Interim Operations of the Company. The Company agrees that, during the period from the date of this Agreement through the earlier of (x) the time that the designees of Parent as provided in Section 1.4(a) have been elected to or designated as members of, and shall constitute a majority of, the Company’s Board of Directors, or (y) the date of termination of this Agreement, except (i) to the extent Parent shall otherwise consent in writing (which consent, in the case of actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, and in the case of any commitment or agreement described in clause “(y)” below to take any of the actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, is not to be unreasonably withheld, conditioned or delayed), (ii) as set forth in the Company Disclosure Schedule (including Part 5.1 thereof), (iii) as necessary to implement or otherwise effectuate an Agreed Arrangement or as otherwise expressly contemplated by this Agreement or (iv) as may be required by any Legal Requirement, (A) the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to conduct its business in the ordinary course consistent with the manner in which such business was being conducted prior to the date of this Agreement and use its commercially reasonable efforts to preserve its present business and organization substantially intact and to maintain such relations with customers, suppliers, employees, contractors, distributors and others having business dealings with it to the extent reasonably necessary to preserve substantially intact its present business and organization, and (B) neither the Company nor any of its Subsidiaries shall: (a) amend the Company’s certificate of incorporation or bylaws; (b) split, combine or reclassify any shares of the Company’s capital stock; (c) declare, set aside or pay any dividend (whether payable in cash, stock or property) with respect to any shares of the Company’s capital stock, except prior to the Acceptance Time for the regular quarterly cash dividend in the amount of $.01 per issued and outstanding Company Share declared and paid on its historical schedule consistent with past practice; (d) form any Subsidiary; (e) issue, sell, pledge, dispose of or encumber any additional shares of its capital stock, or securities convertible or exchangeable for, or options or rights to acquire, any shares of its capital stock, other than (i) Company Shares reserved for issuance upon exercise of Company Options outstanding on the date of this Agreement (or granted pursuant to clause “(ii)” or clause “(iii)” of this clause “(e)”), (ii) Company Options or shares of restricted stock granted to new employees in connection with their initial hiring by the Company consistent with the past practices of the Company with respect to newly hired employees and (iii) Company Options or shares of restricted stock granted to employees of the Company and its Subsidiaries at times and in amounts consistent with past practices of the Company; (f) transfer, dispose of or lease, or materially encumber, any material tangible assets of the Company or any of its Subsidiaries, other than (i) pursuant to written contracts or commitments existing as of the date of this Agreement (copies of which have been made available to Parent) or (ii) tangible assets with a value not in excess of $100,000 individually or $1,000,000 in the aggregate; (g) dispose of or abandon, or grant or allow to be prematurely terminated licenses or similar rights to, any material Company IP (other than (i) nonexclusive licenses granted in the ordinary course of business consistent with past practice or (ii) implied licenses arising from sales of products); (h) repurchase, redeem or otherwise acquire any shares of the capital stock of the Company, except shares repurchased from employees or former employees of the Company or any of its Subsidiaries pursuant to (i) the exercise of repurchase or cancellation rights, or (ii) elections by employees or former employees to sell or otherwise transfer Company Shares to the Company to satisfy withholding obligations, in each case pursuant to the Company Option Plan or applicable award; (i) incur any indebtedness for borrowed money or guarantee any such indebtedness, except for borrowings incurred or made in the ordinary course of business (under credit facilities in existence as of the date of this Agreement) that do not result in the total indebtedness for borrowed money of the Company and its Subsidiaries exceeding $30,000,000 outstanding at any one time; (j) adopt or amend in any material respect any Company Benefit Plan, or increase the compensation or fringe benefits of any director, officer or employee of the Company or any of its Subsidiaries, except for (i) any increases committed to prior to the date of this Agreement (as previously disclosed to Parent) and (ii) increases in amounts and at times consistent with past practices, provided that any such increase pursuant to this clause “(ii)” for any officer does not exceed 5% of then current compensation of such officer; (k) accelerate the payment or vesting of benefits or amounts payable or to become payable under any Company Benefit Plan, or amend in any material respect any Company Benefit Plan in a manner inconsistent with the foregoing, except as required by any existing agreement, plan or applicable Legal Requirement; (l) enter into or amend or modify in any material respect any Employment Agreement; (m) materially amend any CT Contract or Material Contract described in clause “(i),” clause “(ii),” clause “(iii),” clause “(iv),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement) or prematurely terminate any CT Contract or Material Contract described in clause “(ii),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement), except, in each case (other than in the case of a CT Contract), in the ordinary course of business consistent with past practice or where the failure to amend or terminate any such Material Contract could, in the good faith judgment of the Company, have a material adverse impact on the Company; (n) enter into any new agreement or contract described in clause “(i),” clause “(iv),” clause “(vii),” clause “(viii)” or clause “(xiv)” of Section 3.8(a); (o) enter into any agreement, including any option agreement, relating to the acquisition or disposition of any business, business line or Entity (whether by merger, sale of stock, sale of assets or otherwise); (p) change any of its methods of accounting or accounting practices in any material respect; (q) make or rescind any material Tax election, settle or compromise any material claim with respect to Taxes, consent to any extension or waiver of the limitation period applicable to any material Tax claim or enter into any material agreement with any taxing authority relating to Taxes; (r) make any capital expenditure in excess of $250,000 individually or $1,850,000 in the aggregate in any fiscal month; (s) adopt any plan of complete or partial liquidation, dissolution, restructuring or other reorganization of the Company or, except in accordance with the rights of the Company under Section 5.2, adopt any plan providing for, or enter into, an Alternative Acquisition (as defined in Section 5.2(f)); (t) make any loans, advances or capital contributions to, or investments in, any other Person other than (i) loans or advances to customers in the form of trade credit or deferred purchase price arrangements in the ordinary course of business, (ii) by the Company or any Subsidiary of the Company to or in the Company or any Subsidiary of the Company, (iii) pursuant to any contract or other legal obligation set forth in Part 5.1(t) of the Company Disclosure Schedule or (iv) advances to employees (other than officers of the Company) in the ordinary course of business consistent with past practice, not to exceed $10,000 in each individual case and $500,000 in the aggregate; (u) settle or compromise any Legal Proceeding or enter into any consent decree, injunction or similar restraint or form of equitable relief in settlement of any Legal Proceeding, other than (i) settlements and compromises that relate to Taxes (which are the subject of Section 5.1(q)) and (ii) any settlement, compromise, consent decree, injunction, restraint or relief in an amount less than $500,000 that would not limit or restrict in any material respect the ability of the Company or any of its Subsidiaries to engage in or conduct any business in any geographic area or restrict the Company’s right to use any material Company IP or license any material Company IP from any other Person; (v) terminate, cancel, amend or modify any material insurance policy maintained by the Company or any of its Subsidiaries which is not promptly replaced by a comparable amount of insurance coverage; (w) redeem the Company Rights or amend, modify or terminate the Company Rights Agreement, or render it inapplicable to (or otherwise exempt from the application of the Company Rights Agreement) any Person or action (other than Parent and Acquisition Sub in connection with the delivery and performance of this Agreement); (x) fail to repurchase in accordance with the terms of applicable repurchase rights any shares of restricted stock of the Company that, by virtue of any termination of employment of a holder thereof or otherwise, become subject to repurchase at any time prior to the Acceptance Time; or (y) enter into any commitment or agreement to take any of the actions described in clauses “(a)” through “(x)” of this sentence.
Appears in 1 contract
Interim Operations of the Company. The 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 in connection with applicable Law, (ii) with the prior written consent of Parent, which consent shall not be unreasonably withheld, delayed or conditioned, (iii) as contemplated or permitted by this Agreement, (iv) as required by the Patent Purchase Agreement or contemplated by Section 6.7(c), (v) actions taken or not taken following a request by Parent pursuant to and in accordance with Section 6.15, pursuant to Section 6.15 or (vi) as set forth in Section 6.1 of the Company agrees thatDisclosure 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 (except with respect to clauses (b), (c), (d) and (e) below), (iii) as contemplated or permitted by this Agreement, (iv) as required by the Patent Purchase Agreement or contemplated by Section 6.7(c), (v) actions taken or not taken following a request by Parent pursuant to and in accordance with Section 6.15, pursuant to Section 6.15 or (vi) as set forth in Section 6.1 of the Company Disclosure Schedule), during the period from the date of hereof to the Effective Time or the date, if any, on which this Agreement through the is earlier of (x) the time that the designees of Parent as provided in terminated pursuant to Section 1.4(a) have been elected to or designated as members of, and shall constitute a majority of8.1, the Company’s Board of DirectorsCompany agrees that it shall not, or (y) the date of termination of this Agreement, except (i) to the extent Parent nor shall otherwise consent in writing (which consent, in the case of actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, and in the case of it permit any commitment or agreement described in clause “(y)” below to take any of the actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, is not to be unreasonably withheld, conditioned or delayed), (ii) as set forth in the Company Disclosure Schedule (including Part 5.1 thereof), (iii) as necessary to implement or otherwise effectuate an Agreed Arrangement or as otherwise expressly contemplated by this Agreement or (iv) as may be required by any Legal Requirement, (A) the Company shall, and shall cause each of its Subsidiaries Subsidiary to, use its commercially reasonable efforts to conduct its business in the ordinary course consistent with the manner in which such business was being conducted prior to the date of this Agreement and use its commercially reasonable efforts to preserve its present business and organization substantially intact and to maintain such relations with customers, suppliers, employees, contractors, distributors and others having business dealings with it to the extent reasonably necessary to preserve substantially intact its present business and organization, and (B) neither the Company nor any of its Subsidiaries shall:
(a) amend the Company’s its certificate of incorporation or bylawsbylaws (or equivalent organizational documents of any Company Subsidiary) other than pursuant to any contemplated liquidation of a dormant Company Subsidiary;
(b) splitexcept for Company Common Stock to be issued upon the exercise or settlement of Company Options, combine Company RSAs, Company RSUs, Company CSEs or reclassify Company SBDC Units outstanding as of the date hereof in accordance with their terms, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, sale, disposition or pledge or other encumbrance of, (i) any shares of the Company’s capital stock;
(c) declare, set aside stock of any class or pay any dividend (whether payable in cash, stock or property) with respect to any shares of the Company’s capital stock, except prior to the Acceptance Time for the regular quarterly cash dividend in the amount of $.01 per issued and outstanding Company Share declared and paid on its historical schedule consistent with past practice;
(d) form any Subsidiary;
(e) issue, sell, pledge, dispose of or encumber any additional shares of its capital stock, or securities convertible or exchangeable for, or options or rights to acquire, any shares of its capital stock, other than (i) Company Shares reserved for issuance upon exercise of Company Options outstanding on the date of this Agreement (or granted pursuant to clause “(ii)” or clause “(iii)” of this clause “(e)”), (ii) Company Options or shares of restricted stock granted to new employees in connection with their initial hiring by the Company consistent with the past practices of the Company with respect to newly hired employees and (iii) Company Options or shares of restricted stock granted to employees of the Company and its Subsidiaries at times and in amounts consistent with past practices of the Company;
(f) transfer, dispose of or lease, or materially encumber, any material tangible assets equity 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 capital stock or any other than (i) pursuant to written contracts or commitments existing as equity interest of the date Company or any Company Subsidiary, or any rights, warrants, options, calls, commitments or any other agreements of this Agreement (copies any character to purchase or acquire any shares of which have been made available capital stock or any other 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 Parent) subscribe for, any shares of capital stock or any other equity interest of the Company or any Company Subsidiary or (ii) tangible assets with a value not in excess of $100,000 individually or $1,000,000 in the aggregate;
(g) dispose of or abandon, or grant or allow to be prematurely terminated licenses or similar rights to, any material Company IP (other than (i) nonexclusive licenses granted in the ordinary course of business consistent with past practice or (ii) implied licenses arising from sales of products);
(h) repurchase, redeem or otherwise acquire any shares of the capital stock of the Company, except shares repurchased from employees or former employees securities of the Company or any of its Subsidiaries pursuant in respect of, in lieu of, or in substitution for, Company Common Stock outstanding on the date hereof;
(c) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Company Common Stock, except for the acquisition of shares of Company Common Stock (and corresponding rights to purchase Company Common Stock) (i) from holders of Company Options in full or partial payment of the exercise price payable by such holder upon exercise of repurchase Company Options to the extent required or cancellation rightspermitted under the terms of such Company Options or to satisfy related Tax obligations upon exercise or settlement of Company Options, Company RSAs, Company RSUs, Company SBDC Units or (ii) elections as required by employees or former employees to sell or otherwise transfer Company Shares to the Company to satisfy withholding obligations, in each case pursuant to the Company Option Plan or applicable awardterms of any Benefit Plan;
(d) (i) incur split, combine, subdivide or reclassify any indebtedness shares of its capital stock or declare, set aside for borrowed money payment or guarantee pay or agree to pay any dividend or other distribution in respect of any shares of its capital stock or otherwise make any payments to stockholders in their capacity as such indebtedness, except for borrowings incurred or made in (ii) enter into any agreement with respect to the ordinary course voting or registration of business (under credit facilities in existence as of the date of this Agreement) that do not result in the total indebtedness for borrowed money of the Company and its Subsidiaries exceeding $30,000,000 outstanding at any one timecapital stock;
(je) adopt merge or amend in any material respect any Company Benefit Plan, or increase the compensation or fringe benefits of any director, officer or employee of consolidate the Company or any of its Subsidiaries, except for (i) any increases committed to prior to the date of this Agreement (as previously disclosed to Parent) and (ii) increases in amounts and at times consistent with past practices, provided that any such increase pursuant to this clause “(ii)” for any officer does not exceed 5% of then current compensation of such officer;
(k) accelerate the payment Company Subsidiary or vesting of benefits or amounts payable or to become payable under any Company Benefit Plan, or amend in any material respect any Company Benefit Plan in adopt a manner inconsistent with the foregoing, except as required by any existing agreement, plan or applicable Legal Requirement;
(l) enter into or amend or modify in any material respect any Employment Agreement;
(m) materially amend any CT Contract or Material Contract described in clause “(i),” clause “(ii),” clause “(iii),” clause “(iv),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement) or prematurely terminate any CT Contract or Material Contract described in clause “(ii),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement), except, in each case (other than in the case of a CT Contract), in the ordinary course of business consistent with past practice or where the failure to amend or terminate any such Material Contract could, in the good faith judgment of the Company, have a material adverse impact on the Company;
(n) enter into any new agreement or contract described in clause “(i),” clause “(iv),” clause “(vii),” clause “(viii)” or clause “(xiv)” of Section 3.8(a);
(o) enter into any agreement, including any option agreement, relating to the acquisition or disposition of any business, business line or Entity (whether by merger, sale of stock, sale of assets or otherwise);
(p) change any of its methods of accounting or accounting practices in any material respect;
(q) make or rescind any material Tax election, settle or compromise any material claim with respect to Taxes, consent to any extension or waiver of the limitation period applicable to any material Tax claim or enter into any material agreement with any taxing authority relating to Taxes;
(r) make any capital expenditure in excess of $250,000 individually or $1,850,000 in the aggregate in any fiscal month;
(s) adopt any plan of complete or partial liquidation, dissolution, restructuring merger, consolidation, restructuring, business combination, recapitalization or other reorganization of the Company oror any Company Subsidiary, except other than the Transactions;
(f) other than in accordance with the rights ordinary course of business or as permitted under Section 6.1(p), acquire (including by merger, consolidation, or acquisition of stock or assets), sell, lease, license or otherwise dispose of, or pledge or encumber any assets, or create, extend, grant or issue any Lien over any of the properties or assets of the Business, other than (i) acquisitions in existing or related lines of business of the Company under Section 5.2or any Company Subsidiary as to which the aggregate consideration for all such acquisitions does not exceed $1,500,000, adopt (ii) sales, leases, dispositions, pledges or encumbrances of assets with an aggregate fair market value of less than $1,500,000 or (iii) in the ordinary course of business in connection with the license of any plan providing for, of the Company’s products or enter into, an Alternative Acquisition (as defined in Section 5.2(f))sale of any of the Company’s services to customers;
(tg) incur any indebtedness for borrowed money in addition to that incurred as of the date hereof or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person Person, other than (i) loans to the Company or advances to customers any wholly owned Company Subsidiary or (ii) letters of credit or similar arrangements issued in the form ordinary course of trade credit business as to which the aggregate liability of the Company and the Company Subsidiaries does not exceed $2,000,000;
(i) grant any increases in the compensation of any of its directors, executive officers or deferred purchase price arrangements employees, except for increases in the compensation of non-executive-officer employees in the ordinary course of business, (ii) enter into or amend any employment or severance agreements with any directors or executive officers or (iii) establish any bonus or incentive plan or set performance targets under any existing bonus or incentive plan; provided, however, that the Company and the Company Subsidiaries shall pay, prior to December 31, 2010, earned annual bonuses for employees for fiscal year 2010, as determined in accordance with the terms of the applicable plan or program; provided further, however, that the aggregate amount of payment of earned annual bonuses for fiscal year 2010 shall not exceed $42,000,000;
(i) enter into, terminate or materially amend any Benefit Plan, except (i) as may be contemplated by this Agreement, (ii) to the extent required or advisable to comply with applicable Law or (iii) in the ordinary course of business with respect to any Company Welfare Plan, provided that such plan (or any amendment thereto) does not limit the right of the Company or any Company Subsidiary to modify or terminate such plan without incurring additional liability;
(j) change in any material respect any of the accounting policies, practices, principles, procedures or methods used by the Company or any Company Subsidiary unless required by GAAP, IFRS or applicable Law;
(k) waive, release, or assign any material claims or compromise, settle or agree to settle any suit, action, claim, proceeding or investigation (including any suit, action, claim, proceeding or investigation relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the Company to payment of monetary damages not in excess of $1,000,000 individually or $3,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company or any Subsidiary Company Subsidiary;
(l) (i) 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 Companystatute of limitations period applicable to any Tax claim or assessment, (iii) pursuant change any annual Tax accounting period, (iv) change (or make a request to any contract 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) take any action to exempt or make not subject to (i) the provisions of section 203 of the DGCL or (ii) any other state takeover law or state law that purports to limit or restrict business combinations or the ability to acquire or vote shares, any Person (other than Parent and any Subsidiary of Parent) or any action taken thereby, which Person or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(n) with respect to any Company Owned 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 legal obligation set forth in Part 5.1(t) similar channel partner), or otherwise dispose of any right, title or interest of the Company Disclosure Schedule or any of its Subsidiaries in any Company Owned Intellectual Property or Software (iv) advances to employees (in each case other than officers of the Company) 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 Owned Intellectual Property to any Person who is not subject to exceed $10,000 in each individual case and $500,000 in an enforceable written agreement to maintain the aggregateconfidentiality of such Trade Secrets;
(u) settle or compromise any Legal Proceeding or enter into any consent decree, injunction or similar restraint or form of equitable relief in settlement of any Legal Proceeding, other than (i) settlements and compromises that relate to Taxes (which are the subject of Section 5.1(q)) and (ii) any settlement, compromise, consent decree, injunction, restraint or relief in an amount less than $500,000 that would not limit or restrict in any material respect the ability of the Company or any of its Subsidiaries to engage in or conduct any business in any geographic area or restrict the Company’s right to use any material Company IP or license any material Company IP from any other Person;
(vo) terminate, cancel, amend materially amend, renew, or modify request or agree to any material insurance policy maintained change in or material waiver under any Specified Contract, or enter into or amend any material Contract (including any original equipment manufacture, joint development, joint marketing or joint venture Contract) in which any third party is granted marketing, resale or distribution rights of any type or scope with respect to any of the Company Products or technology assets that cannot be terminated for convenience by the Company or any of its Subsidiaries which is not promptly replaced by a comparable amount of insurance coverage;
applicable Company Subsidiary upon sixty (w60) redeem the Company Rights days’ notice or amend, modify or terminate the Company Rights Agreement, or render it inapplicable to (or otherwise exempt from the application of the Company Rights Agreement) any Person or action less (other than Parent and Acquisition Sub in the ordinary course of business in connection with the delivery and performance license, sale, resale, development or distribution of this Agreementany Company Products or sale, distribution, development or resale of any of the Company’s services to customers);
(xp) fail make or authorize any capital expenditure in excess of the Company’s capital expenditure budget as disclosed to repurchase Parent prior to the date hereof;
(q) hire any natural person to be employed by, or provide services to, the Company or any Company Subsidiary, other than as set forth in accordance with the terms of applicable repurchase rights any shares of restricted stock Section 6.1(q) of the Company thatDisclosure Schedule;
(r) take any action which is 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 more of the covenants required hereunder to be performed by it, by virtue of any termination of employment of a holder thereof in each case that would result in the closing conditions set forth in Section 7.2(a) or otherwise, become subject to repurchase at any time prior to the Acceptance TimeSection 7.2(b) not being satisfied; or
(ys) enter into any enforceable contract, agreement, commitment or agreement arrangement to take do any of the actions described in clauses “(a)” through “(x)” of this sentenceforegoing.
Appears in 1 contract
Samples: Merger Agreement (Novell Inc)
Interim Operations of the Company. The Company agrees that, during (a) During the period from the date of this Agreement through the earlier of the Effective Time and the date, if any, on which this Agreement is validly terminated pursuant to Section 7.1 (x) the time that the designees of Parent as provided in Section 1.4(a) have been elected to or designated as members of, and shall constitute a majority of, the Company’s Board of Directors, or (y) the date of termination of this Agreement“Interim Period”), except (i) to as may be required by Law, (ii) with the extent prior written consent of Parent shall otherwise consent in writing (which consentmay be via email from the person named under Section 9.3 to receive notices on behalf of Parent hereunder), in the case of actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, and in the case of any commitment or agreement described in clause “(y)” below to take any of the actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, is which consent shall not to be unreasonably withheld, conditioned delayed or delayed)conditioned, (iiiii) as expressly contemplated or permitted by this Agreement or (iv) as set forth in the Company Disclosure Schedule (including Part 5.1 thereof)Letter, (iii) as necessary to implement or otherwise effectuate an Agreed Arrangement or as otherwise expressly contemplated by this Agreement or (iv) as may be required by any Legal Requirement, (A) the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to conduct carry on its business in the ordinary course consistent with the manner in which such of business was being conducted prior to the date of this Agreement and use its commercially reasonable best efforts to (1) preserve intact its business organization, (2) maintain in effect all material licenses and permits required to carry on its business, (3) maintain in effect any exemptive orders or exemptive relief which it has received from the SEC and which are currently in effect and (4) preserve its present material business and organization substantially intact and to maintain such relations with customersrelationships; provided, suppliershowever, employees, contractors, distributors and others having business dealings with it to the extent reasonably necessary to preserve substantially intact its present business and organization, and (B) neither that no action by the Company nor or any of its Subsidiaries shall:
(awith respect to matters addressed specifically by any provision of Section 5.1(b) amend the Company’s certificate shall be deemed a breach of incorporation or bylaws;this sentence unless such action would constitute a breach of such specific provision.
