement or otherwise make closing agreement with respect to any payments material Taxes, settle or distributions consent to stockholders settlement of any material Tax Claim, take any affirmative action to surrender any right to claim a refund of material Taxes, or consent to any extension or waiver of the Company or of limitation period applicable to any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as suchmaterial Tax Claim;
(et) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, (other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) adopt any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material stockholder rights thereunderplan;
(v) create enter into a Company IP Agreement or amend any SubsidiaryCompany IP Agreement, in each case in a manner that would provide any Person with the right to receive or use Company Source Code in the event of a change in control or transfer of the assets of Company or any exclusive rights with respect to any Company IP;
(w) abandon, fail to maintain or allow to expire, or sell or exclusively license to any Person, any material Company IP;
(x) enter into any new material line of business outside of its existing business segments and reasonable extensions thereof;
(y) modify the Company’s standard warranty terms for Company Products or services in any manner that is likely to be materially adverse to the Company and the Company Subsidiaries, taken as a whole; or
(wz) enter into any written agreement, contract, agreement, commitment or arrangement to do any of the foregoing, or authorize in writing any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. Except as set forth in Section 5.1 of the Company Disclosure Schedule, as required pursuant to this Agreement, from the date hereof until the earlier of (A) the valid termination of this Agreement in accordance with Article VIII hereof, and (B) the Effective Time, the Company shall, and shall cause the Company Subsidiaries to, (i) as required by Lawconduct their businesses in all material respects in the ordinary course consistent with past practice, (ii) use their reasonable best efforts to preserve intact their present business organizations, (iii) use their reasonable best efforts to maintain satisfactory relations with and keep available the services of their current officers and other key employees, and (iv) use their reasonable best efforts to preserve existing relationships with material customers, lenders, suppliers, distributors and others having material business relationships with the Company and the Company Subsidiaries. Without limiting the generality of the foregoing, except as set forth in Section 5.1 of the Company Disclosure Schedule, as expressly required pursuant to this Agreement or as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date hereof until the earlier of (x) the valid termination of this Agreement to the Effective Time the Company shallin accordance with Article VIII hereto, and shall cause each of its Subsidiaries to, conduct its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve its present relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and nor shall not it permit any of its Subsidiaries Company Subsidiary to, do any of the following:
(a) except for Shares to be issued amend or delivered pursuant to modify the exercise of Options or WarrantsCompany Governing Documents, the settlement Rights Agreement or equivalent documents of RSUs any Company Subsidiary or amend or modify the lapsing terms of forfeiture restrictions of Restricted Stock Awards, each any outstanding on the date hereof or the issuance security of the Company or any Company Subsidiary;
(b) split, combine, subdivide or reclassify any shares of capital stock of the Company or any Company Subsidiary, other than any such transaction by a Company Subsidiary that remains a Company Subsidiary after consummation of such transaction;
(c) declare, set aside or pay any dividend or other distribution payable in cash, stock or property (or any combination thereof) with respect to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its ’s capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereofstock;
(bd) redeem, purchase or otherwise acquire, or propose offer to redeem, purchase or otherwise acquire, any outstanding SharesEquity Interests, except (i) repurchases or forfeitures of unvested restricted Shares subject to restricted stock awards or stock bonus awards granted under the Company Stock Plans in accordance with the terms and conditions of such awards, (ii) repurchases of unvested Shares in connection with the withholding of Shares upon the exercise of Company Options or the vesting of restricted Shares subject to restricted stock awards or stock bonus awards granted under the Company Stock Plans, and (iii) repurchases of Shares from employees of the Company or a Company Subsidiary in relation to the loan agreements with such employees that are set forth in Section 5.1(d)(iii) of the Company Disclosure Schedule;
(e) issue, sell, pledge, deliver, transfer, dispose of or encumber any shares of, or securities convertible into or exchangeable for, or grant any Company Options, Warrants restricted Shares subject to restricted stock awards or stock bonus awards or other securities stock awards under the Company Stock Plans or warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class, or grant to any Person any right the value of which is based on the value of Shares or other capital stock, other than (i) the issuance of Shares pursuant to the exercise of the Company Options outstanding as of the date hereof and disclosed in Section 3.2(b) of the Company Disclosure Schedule or granted after the date hereof in compliance with the terms of the succeeding clause (ii) of this Section 5.1(e), and (ii) the grant of Company Options to newly hired or promoted employees of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to Subsidiary after the date hereof pursuant in the ordinary course of business up to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender a maximum of Shares by holders of Options or Warrants in order to pay 100,000 Shares, provided that the exercise price for any such grants shall be the fair market value of the Shares underlying such Company Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under on the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders date of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Mergergrant;
(f) acquire (whether pursuant to merger, stock or asset purchase or otherwise) in one transaction or any series of related transactions (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice, any assets having a fair market value in excess of $1,000,000 or (ii) any equity interests in any Person or any business or division of any Person or all or substantially all of the assets of any Person (or business or division thereof);
(g) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any of its material assets, other than (i) sales of inventory and licenses of software or other Intellectual Property, in each case, to customers in the ordinary course of business consistent with past practice, and (ii) dispositions of assets no longer used in the operation of the business;
(h) (i) incur or assume any long-term or short-term indebtedness except short-term payables incurred in the ordinary course of business consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for borrowed money the obligations of any other Person, other than obligations of wholly owned Company Subsidiaries in addition to that incurred as the ordinary course of the date of this Agreement business consistent with past practice; or guarantee any such indebtedness or (iii) make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its loans, advances or capital contributions to, or investments in, wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses Company Subsidiaries made in the ordinary course of business consistent with past practice;
(i) except other than as required by applicable Law or except as required by the terms of a Benefit Plan any agreement or other contract in effect as of on the date hereof, make any change in, or accelerate the vesting of, the compensation or benefits payable or to become payable to, or grant any severance or termination pay to, any of this Agreementits officers, (i) directors, employees, agents or consultants or enter into an employment agreement with or amend any Person or grant to any Person any right to employment, consulting, severance, retention, change in control control, termination pay, collective bargaining or termination compensation other similar agreement or, except as permitted under Section 5.1(e)(ii), any equity based compensation, pension, deferred compensation, welfare benefits or benefitsother employee benefit plan or arrangement, or increase make any Person’s rights theretoloans to any of its officers, directors, employees, affiliates or agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to a Benefit Plan or otherwise; except (i) as required by and pursuant to previously existing contractual arrangements or policies of the Company, (ii) grant pursuant to employment agreements that do not provide for any compensation or severance related to or as a result of a change in control which (x) are entered into in the ordinary course of business with a Person who would hold a title junior to Vice President of the Company after entry into such employment agreement and who is hired or promoted by the Company or a Company Subsidiary after the date hereof in the ordinary course of business, (y) provide for severance benefits which are no more favorable than the severance benefits provided under the Company’s current or former severance policy described in Section 6.8 of the Company Disclosure Schedule and (z) in the event the Person entering such employment agreement is replacing an existing officer, director, officer employee, agent or employee consultant of the Company or any of its Subsidiariesa Company Subsidiary, any increase in compensation other than, with respect to Persons who are not directors or officers and provide for severance benefits which do not report directly exceed the severance benefits that were applicable to the Company’s President and Chief Operating Officerpredecessor of such Person, ordinary course annual increases consistent with past practice, or (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreementto the extent necessary to comply with, or (iv) terminate satisfy an exemption from, Section 409A of the employment of or hire Code without increasing the benefits provided to any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;Person.