(b) splitWithout limiting the generality of the foregoing, combine during the Interim Period, except (i) as may be required by Law, (ii) with the prior written consent of Parent (which may be via email 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 reclassify conditioned, (iii) as expressly required, contemplated or permitted by this Agreement or (iv) as set forth in the Company Disclosure Letter, the Company shall not, and shall not permit any of its Subsidiaries to:
(i) issue, deliver, sell, dispose of, grant, pledge or otherwise encumber or subject to any Lien, or authorize or propose the issuance, sale, disposition, pledge or other encumbrance of, (A) any shares of capital stock of any class or any other ownership interest of the Company’s capital stock;
Company or any of its Subsidiaries, (cB) declareany securities or rights convertible into, set aside exchangeable for, exercisable for, or pay any dividend (whether payable in cash, stock or property) with respect evidencing the right to subscribe for any shares of capital stock or any other ownership interest of the Company’s capital stockCompany or any of its Subsidiaries, except prior including any rights, warrants, options, calls, commitments or any other agreements of any character to the Acceptance Time for the regular quarterly cash dividend in the amount of $.01 per issued and outstanding Company Share declared and paid on its historical schedule consistent with past practice;
(d) form purchase or acquire any Subsidiary;
(e) issue, sell, pledge, dispose of or encumber any additional shares of capital stock or any other ownership interest of the Company or any of its capital stockSubsidiaries or any securities or rights convertible into, or securities convertible or exchangeable for, or options or rights evidencing the right to acquiresubscribe for, any shares of capital stock or any other ownership interest of the Company or any of its capital stockSubsidiaries on a deferred basis or (C) any other securities of the Company or any of its Subsidiaries in respect of, other than (i) in lieu of, or in substitution for, Company Shares reserved for issuance upon exercise of Company Options Common Stock outstanding on the date of this Agreement (or granted pursuant to clause “(ii)” or clause “(iii)” of this clause “(e)”), hereof;
(ii) Company Options adopt or shares enter into a plan of restricted stock granted to new employees in connection with their initial hiring by the Company consistent with the past practices of the Company with respect to newly hired employees and (iii) Company Options complete or shares of restricted stock granted to employees of the Company and its Subsidiaries at times and in amounts consistent with past practices of the Company;
(f) transferpartial liquidation, dispose of dissolution, merger, consolidation, restructuring, recapitalization or lease, or materially encumber, any material tangible assets other reorganization of the Company or any of its Subsidiaries, other than (i) pursuant to written contracts or commitments existing as of the date of this Agreement (copies of which have been made available to Parent) or (ii) tangible assets with a value not in excess of $100,000 individually or $1,000,000 in the aggregateMergers;
(giii) dispose of redeem, purchase or abandonotherwise acquire, or grant propose to redeem, repurchase or allow to be prematurely terminated licenses otherwise acquire, or similar rights tootherwise amend the terms of, any material outstanding Company IP Common Stock or Subsidiary equity interests of non-wholly owned Subsidiaries;
(iv) amend, enter into or terminate any Company Material Contract other than (i) nonexclusive licenses granted in the ordinary course of business consistent with past practice or (ii) implied licenses arising from sales of products)business;
(hv) repurchase, redeem or otherwise acquire make any shares material change in any of the capital stock of the Company, except shares repurchased from employees or former employees of accounting methods used by the Company or any of its Subsidiaries pursuant to (i) the exercise of repurchase or cancellation rights, or (ii) elections unless required by employees or former employees to sell or otherwise transfer Company Shares to the Company to satisfy withholding obligations, in each case pursuant to the Company Option Plan GAAP or applicable awardLaw;
(i) incur any indebtedness for borrowed money or guarantee any such indebtedness, except for borrowings incurred or made in the ordinary course of business (under credit facilities in existence as of the date of this Agreement) that do not result in the total indebtedness for borrowed money of the Company and its Subsidiaries exceeding $30,000,000 outstanding at any one time;
(j) adopt or amend in any material respect any Company Benefit Plan, or increase the compensation or fringe benefits of any director, officer or employee of the Company or any of its Subsidiaries, except for (i) any increases committed to prior to the date of this Agreement (as previously disclosed to Parent) and (ii) increases in amounts and at times consistent with past practices, provided that any such increase pursuant to this clause “(ii)” for any officer does not exceed 5% of then current compensation of such officer;
(k) accelerate the payment or vesting of benefits or amounts payable or to become payable under any Company Benefit Plan, or amend in any material respect any Company Benefit Plan in a manner inconsistent with the foregoing, except as required by any existing agreement, plan or applicable Legal Requirement;
(l) enter into or amend or modify in any material respect any Employment Agreement;
(m) materially amend any CT Contract or Material Contract described in clause “(i),” clause “(ii),” clause “(iii),” clause “(iv),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(avi) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement) or prematurely terminate any CT Contract or Material Contract described in clause “(ii),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement), except, in each case (other than in the case of a CT Contract), in the ordinary course of business consistent with past practice or where the failure to amend or terminate any such Material Contract could, in the good faith judgment of the Company, have a material adverse impact on the Company;
(n) enter into any new agreement or contract described in clause “(i),” clause “(iv),” clause “(vii),” clause “(viii)” or clause “(xiv)” of Section 3.8(a);
(o) enter into any agreement, including any option agreement, relating to the acquisition or disposition of any business, business line or Entity (whether by merger, sale of stock, sale of assets or otherwise);
(p) change any of its methods of accounting or accounting practices in any material respect;
(qA) make or rescind change any material Tax election, settle or compromise any material claim with respect to Taxes, consent to any extension or waiver of the limitation period applicable to any material Tax claim or enter into any material agreement with any taxing authority relating to Taxes;
(r) make any capital expenditure in excess of $250,000 individually or $1,850,000 in the aggregate in any fiscal month;
(s) adopt any plan of complete or partial liquidation, dissolution, restructuring or other reorganization of the Company or, except in accordance with the rights of the Company under Section 5.2, adopt any plan providing for, or enter into, an Alternative Acquisition (as defined in Section 5.2(f));
(t) make any loans, advances or capital contributions to, or investments in, any other Person election other than (i) loans or advances to customers in the form of trade credit or deferred purchase price arrangements in the ordinary course of business, (iiB) by the Company or change any Subsidiary material method of the Company to or in the Company or any Subsidiary of the Company, (iii) pursuant to any contract or other legal obligation set forth in Part 5.1(t) of the Company Disclosure Schedule or (iv) advances to employees (Tax accounting other than officers of the Company) in the ordinary course of business consistent or (C) agree to any extension or waiver of the statute of limitations with past practice, not respect to exceed $10,000 in each individual case and $500,000 in the aggregatea material amount of Tax;
(uvii) settle except as contemplated by this Agreement, amend the certificate of incorporation or compromise any Legal Proceeding or enter into any consent decree, injunction or similar restraint or form of equitable relief in settlement of any Legal Proceeding, other than (i) settlements second amended and compromises that relate to Taxes (which are the subject of Section 5.1(q)) and (ii) any settlement, compromise, consent decree, injunction, restraint or relief in an amount less than $500,000 that would not limit or restrict in any material respect the ability restated bylaws of the Company or similar governing documents of any of its Subsidiaries to engage in Subsidiaries;
(viii) (A) redeem, repurchase, prepay or conduct defease any indebtedness for borrowed money at an amount above the par value thereof, (B) incur or otherwise acquire any indebtedness for borrowed money or (C) guarantee, forgive or otherwise become liable for any indebtedness for borrowed money;
(ix) enter into a new line of business in any geographic area or restrict outside of the Company’s right to use any material Company IP or license any material Company IP from any other Person;
(v) terminate, cancel, amend or modify any material insurance policy maintained by investment objective as described in the Company or SEC Reports (provided, that the foregoing shall not apply in any of its Subsidiaries which is not promptly replaced by a comparable amount of insurance coverage;
(w) redeem the Company Rights or amend, modify or terminate the Company Rights Agreement, or render it inapplicable way to (or otherwise exempt from the application of the Company Rights Agreement) any Person or action (other than Parent and Acquisition Sub in connection with the delivery and performance of this Agreementportfolio company);
(x) directly or indirectly take any action, or knowingly fail to repurchase in accordance with the terms of applicable repurchase rights take any shares of restricted stock of action, which action or failure to act is reasonably likely to cause the Company thatto fail to qualify, by virtue of any termination of employment of a holder thereof or otherwise, become not be subject to repurchase at any time prior to the Acceptance Timetax, as a RIC; or
(yxi) enter into any contract, agreement, commitment or agreement arrangement to take do any of the actions described in clauses “(a)” through “(x)” of this sentenceforegoing.
Appears in 1 contract
Interim Operations of the Company. (a) The Company covenants and agrees as to itself and its Subsidiaries that, during after the period date of this Agreement and prior to the Effective Time (unless Sponsor shall otherwise approve in writing (such approval not to be unreasonably withheld, delayed or conditioned), and except (1) as set forth on Section 6.1(a) of the Company Disclosure Letter, (2) as provided in the Settlement Agreement, (3) with respect to the Excluded Assets or (4) as otherwise expressly permitted by this Agreement or as required by applicable Laws), the business of it and its Subsidiaries shall be conducted in all material respects in the ordinary course of business and, to the extent consistent with the foregoing, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve their business organizations substantially intact and maintain existing or satisfactory relations with Governmental Entities and customers, suppliers, service providers, creditors, tax equity partners and lessors having significant business dealings with them, and keep available the services of its and its Subsidiaries’ key employees; provided, however, that no action taken by the Company or its Subsidiaries with respect to any matter specifically addressed by any of clauses (i) through (xxi) of this Section 6.1(a) shall be deemed a breach of this sentence unless such action would constitute a breach of such other clause. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement through until the earlier of Effective Time, except (xA) the time that the designees of Parent as provided in Section 1.4(a) have been elected to or designated as members of, and shall constitute a majority of, the Company’s Board of Directors, or (y) the date of termination of otherwise expressly permitted by this Agreement, except (iB) to the extent Parent shall otherwise consent as Sponsor may approve in writing (which consent, in the case of actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, and in the case of any commitment or agreement described in clause “(y)” below to take any of the actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, is such approval not to be unreasonably withheld, conditioned delayed or delayedconditioned), (iiC) as set forth in Section 6.1(a) of the Company Disclosure Schedule Letter, or (including Part 5.1 thereof), (iiiD) as necessary to implement or otherwise effectuate an Agreed Arrangement or as otherwise expressly contemplated by this provided in the Settlement Agreement or (iv) as may be required by in the form executed on the date hereof and any Legal Requirementamendment thereto entered into with the written consent of Sponsor, (A) the Company shall, will not and shall cause each of will not permit its Subsidiaries to:
(i) adopt any change in its certificate of incorporation or by-laws or other applicable governing instruments, use its commercially reasonable efforts to conduct its business in the ordinary course consistent with the manner in which such business was being conducted prior other than ministerial or administrative changes that are not adverse to the date interests of this Agreement and use its commercially reasonable efforts to preserve its present business and organization substantially intact and to maintain such relations with customers, suppliers, employees, contractors, distributors and others having business dealings with it to the extent reasonably necessary to preserve substantially intact its present business and organization, and Sponsor;
(Bii) neither (1) merge or consolidate the Company nor or any of its Subsidiaries shall:
(a) amend the Company’s certificate of incorporation or bylaws;
(b) split, combine or reclassify with any shares of the Company’s capital stock;
(c) declare, set aside or pay any dividend (whether payable in cash, stock or property) with respect to any shares of the Company’s capital stock, except prior to the Acceptance Time for the regular quarterly cash dividend in the amount of $.01 per issued and outstanding Company Share declared and paid on its historical schedule consistent with past practice;
(d) form any Subsidiary;
(e) issue, sell, pledge, dispose of or encumber any additional shares of its capital stockother Person, or securities convertible restructure, reorganize or exchangeable for, completely or options or rights to acquire, any shares of its capital stock, other than (i) Company Shares reserved for issuance upon exercise of Company Options outstanding on the date of this Agreement (or granted pursuant to clause “(ii)” or clause “(iii)” of this clause “(e)”), (ii) Company Options or shares of restricted stock granted to new employees in connection with their initial hiring by the Company consistent with the past practices of the Company with respect to newly hired employees and (iii) Company Options or shares of restricted stock granted to employees of the Company and its Subsidiaries at times and in amounts consistent with past practices of the Company;
(f) transfer, dispose of or lease, or materially encumber, any material tangible assets of partially liquidate the Company or any of its Subsidiaries, except for any such transactions among Wholly-owned Company Subsidiaries, or (2) commence or file any petition seeking (x) liquidation, reorganization or other relief under any U.S. Federal, U.S. state or other bankruptcy, insolvency, receivership or similar Law or (y) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official;
(iii) make any acquisition (whether by merger, consolidation, acquisition of stock or assets or otherwise) of any interest in any Person or any business, line of business or division thereof (which for the avoidance of doubt shall not include acquisitions of assets that are covered by clause (iv) below);
(iv) make any acquisition of assets, properties, operations or projects, other than (iA) acquisitions of supplies in the ordinary course consistent with past practice used by the Company and its Subsidiaries in their operations or (B) acquisitions pursuant to written contracts or commitments existing Contracts in effect as of the date of this Agreement (copies of which have been made available to Parent) or (ii) tangible assets with a value not in excess of $100,000 individually or $1,000,000 in the aggregate;
(g) dispose of or abandon, or grant or allow to be prematurely terminated licenses or similar rights to, any material Company IP (other than (i) nonexclusive licenses granted in the ordinary course of business consistent with past practice or (ii) implied licenses arising from sales of productsSponsor);
(h1) repurchaseissue, redeem sell, pledge, grant, transfer or encumber or otherwise dispose of or redeem, repurchase or otherwise acquire any shares of the capital stock of the Company, except shares repurchased from employees or former employees other equity interests of the Company or any of its Subsidiaries pursuant to (i) the exercise of repurchase or cancellation profits interests, stock appreciation rights, phantom stock or (ii) elections by employees securities convertible into or former employees to sell or otherwise transfer Company Shares to the Company to satisfy withholding obligations, in each case pursuant to the Company Option Plan or applicable award;
(i) incur any indebtedness for borrowed money or guarantee any such indebtedness, except for borrowings incurred or made in the ordinary course of business (under credit facilities in existence as of the date of this Agreement) that do not result in the total indebtedness for borrowed money of the Company and its Subsidiaries exceeding $30,000,000 outstanding at any one time;
(j) adopt or amend in any material respect any Company Benefit Planexchangeable for, or increase the compensation subscriptions, options, warrants, calls, agreements, arrangements, undertakings, commitments or fringe benefits other rights of any directorkind to acquire, officer or employee any shares of capital stock of the Company or any of its SubsidiariesSubsidiaries (other than (A) the issuance of shares or interests by a Wholly-owned Company Subsidiary to the Company or another Wholly-owned Company Subsidiary, except for (iB) any increases committed to prior to the issuance of shares or interests in respect of Company RSUs outstanding as of the date of this Agreement (in accordance with their terms and the Stock Plan as previously disclosed to Parent) and (ii) increases in amounts and at times consistent with past practices, provided that any such increase pursuant to this clause “(ii)” for any officer does not exceed 5% of then current compensation of such officer;
(k) accelerate the payment or vesting of benefits or amounts payable or to become payable under any Company Benefit Plan, or amend in any material respect any Company Benefit Plan in a manner inconsistent with the foregoing, except as required by any existing agreement, plan or applicable Legal Requirement;
(l) enter into or amend or modify in any material respect any Employment Agreement;
(m) materially amend any CT Contract or Material Contract described in clause “(i),” clause “(ii),” clause “(iii),” clause “(iv),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after effect on the date of this AgreementAgreement or (C) or prematurely terminate any CT Contract or Material Contract described in clause “(ii),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement), except, in each case (other than in the case of a CT Contract), in the ordinary course of business consistent with past practice or where the failure to amend or terminate any such Material Contract could, in the good faith judgment issuance of the Company, have a material adverse impact on the Company;
(n) enter into any new agreement or contract described in clause “(i),” clause “(iv),” clause “(vii),” clause “(viii)” or clause “(xiv)” of Section 3.8(a);
(o) enter into any agreement, including any option agreement, relating to the acquisition or disposition of any business, business line or Entity (whether by merger, sale of stock, sale of assets or otherwise);
(p) change any of its methods of accounting or accounting practices in any material respect;
(q) make or rescind any material Tax election, settle or compromise any material claim with respect to Taxes, consent to any extension or waiver of the limitation period applicable to any material Tax claim or enter into any material agreement with any taxing authority relating to Taxes;
(r) make any capital expenditure in excess of $250,000 individually or $1,850,000 in the aggregate in any fiscal month;
(s) adopt any plan of complete or partial liquidation, dissolution, restructuring or other reorganization of the Company or, except Exchange Class A Shares in accordance with the rights of recitals to this Agreement and the Company Additional SunE Shares to SunEdison in accordance with Section 4.1(a)(i) or (2) take any action that would result in any adjustment under Section 5.2, adopt any plan providing for, or enter into, an Alternative Acquisition (as defined in Section 5.2(f))4.5;
(tvi) make any loans, advances or capital contributions to, to or investments inin any Person (other than among the Company and any Wholly-owned Company Subsidiary or among the Wholly-owned Company Subsidiaries);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or other equity securities (except for (A) the Special Dividend and (B) dividends paid by any direct or indirect Subsidiary to the Company (or any other Person direct or indirect Subsidiary of the Company) and the other equity holders of such Subsidiary (other than (i) loans TERP LLC, which shall not be permitted to pay dividends in respect of its Class B Units), in each case on a pro rata basis in accordance with such Subsidiary’s certificate of incorporation or advances to customers in the form of trade credit by-laws or deferred purchase price arrangements other applicable governing instruments and in the ordinary course consistent with past practice, or paid to tax equity investors in accordance with capital contribution or investment agreements or organizational documents (in each case, copies of businesswhich have been made available to Sponsor) or enter into any agreement with respect to the voting of its capital stock or other equity securities;
(viii) except for (A) transactions among the Company and Wholly-owned Company Subsidiaries or among the Wholly-owned Company Subsidiaries or (B) pursuant to Contracts in effect as of the date of this Agreement (copies of which have been made available to Sponsor), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire any of its capital stock (iior other equity securities) by or securities convertible or exchangeable into or exercisable for any shares of its capital stock (or other equity securities) (other than the withholding of shares to satisfy withholding Tax obligations in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plan as in effect on the date of this Agreement);
(ix) incur, assume or otherwise become liable for any indebtedness for borrowed money or guarantee such indebtedness of another Person (other than a Wholly-owned Company Subsidiary), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any Subsidiary of its Subsidiaries;
(x) except for (1) any single or series of related expenditures not to exceed $5,000,000 in the Company aggregate during any calendar quarter in accordance with the Company’s capital expenditure plan (a copy of which has been made available to Sponsor) and (2) expenditures related to operational emergencies, equipment failures or in outages, make or authorize any capital expenditures;
(xi) make any material changes with respect to financial accounting policies or procedures, except as required by GAAP;
(xii) settle any litigation claim or other pending or threatened proceeding by or before a Governmental Entity involving the Company or any Subsidiary of its Subsidiaries if such settlement (A) with respect to the payment of monetary damages, involves the payment of monetary damages that exceed $2,500,000 individually or $7,500,000 in the aggregate during any calendar year, net of any amount covered by insurance or third-party indemnification, or (B) with respect to any non-monetary terms or conditions therein, imposes or requires actions that would or would be reasonably likely to have a material effect on the continuing operations of the CompanyCompany or any of its Subsidiaries (or Sponsor or any of its Subsidiaries after the Closing);
(xiii) except as required by Law (A) make, change or revoke any material Tax election, (iiiB) settle or compromise any audit or proceeding relating to a material amount of Taxes, (C) file any amended Tax Return reflecting a material amount of Taxes, (D) make any change in any material Tax accounting method or (E) enter into any closing agreement relating to a material amount of Taxes;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material amount of assets, licenses, operations, rights, product lines or businesses of the Company or its Subsidiaries, including capital stock (or other equity interests) of any such Subsidiaries, other than (A) energy, electricity, capacity renewable energy credits and other environmental attributes, (B) sales of obsolete assets that are not material and are no longer used in the operation of the business or (C) pursuant to Contracts in effect as of the date of this Agreement (copies of which have been made available to Sponsor);
(xv) become a party to, establish, adopt, amend, commence participation in or terminate any contract collective bargaining agreement or other legal obligation set forth in Part 5.1(tagreement with a labor union, works council or similar organization;
(xvi) of the Company Disclosure Schedule or (ivA) advances to employees (other than officers of the Company) normal vendor renewals, extensions or replacements or otherwise in the ordinary course of business consistent with past practice, not to exceed $10,000 in each individual case and $500,000 in the aggregate;
(u) settle modify or compromise any Legal Proceeding or enter into any consent decree, injunction or similar restraint or form of equitable relief in settlement of any Legal Proceeding, other than (i) settlements and compromises that relate to Taxes (which are the subject of Section 5.1(q)) and (ii) any settlement, compromise, consent decree, injunction, restraint or relief in an amount less than $500,000 that would not limit or restrict amend in any material respect or terminate or cancel or waive, release or assign any material rights or claims with respect to, any Material Contract or (B) enter into any Contract that, if entered into prior to the date of this Agreement, would qualify as a Material Contract under any of clauses (B) through (M) of Section 5.1(j)(i);
(xvii) enter into any new line of business other than any line of business that is reasonably ancillary to and a reasonably foreseeable extension of any line of business as of the date of this Agreement;
(xviii) except as may be required by applicable Law or pursuant to the terms of any Company Plan in effect on the date of the Agreement, (A) establish, adopt, terminate or materially amend any material Company Plan; (B) grant to any employee or service provider any material increase in base salary, wages, bonuses, incentive compensation or severance, retention or other employee benefits; (C) grant any equity-based awards (whether under the Stock Plan or otherwise); (D) accelerate the time of payment for, or vesting of, any compensation or benefits; or (E) materially change any actuarial or other assumption used to calculate funding obligations or liabilities under any Company Plan;
(xix) (A) hire any employee or other service provider; provided, however, that the Company and its Subsidiaries shall be permitted to hire employees or engage other service providers to fill existing positions that are or become vacant or positions that are newly created in the ordinary course of business consistent with past practice to the extent that the annual compensation opportunity provided to any such employee or other service provider does not exceed $250,000 and, in the case of service providers other than employees, the duration of engagement does not exceed six (6) months, and the compensation and benefits provided to any such employee or other service provider are consistent with terms previously provided by the Company and its Affiliates in the ordinary course of business; or (B) terminate any employee or other service provider whose annual compensation opportunity exceeds $250,000 other than for cause;
(xx) amend or modify the Settlement Agreement or otherwise seek, move for or support a motion seeking any such amendment or modification other than an amendment or modification (i) that is immaterial to Sponsor (in its capacity as the acquiror of Continuing Class A Shares pursuant to the terms of this Agreement), the Company, this Agreement and the transactions contemplated herein or in the Ancillary Agreements (such as those that relate to transactions between and among creditor constituencies of SunEdison) or (ii) that is not adverse to Sponsor and the Company; or
(xxi) agree, authorize or commit to do any of the foregoing.