(j) incur any capital expenditures or any obligations or liabilities in respect thereof in excess of $1,000,000, in the aggregate, except as required by any Benefit Plan those contemplated in accordance with its terms as of the date of this Agreement, take any action capital expenditures budgets for the Company and the Company Subsidiaries previously made available to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determinedParent;
(k) enter into any agreement or arrangement that limits or otherwise restricts the Company, any Company Subsidiary, or upon completion of the Merger, Parent or its Subsidiaries or any successor thereto from engaging or competing in any line of business or in any location;
(l) change any of the accounting methods used by the Company it materially affecting its assets, liabilities or its Subsidiaries unless business, except for such changes required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments Regulation S-X promulgated under the charter or organizational documents of any Subsidiary of the CompanyExchange Act;
(m) authorize adopt a plan of complete or make any commitment with respect topartial liquidation, any capital expenditure dissolution, restructuring, recapitalization or other expenditures reorganization of the Company (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000Merger);
(n) make or change any election, change any annual accounting period, adopt or change any method of accounting, file any amended Tax Return, enter into any closing agreement, settle any claim or assessment, surrender any right to claim a refund, offset or other reduction in liability, or consent to any extension or waiver of the limitations period applicable to any claim or assessment, in each case with respect to Taxes;
(io) enter into any new line of business outside of its existing business segments that is material to the Company and the Company Subsidiaries, taken as a whole;
(p) pay, discharge, settle or satisfy any material claims, liabilities, liabilities or obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the (i) performance of contractual obligations in accordance with their terms, (ii) payment, discharge, settlement or satisfaction thereof in the ordinary course of business consistent with past practice business, or in accordance with their terms, (iii) settlement or satisfaction of liabilities reserved against outstanding claims or litigation for less than $500,000 in the most recent Financial Statements aggregate;
(q) fail to keep in force insurance policies or replacement or revised provisions regarding insurance coverage with respect to the assets, operations and activities of the Company included and the Company Subsidiaries as currently in the Filed SEC Documents effect;
(for amounts not r) (i) modify, amend, terminate, cancel or extend any Company Material Contract or (ii) enter into any contract that if in excess of such reserves) or incurred since effect on the date of such Financial Statements hereof would be a Company Material Contract, except, in either case, in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;; and
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(rs) enter into any material joint venture or partnership;
(s) engage in any transactionswritten agreement, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoing, or authorize in writing any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. Except (i) The Company covenants and agrees as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of itself and its Subsidiaries that during the Company Disclosure Schedule, period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (i) expressly contemplated or permitted by this Agreement, (ii) set forth in Section 5.1 of the Company Disclosure Letter, (iii) required by applicable Law, or (iv) agreed to in writing by Parent, after the date of this Agreement and prior to the Effective Time Time:
(a) the business of the Company shall, and shall cause each of its Subsidiaries to, conduct its business shall be conducted only in the usual, regular and ordinary course consistent with past practice practice, and the Company shall use all its reasonable best efforts to preserve intact its current business organization, organization and goodwill and the business organization and goodwill of its Subsidiaries and keep available the services of its their current officers and employees and preserve its present relationships and maintain existing material relations with customers, suppliers, licensorsofficers, licenseesemployees, distributors, creditors and Governmental Entities and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except Entities;
(wb) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and nor shall not it permit any of its Subsidiaries to, do any of the following:
(ai) (A) enter into any new line of business, or (B) except as required on an emergency basis, incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures, other than (1) in the ordinary course of business, not to exceed $500,000 in the aggregate, or (2) capital expenditures and obligations or liabilities incurred or committed to in an amount not materially greater in the aggregate than, and during the same time period set forth in, the Company’s capital budget set forth in Section 5.1(b) of the Company Disclosure Letter;
(ii) amend its or any of its Subsidiaries’ certificate of incorporation or bylaws or similar organizational documents, except as contemplated by the transactions contemplated hereby;
(iii) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (iA) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities distributions between wholly-owned Subsidiaries of the Company and (B) distributions to the Company from its Subsidiaries Subsidiaries, declare, set aside or pay any distributions in respect of its equity securities, or split, combine or reclassify any of its equity securities or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any of its equity securities;