(b) From the date of this Agreement until the Effective Time, except as Sponsor may approve in writing (solely in the case of clause (iii) below, such consent not to be unreasonably withheld), the Company will not (i) amend, modify or terminate the Settlement Agreement or seek, move for or support a motion seeking any amendment, modification or termination, other than an amendment or modification that is (x) immaterial and (y) not adverse, in each case to Sponsor, the Company, this Agreement and the transactions contemplated herein or in the Ancillary Agreements, (ii) amend, modify, supplement or terminate the Bankruptcy Court Orders or the forms thereof or otherwise seek, move for or support a motion seeking any such amendment, modification, supplement or termination, other than any amendment, modification or supplement to any of the Bankruptcy Court Orders or the forms thereof that is (x) immaterial and (y) not adverse, in each case to Sponsor, the Company, this Agreement or the transactions contemplated herein or in the Ancillary Agreements, or (iii) agree to preserve any Contract pursuant to the Settlement Agreement.
(c) Nothing contained in this Agreement is intended to give Sponsor, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, each of Sponsor and the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
(d) Notwithstanding anything to the contrary herein, nothing contained in this Agreement shall restrict the ability of the Company or any of its Subsidiaries to engage in authorize, consummate, perform its obligations under or conduct make any business in any geographic area amendments or restrict modifications to, the Company’s right to use any material Company IP or license any material Company IP from any other Person;
(v) terminate, cancel, amend or modify any material insurance policy maintained by the Company or any of its Subsidiaries which is not promptly replaced by a comparable amount of insurance coverage;
(w) redeem the Company Rights or amend, modify or terminate the Company Rights Sale and Purchase Agreement, dated as of January 5, 2017 (the “UK Sale Agreement”), among SunEdison Yieldco UK Holdco 2, LLC, TerraForm Power Operating, LLC and Vortex Solar UK Limited, provided that any such amendments or render it inapplicable to (or otherwise exempt from the application of the Company Rights Agreement) any Person or action (other than Parent and Acquisition Sub in connection with the delivery and performance of this Agreement);
(x) fail to repurchase in accordance with the terms of applicable repurchase rights any shares of restricted stock of the Company that, by virtue of any termination of employment of a holder thereof or otherwise, become subject to repurchase at any time prior modifications are not adverse to the Acceptance Time; or
(y) enter into any commitment or agreement to take any interests of the actions described in clauses “(a)” through “(x)” of this sentenceSponsor.
Appears in 1 contract
Interim Operations of the Company. The Company agrees that, during (a) From the period from Agreement Date and until the date Effective Time or the earlier termination of this Agreement through in accordance with its terms (the earlier “Interim Period”), except as (v) otherwise contemplated by this Agreement, (w) set forth in the applicable subsection of Section 5.1 of the Company Disclosure Letter, (x) the time that the designees of Parent as provided in Section 1.4(a) have been elected to or designated as members ofrequired by applicable Law, and shall constitute a majority of, the Company’s Board of Directors, or (y) required to comply with COVID-19 Measures or otherwise taken (or not taken) by the date Company or any of termination its Subsidiaries reasonably and in good faith to respond to COVID-19, COVID-19 Measures; provided that prior to taking any action in reliance on this clause (y) that would otherwise be prohibited by any provision of this Agreement, except the Company will use commercially reasonable efforts to provide advance notice to and consult with Parent (iif reasonably practicable) with respect thereto, or (z) consented to the extent Parent shall otherwise consent in writing by Parent (which consent, in the case of actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, and in the case of any commitment or agreement described in clause “(y)” below to take any of the actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, is consent will not to be unreasonably withheld, conditioned or delayed), (ii) as set forth in the Company Disclosure Schedule (including Part 5.1 thereof), (iii) as necessary to implement or otherwise effectuate an Agreed Arrangement or as otherwise expressly contemplated by this Agreement or (iv) as may be required by any Legal Requirement, (A) the Company shallwill, and shall will cause each of its Subsidiaries to, use its commercially reasonable efforts to conduct its business in all material respects in the ordinary course consistent of business and in compliance in all material respects with the manner in which such business was being conducted prior to the date all material applicable Laws, and will, and will cause each of this Agreement and its Subsidiaries to, use its commercially reasonable efforts to preserve its present business and organization substantially intact and to maintain such relations with customers, suppliers, employees, contractors, distributors and others having business dealings with it to the extent reasonably necessary to preserve substantially intact its present business and organization, keep available the services of its directors, officers and employees and consistent with prior practice maintain existing relations and goodwill with customers, distributors, lenders, partners, suppliers and others having material business associations with it or its Subsidiaries; provided, however, that (B1) neither the failure to take any action prohibited by Section 5.1(b) will not be a breach by the Company nor or any of its Subsidiaries shall:
of the covenants and agreements set forth in this Section 5.1(a) and (a2) amend no action taken by the Company’s certificate Company or any of incorporation its Subsidiaries that is specifically addressed by any of the subclauses in Section 5.1(b) and taken in compliance with the provisions of such subclause will be deemed a breach by the Company or bylaws;any of its Subsidiaries of the covenants and agreements set forth in this Section 5.1(a).
(b) splitSubject to the exceptions set forth in the foregoing clauses (v), combine (w), (x), (y) and (z) (provided that the parenthetical set forth in clause (z) providing that Parent’s consent shall not be unreasonably withheld, conditioned or reclassify any shares delayed shall only apply to subsections (iii), (iv), (v), (vi), (ix), (x), (xii) and (xiii) of this Section 5.1(b), and, insofar as it relates to the Company’s capital stockforgoing subsections, subsection (xiv) of this Section 5.1(b)) of Section 5.1(a), during the Interim Period, the Company will not and will cause its Subsidiaries not to:
(i) amend its Articles of Incorporation or Regulations;
(cii) (A) declare, set aside aside, make or pay any dividend (whether or other distribution, payable in cash, stock stock, property or property) otherwise, with respect to any shares of its capital stock (except for cash dividends paid by any direct or indirect wholly owned Subsidiary (x) to the Company, or (y) to any other direct or indirect wholly owned Subsidiary of the Company’s , in each case, consistent in all material respects with past practice) or enter into any Contract with respect to voting of its capital stock, except prior to the Acceptance Time for the regular quarterly cash dividend in the amount of $.01 per issued and outstanding Company Share declared and paid on its historical schedule consistent with past practice;
(d) form any Subsidiary;
(eB) issue, sell, transfer, pledge, dispose of of, grant, encumber or encumber agree to issue, sell, transfer, pledge, dispose of, grant or encumber, any additional shares of its capital stockof, or securities convertible into or exchangeable for, or options options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock, other than (i) Company Shares reserved for issuance upon exercise of Company Options outstanding on the date of this Agreement (or granted pursuant to clause “(ii)” or clause “(iii)” of this clause “(e)”), (ii) Company Options or shares of restricted stock granted to new employees in connection with their initial hiring by the Company consistent with the past practices of the Company with respect to newly hired employees and (iii) Company Options or shares of restricted stock granted to employees of the Company and its Subsidiaries at times and in amounts consistent with past practices of the Company;
(f) transfer, dispose of or lease, or materially encumber, any material tangible assets of the Company or any of its Subsidiaries, other than (i) pursuant to written contracts or commitments existing as of the date of this Agreement (copies of which have been made available to Parent) or (ii) tangible assets with a value not in excess of $100,000 individually or $1,000,000 in the aggregate;
(g) dispose of or abandon, or grant or allow to be prematurely terminated licenses or similar rights to, any material Company IP (other than (i) nonexclusive licenses granted in the ordinary course of business consistent with past practice or (ii) implied licenses arising from sales of products);
(h) repurchase, redeem or otherwise acquire any shares of the capital stock of the Company, except shares repurchased from employees or former employees other Rights of the Company or any of its Subsidiaries (other than the issuance of shares of the Company’s capital stock reserved for issuance on the Agreement Date and issued pursuant to the awards under the Company Stock Plans outstanding as of the Agreement Date or as would be permitted pursuant to Section 5.1(b)(iii)), (iC) split, combine, subdivide or reclassify the exercise Shares or any other outstanding capital stock of repurchase the Company or cancellation rightsany of its Subsidiaries or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution therefor, or (iiD) elections by employees or former employees to sell redeem, purchase or otherwise transfer Company Shares to the Company to satisfy withholding obligationsacquire, in each case pursuant to the Company Option Plan directly or applicable award;
(i) incur indirectly, any indebtedness for borrowed money capital stock or guarantee any such indebtedness, except for borrowings incurred or made in the ordinary course of business (under credit facilities in existence as of the date of this Agreement) that do not result in the total indebtedness for borrowed money of the Company and its Subsidiaries exceeding $30,000,000 outstanding at any one time;
(j) adopt or amend in any material respect any Company Benefit Plan, or increase the compensation or fringe benefits of any director, officer or employee other Rights of the Company or any of its Subsidiaries, except for repurchases, redemptions or acquisitions required by the terms of its capital stock or any securities outstanding on the Agreement Date or for the acquisition or acceptance of Shares by the Company upon the exercise of Options or the vesting of Share Units for withholding Taxes in the ordinary course of business;
(iiii) any increases committed except as required pursuant to Contracts and Company Plans in effect prior to the date Agreement Date, (A) enter into, pay, grant or provide any change of this Agreement control agreements, retention, severance or termination payments or benefits, or any other similar arrangements to any member of the Company Board or to any executive officer, consultant or employee of the Company or any of its Subsidiaries; (as previously disclosed B) materially increase the compensation, bonus or pension, welfare, or other benefits of, pay any bonus, incentive or retention payments to, or make any new equity awards to Parent) and (ii) any Covered Employee, except for increases in amounts and at times consistent with past practices, provided that any such increase pursuant to this clause “(ii)” for any officer does not exceed 5% of then current compensation of such officer;
(k) accelerate the payment or vesting of benefits or amounts payable or to become payable under any Company Benefit Plan, or amend in any material respect any Company Benefit Plan in a manner inconsistent with the foregoing, except as required by any existing agreement, plan or applicable Legal Requirement;
(l) enter into or amend or modify in any material respect any Employment Agreement;
(m) materially amend any CT Contract or Material Contract described in clause “(i),” clause “(ii),” clause “(iii),” clause “(iv),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement) or prematurely terminate any CT Contract or Material Contract described in clause “(ii),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement), except, in each case (other than in the case of a CT Contract), base salary in the ordinary course of business consistent with past practice practice; (C) establish or where adopt, any Company Labor Agreement or amend the failure terms of any outstanding equity-based awards; (D) take any action to amend accelerate the vesting or payment, or fund or in any other way secure the payment, of any material compensation or benefits under any Company Plan other than in the ordinary course of business consistent with past practice; (E) forgive any material loans to any Covered Employee; or (F) hire or terminate without cause the employment of any such Material Contract couldexecutive officer or any employee with annual base compensation in excess of $250,000, other than to fill positions that become vacant after the Agreement Date;
(iv) (A) other than in the ordinary course of business (which will in no event exceed $10,000,000 in the aggregate), draws from the Company Credit Agreement in effect as of the Agreement Date, or in respect of intercompany borrowing solely among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries in the ordinary course of business, guarantee, issue, assume or incur any Indebtedness, or (B) except as permitted by Section 5.1(b)(v), make any loans, advances or capital contributions to, or guarantees of or investments in (including by purchase of stock or securities, property transfers or purchase of property or assets of any Person) any other Person (other than the Company or any direct or indirect wholly owned Subsidiary of the Company) other than (1) any routine travel, relocation (of non-executive employees) and business advances in the ordinary course of business to the Company’s or its Subsidiaries’ employees and (2) trade credit to customers, in either case, made in the ordinary course of business;
(v) make any capital expenditures that, in the good faith judgment aggregate, exceed, by an amount in excess of $1,000,000, the amount of the Company, have a material adverse impact on capital expenditures as contemplated by the Company’s existing capital budget made available to the Parent Parties prior to the Agreement Date;
(nvi) enter into waive, release, settle or compromise any new agreement pending or contract described threatened Action against the Company or any of its Subsidiaries, other than settlements or compromises of any Action in clause “which the amount paid by or on behalf of the Company or any of its Subsidiaries (i),” clause “net of any available third party insurance proceeds) in settlement or compromise does not exceed $1,000,000; provided that such settlement or compromise does not include (iv),” clause “A) any obligation that would impose any material restrictions on the business or operations of the Company or its Subsidiaries after the Effective Time or (B) any admission of wrongdoing or similar admission by the Company or any of its Subsidiaries that would be reasonably expected to negatively affect the Company or any of its Subsidiaries in a material respect beyond the making of any such payment;
(vii) change any of the material accounting methods, principles or practices used by it unless required by a change in GAAP or Law (including, for purposes of this Section 5.1(b)(vii),” clause “(viii)” , any changes of SEC rules and regulations or clause “(xiv)” Regulation S-X of Section 3.8(athe Exchange Act and, in each case, authoritative interpretations thereof);
(oA) enter into any agreementadopt a plan of complete or partial liquidation, including any option agreementdissolution, relating to the acquisition or disposition of any businessmerger, consolidation, business line combination, restructuring, recapitalization or Entity other reorganization (other than this Agreement) of the Company or any of its Subsidiaries, (B) other than as would be permitted pursuant to Section 5.1(b)(v) and except for the purchase of inventory or other assets in the ordinary course of business consistent with past practice, acquire assets, businesses, or capital stock (whether by merger, sale tender offer, consolidation, purchase of stockproperty or otherwise) or (C) transfer, sale sell, lease, license (other than non-exclusive licenses of Intellectual Property granted in the ordinary course of business consistent with past practice), mortgage, pledge, surrender, grant any option thereon, subject to any other Encumbrance (other than Permitted Encumbrances), cancel, abandon or allow to lapse or expire any material assets or otherwisematerial properties (including any material Owned Intellectual Property) of the Company or its Subsidiaries, including capital stock of any of the Company’s Subsidiaries, except (x) in the ordinary course of business consistent with past practice, (y) for the sale, cancellation, lapse, expiration or abandonment of obsolete assets, or (z) for the expiration in accordance with the applicable terms governing any such assets or properties;
(ix) other than in the ordinary course of business (A) enter into any Contract that would have been a Material Contract set forth in Section 3.9(a)(i), (ii), (iii), (viii)(A) or (B), (x), or (xiii), or a Material Lease had it been entered into prior to this Agreement, (B) amend, modify, assign, transfer or terminate (other than a termination upon the expiration of the term thereof) any Material Contract set forth in Section 3.9(a)(i), (ii), (iii), (viii)(A) or (B), (x), or (xiii), or Material Lease (or any Contract that would have been a Material Contract set forth in Section 3.9(a)(i), (ii), (iii), (viii)(A) or (B), (x), or (xiii), or a Material Lease had it been entered into prior to this Agreement), or (C) amend, cancel, modify, assign, transfer, waive, accelerate or defer any material debts or rights under any Material Contract set forth in Section 3.9(a)(i), (ii), (iii), (viii)(A) and (B), (x), or (xiii), or a Material Lease (or any Contract that would have been a Material Contract set forth in Section 3.9(a)(i), (ii), (iii), (viii)(A) or (B), (x), or (xiii), or a Material Lease had it been entered into prior to this Agreement), provided that, to the extent that the Parent has received written request from the Company in respect of the taking of any action contemplated by this Section 5.1(b)(ix) and Parent has not responded to the Company in writing within five Business Days of Parent receiving such written request, Parent will be deemed to have consented to the relevant action;
(x) (A) enter into any Contract that would have been a Material Contract set forth in in Section 3.9(a)(viii)(C), (ix), or (xii) had it been entered into prior to this Agreement, (B) amend, modify, assign, transfer or terminate (other than a termination upon the expiration of the term thereof) any Material Contract set forth in Section 3.9(a)(viii)(C), (ix), or (xii), (or any Contract that would have been a Material Contract set forth in Section 3.9(a)(viii)(C), (ix), or (xii) had it been entered into prior to this Agreement), or (C) amend, cancel, modify, assign, transfer, waive, accelerate or defer any material debts or rights under any Material Contract set forth in Section 3.9(a)(viii)(C), (ix), or (xii) (or any Contract that would have been a Material Contract set forth in Section 3.9(a)(viii)(C), (ix), or (xii) had it been entered into prior to this Agreement);
(pxi) (A) make, change any of its methods of accounting or accounting practices in any material respect;
(q) make or rescind revoke any material Tax election, settle (B) change any annual Tax accounting period or compromise adopt or change any method of accounting for Tax purposes, (C) file any material amended Tax Return, (D) settle, concede, compromise or abandon any claim with respect to or assessment for a material amount of Taxes, (E) enter into any closing agreement within the meaning of Section 7121 of the Code (or any similar provision of state, local or foreign Law) or any Tax sharing or similar agreement, or request any Tax ruling, (F) surrender any right to claim a material Tax refund, or (G) consent to any extension or waiver of the limitation period applicable to any material Tax claim or enter into any assessment with respect to a material agreement with any taxing authority relating to amount of Taxes;
(rxii) make enter into any capital expenditure in excess of $250,000 individually joint venture, partnership, participation or $1,850,000 in the aggregate in any fiscal monthother similar arrangement;
(sxiii) adopt any plan of complete or partial liquidation, dissolution, restructuring or other reorganization of the Company or, except in accordance with the rights of the Company under Section 5.2, adopt any plan providing for, or enter into, an Alternative Acquisition (as defined in Section 5.2(f));
(t) make any loans, advances or capital contributions to, or investments in, any other Person other than (i) loans or advances to customers in the form of trade credit or deferred purchase price arrangements in the ordinary course of business, (ii) by the Company or any Subsidiary of the Company to or in the Company or any Subsidiary of the Company, (iii) pursuant to any contract or other legal obligation set forth in Part 5.1(t) of the Company Disclosure Schedule or (iv) advances to employees (other than officers of the Company) in the ordinary course of business consistent with past practice, not to exceed $10,000 in each individual case and $500,000 in the aggregate;
(u) settle or compromise any Legal Proceeding or enter into any consent decreeinterest rate swaps, injunction foreign exchange or commodity agreements or other similar restraint or form of equitable relief in settlement of any Legal Proceeding, other than (i) settlements and compromises that relate to Taxes (which are the subject of Section 5.1(q)) and (ii) any settlement, compromise, consent decree, injunction, restraint or relief in an amount less than $500,000 that would not limit or restrict in any material respect the ability of the Company or any of its Subsidiaries to engage in or conduct any business in any geographic area or restrict the Company’s right to use any material Company IP or license any material Company IP from any other Person;
(v) terminate, cancel, amend or modify any material insurance policy maintained by the Company or any of its Subsidiaries which is not promptly replaced by a comparable amount of insurance coverage;
(w) redeem the Company Rights or amend, modify or terminate the Company Rights Agreement, or render it inapplicable to (or otherwise exempt from the application of the Company Rights Agreement) any Person or action (other than Parent and Acquisition Sub in connection with the delivery and performance of this Agreement);
(x) fail to repurchase in accordance with the terms of applicable repurchase rights any shares of restricted stock of the Company that, by virtue of any termination of employment of a holder thereof or otherwise, become subject to repurchase at any time prior to the Acceptance Timehedging arrangements; or
(yxiv) enter into authorize or agree to take or make any commitment or agreement to take any of the actions described prohibited by this Section 5.1(b) or enter into any Contract with respect to any of the foregoing actions.
(c) Nothing contained in clauses “(a)” through “(x)” this Agreement will give any Parent Party or the Company, directly or indirectly, the right to control or direct the other Party’s operations prior to the Effective Time. Prior to the Effective Time, the Parent Parties, on the one hand, and the Company and its Subsidiaries, on the other hand, will exercise, consistent with the terms and conditions of this sentenceAgreement, complete control and supervision over its operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent or the Company will be required with respect to any matter set forth in this Section 5.1 or elsewhere in this Agreement to the extent that the requirement of such consent would, upon the advice of outside legal counsel, violate applicable Antitrust Law.
Appears in 1 contract
Interim Operations of the Company. The Company covenants and agrees that, during the period from between the date of this Agreement through and the earlier of (x) Effective Time or the time that the designees of Parent as provided in date, if any, on which this Agreement is terminated pursuant to Section 1.4(a) have been elected to or designated as members of, and shall constitute a majority of, the Company’s Board of Directors, or (y) the date of termination of this Agreement8.1, except (i) to the extent Parent shall otherwise consent in writing (which consent, in the case of actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, and in the case of any commitment or agreement described in clause “(y)” below to take any of the actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, is not to as may be unreasonably withheld, conditioned or delayed)required by Law, (ii) as set forth may be agreed to in the Company Disclosure Schedule (including Part 5.1 thereof)writing by Parent, (iii) as necessary to implement or otherwise effectuate an Agreed Arrangement or as otherwise expressly may be contemplated by this Agreement or the Intel Purchase Agreement or (iv) as may set forth in Section 6.1 of the Company Disclosure Schedule, the business of the Post-Sale Company shall be required by any Legal Requirementconducted only in the ordinary course of business and in a manner consistent with past practice in all material respects; and, (A) to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its their respective commercially reasonable efforts to conduct its (x) preserve substantially intact the Post-Sale Company’s business in organization and maintain the ordinary course consistent Post-Sale Company’s business relationships with material suppliers, contractors, distributors, customers, licensors, licensees and others having material business relationships with the manner in which Post-Sale Company; and (y) to keep available the services of those of their present officers, employees and consultants who are integral to the operation of their businesses as presently conducted; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any of the following provisions of this Section 6.1 shall be deemed a breach of this sentence unless such business was being conducted prior to action would constitute a breach of such specific provision. Without limiting the generality of the foregoing, the Company agrees that, between the date of this Agreement and use the Effective Time or the date, if any, on which this Agreement is terminated pursuant to Section 8.1, except (A) as may be required by Law, (B) as may be agreed to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned with respect to Sections 6.1(d), (h)(iii), (i)(i)-(iv), (n)(ii), (o) or, with respect to the foregoing sections of Section 6.1 only, (q)), (C) as may be contemplated by this Agreement or the Intel Purchase Agreement or (D) as set forth in Section 6.1 of the Company Disclosure Schedule, the Company shall not (and shall not permit its commercially reasonable efforts to preserve its present business and organization substantially intact and to maintain such relations with customersSubsidiaries to), suppliers, employees, contractors, distributors and others having business dealings with it to the extent reasonably necessary relating to preserve substantially intact its present business and organization, and (B) neither the Company nor any of its Subsidiaries shallPost-Sale Company:
(a) amend or otherwise change the Company’s certificate Amended and Restated Certificate of incorporation Incorporation or bylawsAmended and Restated Bylaws of the Company or such equivalent organizational documents of any of its Subsidiaries;
(b) split, combine combine, subdivide, reclassify, purchase, redeem or reclassify otherwise acquire, or issue, sell, pledge, grant, dispose or otherwise encumber any shares of capital stock or other equity interests of the Company or its Subsidiaries, or any options, warrants, calls, commitments, convertible securities or other rights to acquire any shares of its or its Subsidiaries’ capital stock, any shares of any securities convertible into or exchangeable for such shares of capital stock, any voting securities or other equity interests, except for transactions among the Company and its wholly owned Subsidiaries (other than the Intel Companies) or among the Company’s capital stockwholly owned Subsidiaries (other than among an Intel Company and another Subsidiary), as otherwise contemplated in Section 6.1(e) or pursuant to the exercise of any Company Option, Company Warrant or Convertible Notes;
(c) declare, authorize, set aside aside, make or pay any dividend (whether or other distribution, payable in cash, stock stock, property or property) otherwise, with respect to any shares of the Company’s or any of its Subsidiaries’ capital stock, except prior other than dividends paid by any Subsidiary of the Company to the Acceptance Time for Company or to any wholly owned Subsidiary of the regular quarterly Company (it being understood that cash dividend in dividends may be paid from any Intel Company to the amount Company or any of $.01 per issued and outstanding Company Share declared and paid on its historical schedule consistent with past practiceSubsidiaries subject to the Intel Agreement);
(d) form any Subsidiary;
(e) issue, sell, pledge, dispose of or encumber any additional shares of its capital stock, or securities convertible or exchangeable for, or options or rights to acquire, any shares of its capital stock, other than (i) Company Shares reserved for issuance upon exercise of Company Options outstanding on increase the date of this Agreement (compensation, bonus opportunity or granted pursuant other benefits payable or to clause “(ii)” become payable to directors, officers or clause “(iii)” of this clause “(e)”), (ii) Company Options or shares of restricted stock granted to new employees in connection with their initial hiring by the Company consistent with the past practices of the Company with respect to newly hired employees and (iii) Company Options or shares of restricted stock granted to employees of the Company and its Subsidiaries at times and in amounts consistent with past practices of the Company;
(f) transfer, dispose of or lease, or materially encumber, any material tangible assets of the Company or any of its SubsidiariesSubsidiaries except in the ordinary course of business consistent with past practice (including, other than without limitation, with respect to amount and timing) (i) pursuant to written contracts or commitments existing as of including, for this purpose, the date of this Agreement (copies of which have been made available to Parent) or normal salary, bonus and compensation review process conducted each year), (ii) tangible assets with a value not in excess of $100,000 individually or $1,000,000 in the aggregate;
(g) dispose of or abandonenter into any employment, or grant or allow to be prematurely terminated licenses deferred compensation or similar rights toagreement (or amendment to any such existing agreement) with any director, officer or employee of the Company or any material Company IP of its Subsidiaries (other than except (iA) nonexclusive licenses granted for agreements with new employees entered into in the ordinary course of business consistent with past practice or (iiB) implied licenses arising from sales for extension of products);
(h) repurchase, redeem or otherwise acquire any shares of the capital stock of the Company, except shares repurchased from employees or former employees of the Company or any of its Subsidiaries pursuant to (i) the exercise of repurchase or cancellation rights, or (ii) elections by employees or former employees to sell or otherwise transfer Company Shares to the Company to satisfy withholding obligations, in each case pursuant to the Company Option Plan or applicable award;
(i) incur any indebtedness for borrowed money or guarantee any such indebtedness, except for borrowings incurred or made employment agreements in the ordinary course of business consistent with past practice), (under credit facilities in existence as of the date of this Agreementiii) that do not result in the total indebtedness for borrowed money of the Company and its Subsidiaries exceeding $30,000,000 outstanding at any one time;
(j) adopt or amend in any material respect any Company Benefit Plan, grant or increase the compensation any severance or fringe benefits of termination pay to any director, officer or employee of the Company or any of its Subsidiaries, (iv) establish, adopt, enter into, amend or terminate any Benefit Plan or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Benefit Plan if it were in existence as of the date of this Agreement, except, in each case, as required pursuant to Contracts in effect as of the date hereof and set forth on Section 6.1(d) of the Company Disclosure Schedule or Benefit Plans in effect as of the date hereof, or as otherwise required by Law or (v) pay or accrue any bonuses in advance or prior to the time such amounts would other be due, paid or accrued in the ordinary course of business and in a manner consistent with the past practices of the Company and its Subsidiaries;
(e) grant, confer or award options, convertible securities, restricted stock units or other rights to acquire any shares of the Company’s or its Subsidiaries’ capital stock or other equity interests, except for as may be required under any Contract in effect as of the date hereof and set forth on Section 6.1(e) of the Company Disclosure Schedule;
(f) acquire, including by merger, consolidation, or acquisition of stock or assets, any corporation, partnership, limited liability company, other business organization or any division thereof, or any material amount of assets, in each case, other than (i) inventory from the Company’s suppliers in the ordinary course of business, (ii) pursuant to acquisitions or investments with a purchase price not in excess of $3,000,000 for any increases committed transaction individually or $5,000,000 in the aggregate for a related series of transactions or (iii) pursuant to prior to Contracts as in effect as of the date of this Agreement (as previously disclosed to Parentand set forth on Section 6.1(f) and (ii) increases in amounts and at times consistent with past practices, provided that any such increase pursuant to this clause “(ii)” for any officer does not exceed 5% of then current compensation of such officerthe Company Disclosure Schedule;
(kg) accelerate the payment make, change or vesting of benefits or amounts payable or to become payable under any Company Benefit Plan, or amend in revoke any material Tax election, adopt or change any material Tax accounting method, file any material amended Tax Return, enter into any closing agreement with respect to a material amount of Taxes, settle any Company Benefit Plan in material Tax claim or assessment or surrender any right to claim a manner inconsistent with the foregoing, except as required by any existing agreement, plan or applicable Legal Requirementrefund of a material amount of Taxes;
(lh) incur any long-term indebtedness for borrowed money or guarantee any such indebtedness for any Person or enter into a “keep well” or amend similar agreement or modify in issue or sell any material respect debt securities or options, warrants, calls or other rights to acquire any Employment Agreement;
(m) materially amend debt securities of the Company or any CT Contract or Material Contract described in clause “of its Subsidiaries, except for indebtedness (i),” clause “(ii),” clause “(iii),” clause “(iv),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” ) existing as of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement) Agreement or prematurely terminate any CT Contract or Material Contract thereafter incurred under the Company’s existing credit facilities described in clause “Section 6.1(h) of the Company Disclosure Schedule, (ii),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” for borrowed money incurred pursuant to such clauses if entered into after Contracts as in effect as of the date of this AgreementAgreement as disclosed in Section 6.1(h) of the Company Disclosure Schedule, (iii) except as otherwise permitted pursuant to this Section 6.1(h), exceptin an aggregate principal amount not to exceed $10,000,000 to finance working capital requirements, (iv) among the Company and any of its wholly owned Subsidiaries or among any of such Subsidiaries (for the avoidance of doubt, including any indebtedness or guarantees to a Transferred Intel Company consistent with past practice in each case all material respects and subject to the Intel Agreement, but only to the extent such indebtedness or guarantees will be cancelled or repaid on or prior to the Intel Closing), or (v) in the form of interest rate or foreign currency swaps on customary commercial terms consistent with past practice in all material respects and not to exceed $10,000,000 of notional debt in the aggregate in connection with debt permitted under this Section 6.1(h);
(i) (i) modify, amend or terminate any Company Material Contract other than in the case of a CT Contract), (A) in the ordinary course of business consistent with past practice or where the failure to amend (B) modifications or terminate any such Material Contract could, in the good faith judgment of the Company, have a material adverse impact on the Company;
amendments which are immaterial; (nii) enter into any new Contract or agreement that, if entered into prior to the date of this Agreement, would have been required to be listed in Section 4.18 of the Company Disclosure Schedule as a Company Material Contract other than customer contracts entered into in the ordinary course of business consistent with past practice (it being understood that the foregoing exception to this clause (ii) shall not permit the entry into any Contract with an Affiliate or contract described a “related person” (as such terms is defined in clause “item 404(a) of Regulation S-K under the Exchange Act)); (i),” clause “(iv),” clause “(vii),” clause “(viii)” or clause “(xiv)” of Section 3.8(a);
(oiii) enter into any agreementmaterial Contract that would be breached by, including any option agreement, relating to or require the acquisition or disposition consent of any businessthird party in order to continue in full force following the consummation of the Transactions; (iv) enter into any material Contract with any third party that grants such third party any rights or which provides for any diminution of rights of the Company or its Subsidiaries or that can be terminated by such third party, in each case, upon a change of control of the Company; (v) release any Person from, or modify or waive any provision of, any confidentiality, standstill or similar agreement in connection with an Acquisition Proposal or (vi) authorize or take any action to make the provisions of Section 203 of the DGCL (or any other “business line combination,” “control share acquisition,” “fair price” or Entity (whether other similar anti-takeover Law) inapplicable to any transaction contemplated by merger, sale of stock, sale of assets or otherwise)an Acquisition Proposal;
(pj) make any material change any of to its methods of accounting in effect at June 30, 2010, except (i) as required by GAAP (or accounting practices any interpretation thereof), Regulation S-X of the Exchange Act or as required by a Governmental Entity or quasi-Governmental Entity (including the Financial Accounting Standards Board or any similar organization), (ii) to permit the audit of the Company’s financial statements in any material respectcompliance with GAAP, (iii) as required by a change in applicable Law or (iv) as disclosed in the Company SEC Reports;
(qk) make sell, lease, license, transfer, mortgage or rescind otherwise encumber, or subject to any Lien (other than Permitted Liens) or otherwise dispose of any material Tax electionportion of its properties or assets, settle or compromise any material claim with respect to Taxes, consent to any extension or waiver of the limitation period applicable to any material Tax claim or enter into any material agreement with any taxing authority relating to Taxes;
(r) make any capital expenditure in excess of $250,000 individually or $1,850,000 in the aggregate in any fiscal month;
(s) adopt any plan of complete or partial liquidation, dissolution, restructuring or other reorganization of the Company or, except in accordance with the rights of the Company under Section 5.2, adopt any plan providing for, or enter into, an Alternative Acquisition (as defined in Section 5.2(f));
(t) make any loans, advances or capital contributions to, or investments in, any other Person other than (i) loans transactions among the Company and its wholly owned Subsidiaries (except for the Intel Companies) or advances to customers in the form of trade credit or deferred purchase price arrangements in the ordinary course of businessamong such Subsidiaries (except among an Intel Company and another Subsidiary), (ii) by the Company or any Subsidiary of the Company to or in the Company or any Subsidiary of the Company, (iii) pursuant to any contract or other legal obligation set forth in Part 5.1(t) of the Company Disclosure Schedule or (iv) advances to employees (other than officers of the Company) inventory in the ordinary course of business consistent with past practice, not (iii) pursuant to exceed $10,000 Contracts as in each individual case and $500,000 effect as of the date of this Agreement as disclosed on Section 6.1(k) of the Company Disclosure Schedule or (iv) as may be required by applicable Law or any Governmental Entity in order to permit or facilitate the aggregateconsummation of the Transactions;
(ul) other than as reserved for or reflected on the balance sheets included in the Financial Statements of the Company, pay, discharge, settle or compromise satisfy any Legal Proceeding claims or litigation against the Post-Sale Company for a settlement payment (i) in excess of $500,000 individually or $3,000,000 in the aggregate or (ii) relating to any claim by or litigation with an employee, other than in the case of clause (ii) bona fide settlements of claims or litigation in good faith and not intended as compensation to such employees;
(m) make or commit to make capital expenditures (or any obligation or liability) in excess of $2,000,000 individually or $5,000,000 in the aggregate other than as set forth in the Company’s fiscal 2010 or 2011 capital expenditure plans set forth in Section 6.1(m) of the Company Disclosure Schedule;
(n) make any (i) investment (by contribution of capital, property transfers, purchase of securities or otherwise and other than cash management investments in the ordinary course of business) in, or (ii) loan or advance (other than travel and similar advances to its employees in the ordinary course of business consistent with past practice) to, in each case, any Person other than a direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business (it being understood that the Company and its Subsidiaries may make any cash management investment, loan or advance to any Transferred Intel Company in the ordinary course of business consistent with past practice and subject to the Intel Agreement but only to the extent such investment, loan or advance will be cancelled, repaid or returned on or prior to the Intel Closing);
(o) create any subsidiary of the Company, other than the present Subsidiaries of the Company;
(p) fail in any material respect to pay any maintenance and similar fees and take any other actions necessary to prevent the abandonment or loss of, or which the failure to take would reasonably be expected to result in the diminution of value of, any material Company Intellectual Property Rights; provided that reasonable steps taken in the course of prosecution of any registrations or applications for registration of Company Intellectual Property Rights will not be deemed a breach of this Section 6.1(p); or
(q) authorize or enter into any consent decree, injunction or similar restraint or form of equitable relief in settlement of any Legal Proceeding, other than (i) settlements and compromises that relate to Taxes (which are the subject of Section 5.1(q)) and (ii) any settlement, compromise, consent decree, injunction, restraint or relief in an amount less than $500,000 that would not limit or restrict in any material respect the ability of the Company or any of its Subsidiaries to engage in or conduct any business in any geographic area or restrict the Company’s right to use any material Company IP or license any material Company IP from any other Person;
(v) terminate, cancel, amend or modify any material insurance policy maintained by the Company or any of its Subsidiaries which is not promptly replaced by a comparable amount of insurance coverage;
(w) redeem the Company Rights or amend, modify or terminate the Company Rights Agreement, or render it inapplicable to (written agreement or otherwise exempt from the application of the Company Rights Agreement) any Person or action (other than Parent and Acquisition Sub in connection with the delivery and performance of this Agreement);
(x) fail to repurchase in accordance with the terms of applicable repurchase rights any shares of restricted stock of the Company that, by virtue of any termination of employment of a holder thereof or otherwise, become subject to repurchase at any time prior to the Acceptance Time; or
(y) enter into make any commitment or agreement to take do any of the actions described in clauses “(a)” through “(x)” of this sentenceforegoing.
Appears in 1 contract
Interim Operations of the Company. (a) The Company agrees that, during the period from the date of this Agreement through to the earlier of (x) the time that the designees of Parent as provided in Section 1.4(a) have been elected to or designated as members of, and shall constitute a majority of, the Company’s Board of Directors, or (y) the date of termination of this AgreementAgreement in accordance with Section 8.1 and the Closing (the “Interim Period”), except (i) to the extent Parent shall otherwise consent in writing (which consent, in the case of actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, and in the case of any commitment or agreement described in clause “(y)” below to take any of the actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, is not to be unreasonably withheld, conditioned or delayed), (ii) as set forth in the Company Disclosure Schedule (including Part 5.1 thereof), (iii) as necessary to implement or otherwise effectuate an Agreed Arrangement or as otherwise expressly contemplated required by this Agreement Agreement, or (iv) as may be required consented to in advance in writing by any Legal RequirementParent, (A) the Company shall, and shall cause each of its Subsidiaries Company Subsidiary to, use its commercially reasonable efforts to (i) conduct its business in the ordinary course consistent Ordinary Course and in compliance in all material respects with the manner in which such business was being conducted prior to the date of this Agreement applicable Laws and (ii) use its commercially reasonable best efforts to (A) preserve intact its present business organization, (B) keep available the services of and organization substantially intact retain its directors, officers and to key employees and (C) maintain such relations and preserve existing relationships with its suppliers, vendors, customers, suppliers, employees, contractors, distributors insurers and others having material business dealings relationships with it it. Notwithstanding anything to the contrary contained herein, after the date hereof, nothing herein will prevent the Company or the Company Subsidiaries from taking or failing to take, in good faith, any commercially reasonable action, including the establishment of any commercially reasonable policy, procedure or protocol, in response to COVID-19 or any COVID-19 Measures to comply with applicable Law related to COVID-19 so long as, in each instance, the Company, to the extent reasonably necessary practicable under the circumstances, provides Parent with advance notice of such anticipated action and consults with Parent in good faith with respect to preserve substantially intact its present business and organization, and (B) neither the Company nor any of its Subsidiaries shall:
(a) amend the Company’s certificate of incorporation or bylaws;such action.