(iv) (A) adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any shares of, or in substitution securities convertible into or exchangeable for, Shares outstanding on or options, warrants, calls, commitments or rights of any kind to acquire, any shares of Company Common Stock or capital stock or other equity interest of any class or of any other such securities or agreements of the Company or any of its Subsidiaries, other than issuances of shares of Company Common Stock pursuant to Company Options existing at the date hereof;
of this Agreement and disclosed to Parent in Section 3.2(c) of the Company Disclosure Letter; or (bB) except as provided in Section 2.3, redeem, purchase or otherwise acquireacquire directly or indirectly any of its capital stock (including any Company Common Stock) or any other securities or agreements of the type described in clause (A) of this Section 5.1(b)(iv);
(A) except for increases in the ordinary course of business consistent with past practice with respect to non-officer employees, grant any increase in the compensation or benefits payable or to become payable by the Company or any of its Subsidiaries to any current or former officer, employee or director; (B) adopt, enter into, amend or otherwise increase, or propose accelerate the payment or vesting of the amounts, benefits or rights payable or accrued or to redeembecome payable or accrued under any bonus, purchase or otherwise acquirecommission incentive compensation, any outstanding Sharesdeferred compensation, Optionsseverance, Warrants termination, change in control, retention, hospitalization or other securities medical, life, disability, insurance or other welfare, profit sharing, stock option, stock appreciation right, restricted stock or other equity based, pension, retirement or other employee compensation or benefit plan, program, agreement or arrangement, which for the avoidance of doubt, shall include any agreement with any current or former officer, employee or director; (C) except in accordance with the terms of any Company Plan disclosed to Parent in Section 3.10(a) of the Company Disclosure Letter, grant any severance, retention, change in control, termination or similar pay or benefit to any current or former officer, director or employee of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(cD) grant any Optionsstock options, Restricted Stock Awards, RSUs restricted stock awards or other equity-based awards other than issuances of Company Common Stock upon the exercise of Company Options existing on the date hereof in accordance with their terms in effect as of the date hereof as disclosed to Parent in the Section 3.2(c) of the Company Disclosure Letter; (E) adopt or grant enter into any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
Collective Bargaining Agreement; or (dF) split, combine, subdivide enter into or reclassify amend any Shares or declare, set aside for payment or pay employment agreement with any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders officer of the Company or any of its Subsidiaries.
(vi) change its methods of accounting in effect as of the date of this Agreement, except in accordance with changes in GAAP, applicable Law or regulatory guidelines as concurred to by the independent auditors of the Company;
(vii) acquire by merging or consolidating with (other than mergers among wholly-owned Subsidiaries of the Company), by purchasing an equity interest in (other than investments in wholly-owned Subsidiaries of the Company) or all or a material portion of the assets of, or by any other manner, any Person or other business organization, division or business of such Person or, any material assets; provided that any such acquisitions made in accordance with this Section 5.1(b)(vii) shall not exceed $500,000 in the aggregate.
(viii) except in the ordinary course of business consistent with past practice, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any of the Company Assets or Company Oil and Gas Properties having a purchase price in excess of $250,000 individually and $1,000,000 in the aggregate;
(ix) mortgage, pledge, hypothecate, grant any security interest in, or otherwise subject to any other Lien other than Permitted Liens, any of the Company Assets or Company Oil and Gas Properties;
(A) except as set forth in clause (B) below, pay, discharge or satisfy any material claims (including claims of equityholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment or transfer, assignment or conveyance of cash, Company Assets, Company Oil and Gas Properties or otherwise, except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of Material Contracts as in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, provided, however, that nothing in this Section 5.1(b)(x) shall prohibit the Company or any of its Subsidiaries from paying, discharging or satisfying accounts payable existing on or arising after, in each case in the ordinary course of business consistent with past practice, the date of this Agreement, or (B) compromise, settle, grant any waiver or release relating to any Litigation, that is would admit liability of the Company or its Subsidiaries or that would result in restrictions on the business of the Company and its Subsidiaries, other than settlements or compromises of Litigation fully covered by insurance or where the amount of such payment made or to be made, or, of such transfer, assignment, or conveyance made or to be made, of cash, Company Assets, Company Oil and Gas Properties or otherwise does not wholly owned exceed $250,000 in the aggregate for all claims;
(xi) engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement insofar as such agreements are disclosed in Section 3.20 of the Company Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly) by Company in their capacity as such, any of the Company’s or any of its Subsidiaries’ affiliates;