(b) splitThe Company agrees that, combine during the Interim Period, except as otherwise expressly required by this Agreement, as required by applicable Law (including as may be compelled by any Governmental Entity), as set forth on Schedule 5.1(b) or reclassify as consented to in advance in writing by Parent, the Company shall not, and shall cause each Company Subsidiary not to:
(i) amend, modify, waive or fail to enforce any shares of its respective Governing Documents or the Company’s capital stockStockholder Agreements;
(cii) declare, set aside issue or pay any dividend (whether payable in cash, stock or property) with respect to any shares of the Company’s capital stock, except prior to the Acceptance Time for the regular quarterly cash dividend in the amount of $.01 per issued and outstanding Company Share declared and paid on its historical schedule consistent with past practice;
(d) form any Subsidiary;
(e) issue, sell, pledgeor authorize to issue or sell, dispose of or encumber any additional shares of its capital stock, membership interests or any other Equity Interests, as applicable, or issue or sell, or authorize to issue or sell, any securities convertible into or exchangeable for, or options (including Company Options), warrants or rights to purchase or subscribe for, or enter into any Contract with respect to the issuance or sale of, any shares of its capital stock, membership interests or any other Equity Interests, as applicable (other than issuances of the Additional Cargill Warrants, shares of Company Common Stock pursuant to Section 2.7 and Section 2.9, or the grant of Company RSUs under the Company’s Equity Incentive Plan, substantially in the form made available to Parent, to newly hired employees and other service providers which are included in Company Fully Diluted Shares);
(iii) split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stock, membership interests or any other than (i) Company Shares reserved for issuance upon exercise of Company Options outstanding on the date of this Agreement (or granted pursuant to clause “(ii)” or clause “(iii)” of this clause “(e)”)Equity Interests, (ii) Company Options or shares of restricted stock granted to new employees in connection with their initial hiring by the Company consistent with the past practices of the Company with respect to newly hired employees and (iii) Company Options or shares of restricted stock granted to employees of the Company and its Subsidiaries at times and in amounts consistent with past practices of the Companyas applicable;
(fiv) transfermake, dispose declare, set aside or pay any dividend or make any other distribution, in each case whether in cash, stock or otherwise;
(v) make any change to any of or lease, or materially encumber, any material tangible assets the cash management practices of the Company or any Company Subsidiary, including deviating from or altering any of its practices, policies or procedures in paying accounts payable or collecting accounts receivable;
(vi) make any change to any policy or practice regarding extensions of credit, prepayments, sales, recognition of deferred revenue, collections, receivables or payment of accounts with respect to its business or accelerate or delay the payment or receipt of any payables or receivables;
(vii) (A) grant any material refunds, credits, rebates or allowances (or offer new discounts/rebates/credits or allowances) to customers or (B) give any discount, accommodation or other concession other than in the Ordinary Course, in order to accelerate or induce the collection of any receivable;
(viii) take any action or fail to take any action that would have, or could reasonably be expected to have, the effect of (i) delaying or postponing the payment of any accounts payable or commissions or any other liability to post-Closing periods that would otherwise be expected to occur prior to the Closing, or (ii) accelerating the collection of (or discount) any accounts or notes receivable to pre-Closing periods that would otherwise be expected to occur after the Closing;
(ix) (A) incur any Indebtedness in excess of $250,000 in the aggregate, other than Indebtedness related to the Live Oak Term Sheet, as set forth in Schedule 5.1(b) of the Disclosure Schedules, and Indebtedness related to the Additional Cargill Warrants, or (B) make any loans or advances to any other Person;
(x) cancel or forgive any Indebtedness in excess of $250,000 in the aggregate owed to the Company or any of the Company Subsidiaries, other than (i) pursuant to written contracts or commitments existing as Indebtedness of the date Company to a Company Subsidiary or Indebtedness for borrowed money of this Agreement (copies of which have been made available a Company Subsidiary to Parent) the Company or (ii) tangible assets with to another Company Subsidiary that does not result in a value not in excess of $100,000 individually post-Closing Tax or $1,000,000 in the aggregateother liability;
(gxi) dispose of except as may be required by Law or abandonGAAP, or grant or allow to be prematurely terminated licenses or similar rights to, make any material Company IP (other than (i) nonexclusive licenses granted change in the ordinary course of business consistent with past practice financial or (ii) implied licenses arising from sales of products);
(h) repurchasetax accounting methods, redeem principles or otherwise acquire any shares of the capital stock of the Company, except shares repurchased from employees or former employees practices of the Company or any of its Subsidiaries pursuant to Company Subsidiary (i) the exercise of repurchase or cancellation rights, or (ii) elections by employees or former employees to sell or otherwise transfer Company Shares to the Company to satisfy withholding obligations, in each case pursuant to the Company Option Plan or applicable awardchange an annual accounting period);
(ixii) incur (A) make, change or rescind any indebtedness for borrowed money Tax election, (B) settle or guarantee compromise any such indebtednessclaim, except for borrowings incurred notice, audit report or made assessment in the ordinary course respect of business Taxes, (under credit facilities in existence as of the date of this AgreementC) that do not result in the total indebtedness for borrowed money of the Company and its Subsidiaries exceeding $30,000,000 outstanding at change any one time;
Tax period, (jD) adopt or amend in change any material respect method of Tax accounting, (E) file any Company Benefit Planamended Tax Return or claim for a Tax refund, or increase the compensation or fringe benefits (F) surrender any right to claim a refund of any directorTaxes, officer or employee of the Company or any of its Subsidiaries, except for (i) any increases committed to prior to the date of this Agreement (as previously disclosed to Parent) and (ii) increases in amounts and at times consistent with past practices, provided that any such increase pursuant to this clause “(ii)” for any officer does not exceed 5% of then current compensation of such officer;
(k) accelerate the payment or vesting of benefits or amounts payable or to become payable under any Company Benefit Plan, or amend in any material respect any Company Benefit Plan in a manner inconsistent with the foregoing, except as required by any existing agreement, plan or applicable Legal Requirement;
(l) enter into or amend or modify in any material respect any Employment Agreement;
(m) materially amend any CT Contract or Material Contract described in clause “(i),” clause “(ii),” clause “(iii),” clause “(iv),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement) or prematurely terminate any CT Contract or Material Contract described in clause “(ii),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement), except, in each case (other than in the case of a CT Contract), in the ordinary course of business consistent with past practice or where the failure to amend or terminate any such Material Contract could, in the good faith judgment of the Company, have a material adverse impact on the Company;
(nG) enter into any new agreement or contract described in clause “(i),” clause “(iv),” clause “(vii),” clause “(viii)” or clause “(xiv)” of Section 3.8(a);
(o) enter into any Tax allocation agreement, including any option Tax sharing agreement, relating Tax indemnity agreement, pre-filing agreement, advance pricing agreement, cost sharing agreement, or closing agreement related to the acquisition any Tax, (H) request any Tax ruling from a competent authority or disposition of any business, business line or Entity (whether by merger, sale of stock, sale of assets or otherwise);
(pI) change any of its methods of accounting or accounting practices in any material respect;
(q) make or rescind any material Tax election, settle or compromise any material claim with respect to Taxes, consent to any extension or waiver of the limitation statute of limitations period applicable to any material Tax claim or assessment;
(xiii) enter into, renew, modify or amend any Company Affiliate Agreement (or any Contract, that if existing on the date hereof, would have constituted a Company Affiliate Agreement);
(xiv) grant or otherwise create or consent to the creation of any Lien (other than a Permitted Lien) on any of its material assets, Owned Real Properties or Leased Real Properties;
(xv) sell, lease, license, permit to lapse, abandon or otherwise dispose of any of its material properties or assets that are material to its business (excluding Intellectual Property which is addressed in Section 5.1(b)(xvi)), except sales of inventory in the Ordinary Course;
(xvi) sell, assign, transfer, lease, license, abandon, let lapse, cancel, dispose of, or otherwise subject to any Lien (other than Permitted Liens) any material intellectual property, except non-exclusive licenses of Intellectual Property granted in the Ordinary Course or the full-term expiration of registered Intellectual Property or abandonment in the Ordinary Course of Intellectual Property not material to the business of any Group Company;
(xvii) (A) amend, extend, renew, assign or otherwise modify any Company Material Contract (or any Contract that would have been a Company Material Contract if not so amended, extended, renewed, assigned or otherwise modified as of the date hereof) in any manner less favorable to the Company or any of its Subsidiaries than prior to such amendment or modification, (B) enter into any Contract that would have been a Company Material Contract if entered into prior to the date hereof, or (C) terminate any Company Material Contract (or any Contract that would have been a Company Material Contract if entered into prior to the date hereof), in each case other than in the Ordinary Course;
(xviii) hire, engage or terminate (without cause), furlough, or temporarily layoff any employee or independent contractor with annual compensation in excess of $250,000;
(xix) waive or release any noncompetition, nonsolicitation, nondisparagement, nondisclosure or other restrictive covenant obligation of any current or former employee or independent contractor, other than in the Ordinary Course;
(xx) except as required under applicable Law or the terms (as in effect on the date hereof) of any Company Benefit Plan set forth on Schedule 3.16(a), (A) grant or agree to grant to any employee, officer, director or independent contractor of the Company or any of the Company Subsidiaries any increase in (i) wages or bonus (except in connection with promotions in the Ordinary Course) or (ii) severance, profit sharing, retirement, insurance or other compensation or benefits, (B) adopt, enter into or establish any plan or arrangement that would be a Company Benefit Plan if it was in effect on the date hereof (except with respect to employment or consulting Contracts which would not be Company Material Contracts if in effect on the date hereof), or amend, modify, terminate, or agree to amend, modify or terminate any existing Company Benefit Plans (except for group welfare insurance policy renewals in the Ordinary Course), (C) accelerate the time of payment, vesting or funding of any compensation or benefits under any Company Benefit Plan or otherwise (including any plan or arrangement that would be a Company Benefit Plan if it was in effect on the date hereof), (D) make or agree to make any bonus or incentive payments to any individual (except in connection with payment of the Transaction Bonus Pool Amount pursuant to Section 7.4(c)) or (E) make any personnel change to the management of the Company, including the hiring of additional officers or termination (except for cause) of existing officers;
(xxi) unless required by Law, (A) modify, negotiate, extend, terminate or enter into any material agreement with CBA, or (B) recognize or certify any taxing authority relating to Taxeslabor union, labor organization, works council, or group of employees as the bargaining representative for any employees of the Group Companies;
(rxxii) make implement or announce any capital expenditure employee layoffs or furloughs, reductions in force, reductions in compensation, hours or benefits, work schedule changes or similar actions that could implicate the WARN Act;
(xxiii) pay, discharge, compromise, waive, release, assign or settle any material rights or pending or threatened Actions (whether civil, criminal, administrative or investigative) against the Company or any Company Subsidiary (A) involving payments in excess of $150,000 in any single instance or in excess of $250,000 in the aggregate, (B) seeking material injunctive or other equitable remedy, (C) which imposes any material restrictions on the operations of the Company or any Company Subsidiary or (D) by the Equity Holders or any other Person, which relates to the transactions contemplated by this Agreement;
(xxiv) make or incur any capital expenditures that in aggregate exceed $100,000 in excess of the Company’s annual capital expenditure budget for periods following the date hereof made available to Parent;
(xxv) buy, purchase or otherwise acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than (A) inventory and supplies in the Ordinary Course, or (B) other assets in an amount not to exceed $150,000 individually or $1,850,000 250,000 in the aggregate in any fiscal monthaggregate;
(sxxvi) merge or consolidate the Company or any Company Subsidiaries with any other Person, or adopt any or effect a plan of complete or partial liquidation, dissolution, restructuring restructuring, recapitalization or other reorganization of the Company or, except in accordance with the rights of the Company under Section 5.2, adopt any plan providing for, or enter into, an Alternative Acquisition (as defined in Section 5.2(f))reorganization;
(txxvii) make enter into any loans, advances or capital contributions to, or investments in, any other Person other than (i) loans or advances to customers in the form of trade credit or deferred purchase price arrangements in the ordinary course new line of business, except as expressly set forth in any business plan made available to Parent;
(iixxviii) fail to maintain the Insurance Policies or comparable replacement policies consistent with levels maintained by the Company or any and each Company Subsidiary as of the Company to or in the Company or any Subsidiary date of the Company, (iii) pursuant to any contract or other legal obligation set forth in Part 5.1(t) of the Company Disclosure Schedule or (iv) advances to employees (other than officers of the Company) in the ordinary course of business consistent with past practice, not to exceed $10,000 in each individual case and $500,000 in the aggregatethis Agreement;
(uxxix) settle or compromise take any Legal Proceeding action or enter into any consent decreetransaction, injunction the effect of which might reasonably be expected to impair, delay, or similar restraint prevent any required approvals or form expiration or terminations of equitable relief in settlement of any Legal Proceedingwaiting periods under antitrust or competition Laws, other than (i) settlements and compromises that relate to Taxes (which are the subject of Section 5.1(q)) and (ii) any settlement, compromise, consent decree, injunction, restraint or relief in an amount less than $500,000 that would not limit or restrict in any material respect the ability including expiration of the Company waiting period of the HSR Act, or any of its Subsidiaries to engage in or conduct any business in any geographic area or restrict the Company’s right to use any material Company IP or license any material Company IP from any other Personextension thereof;
(vxxx) terminate, cancel, amend make political contributions to political candidates or modify any material insurance policy maintained by the Company or any of its Subsidiaries which is not promptly replaced by a comparable amount of insurance coveragepolitical action committees;
(wxxxi) redeem take any action that is reasonably likely to prevent, delay or impede the Company Rights or amend, modify or terminate the Company Rights Agreement, or render it inapplicable to (or otherwise exempt from the application consummation of the Company Rights Agreement) any Person Mergers or action (the other than Parent and Acquisition Sub in connection with the delivery and performance of transactions contemplated by this Agreement);
(x) fail to repurchase in accordance with the terms of applicable repurchase rights any shares of restricted stock of the Company that, by virtue of any termination of employment of a holder thereof or otherwise, become subject to repurchase at any time prior to the Acceptance Time; or
(yxxxii) enter into authorize any commitment of, or agreement commit or agree to take any of, the foregoing actions in respect of which it is restricted by the actions described in clauses “(a)” through “(x)” provisions of this sentenceSection 5.1.
Appears in 1 contract
Interim Operations of the Company. The Company agrees that, during (a) During the period from the date of Agreement Date to the Share Acceptance Time or the date, if any, on which this Agreement through the is earlier of terminated pursuant to Section 8.1 (x) the time that the designees of Parent as provided in Section 1.4(a) have been elected to or designated as members of, and shall constitute a majority of, the Company’s Board of Directors, or (y) the date of termination of this Agreement, except (i) to the extent Parent shall otherwise consent in writing (which consent, in the case of actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, and in the case of any commitment or agreement described in clause “(y)” below to take any of the actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, is not to as may be unreasonably withheld, conditioned or delayed)required by Law, (ii) with the prior written consent of the Parent, (iii) as contemplated or permitted by this Agreement or (iv) as set forth in the Company Disclosure Schedule (including Part 5.1 thereofSchedule), the business of the Company and its Subsidiary 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 Subsidiary shall use reasonable best efforts to (iii1) as necessary preserve intact their current business organization, (2) maintain their relationships with customers, suppliers and other having business dealings with them, (3) preserve intact and keep available the services of present employees of the Company or its Subsidiary, (4) keep in effect casualty, product liability, workers’ compensation and other insurance policies in coverage amounts substantially similar to implement those in effect at the date of this Agreement, and (5) preserve and protect the Intellectual Property owned by the Company and its Subsidiary; provided, however, that no action by the Company or otherwise effectuate an Agreed Arrangement or as otherwise expressly contemplated its Subsidiary with respect to matters addressed specifically by any provision of this Agreement or Section 6.1(a) shall be a 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 (ivA) as may be required by any Legal RequirementLaw, (AB) with the prior written consent of the Parent, which consent shall not be unreasonably withheld, delayed or conditioned or (C) as set forth in the Company shallDisclosure Schedule, prior to the time 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 cause each of not permit its Subsidiaries Subsidiary to, use its commercially reasonable efforts to conduct its business in the ordinary course consistent with the manner in which such business was being conducted prior to the date of this Agreement and use its commercially reasonable efforts to preserve its present business and organization substantially intact and to maintain such relations with customers, suppliers, employees, contractors, distributors and others having business dealings with it to the extent reasonably necessary to preserve substantially intact its present business and organization, and (B) neither the Company nor do any of its Subsidiaries shallthe following:
(a) i. amend the Company’s its certificate of incorporation or bylawsbylaws (or equivalent organizational documents);
ii. issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, sale, disposition or pledge or other encumbrance of (bx) any shares of capital stock of any class or any other ownership interest of the Company or its Subsidiary, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of capital stock or any other ownership interest of the Company or its Subsidiary, or any rights, warrants, options, calls, commitments or any other agreement of any character to purchase or acquire any shares of capital stock or any other ownership interest of the Company or its Subsidiary or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of capital stock or any other ownership interest of the Company or its Subsidiary, or (y) any other securities of the Company or its Subsidiary in respect of, in lieu of, or in substitution for, Company Common Stock outstanding on the Agreement Date, except for the exercise of the Top-Up Option;
iii. redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Company Common Stock;
iv. split, combine combine, subdivide or reclassify any shares of the Company’s capital stock;
(c) Company Common Stock or declare, set aside for payment or pay any dividend (whether payable or other distribution in cash, stock respect of any Company Common Stock or property) with respect otherwise make any payments to any shares of the Company’s capital stock, except prior to the Acceptance Time for the regular quarterly cash dividend stockholders in the amount of $.01 per issued and outstanding Company Share declared and paid on its historical schedule consistent with past practicetheir capacity as such;
(d) form any Subsidiary;
(e) issue, sell, pledge, dispose of or encumber any additional shares of its capital stock, or securities convertible or exchangeable for, or options or rights to acquire, any shares of its capital stock, other than (i) Company Shares reserved for issuance upon exercise of Company Options outstanding on the date of this Agreement (or granted pursuant to clause “(ii)” or clause “(iii)” of this clause “(e)”), (ii) Company Options or shares of restricted stock granted to new employees in connection with their initial hiring by the Company consistent with the past practices of the Company with respect to newly hired employees and (iii) Company Options or shares of restricted stock granted to employees of the Company and its Subsidiaries at times and in amounts consistent with past practices of the Company;
(f) transfer, dispose of or lease, or materially encumber, any material tangible assets of the Company or any of its Subsidiaries, other than (i) pursuant to written contracts or commitments existing as of the date of this Agreement (copies of which have been made available to Parent) or (ii) tangible assets with v. adopt a value not in excess of $100,000 individually or $1,000,000 in the aggregate;
(g) dispose of or abandon, or grant or allow to be prematurely terminated licenses or similar rights to, any material Company IP (other than (i) nonexclusive licenses granted in the ordinary course of business consistent with past practice or (ii) implied licenses arising from sales of products);
(h) repurchase, redeem or otherwise acquire any shares of the capital stock of the Company, except shares repurchased from employees or former employees of the Company or any of its Subsidiaries pursuant to (i) the exercise of repurchase or cancellation rights, or (ii) elections by employees or former employees to sell or otherwise transfer Company Shares to the Company to satisfy withholding obligations, in each case pursuant to the Company Option Plan or applicable award;
(i) incur any indebtedness for borrowed money or guarantee any such indebtedness, except for borrowings incurred or made in the ordinary course of business (under credit facilities in existence as of the date of this Agreement) that do not result in the total indebtedness for borrowed money of the Company and its Subsidiaries exceeding $30,000,000 outstanding at any one time;
(j) adopt or amend in any material respect any Company Benefit Plan, or increase the compensation or fringe benefits of any director, officer or employee of the Company or any of its Subsidiaries, except for (i) any increases committed to prior to the date of this Agreement (as previously disclosed to Parent) and (ii) increases in amounts and at times consistent with past practices, provided that any such increase pursuant to this clause “(ii)” for any officer does not exceed 5% of then current compensation of such officer;
(k) accelerate the payment or vesting of benefits or amounts payable or to become payable under any Company Benefit Plan, or amend in any material respect any Company Benefit Plan in a manner inconsistent with the foregoing, except as required by any existing agreement, plan or applicable Legal Requirement;
(l) enter into or amend or modify in any material respect any Employment Agreement;
(m) materially amend any CT Contract or Material Contract described in clause “(i),” clause “(ii),” clause “(iii),” clause “(iv),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement) or prematurely terminate any CT Contract or Material Contract described in clause “(ii),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement), except, in each case (other than in the case of a CT Contract), in the ordinary course of business consistent with past practice or where the failure to amend or terminate any such Material Contract could, in the good faith judgment of the Company, have a material adverse impact on the Company;
(n) enter into any new agreement or contract described in clause “(i),” clause “(iv),” clause “(vii),” clause “(viii)” or clause “(xiv)” of Section 3.8(a);
(o) enter into any agreement, including any option agreement, relating to the acquisition or disposition of any business, business line or Entity (whether by merger, sale of stock, sale of assets or otherwise);
(p) change any of its methods of accounting or accounting practices in any material respect;
(q) make or rescind any material Tax election, settle or compromise any material claim with respect to Taxes, consent to any extension or waiver of the limitation period applicable to any material Tax claim or enter into any material agreement with any taxing authority relating to Taxes;
(r) make any capital expenditure in excess of $250,000 individually or $1,850,000 in the aggregate in any fiscal month;
(s) adopt any plan of complete or partial liquidation, dissolution, restructuring merger, consolidation, restructuring, recapitalization or other reorganization of the Company oror its Subsidiary, except other than the Transactions;
vi. acquire, sell, lease, dispose of, pledge or encumber any assets, other than (x) acquisitions in accordance with the rights existing or related lines of business of the Company under Section 5.2or its Subsidiary as to which the aggregate consideration for all such acquisitions does not exceed $25,000, adopt any plan providing for(y) sales, leases, dispositions, pledges or encumbrances of assets with an aggregate fair market value of less than $25,000, or enter into, an Alternative Acquisition (as defined in Section 5.2(f));
(tz) make any loans, advances sales or capital contributions to, or investments in, any other Person other than (i) loans or advances to customers in the form transfers of trade credit or deferred purchase price arrangements inventory in the ordinary course of business, (ii) by the Company or any Subsidiary of the Company to or in the Company or any Subsidiary of the Company, (iii) pursuant to any contract or other legal obligation set forth in Part 5.1(t) of the Company Disclosure Schedule or (iv) advances to employees (other than officers of the Company) in the ordinary course of business consistent with past practice, not to exceed $10,000 in each individual case and $500,000 in the aggregate;
(u) settle or compromise any Legal Proceeding or enter into any consent decree, injunction or similar restraint or form of equitable relief in settlement of any Legal Proceeding, other than (i) settlements and compromises that relate to Taxes (which are the subject of Section 5.1(q)) and (ii) any settlement, compromise, consent decree, injunction, restraint or relief in an amount less than $500,000 that would not limit or restrict in any material respect the ability of the Company or any of its Subsidiaries to engage in or conduct any business in any geographic area or restrict the Company’s right to use any material Company IP or license any material Company IP from any other Person;
(v) terminate, cancel, amend or modify any material insurance policy maintained by the Company or any of its Subsidiaries which is not promptly replaced by a comparable amount of insurance coverage;
(w) redeem the Company Rights or amend, modify or terminate the Company Rights Agreement, or render it inapplicable to (or otherwise exempt from the application of the Company Rights Agreement) any Person or action (other than Parent and Acquisition Sub in connection with the delivery and performance of this Agreement);
(x) fail to repurchase in accordance with the terms of applicable repurchase rights any shares of restricted stock of the Company that, by virtue of any termination of employment of a holder thereof or otherwise, become subject to repurchase at any time prior to the Acceptance Time; or
(y) enter into any commitment or agreement to take any of the actions described in clauses “(a)” through “(x)” of this sentence.
Appears in 1 contract
Samples: Merger Agreement (Epolin Inc /Nj/)
Interim Operations of the Company. The Company agrees that, during the period from the date of this Agreement through to the earlier of (x) the time that the designees termination of Parent as provided this Agreement in accordance with Section 1.4(a) have been elected to or designated as members of8.1, and shall constitute a majority of, the Company’s Board of Directors, or (y) the date of termination of this AgreementClosing, except (i) as otherwise expressly contemplated by this Agreement or any Ancillary Agreements or required in connection with the Merger, (ii) as required by applicable Law (including COVID-19 Measures or Cybersecurity Measures), (iii) as set forth on Schedule 5.1, or (iv) as otherwise necessary to effect the extent Company’s business plan and budget previously disclosed to Parent shall otherwise consent in writing or as consented to by Parent (which consent, in the case of actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, and in the case of any commitment or agreement described in clause “(y)” below to take any of the actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, is consent shall not to be unreasonably withheld, conditioned or delayed), or (iiiv) as with respect to the matters set forth in the Company Disclosure Schedule clauses (including Part 5.1 thereofi), (iii), (iv) or (xv) of Section 5.1(b) as necessary to implement or otherwise effectuate an Agreed Arrangement or as otherwise expressly contemplated effect any Interim Financing; provided, that such consent shall be deemed given by this Agreement or Parent if Parent has not notified the Company that it is withholding its consent within three (iv3) as may be required by any Legal Requirement, Business Days following receipt of the written request for such consent:
(Aa) the Company shall, and shall cause each of Company Subsidiary to use commercially reasonable efforts to, conduct its Subsidiaries tobusiness in the Ordinary Course in all material respects and, to the extent consistent with the foregoing, use its commercially reasonable efforts to conduct (i) preserve intact its present business organization and (ii) maintain existing relationships with its Material Customers and Material Suppliers; and
(b) the Company shall not, and shall cause each Company Subsidiary not to, effect any of the following:
(i) amend or otherwise change its Organizational Documents;
(ii) form or create any Subsidiaries;
(iii) other than any transactions that do not result in (x) an increase in the ordinary course consistent Aggregate Consideration payable in connection with the manner transactions contemplated by this Agreement or (y) consideration in which excess of the Aggregate Consideration that would be payable following the consummation of the transactions contemplated by this Agreement, issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (A) any shares of any class of capital stock of the Company, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such business capital stock, or any other ownership interest (including, without limitation, any phantom interest) of the Company (other than shares issued or acquired pursuant to the exercise or conversion at or prior to the Closing of securities exercisable for or convertible into such shares), or (B) any material assets of the Company;
(iv) split, combine, redeem or reclassify, or purchase or otherwise acquire, any membership interests, shares of its capital stock or any other ownership interests, as applicable, in each case, except for any such transactions that do not result in (x) an increase in the Aggregate Consideration payable in connection with the transactions contemplated by this Agreement or (y) consideration in excess of the Aggregate Consideration that would be payable following the consummation of the transactions contemplated by this Agreement;
(v) other than in the Ordinary Course, sell, lease, license, permit to lapse, abandon or otherwise dispose of any of its properties or assets that are material to its business;
(vi) materially amend, modify or consent to the termination of any (A) Contracts listed on Schedule 3.21, (B) settlement Contracts providing for injunctive or equitable relief, or (C) Company Material Contracts; in each case, excluding any expiration in accordance with its terms or extension of any Company Material Contract that is scheduled to expire in accordance with its terms within twelve (12) months after the date hereof;
(vii) (A) incur any non-convertible Indebtedness for borrowed money in excess of $5,000,000, other than short-term Indebtedness for borrowed money or letters of credit incurred in the Ordinary Course, (B) make any loans or advances to any other Person, other than loans and advances to employees in the Ordinary Course or (C) except as set forth in the foregoing clause (A), issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person, or grant any security interest in any of its assets;
(viii) (A) grant or agree to grant to any employee or independent contractor of the Company or any of the Company Subsidiaries, who has annual base compensation in excess of $300,000, any increase in wages or bonus, severance, profit sharing, retirement, insurance or other compensation or benefits except for increases in the Ordinary Course, (B) adopt or establish any new compensation or employee benefit plans or arrangements, or materially amend, terminate, or agree to amend or terminate any existing material Company Benefit Plans other than arrangements entered into in connection with the employment or engagement of new employees or other service providers or non-material changes made to any group health or welfare plan during the open enrollment process in the Ordinary Course, (C) accelerate the time of payment, vesting or funding of any compensation or benefits under any Company Benefit Plan (including any plan or arrangement that would be a Company Benefit Plan if it was being conducted in effect on the date hereof); (D) enter into any new, or amend any existing employment or consulting agreement or severance or termination agreement with or grant any change of control or retention payments or benefits to, in each case, any current or former director, officer, employee or consultant whose base compensation would exceed, on an annualized basis, $300,000; (E) hire any person whose base compensation would exceed, on an annualized basis, $300,000, or (F) terminate any current director, officer, employee or consultant provider whose base compensation would exceed, on an annualized basis, $300,000 other than for cause;
(ix) other than as required by Law or pursuant to the terms of an agreement entered into prior to the date of this Agreement and use its commercially reasonable efforts to preserve its present business and organization substantially intact and to maintain such relations reflected on Schedule Section 5.1(b)(ix), grant any severance or termination pay to, any director, officer, or other employee of the Company or any Company Subsidiary;
(A) make inconsistent with customerspast practice or outside the Ordinary Course, supplierschange or rescind any material Tax election, employees, contractors, distributors and others having business dealings with it to the extent reasonably necessary to preserve substantially intact its present business and organization, and (B) neither settle or compromise any material claim by a Governmental Entity in respect of Taxes, (C) change any method of Tax accounting, or (D) amend a material Tax Return;
(xi) cancel or forgive any Indebtedness for borrowed money owed to the Company nor or any of the Company Subsidiaries, other than Indebtedness for borrowed money of the Company to a Company Subsidiary or Indebtedness for borrowed money of a Company Subsidiary to the Company or to another Company Subsidiary that does not result in a post-Closing Tax or other liability;
(xii) except as may be required by Law, GAAP or PCAOB standards, make any material change in the financial accounting methods, principles or practices of the Company (or change an annual accounting period);
(xiii) unless required by Law, (i) modify, extend, or enter into any Labor Agreement, or (ii) recognize or certify any labor union, labor organization, or group of employees as the bargaining representative for any employees of the Group Companies;
(xiv) implement any employee layoffs that would, independently or in connection with any layoffs occurring prior to the date hereof, implicate WARN;
(xv) grant or otherwise create or consent to the creation of any Lien (other than a Permitted Lien) on any of its Subsidiaries shall:
(a) amend material assets or Leased Real Properties, other than in the Company’s certificate of incorporation or bylawsOrdinary Course;
(b) split, combine or reclassify any shares of the Company’s capital stock;
(cxvi) declare, set aside or pay any dividend (whether or make any other distribution, payable in cash, stock stock, property or property) otherwise, with respect to any shares of the Company’s its capital stock, except prior to the Acceptance Time for the regular quarterly cash dividend in the amount of $.01 per issued and outstanding Company Share declared and paid on its historical schedule consistent with past practicestock or other equity interests;
(dxvii) form waive, release, assign, settle or compromise any Subsidiary;
rights, claims, suits, actions, audits, reviews, hearings, proceedings, investigations or litigation (ewhether civil, criminal, administrative or investigative) issue, sell, pledge, dispose of or encumber any additional shares of its capital stock, or securities convertible or exchangeable for, or options or rights to acquire, any shares of its capital stock, other than (i) Company Shares reserved for issuance upon exercise of Company Options outstanding on the date of this Agreement (or granted pursuant to clause “(ii)” or clause “(iii)” of this clause “(e)”), (ii) Company Options or shares of restricted stock granted to new employees in connection with their initial hiring by the Company consistent with the past practices of the Company with respect to newly hired employees and (iii) Company Options or shares of restricted stock granted to employees of the Company and its Subsidiaries at times and in amounts consistent with past practices of the Company;
(f) transfer, dispose of or lease, or materially encumber, any material tangible assets of against the Company or any of its Subsidiaries, Company Subsidiary other than (i) pursuant to written contracts waivers, releases, assignments, settlements or commitments existing as of the date of this Agreement (copies of which have been made available to Parent) or (ii) tangible assets with a value compromises that do not in excess of exceed $100,000 500,000 individually or $1,000,000 500,000 in the aggregate;
(gxviii) dispose make or incur any capital expenditures, except for capital expenditures (A) in the Ordinary Course or (B) other than capital expenditures in an amount not to exceed $500,000 in the aggregate;
(xix) buy, purchase or otherwise acquire (by merger, consolidation, acquisition of stock or abandonassets or otherwise), directly or grant or allow to be prematurely terminated licenses or similar rights toindirectly, any material Company IP (assets, securities, properties, interests or businesses, other than (iA) nonexclusive licenses granted inventory and supplies in the ordinary course of business consistent with past practice Ordinary Course or (iiB) implied licenses arising from sales other assets that would not require additional financial statements to be included in the Registration Statement or otherwise prevent or materially delay the consummation of products)the transactions contemplated by this Agreement;
(hxx) repurchase, redeem or otherwise acquire enter into any shares new line of business outside of the capital stock of the Company, except shares repurchased from employees or former employees of business currently conducted by the Company or any of its Subsidiaries pursuant to (i) the exercise of repurchase or cancellation rights, or (ii) elections by employees or former employees to sell or otherwise transfer Company Shares to the Company to satisfy withholding obligations, in each case pursuant to the Company Option Plan or applicable awardSubsidiaries;
(i) incur any indebtedness for borrowed money or guarantee any such indebtedness, except for borrowings incurred or made in the ordinary course of business (under credit facilities in existence as of the date of this Agreement) that do not result in the total indebtedness for borrowed money of the Company and its Subsidiaries exceeding $30,000,000 outstanding at any one time;
(jxxi) adopt or amend in any material respect any Company Benefit Plan, or increase the compensation or fringe benefits of any director, officer or employee of the Company or any of its Subsidiaries, except for (i) any increases committed to prior to the date of this Agreement (as previously disclosed to Parent) and (ii) increases in amounts and at times consistent with past practices, provided that any such increase pursuant to this clause “(ii)” for any officer does not exceed 5% of then current compensation of such officer;
(k) accelerate the payment or vesting of benefits or amounts payable or to become payable under any Company Benefit Plan, or amend in any material respect any Company Benefit Plan in effect a manner inconsistent with the foregoing, except as required by any existing agreement, plan or applicable Legal Requirement;
(l) enter into or amend or modify in any material respect any Employment Agreement;
(m) materially amend any CT Contract or Material Contract described in clause “(i),” clause “(ii),” clause “(iii),” clause “(iv),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement) or prematurely terminate any CT Contract or Material Contract described in clause “(ii),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement), except, in each case (other than in the case of a CT Contract), in the ordinary course of business consistent with past practice or where the failure to amend or terminate any such Material Contract could, in the good faith judgment of the Company, have a material adverse impact on the Company;
(n) enter into any new agreement or contract described in clause “(i),” clause “(iv),” clause “(vii),” clause “(viii)” or clause “(xiv)” of Section 3.8(a);
(o) enter into any agreement, including any option agreement, relating to the acquisition or disposition of any business, business line or Entity (whether by merger, sale of stock, sale of assets or otherwise);
(p) change any of its methods of accounting or accounting practices in any material respect;
(q) make or rescind any material Tax election, settle or compromise any material claim with respect to Taxes, consent to any extension or waiver of the limitation period applicable to any material Tax claim or enter into any material agreement with any taxing authority relating to Taxes;
(r) make any capital expenditure in excess of $250,000 individually or $1,850,000 in the aggregate in any fiscal month;
(s) adopt any plan of complete or partial liquidation, dissolution, restructuring restructuring, recapitalization or other reorganization of the Company or, except in accordance with the rights of the Company under Section 5.2, adopt any plan providing for, or enter into, an Alternative Acquisition (as defined in Section 5.2(f));
(t) make any loans, advances or capital contributions to, or investments in, any other Person other than (i) loans or advances to customers in the form of trade credit or deferred purchase price arrangements in the ordinary course of business, (ii) by the Company or any Subsidiary of the Company to or in the Company or any Subsidiary of the Company, (iii) pursuant to any contract or other legal obligation set forth in Part 5.1(t) of the Company Disclosure Schedule or (iv) advances to employees (other than officers of the Company) in the ordinary course of business consistent with past practice, not to exceed $10,000 in each individual case and $500,000 in the aggregate;
(u) settle or compromise any Legal Proceeding or enter into any consent decree, injunction or similar restraint or form of equitable relief in settlement of any Legal Proceedingreorganization, other than (i) settlements the Merger and compromises that relate to Taxes (which are the subject treatment of Section 5.1(q)) and (ii) any settlement, compromise, consent decree, injunction, restraint or relief in an amount less than $500,000 that would not limit or restrict in any material respect the ability of the Company or any of its Subsidiaries to engage in or conduct any business in any geographic area or restrict the Company’s right to use any material Company IP or license any material Company IP from any other Person;
(v) terminate, cancel, amend or modify any material insurance policy maintained options as contemplated by the Company or any of its Subsidiaries which is not promptly replaced by a comparable amount of insurance coverage;
(w) redeem the Company Rights or amend, modify or terminate the Company Rights Agreement, or render it inapplicable to (or otherwise exempt from the application of the Company Rights Agreement) any Person or action (other than Parent and Acquisition Sub in connection with the delivery and performance of this Agreement);
(x) fail to repurchase in accordance with the terms of applicable repurchase rights any shares of restricted stock of the Company that, by virtue of any termination of employment of a holder thereof or otherwise, become subject to repurchase at any time prior to the Acceptance Time; or
(yxxii) enter into authorize any commitment of, or agreement commit or agree to take any of, the foregoing actions in respect of which it is restricted by the actions described in clauses “(a)” through “(x)” provisions of this sentenceSection 5.1.
Appears in 1 contract
Interim Operations of the Company. The Except as set forth in Section 4.1 of the Company Disclosure Schedule, the Company agrees that, during the period from the date of this Agreement through prior to the earlier of the Effective Time and the date, if any, on which this Agreement is earlier terminated pursuant to Section 6.1 (x) the time that the designees of Parent as provided in Section 1.4(a) have been elected to or designated as members of, and shall constitute a majority of, the Company’s Board of Directors, or (y) the date of termination of this Agreement“Termination Date”), except (i) to the extent Parent or Merger Sub shall otherwise consent in writing (which consent, in the case of actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, and in the case of any commitment or agreement described in clause “(y)” below to take any of the actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, is consent shall not to be unreasonably withheld, conditioned or delayed), (ii) as set forth in the Company Disclosure Schedule (including Part 5.1 thereof)contemplated or permitted by this Agreement, or (iii) as necessary to implement or otherwise effectuate an Agreed Arrangement or as otherwise expressly contemplated by this Agreement or (iv) as may be required by any Legal Requirement, (A) the Company shall, and shall cause each all of its Subsidiaries to, use (a) conduct the business of the Company and its commercially reasonable efforts to conduct its business Subsidiaries, in all material respects, only in, and such entities shall not take any action except in, the ordinary course of business, consistent with the manner in which such business was being conducted prior to the date of this Agreement and past practice; (b) use its commercially reasonable efforts to preserve its intact their present business organizations and organization substantially intact and goodwill, (c) use commercially reasonable efforts to maintain such relations satisfactory relationships with, and keep available the services of, their present officers and other key employees, and (d) use commercially reasonable efforts to preserve existing relationships with material customers, lenders, suppliers, employees, contractors, distributors and others having material business dealings relationships with it the Company and its Subsidiaries, in the case of clauses (b), (c) and (d) above, in all material respects in the ordinary course of business consistent with past practice. Consistent with the foregoing, the Company agrees with Parent, on behalf of itself and its Subsidiaries, that between the date hereof and the earlier of the Effective Time and the Termination Date, and except (A) to the extent reasonably necessary to preserve substantially intact its present business and organizationParent or Merger Sub shall otherwise consent in writing (which consent shall not be unreasonably withheld, and conditioned or delayed), (B) neither as expressly required by this Agreement, or (C) as may be required by any Legal Requirement, the Company nor shall not, and shall not permit any Subsidiary of the Company to, do any of its Subsidiaries shallthe following:
(a) amend the Company’s certificate of incorporation Company Governing Documents or bylawsthe Subsidiary Governing Documents, as applicable;
(b) split, combine combine, subdivide or reclassify any shares of capital stock or other Equity Interests of the Company or any Subsidiary of the Company’s capital stock;
(c) authorize, declare, set aside or pay any dividend or distribution (whether payable in cash, stock stock, other ownership interest or other securities or property) with respect to any shares of the capital stock of the Company or any other Equity Interest of the Company’s capital stock, except prior to the Acceptance Time for the regular quarterly cash dividend in the amount of $.01 per issued and outstanding Company Share declared and paid on its historical schedule consistent with past practice;
(d) form any Subsidiary;
(e) issue, sell, pledge, dispose of sell or encumber grant any additional shares of its capital stockof, or securities convertible or exchangeable for, or options options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stockstock or other Equity Interests;
(e) transfer, lease, license, sell, mortgage, pledge, dispose of, abandon, fail to maintain or encumber any of its material assets, rights or properties other than (i) Company Shares reserved for issuance upon exercise of Company Options outstanding on the date of this Agreement (sales or granted pursuant to clause “(ii)” or clause “(iii)” of this clause “(e)”), (ii) Company Options or shares of restricted stock granted to new employees in connection with their initial hiring by the Company consistent with the past practices of the Company with respect to newly hired employees and (iii) Company Options or shares of restricted stock granted to employees of the Company and its Subsidiaries at times and in amounts consistent with past practices of the Company;
(f) transfer, dispose of or lease, or materially encumber, any material tangible assets of the Company or any of its Subsidiaries, other than (i) pursuant to written contracts or commitments existing as of the date of this Agreement (copies of which have been made available to Parent) or (ii) tangible assets with a value not in excess of $100,000 individually or $1,000,000 in the aggregate;
(g) dispose of or abandon, or grant or allow to be prematurely terminated non-exclusive licenses or similar rights to, any material Company IP (other than (i) nonexclusive licenses granted in the ordinary course of business consistent with past practice or for an amount not exceeding $500,000 in the aggregate and (ii) implied licenses arising from sales dispositions of products)equipment and property no longer used in, or material to, the operation of the business;
(hf) repurchase, redeem or otherwise acquire acquire, or offer to repurchase, redeem or otherwise acquire, any shares of the capital stock of the Company, except shares repurchased from employees or former employees of the Company or any of its Subsidiaries pursuant to (i) the exercise of repurchase or cancellation rightsof, or (ii) elections by employees or former employees to sell or otherwise transfer Company Shares to the Company to satisfy withholding obligations, in each case pursuant to the Company Option Plan or applicable award;
(i) incur any indebtedness for borrowed money or guarantee any such indebtedness, except for borrowings incurred or made in the ordinary course of business (under credit facilities in existence as of the date of this Agreement) that do not result in the total indebtedness for borrowed money of the Company and its Subsidiaries exceeding $30,000,000 outstanding at any one time;
(j) adopt or amend in any material respect any Company Benefit Plan, or increase the compensation or fringe benefits of any director, officer or employee of the Company or any of its Subsidiaries, except for (i) any increases committed to prior to the date of this Agreement (as previously disclosed to Parent) and (ii) increases in amounts and at times consistent with past practices, provided that any such increase pursuant to this clause “(ii)” for any officer does not exceed 5% of then current compensation of such officer;
(k) accelerate the payment or vesting of benefits or amounts payable or to become payable under any Company Benefit Plan, or amend in any material respect any Company Benefit Plan in a manner inconsistent with the foregoing, except as required by any existing agreement, plan or applicable Legal Requirement;
(l) enter into or amend or modify in any material respect any Employment Agreement;
(m) materially amend any CT Contract or Material Contract described in clause “(i),” clause “(ii),” clause “(iii),” clause “(iv),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement) or prematurely terminate any CT Contract or Material Contract described in clause “(ii),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement), except, in each case (other than in the case of a CT Contract), in the ordinary course of business consistent with past practice or where the failure to amend or terminate any such Material Contract could, in the good faith judgment of the Company, have a material adverse impact on the Company;
(n) enter into any new agreement or contract described in clause “(i),” clause “(iv),” clause “(vii),” clause “(viii)” or clause “(xiv)” of Section 3.8(a);
(o) enter into any agreement, including any option agreement, relating to the acquisition or disposition of any business, business line or Entity (whether by merger, sale of stock, sale of assets or otherwise);
(p) change any of its methods of accounting or accounting practices in any material respect;
(q) make or rescind any material Tax election, settle or compromise any material claim with respect to Taxes, consent to any extension or waiver of the limitation period applicable to any material Tax claim or enter into any material agreement with any taxing authority relating to Taxes;
(r) make any capital expenditure in excess of $250,000 individually or $1,850,000 in the aggregate in any fiscal month;
(s) adopt any plan of complete or partial liquidation, dissolution, restructuring or other reorganization of the Company or, except in accordance with the rights of the Company under Section 5.2, adopt any plan providing for, or enter into, an Alternative Acquisition (as defined in Section 5.2(f));
(t) make any loans, advances or capital contributions to, or investments Equity Interests in, any other Person other than (i) loans or advances to customers in the form of trade credit or deferred purchase price arrangements in the ordinary course of business, (ii) by the Company or any Subsidiary of the Company to or in any securities of the Company or any Subsidiary of the Company convertible into or exchangeable or exercisable for capital stock of, or other Equity Interests in, the Company or any Subsidiary of the Company, (iii) pursuant to or any contract warrants, calls, options or other legal obligation set forth rights to acquire any such capital stock or other Equity Interests;
(g) 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, except for (i) transactions among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, or (ii) the incurrence of Indebtedness by the Company or any of its Subsidiaries of the type described in Part 5.1(tclause (iv) of the Company Disclosure Schedule or (iv) advances to employees (other than officers definition of the Company) Indebtedness in the ordinary course of business consistent with past practice, not to exceed $10,000 in each individual case and $500,000 in the aggregate;
(uh) except as required pursuant to any Company Plan or as set forth on Section 4.1(h) of the Company Disclosure Schedule, amend in any material respect any Company Plan or adopt or establish any plan, agreement, policy or program that would constitute a Company Plan if in effect as of the date hereof;
(i) make any employer contributions (discretionary, matching or otherwise) (other than employee deferrals) to any Company Plan that constitutes a cash or deferred plan within the meaning of Section 401(k) of the Code or any health savings account within the meaning of Section 223 of the Code or similar accounts;
(j) enter into any Company Contract that would have constituted a Material Contract if entered into prior to the date hereof, amend or modify in any material respect or terminate any such Company Contract or Material Contract (other than permitting expiration of such Company Contract or Material Contract in accordance with its terms) or otherwise waive, release or assign any material rights, claims, benefits or obligations of the other party thereunder, in each case, other than in the ordinary course of business consistent with past practice;
(k) change any of its methods, principles or practices of accounting or accounting practices in any material respect, except as may be required by applicable Legal Requirements or GAAP;
(l) change its fiscal year or make or change any material Tax election (except for elections in the ordinary course of business that are consistent with past practices of the Acquired Entities) or settle or compromise any Legal Proceeding material Tax liability, claim or assessment or agree to an extension or waiver of the limitation period to any material Tax claim or assessment (except for such actions related thereto which do not require the approval of any officer of the Company) or grant any power of attorney with respect to material Taxes or enter into any consent decreeclosing agreement with respect to any material Tax or surrender any right to claim a material Tax refund;
(m) make, injunction or similar restraint agree or form commit to make, any capital expenditure other than in the ordinary course of equitable relief business in settlement any calendar quarter which, when added to all other capital expenditures made by the Acquired Entities in such calendar quarter, would exceed by more than $2,000,000 the aggregate amount budgeted for capital expenditures in such calendar quarter (as set forth in the Company’s annual business plan or budget that has been provided to Parent);
(n) except as required pursuant to a Company Plan or as set forth on Section 4.1(h) of the Company Disclosure Schedule, (A) grant to any current or former director or employee of the Company or any Subsidiary of the Company any increase in compensation, bonus or fringe or other benefits or grant any type of compensation or benefit to any such person not previously receiving or entitled to receive such compensation, (B) grant to any person any severance, retention, change in control or termination compensation or benefits or any increase therein, or (C) amend, change or modify the terms of any Legal Proceedingexisting equity grants, or award any additional equity grants;
(o) enter into or make any loans to any of its officers, directors, employees, affiliates, agents or consultants (other than business expense advances in the ordinary course of business, consistent with past practice) or make any change in its existing borrowing or lending arrangements for or on behalf of any of such persons, except as required by the terms of any Company Plan;
(p) acquire any Equity Interests in any Person or, other than purchases and sales of inventory, supplies and real property in the ordinary course of business, consistent with past practice, (iA) settlements acquire or agree to acquire any tangible properties or assets or (B) sell, lease (as lessor), license, mortgage, sell and compromises leaseback or otherwise dispose of, other than dispositions to the Company and any Subsidiary of the Company, any tangible properties or assets or any interests therein;
(q) except as necessary in the ordinary course of business, consistent with past practice, grant or acquire, agree to grant to or acquire from any Person, or dispose of or permit to lapse any rights to any IP Rights material to the conduct of the business of the Company and its Subsidiaries (taken as a whole) as currently conducted, or disclose to any Person, other than Representatives of Parent, any material trade secrets;
(r) take any action inconsistent with the cash management policies of the Company other than in the ordinary course of business, consistent with past practice, including any acceleration of any receivables or payables or making of any investment, in each case other than in the ordinary course of business, consistent with past practice;
(s) enter into any collective bargaining agreement or other labor union contract applicable to the employees of the Company or any of the Subsidiaries of the Company;
(t) enter into any new line of business that relate would be material to Taxes the Company and its Subsidiaries, taken as a 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; (u) apply for or otherwise seek any new Company License the receipt of which are would reasonably be likely to prevent or materially impair or delay the subject consummation of Section 5.1(q)the transactions contemplated hereby;
(v) and (ii) any settlementsettle, compromise, consent decreedismiss, injunctiondischarge or otherwise dispose of any litigation, restraint investigation, arbitration, dispute or relief proceeding other than those that (A) do not involve the payment by the Company or any of the Subsidiaries of the Company of monetary damages in an amount less than excess of $500,000 that would not limit or restrict in any individual instance, or $1,000,000 in the aggregate, plus applicable reserves and any applicable insurance coverage and do not involve any material respect injunctive or other non-monetary relief or impose material restrictions on the ability business or operations of the Company or the Subsidiaries of the Company, and (B) provide for a complete release of the Company and the Subsidiaries of the Company and their successors from all claims and do not provide for any admission of liability by the Company or any of the Subsidiaries of the Company; provided, however, that notwithstanding anything in clauses (A) or (B) to the contrary, the written consent of Parent shall be required in order for the Company to settle, compromise, dismiss, discharge or otherwise dispose of any litigation, investigation, arbitration or proceeding arising from, based upon or challenging the validity of this Agreement or the consummation of the transactions contemplated hereby or seeking to prevent the consummation of the transactions contemplated hereby;
(w) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries to engage in or conduct any business in any geographic area alter through merger, liquidation, reorganization or restrict restructuring the Company’s right to use any material Company IP or license any material Company IP from any other Person;
(v) terminate, cancel, amend or modify any material insurance policy maintained by the Company or corporate structure of any of its Subsidiaries which is not promptly replaced by a comparable amount of insurance coverage;
(w) redeem the Company Rights or amend, modify or terminate the Company Rights Agreement, or render it inapplicable to (or otherwise exempt from the application of the Company Rights Agreement) any Person or action (other than Parent and Acquisition Sub in connection with the delivery and performance of this AgreementMerger);; or
(x) fail to repurchase in accordance with the terms of applicable repurchase rights any shares of restricted stock of the Company that, by virtue of any termination of employment of a holder thereof or otherwise, become subject to repurchase at any time prior to the Acceptance Time; or
(y) enter into any commitment or an agreement to take any of the actions described in clauses “(a)” through “(xw)” of this sentenceSection 4.1. Nothing contained in this Agreement shall give Parent, directly or indirectly, any right to control or direct the operations of the Company and its Subsidiaries prior to the Closing. Prior to the Closing, each of the Company and Parent shall exercise, consistent with the other terms and conditions of this Agreement, complete control and supervision over their respective businesses. Parent shall not, and shall not permit any of its Subsidiaries to, take any action or fail to take any action that could reasonably be expected to result in any of the conditions set forth in Article 5 not being satisfied or that could otherwise be reasonably expected to prevent or delay the consummation of the Transactions.