(exii) other than as required by Law, (A) make or change any express or deemed Tax election; (B) amend any Tax Return; (C) settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to material Taxes, other than such settlements or compromises where the amount paid or to be paid as a result of increased taxable income or decreased deductions in prior years or future years could not exceed $100,000 in the aggregate; or (D) change in any material respect any of its methods of reporting income or deductions for U.S. federal income Tax purposes from those employed in the preparation of its federal income Tax Return for the most recent taxable year for which a Tax Return has been filed;
(xiii) take (or omit to take) any action that would, or could reasonably be expected to, result in any of its representations and warranties set forth in this Agreement becoming untrue in a manner that would give rise to the failure of the closing conditions set forth in Section 6.3(a);
(xiv) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its SubsidiariesSubsidiaries or any agreement relating to an Acquisition Proposal, other than the Mergerexcept in compliance with Section 5.3;
(fxv) acquire (iA) by purchaseincur, merger assume or otherwise, guarantee any business or equity interest of any Person or (ii) any asset or assets, except indebtedness for purchases of components, raw materials or supplies borrowed money other than indebtedness incurred in the ordinary course of business consistent with past practice that (x) is incurred pursuant to the Company Credit Agreement up to an aggregate amount of $10,000,000 or as permitted under Section 6.1(m);
(gy) sell, lease, license, mortgage, sell constitutes short-term indebtedness and leaseback does not exceed $2,500,000 in aggregate principal amount outstanding thereunder at any time; (B) modify any material indebtedness or otherwise encumber other liability to increase the Company’s (or dispose of any of its properties Subsidiaries’) obligations with respect thereto or to subject the Company (or any of its Subsidiaries) to yield, prepayment or other assets penalties thereunder; (C) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
other Person (h) incur any indebtedness for borrowed money in addition to that incurred as other than a wholly owned Subsidiary of the date of this Agreement or guarantee any such indebtedness or Company); (D) make any loans, advances or capital contributions to, or investments in, any other Person, Person (other than to the Company and its wholly owned SubsidiariesSubsidiaries of the Company, and other than or by such Subsidiaries to the Company, customary loans or advances to employees in respect accordance with past practice or short-term investments of travel or other related expenses cash in the ordinary course of business consistent in accordance with past practice;
the Company’s cash management procedures); or (i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (iE) enter into an employment agreement with any Person a swap, futures or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) derivatives transaction except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction hedging activities in the ordinary course of business consistent with past practice and with the risk parameters described in Section 3.21;
(xvi) enter into any agreement, understanding or in accordance with their termscommitment that materially restrains, of liabilities reserved against in limits or impedes the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company Company’s or any of its Subsidiaries is a party Subsidiaries’ ability to compete with or (v) waive conduct any material benefits ofbusiness or line of business, or agree to modify in any material respect, or, subject to including geographic limitations on the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company Company’s or any of its Subsidiaries is a partySubsidiaries’ activities;
(oxvii) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, modify or (ii) amend in any material respect, or terminate, any Company Material Contract to distribute, license which it is a party or co-promote waive in any product of the Company material respect or assign any of its Subsidiaries (including products rights or claims, or be in default in any material respect under development and products licensed by the any such Company or any of its Subsidiaries)Material Contract;
(rxviii) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than except in the ordinary course of business consistent with past practice, make any acreage or production acquisition or agree to any such acreage or production acquisition, in each case for which it is not contractually bound at the date hereof and disclosed, in excess of $1,000,000 in the aggregate;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(wxix) enter into any joint operating agreement or other similar contract that is customary in the oil and gas business, except such contracts for which the contract area includes project areas on which the Company has disclosed to Parent, as of the date hereof, plans to explore for Hydrocarbons;
(xx) except in the ordinary course of business consistent with past practice, grant to or acquire from any Person, or dispose of or permit to lapse any rights to, or disclose to any Person any material Trade Secret included in, any material Intellectual Property used in or necessary to conduct the Calliope System;
(xxi) grant any overriding royalty interest (or similar instrument) in respect of any Hydrocarbon Interest in the Xxxxxx formation or on which there are no producing xxxxx holding the Hydrocarbon Interest as of the time of grant of such interest (or similar instrument);
(xxii) enter into an agreement, contract, agreement, commitment or arrangement to do any of the foregoing;
(c) the Company shall use commercially reasonable efforts to maintain its insurance policies in effect on the date of this Agreement; and
(d) the Company shall file on a timely basis all material notices, reports, returns and other filings required to be filed with or reported to any Governmental Entity, as well as all applications and other documents necessary to maintain, renew or extend any material Permit required by any Governmental Entity for the continuing operation of its business.
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