Appears in 1 contract
Interim Operations of the Company. The Company agrees that(a) During the Pre-Closing Period, during the period from the date of this Agreement through the earlier of except (w) as otherwise expressly required or permitted hereby, (x) with the time that prior written consent of the designees of Parent (which the Parent shall not unreasonably withhold, delay, or condition), (y) as provided in Section 1.4(a) have been elected to or designated as members of, and shall constitute a majority of, the Company’s Board of Directorsrequired by applicable Law, or (y) the date of termination of this Agreement, except (i) to the extent Parent shall otherwise consent in writing (which consent, in the case of actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, and in the case of any commitment or agreement described in clause “(y)” below to take any of the actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, is not to be unreasonably withheld, conditioned or delayed), (iiz) as set forth in Section 6.1(a) of the Company Disclosure Schedule (including Part 5.1 thereof)Letter, (iii) as necessary to implement or otherwise effectuate an Agreed Arrangement or as otherwise expressly contemplated by this Agreement or (iv) as may be required by any Legal Requirement, (A) the Company shall, shall (and shall cause each of its the Company Subsidiaries to), use its commercially reasonable efforts subject to conduct its business Sections 6.1(b) and (c): (i) carry on the Company Business in the ordinary course consistent with the manner in which such business was being conducted prior to the date of this Agreement and Ordinary Course; (ii) use its commercially reasonable efforts to preserve its present business and organization substantially intact each Company Entity’s current business organization; (iii) use its commercially reasonable efforts to keep available the services of such Company Entity’s current officers and to key employees and preserve and maintain such Company Entity’s existing relations with such Company Entity’s customers, suppliers, employees, contractors, distributors and others having business dealings with it to the extent reasonably necessary to preserve substantially intact its present business and organization, creditors; and (Biv) neither cooperate with the Parent in connection with the Parent’s renegotiation with the respective contract counterparties of the Company nor any of its Subsidiaries shall:
(a) amend the Company’s certificate of incorporation or bylaws;Entities.
(b) splitDuring the Pre-Closing Period, combine except (w) as otherwise expressly required or reclassify any shares permitted hereby, (x) with the prior written consent of the Company’s capital stockParent (which the Parent shall not unreasonably withhold, delay, or condition), (y) as required by applicable Law, or (z) as set forth in Section 6.1(b) of the Company Disclosure Letter, the Company shall not (and shall cause each of the Company Subsidiaries not to):
(i) enter into any new line of business material to it and its Subsidiaries taken as a whole;
(cii) make capital expenditures that are more than $25,000 individually or $100,000 in the aggregate;
(iii) amend, violate, or breach such Company Entity’s Organizational Documents;
(iv) declare, set aside aside, or pay any dividend (or other distribution, whether payable in cash, stock stock, or property) any other property or right, with respect to any shares of the Companysuch Company Entity’s capital stock, ; except prior that this Section 6.1(b)(iv) will not prohibit the Company from paying dividends to the Acceptance Time for Company Series B Preferred Stock Holders in accordance with the regular quarterly cash dividend in the amount of $.01 per issued and outstanding Company Share declared and paid on its historical schedule consistent with past practiceCharter;
(dv) form (1) adjust, split, combine, or reclassify any Subsidiary;
(e) capital stock or issue, grant, sell, transfer, pledge, dispose of of, or encumber any additional shares of its capital stockstock of any class, or securities convertible into or exchangeable for, or options options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stockstock of any class or of any other such securities or agreements, or (2) redeem, purchase, or otherwise acquire directly or indirectly any of such Company Entity’s capital stock or any other securities or agreements of the type described in the immediately foregoing clause (1), except shares of Company Common Stock that are withheld to satisfy applicable tax withholding requirements; except that (x) the Company is permitted to combine the Company Capital Stock as necessary in order to satisfy Nasdaq continued listing requirements, (y) for the avoidance of doubt, the Company is permitted to issue shares of Company Common Stock to any Company Series B Preferred Stock Holder, Company Option Holder, or Warrant Holder (or any of the foregoing) in connection with the exercise, conversion, or cancellation, as the case might be, of such Holder’s Company B Series Preferred Stock, Company Option, or Warrant, respectively, and (z) this Section 6.1(b)(v) will not prohibit the Company from paying dividends in shares of Company Capital Stock to the Company Series B Preferred Stock Holders in accordance with the Charter;
(vi) (1) enter into, adopt, amend, renew, or terminate any Benefit Plan or any other benefit plan or arrangement of any Company Entity, (2) except as required by the terms of any Benefit Plan as in effect as of the Signing Date, and except with respect to non-executive officer employees, independent contractors, and consultants in the Ordinary Course, increase in any manner the compensation, bonus, or fringe or other benefits of, or pay any bonus of any kind or amount to, any current or former director, officer, employee, independent contractor, consultant or Affiliate; except that each Company Entity shall not make any equity or equity-based grants, (3) pay any benefit or amount not required under any Benefit Plan or any other benefit plan or arrangement of any Company Entity as in effect on the Signing Date, (4) grant or pay any severance or termination pay or increase in any manner the severance or termination pay of any current or former director, officer, employee, independent contractor, consultant or Affiliate, (5) except as required to comply with law or with any agreement or policy in existence as of the Signing Date in the Ordinary Course, (A) grant any awards under any bonus, incentive, performance, or other compensation plan or arrangement or 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 Benefit Plan, or (C) take any action to accelerate the vesting or payment of any compensation or benefit under any Benefit Plan.
(vii) enter into any employment Contract (other than at-will employment arrangements), compensation Contract, or change of control Contract with any Person, including any Company Entity’s employees;
(viii) change in any material respect such Company Entity’s methods of accounting in effect at December 31, 2011, except in accordance with changes in GAAP as concurred with by such Company Entity’s independent auditors;
(ix) 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 significant portion of the assets or business of, any Person, or by any other means, other than (i) Company Shares reserved for issuance upon exercise of Company Options outstanding on in the date of this Agreement (or granted pursuant to clause “(ii)” or clause “(iii)” of this clause “(e)”), (ii) Company Options or shares of restricted stock granted to new employees in connection with their initial hiring by the Company consistent with the past practices of the Company with respect to newly hired employees and (iii) Company Options or shares of restricted stock granted to employees of the Company and its Subsidiaries at times and in amounts consistent with past practices of the CompanyOrdinary Course;
(fx) transfersell, dispose of or lease, exchange, transfer or materially encumberotherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material tangible assets assets, except for (A) the sale of inventory or the Company or any leasing of its Subsidiariesequipment in the Ordinary Course and (B) sales to non-affiliated Persons in arms’-length transactions for not less than fair market value, other not less than (i) pursuant to written contracts or commitments existing as of the date of this Agreement (copies of which have been made available to Parent) or (ii) tangible assets with a value book value, and not in excess of $100,000 50,000 individually or $1,000,000 250,000 in the aggregate, other than sales of products and assets in the Ordinary Course;
(gxi) dispose mortgage, pledge, hypothecate, grant any security interest in, or otherwise subject to any other Lien (other than Permitted Liens), any Company Assets;
(xii) pay, discharge, or satisfy any material Liabilities if such payment, discharge, or satisfaction would require any material payment, other than the payment, discharge, or satisfaction of liabilities or abandonobligations in the Ordinary Course or in accordance with the terms of any Material Contract as in effect on the Signing Date, or compromise, settle, or grant any waiver or allow release relating to be prematurely terminated licenses any Action;
(xiii) except pursuant to the terms of any Material Contract as in effect on the Signing Date insofar as such agreement is referenced in Section 4.21, engage in any transaction with, or similar rights toenter into any Contract with, directly or indirectly, any material Company IP Affiliate (except that, for the purpose of this clause (xiii) only, the term Company Affiliate excludes any employee of any Company Entity, other than (i) nonexclusive licenses granted in directors and executive officers thereof and other than any employees who share the ordinary course of business consistent with past practice or (ii) implied licenses arising from sales of productssame household as any such directors and executive officers);
(hxiv) repurchase, redeem or otherwise acquire any shares of the capital stock of the Company, except shares repurchased from employees or former employees of the Company or any of its Subsidiaries pursuant to (i) the exercise of repurchase or cancellation rights, or (ii) elections by employees or former employees to sell or otherwise transfer Company Shares to the Company to satisfy withholding obligations, in each case pursuant to the Company Option Plan or applicable award;
(i) incur any indebtedness for borrowed money or guarantee any such indebtedness, except for borrowings incurred or made in the ordinary course of business (under credit facilities in existence as of the date of this Agreement) that do not result in the total indebtedness for borrowed money of the Company and its Subsidiaries exceeding $30,000,000 outstanding at any one time;
(j) adopt or amend in any material respect any Company Benefit Plan, or increase the compensation or fringe benefits of any director, officer or employee of the Company or any of its Subsidiaries, except for (i) any increases committed to prior to the date of this Agreement (as previously disclosed to Parent) and (ii) increases in amounts and at times consistent with past practices, provided that any such increase pursuant to this clause “(ii)” for any officer does not exceed 5% of then current compensation of such officer;
(k) accelerate the payment or vesting of benefits or amounts payable or to become payable under any Company Benefit Plan, or amend in any material respect any Company Benefit Plan in a manner inconsistent with the foregoing, except as required by any existing agreementLaw, plan make, change, or applicable Legal Requirement;
(l) enter into or amend or modify in any material respect any Employment Agreement;
(m) materially amend any CT Contract or Material Contract described in clause “(i),” clause “(ii),” clause “(iii),” clause “(iv),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement) or prematurely terminate any CT Contract or Material Contract described in clause “(ii),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement), except, in each case (other than in the case of a CT Contract), in the ordinary course of business consistent with past practice or where the failure to amend or terminate any such Material Contract could, in the good faith judgment of the Company, have a material adverse impact on the Company;
(n) enter into any new agreement or contract described in clause “(i),” clause “(iv),” clause “(vii),” clause “(viii)” or clause “(xiv)” of Section 3.8(a);
(o) enter into any agreement, including any option agreement, relating to the acquisition or disposition of any business, business line or Entity (whether by merger, sale of stock, sale of assets or otherwise);
(p) change any of its methods of accounting or accounting practices in any material respect;
(q) make or rescind revoke any material Tax election, change any annual Tax accounting period, adopt or change any Tax accounting method, file any Return in a manner that is materially inconsistent with past practice, amend any Return, enter into any closing or similar agreement, surrender any right to claim a refund, offset, or other reduction in Taxes, settle or compromise any material claim with respect made by any Governmental Entity relating to Taxes, consent to any extension extensions or waiver waivers of the limitation limitations period applicable to any material claim for Taxes or Tax claim assessment, or enter into any material agreement with any taxing authority relating to Taxesa Tax Sharing Agreement;
(r) make any capital expenditure in excess of $250,000 individually or $1,850,000 in the aggregate in any fiscal month;
(sxv) adopt any or enter into a plan of complete or partial liquidation, dissolution, restructuring merger, consolidation, restructuring, recapitalization or other reorganization of (other than the Company or, except in accordance with the rights of the Company under Section 5.2, adopt any plan providing for, or enter into, an Alternative Acquisition (as defined in Section 5.2(f)Merger);
(txvi) make any loans, advances incur or capital contributions to, or investments in, any other Person other than (i) loans or advances to customers in the form of trade credit or deferred purchase price arrangements in the ordinary course of business, (ii) by the Company or any Subsidiary of the Company to or in the Company or any Subsidiary of the Company, (iii) pursuant otherwise become liable with respect to any contract or other legal obligation set forth in Part 5.1(t) of the Company Disclosure Schedule or (iv) advances to employees (other than officers of the Company) in the ordinary course of business consistent with past practice, not to exceed $10,000 in each individual case and $500,000 in the aggregate;
(u) settle or compromise any Legal Proceeding Indebtedness or enter into any consent decreeContracts that obligate any Company Entity to make cash expenditures in excess of $50,000 individually or $250,000 in the aggregate (except in connection with the purchase of products and equipment in the Ordinary Course);
(xvii) enter into any Contract that materially restrains, injunction limits, or similar restraint impedes any Company Entity’s ability (or form of equitable relief in settlement of any Legal Proceeding, other than (i) settlements and compromises that relate to Taxes (which are the subject of Section 5.1(q)) and (ii) any settlement, compromise, consent decree, injunction, restraint or relief in an amount less than $500,000 that would not limit materially restrain, limit, or restrict in any material respect impede the ability of the Company Parent or any of its Subsidiaries Parent Subsidiary following the Effective Time) to engage in compete with or conduct any business in or line of business, including geographic limitations on any geographic area Company Entity’s activities (or restrict the Company’s right to use any material Company IP or license any material Company IP from any other Person;
(v) terminate, cancel, amend or modify any material insurance policy maintained by activities of the Company Parent or any of its Subsidiaries which is not promptly replaced by a comparable amount of insurance coverage;
(w) redeem Parent Subsidiary following the Company Rights or amend, modify or terminate the Company Rights Agreement, or render it inapplicable to (or otherwise exempt from the application of the Company Rights Agreement) any Person or action (other than Parent and Acquisition Sub in connection with the delivery and performance of this AgreementEffective Time);
(xxviii) enter into any material Contract other than in the Ordinary Course, or modify or amend in any material respect, waive in any material respect, or assign any Company Entity’s rights or claims under, or terminate any material Contract to which any Company Entity is a party;
(xix) cause or permit, by any act or failure to act, any material Permit to expire or to be revoked, suspended, or modified, or knowingly take any action that causes, or that is reasonably likely to cause, any Governmental Entity to institute proceedings for the suspension, revocation, or adverse modification of any material Permit;
(xx) fail to repurchase maintain any material property in accordance customary repair, order, and condition, consistent with current maintenance policies, ordinary wear and tear excepted;
(xxi) fail to maintain in full force and effect the terms of applicable repurchase rights any shares of restricted stock of existing insurance policies covering the Company thatEntities or their respective properties, by virtue of assets, and businesses or replacement policies that are comparable in all material respects, or knowingly take any termination of employment of a holder thereof action that would cause any such policy to terminate or otherwise, become subject to repurchase at any time be terminable prior to the Acceptance Timeexpiration of its stated term; or
(yxxii) enter into any commitment or agreement Contract to take any of the actions described otherwise prohibited by this Section 6.1(b).
(c) The Company (and, where applicable, the Parent) shall comply, and the Company shall cause the Company Subsidiaries to comply, with the following:
(i) During the Pre-Closing Period, the Company shall operate the Company Business in clauses accordance with an interim operating plan set forth in Exhibit C (the “Operating Plan”).
(aii) (1) The Parent shall appoint and designate one of the Parent’s executive or managing employees as the liaison officer of Parent to oversee and assist in the management of the business of the Company during the Pre-Closing Period (the “Parent Liaison Officer”)” through “, with powers and authority as set forth herein. The Parent hereby appoints and designates Cxxxx Xxxxx as the initial Parent Liaison Officer. The Parent is permitted to remove and replace the Parent Liaison Officer at its discretion, upon five days’ advance written notice to the Company Board (xor a designated Company Board Committee)” of this sentence. The Parent will use its Reasonable Best Efforts to ensure that a Parent Liaison Officer is designated continuously during the Pre-Closing Period.
Appears in 1 contract
Interim Operations of the Company. (a) The Company agrees that, during the period from the date of this Agreement through to the earlier of (x) the time that the designees of Parent as provided in Section 1.4(a) have been elected to or designated as members of, and shall constitute a majority of, the Company’s Board of Directors, or (y) the date of termination of this AgreementAgreement in accordance with Section 8.1 and the Closing, except (i) to the extent Parent shall otherwise consent in writing (which consent, in the case of actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, and in the case of any commitment or agreement described in clause “(y)” below to take any of the actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, is not to be unreasonably withheld, conditioned or delayed), (ii) as set forth in the Company Disclosure Schedule (including Part 5.1 thereof), (iii) as necessary to implement or otherwise effectuate an Agreed Arrangement or as otherwise expressly contemplated required by this Agreement or Agreement, as required by applicable Law (iv) including as may be required compelled by any Legal RequirementGovernmental Entity) or as consented to in advance in writing by Parent, (A) the Company shall, and shall cause each of its Subsidiaries Company Subsidiary to, use its commercially reasonable best efforts to (i) conduct its business in the ordinary course Ordinary Course and in compliance in all material respects with applicable Laws and (ii) (A) preserve intact its present business organization, (B) keep available the services of its directors, officers and key employees, (C) maintain existing relationships with its material suppliers, resellers, distributors, employees, and others having material business relationships with it, and (D) maintain the Insurance Policies or comparable replacement policies consistent with levels maintained by the manner in which such business was being conducted prior to Company and each Company Subsidiary as of the date of this Agreement.
(b) The Company agrees that, during the period from the date of this Agreement and use its commercially reasonable efforts to preserve its present business and organization substantially intact and to maintain such relations with customers, suppliers, employees, contractors, distributors and others having business dealings with it to the extent reasonably earlier of termination of this Agreement in accordance with Section 8.1 and the Closing, except as required in order to effectuate the conversions, cancellations, forfeitures and other transactions expressly contemplated by Section 2.3 and Section 2.7 or as otherwise expressly required by this Agreement, as required by applicable Law (including as may be compelled by any Governmental Entity), as set forth on Schedule 5.1(b) or as consented to in advance in writing by Parent, the Company shall not, and shall cause each Company Subsidiary not to:
(i) other than as necessary to preserve substantially intact its present business and organizationeffectuate the implementation of the Dual Class Structure, and (A) amend or otherwise modify, (B) neither waive any rights under, or (C) fail to enforce with respect to the Company nor transactions contemplated by this Agreement, any of its Subsidiaries shall:
(a) amend respective Governing Documents or the Company’s certificate Stockholder Agreements other than the termination of incorporation or bylawssuch Stockholder Agreements;
(bii) split, combine or reclassify any shares other than as necessary to effectuate the implementation of the Company’s capital stock;
(c) declareDual Class Structure, set aside issue or pay any dividend (whether payable in cash, stock or property) with respect to any shares of the Company’s capital stock, except prior to the Acceptance Time for the regular quarterly cash dividend in the amount of $.01 per issued and outstanding Company Share declared and paid on its historical schedule consistent with past practice;
(d) form any Subsidiary;
(e) issue, sell, pledgeor authorize to issue or sell, dispose of or encumber any additional shares of its capital stock, membership interests or any other Equity Interests, as applicable, or issue or sell, or authorize to issue or sell, any securities convertible into or exchangeable for, or options options, warrants or rights to purchase or subscribe for, or enter into any Contract with respect to the issuance or sale of, any shares of its capital stock, membership interests or any other Equity Interests, as applicable, other than (A) issuances or sales to new hires of any Group Company following the date hereof in the Ordinary Course and (B) the exercise of Company Equity Awards or Company Warrants outstanding as of the date hereof in accordance with their terms (iii) other than as necessary to effectuate the implementation of the Dual Class Structure, split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stock, membership interests or any other Equity Interests, as applicable, other than (i) Company Shares reserved for issuance upon exercise of Company Options outstanding on the date of this Agreement (or granted pursuant to clause “(ii)” or clause “(iii)” of this clause “(e)”), (ii) Company Options or shares of restricted stock granted to new employees in connection with their initial hiring repurchase by the Company consistent of unvested shares of Company Restricted Stock outstanding as of the date hereof or issued upon conversion of a Company Equity Award outstanding as of the date hereof in accordance with its terms at no greater than cost;
(iv) make, declare, set aside or pay any dividend or make any other distribution, in each case whether in cash, stock or otherwise;
(v) make any material change to any of the past cash management practices of the Company with respect or any Company Subsidiary;
(vi) incur any Indebtedness in excess of $1,000,000 in the aggregate, or make any loans or advances to newly hired employees any other Person, other than employee advances in the Ordinary Course pursuant to applicable policies of the Group Companies as in effect on the date hereof and normal trade payables incurred in the Ordinary Course;
(iiivii) cancel or forgive any Indebtedness in excess of $100,000 in the aggregate owed to the Company Options or shares of restricted stock granted to employees any of the Company Subsidiaries by any Equity Holder, employee, officer, director or Affiliate (other than a wholly owned Subsidiary of the Company) of the Company or any Company Subsidiary;
(viii) make any political contributions to political candidates or political action committees;
(ix) except as may be required by Law or GAAP, make any material change in the financial or tax accounting methods, principles or practices of the Company or any Company Subsidiary (or change an annual accounting period);
(x) (A) make, change or rescind any material Tax election, (B) settle or compromise any claim, notice, audit report or assessment in respect of a material amounts of Taxes, (C) file any material amended Tax Return or claim for a material Tax refund (other than as required by applicable Law and its Subsidiaries at times and in amounts consistent with past practices of practice in the CompanyOrdinary Course);
(fxi) transferenter into, renew, modify or amend any Company Affiliate Agreement (or any Contract, that if existing on the date hereof, would have constituted a Company Affiliate Agreement);
(xii) sell, lease, license, permit to lapse, abandon or otherwise dispose of any Company Intellectual Property, other than non-exclusive licenses in the Ordinary Course;
(xiii) (A) materially amend or lease, or otherwise modify any Company Material Contract in any manner materially encumber, any material tangible assets of less favorable to the Company or any of its Subsidiaries, other taken as a whole, than (i) pursuant prior to written contracts such material amendment or commitments existing as of the date of this Agreement (copies of which have been made available to Parent) modification, or (iiB) tangible assets terminate (excluding any expiration in accordance with its terms) any Company Material Contract, in each case in a value not manner that is materially adverse to the Company or any Company Subsidiary, taken as a whole;
(xiv) terminate (without cause) any employee or independent contractor that is a natural person with annual compensation in excess of $100,000 individually or $1,000,000 in the aggregate251,000;
(gxv) dispose of waive or abandonrelease any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or grant other restrictive covenant obligation of any current or allow to be prematurely terminated licenses former officer, director or similar rights to, any material Company IP (other than (i) nonexclusive licenses granted in member of the ordinary course of business consistent with past practice or (ii) implied licenses arising from sales of products)executive management team;
(hxvi) repurchaseexcept as required under applicable Law, redeem (A) grant or otherwise acquire agree to grant to any shares of the capital stock of the Companyemployee, except shares repurchased from employees officer, director or former employees independent contractor of the Company or any of its Subsidiaries pursuant to (i) the exercise of repurchase or cancellation rights, or (ii) elections by employees or former employees to sell or otherwise transfer Company Shares to the Company to satisfy withholding obligationsSubsidiaries any material increase in wages or bonus, in each case pursuant to the Company Option Plan severance, retirement or applicable award;
(i) incur any indebtedness for borrowed money or guarantee any such indebtedness, except for borrowings incurred or made in the ordinary course of business (under credit facilities in existence insurance as of the date of this Agreement) that do not result , other than increases in base compensation of employees in the total indebtedness for borrowed money ordinary course of business, (B) accelerate the time of payment, vesting or funding of any compensation or benefits under any Company Benefit Plan (including any plan or arrangement that would be a Company Benefit Plan if it was in effect on the date hereof), (C) make or agree to make any bonus or incentive payments to any individual, or (D) enter into any new CBA or employment or consulting Contract which would be a Company Material Contract if it was in effect on the date hereof, except with respect to clauses (C) and its Subsidiaries exceeding $30,000,000 outstanding at (D), as required pursuant to the terms of any one timeCompany Benefit Plan and other than with respect to new hires of any Group Company following the date hereof in the Ordinary Course;
(jxvii) adopt unless required by Law, (A) modify, negotiate, extend, terminate or amend enter into any CBA, or (B) recognize or certify any labor union, labor organization, works council, or group of employees as the bargaining representative for any employees of the Group Companies;
(xviii) pay, discharge, compromise, waive, release, assign or settle any material rights or pending or threatened Actions (whether civil, criminal, administrative or investigative) against the Company or any Company Subsidiary (A) involving payments in excess of $500,000 in any material respect single instance or in excess of $1,000,000 in the aggregate, (B) seeking injunctive or other equitable relief which imposes any Company Benefit Plan, or increase materially adverse restrictions on the compensation or fringe benefits of any director, officer or employee operations of the Company or any Company Subsidiary, (C) which relates to an Action brought by a Governmental Entity against a Group Company in respect of its Subsidiaries, except for (i) a breach or violation or alleged breach or violation of any increases committed to prior Healthcare Laws or Healthcare Permits applicable to the date Group Companies or the Affiliated Physician Practices, respectively, and involving payments in excess of $100,000 in the aggregate or any injunctive or other equitable remedy or admission of wrongdoing, (D) by any of the Equity Holders or their Affiliates (other than employment related claims arising in the Ordinary Course), or (E) which relates to the transactions contemplated by this Agreement (as previously disclosed to Parent) and (ii) increases except in amounts and at times consistent accordance with past practices, provided that any such increase pursuant to this clause “(iiSection 5.11(i)” for any officer does not exceed 5% of then current compensation of such officer;
(k) accelerate the payment or vesting of benefits or amounts payable or to become payable under any Company Benefit Plan, or amend in any material respect any Company Benefit Plan in a manner inconsistent with the foregoing, except as required by any existing agreement, plan or applicable Legal Requirement;
(l) enter into or amend or modify in any material respect any Employment Agreement;
(m) materially amend any CT Contract or Material Contract described in clause “(i),” clause “(ii),” clause “(iii),” clause “(iv),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement) or prematurely terminate any CT Contract or Material Contract described in clause “(ii),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement), except, in each case (other than in the case of a CT Contract), in the ordinary course of business consistent with past practice or where the failure to amend or terminate any such Material Contract could, in the good faith judgment of the Company, have a material adverse impact on the Company;
(n) enter into any new agreement or contract described in clause “(i),” clause “(iv),” clause “(vii),” clause “(viii)” or clause “(xiv)” of Section 3.8(a);
(oxix) enter into make or incur any agreementcapital expenditures that in aggregate exceed $500,000 in excess of the Company’s annual capital expenditure budget for periods following the date hereof made available to Parent;
(xx) buy, including any option agreement, relating to the acquisition purchase or disposition of any business, business line or Entity otherwise acquire (whether by merger, sale consolidation, acquisition of stock, sale of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than (A) inventory and supplies in the Ordinary Course, or (B) other assets in an amount not to exceed $2,500,000 individually or $5,000,000 in the aggregate;
(pxxi) change merge or consolidate the Company or any Company Subsidiaries with any other Person (other than, for the avoidance of its methods of accounting or accounting practices in any material respectdoubt, as contemplated hereby);
(q) make or rescind any material Tax election, settle or compromise any material claim with respect to Taxes, consent to any extension or waiver of the limitation period applicable to any material Tax claim or enter into any material agreement with any taxing authority relating to Taxes;
(r) make any capital expenditure in excess of $250,000 individually or $1,850,000 in the aggregate in any fiscal month;
(sxxii) adopt any or effect a plan of complete or partial liquidation, dissolution, restructuring restructuring, recapitalization or other reorganization of the Company or, except in accordance with the rights of the Company under Section 5.2, adopt any plan providing for, or enter into, an Alternative Acquisition (as defined in Section 5.2(f))reorganization;
(txxiii) make enter into any loans, advances new line of business not related to the Group Companies’ existing lines of business or capital contributions to, or investments in, any other Person other than (i) loans or advances to customers in inconsistent with the form of trade credit or deferred purchase price arrangements in the ordinary course of business, (ii) by the Company or any Subsidiary description of the Company to or in the Company or any Subsidiary of the Company, (iii) pursuant to any contract or other legal obligation Group Companies’ business as set forth in Part 5.1(t) of the Company Disclosure Schedule or (iv) advances to employees (other than officers of the Company) in the ordinary course of business consistent with past practice, not to exceed $10,000 in each individual case and $500,000 in the aggregate;
(u) settle or compromise any Legal Proceeding or enter into any consent decree, injunction or similar restraint or form of equitable relief in settlement of any Legal Proceeding, other than (i) settlements and compromises that relate to Taxes (which are the subject of Section 5.1(q)) and (ii) any settlement, compromise, consent decree, injunction, restraint or relief in an amount less than $500,000 that would not limit or restrict in any material respect the ability of the Company or any of its Subsidiaries to engage in or conduct any business in any geographic area or restrict the Company’s right to use any material Company IP or license any material Company IP from any other Person;
(v) terminate, cancel, amend or modify any material insurance policy maintained by the Company or any of its Subsidiaries which is not promptly replaced by a comparable amount of insurance coverage;
(w) redeem the Company Rights or amend, modify or terminate the Company Rights Agreement, or render it inapplicable to (or otherwise exempt from the application of the Company Rights Agreement) any Person or action (other than Parent and Acquisition Sub in connection with the delivery and performance of this Agreement);
(x) fail to repurchase in accordance with the terms of applicable repurchase rights any shares of restricted stock of the Company that, by virtue of any termination of employment of a holder thereof or otherwise, become subject to repurchase at any time prior to the Acceptance TimeRegistration Statement / Proxy Statement; or
(yxxiv) enter into authorize any commitment of, or agreement commit or agree to take any of, the foregoing actions in respect of which it is restricted by the actions described in clauses “(a)” through “(x)” provisions of this sentenceSection 5.1.
Appears in 1 contract
Interim Operations of the Company. The Company agrees that, during During the period from the date of this Agreement through to the earlier of (x) the time that Effective Time and the designees of Parent as provided in date, if any, on which this Agreement is terminated pursuant to Section 1.4(a) have been elected to or designated as members of, and shall constitute a majority of, the Company’s Board of Directors, or (y) the date of termination of this Agreement8.1, except (i) to as may be required by Law, (ii) with the extent Parent shall otherwise prior written consent in writing (of Parent, which consent, in the case of actions described in clauses “(dg),” “, (ij),” “, (nl),” “, (ps),” “(q),” “(t),” “, (u)” ) and “(v)” below, and in ) (to the case of any commitment or agreement described in clause “(y)” below extent related to take any of the actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” foregoing clauses) below, is shall not to be unreasonably withheld, conditioned delayed or delayed)conditioned, (iiiii) as contemplated or permitted by this Agreement or the Ancillary Agreements, (iv) as required by the GALAC Purchase Agreement or (v) as set forth in Section 6.1 of the Company Disclosure Schedule (including Part 5.1 thereof)Letter, (iii) as necessary to implement or otherwise effectuate an Agreed Arrangement or as otherwise expressly contemplated by this Agreement or (iv) as may be required by any Legal Requirement, (A) the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to conduct carry on its business in the ordinary course consistent Ordinary Course of Business and use reasonable best efforts to preserve intact its business organization, keep available the services of its current officers and 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 that they have received from the SEC and that are currently in effect and preserve their material business relationships; 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 manner in which such business was being conducted prior to generality of the foregoing, during the period from the date of this Agreement to the earlier of the Effective Time and use its commercially reasonable efforts the date, if any, on which this Agreement is terminated pursuant to preserve its present business Section 8.1, except (i) as may be required by Law, (ii) with the prior written consent of Parent, which consent, in the case of clauses (g), (j), (l), (s), (u) and organization substantially intact and to maintain such relations with customers, suppliers, employees, contractors, distributors and others having business dealings with it (v) (to the extent reasonably necessary related to preserve substantially intact its present business and organizationany of the foregoing clauses) below, shall not be unreasonably withheld, delayed or conditioned, (iii) as required, contemplated or permitted by this Agreement or the Ancillary Agreements or (iv) as set forth in Section 6.1 of the Company Disclosure Letter, the Company shall not, and (B) neither the Company nor shall not permit any of its Subsidiaries shallto:
(a) amend except for Common Stock to be issued or delivered pursuant to equity awards outstanding on the Company’s certificate date hereof, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, sale, disposition or pledge or other encumbrance of incorporation (i) any shares of capital stock of any class or bylawsany 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 capital stock or any other ownership interest 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 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 capital stock or any other ownership interest of the Company or any of its Subsidiaries, or (ii) any other securities of the Company or any of its Subsidiaries in respect of, in lieu of or in substitution for Common Stock outstanding on the date hereof;
(b) splitredeem, combine purchase or reclassify otherwise acquire, or propose to redeem, purchase or otherwise acquire, any shares of the Company’s capital stockoutstanding Common Stock;
(c) split, combine, subdivide or reclassify any Common Stock or declare, set aside for payment or pay any dividend (whether payable or distribution in cashrespect of any Common Stock or otherwise make any payments to stockholders in their capacity as such, stock other than the Extraordinary Dividend and dividends by the Insurance Company or property) with respect to any shares wholly owned Subsidiary of the Company’s capital stock, except prior to the Acceptance Time for the Company or regular quarterly cash dividend in dividends on the amount Common Stock, if and when declared by the Board of $.01 per issued and outstanding Company Share declared and paid on its historical schedule Directors consistent with past practicepractice in timing and not to exceed $0.0625 per share per quarter;
(d) form any Subsidiary;
(e) issueadopt a plan of complete or partial liquidation, selldissolution, pledgemerger, dispose of consolidation, restructuring, recapitalization or encumber any additional shares of its capital stock, or securities convertible or exchangeable for, or options or rights to acquire, any shares of its capital stock, other than (i) Company Shares reserved for issuance upon exercise of Company Options outstanding on the date of this Agreement (or granted pursuant to clause “(ii)” or clause “(iii)” of this clause “(e)”), (ii) Company Options or shares of restricted stock granted to new employees in connection with their initial hiring by the Company consistent with the past practices of the Company with respect to newly hired employees and (iii) Company Options or shares of restricted stock granted to employees of the Company and its Subsidiaries at times and in amounts consistent with past practices of the Company;
(f) transfer, dispose of or lease, or materially encumber, any material tangible assets reorganization of the Company or any of its Subsidiaries, other than the Merger;
(e) acquire, sell, lease or dispose of (i) any Owned Real Property or (ii) any other assets that, in the aggregate, are material to the Company and its Subsidiaries, taken as a whole, except (i) Investment Assets in the Ordinary Course of Business and not inconsistent with the Company’s or any of its Subsidiaries’ investment guidelines or policies in effect on the date hereof, (ii) pursuant to written contracts as in effect prior to the date of this Agreement or commitments existing (iii) in the Ordinary Course of Business;
(f) acquire (by merger, consolidation or acquisition of stock, other equity interest or assets, bulk reinsurance or otherwise) any Person or other business organization or assets or liabilities comprising a business or a segment, division or line of business of any other Person or create or acquire any Subsidiaries;
(g) make any capital expenditure for which the aggregate consideration paid or payable in any individual transaction is in excess of $50,000 or in the aggregate in excess of $100,000;
(h) other than in the Ordinary Course of Business, incur any material indebtedness for borrowed money in addition to that incurred as of the date of this Agreement (copies of which have been made available to Parent) or (ii) tangible assets with a value not in excess of $100,000 individually or $1,000,000 in the aggregate;
(g) dispose of or abandon, or grant or allow to be prematurely terminated licenses or similar rights to, guarantee any material Company IP (other than (i) nonexclusive licenses granted in the ordinary course of business consistent with past practice or (ii) implied licenses arising from sales of products);
(h) repurchase, redeem or otherwise acquire any shares of the capital stock of the Company, except shares repurchased from employees or former employees of the Company or any of its Subsidiaries pursuant to (i) the exercise of repurchase or cancellation rights, or (ii) elections by employees or former employees to sell or otherwise transfer Company Shares to the Company to satisfy withholding obligations, in each case pursuant to the Company Option Plan or applicable awardsuch indebtedness;
(i) incur default under any indebtedness for borrowed money or guarantee cancel or compromise any such indebtedness, except for borrowings incurred indebtedness or made in the ordinary course of business (under credit facilities in existence as of the date of this Agreement) that do not result in the total indebtedness for borrowed money of the Company and its Subsidiaries exceeding $30,000,000 outstanding at waive any one timematerial rights relating thereto;
(j) adopt or amend in any material respect any Company Benefit Plan, or increase the compensation or fringe benefits of any director, officer or employee of the Company or any of its Subsidiaries, except for (i) any increases committed to prior to the date of this Agreement (as previously disclosed to Parent) and (ii) increases in amounts and at times consistent with past practices, provided that any such increase pursuant to this clause “(ii)” for any officer does not exceed 5% of then current compensation of such officer;
(k) accelerate the payment or vesting of benefits or amounts payable or to become payable under any Company Benefit Plan, or amend in any material respect any Company Benefit Plan in a manner inconsistent with the foregoing, except as required by any existing agreement, plan or applicable Legal Requirement;
(l) enter into or amend or modify in any material respect any Employment Agreement;
(m) materially amend any CT Contract or Material Contract described in clause “(i),” clause “(ii),” clause “(iii),” clause “(iv),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement) or prematurely terminate any CT Contract or Material Contract described in clause “(ii),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement), except, in each case (other than in the case of a CT Contract), in the ordinary course of business consistent with past practice or where the failure to amend or terminate any such Material Contract could, in the good faith judgment of the Company, have a material adverse impact on the Company;
(n) enter into any new agreement or contract described in clause “(i),” clause “(iv),” clause “(vii),” clause “(viii)” or clause “(xiv)” of Section 3.8(a);
(o) enter into any agreement, including any option agreement, relating to the acquisition or disposition of any business, business line or Entity (whether by merger, sale of stock, sale of assets or otherwise);
(p) change any of its methods of accounting or accounting practices in any material respect;
(q) make or rescind any material Tax election, settle or compromise any material claim with respect to Taxes, consent to any extension or waiver of the limitation period applicable to any material Tax claim or enter into any material agreement with any taxing authority relating to Taxes;
(r) make any capital expenditure in excess of $250,000 individually or $1,850,000 in the aggregate in any fiscal month;
(s) adopt any plan of complete or partial liquidation, dissolution, restructuring or other reorganization of the Company or, except in accordance with the rights of the Company under Section 5.2, adopt any plan providing for, or enter into, an Alternative Acquisition (as defined in Section 5.2(f));
(t) make any loans, advances or capital contributions to, or investments in, to any other Person Person, other than (i) loans or advances to customers in the form of trade credit or deferred purchase price arrangements in the ordinary course of business, (ii) by the Company or any Subsidiary of the Company to or in the Company or any Subsidiary of the Company, (ii) investment portfolio transactions in the Ordinary Course of Business and not inconsistent with the Company’s or any of its Subsidiaries’ investment guidelines or policies in effect at the date hereof or (iii) pursuant to any contract in the Ordinary Course of Business;
(k) change the investment policies or other legal obligation set forth in Part 5.1(t) guidelines of the Company Disclosure Schedule and its Subsidiaries, except as required by applicable Law;
(l) incur, create or (iv) advances to employees (assume any Lien, other than officers Permitted Liens;
(m) except as may be required under any Company Benefit Plan or any outstanding equity awards, grant any increase in, take any action to forgive the indebtedness of, accelerate the vesting or payment or fund or in any other way secure the payment of, the compensation and benefits of any of the Company) in the ordinary course of business consistent with past practice’s directors, not to exceed $10,000 in each individual case and $500,000 in the aggregateofficers, key employees, consultants or independent contractors;
(un) settle or compromise any Legal Proceeding or enter into any consent decree, injunction or similar restraint or form of equitable relief in settlement terminate the employment of any Legal Proceeding, officer of the Company or any of its Subsidiaries other than for “cause” (ias such term is defined under any employment, severance or other agreement with such officer), take any action (or fail to take any action) settlements and compromises that relate if such action or failure would reasonably be expected to Taxes (which are the subject of Section 5.1(q)) and (ii) constitute “good reason” for any settlement, compromise, consent decree, injunction, restraint or relief in an amount less than $500,000 that would not limit or restrict in any material respect the ability officer of the Company or any of its Subsidiaries to engage in terminate such officer’s employment under any employment, severance or conduct other agreement, or, except as may be required under any business in Company Benefit Plan, enter into any geographic area employment or restrict the Company’s right to use severance agreement with any material director, officer, key employee, consultant or independent contractor, enter into any collective bargaining agreement or adopt, terminate or amend any Company IP or license any material Company IP from any other PersonBenefit Plan;
(vo) terminate, cancel, amend or modify make any material insurance policy maintained change in any of the accounting methods used by the Company unless required by GAAP, SAP or applicable Law;
(p) (A) make, revoke or amend any Tax election of the Company or any of its Subsidiaries, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any amended Tax Return, settle any Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if such action or omission would have the effect of materially increasing the Tax liability or reducing any Tax attribute of the Company or any of its Subsidiaries which is not promptly replaced by a comparable amount or (B) make any payment under any agreement providing for the allocation or sharing of insurance coverage;
(w) redeem the Company Rights or amend, modify or terminate the Company Rights Agreement, or render it inapplicable to (or otherwise exempt from the application of the Company Rights Agreement) any Person or action Taxes (other than Parent and Acquisition Sub in connection agreements with or among the delivery and performance Company or any of this Agreementits Subsidiaries);
(xq) fail to repurchase in accordance with amend the terms certificate of applicable repurchase rights any shares of restricted stock incorporation or by-laws of the Company that, by virtue or comparable charter or organizational documents of any termination Subsidiary of employment the Company;
(r) make any change in any of a holder thereof the policies, guidelines, practices, principles, standards, procedures or otherwisesystems of the Company or any of its Subsidiaries, become subject in each case, with respect to repurchase at the Company’s or any time of its Subsidiaries’ reinsurance, claims administration, reserving, actuarial determinations, pricing, hedging, Producer compensation, policy retention and conservation or underwriting, other than such changes as are required by GAAP, SAP or applicable Law or, in respect of underwriting, pricing or claims administration, in the Ordinary Course of Business;
(s) modify or amend in any material respect or terminate any of the Company Material Contracts or Reinsurance Agreements or waive, release or assign any material rights or claims thereunder or enter into any contract or agreement that would, if entered into prior to the Acceptance Timedate hereof, have been a Company Material Contract or Reinsurance Agreement;
(t) enter into any new line of business, or introduce any new products or services, or change in any material respect existing products or services, except as may be required by applicable Law;
(u) settle or compromise or agree to the dismissal of any claim, action, suit, litigation, arbitration, investigation, inquiry, hearing, charge, complaint, demand, notice or other proceeding (in each case, except for claims under any Insurance Contracts within applicable policy limits), including any stockholder litigation against the Company or any of its directors or executive officers relating to the Transactions (and Parent shall have the right to participate in the defense or settlement of any such litigation), other than any settlement or compromise that involves solely cash payments of less than $50,000 in the aggregate; or
(yv) enter into any contract, agreement, commitment or agreement arrangement to take do any of the actions described in clauses “(a)” through “(x)” of this sentenceforegoing.
Appears in 1 contract
Interim Operations of the Company. The Company agrees that, during During the period from the date of this Agreement through the Closing or the date, if any, on which this Agreement is earlier of terminated pursuant to Section 8.1 (x) the time that the designees of Parent as provided in Section 1.4(a) have been elected to or designated as members of, and shall constitute a majority of, the Company’s Board of Directors, or (y) the date of termination of this Agreement“Pre-Closing Period”), except (i) to the extent Parent shall otherwise consent in writing (which consent, in the case of actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, and in the case of any commitment or agreement described in clause “(y)” below to take any of the actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, is not to be unreasonably withheld, conditioned or delayed), (ii) as set forth in the Company Disclosure Schedule (including Part 5.1 thereof), (iii) as necessary to implement or otherwise effectuate an Agreed Arrangement or as otherwise expressly contemplated by this Agreement or (iv) as may be required by any Legal RequirementLaw, (Aw) with the prior written consent of Parent, (x) as required or specifically contemplated by this Agreement, (y) as set forth in Section 6.1 of the Company Disclosure Schedule or (z) with respect to actions or omissions taken by or at the direction of Parent, Sub or any Designated Family Member: (i) the Company shallshall ensure that the business and operations of the Acquired Corporations shall be conducted in the ordinary course of business and in accordance with past practices, and in compliance with all applicable Law and the requirements of all Company Material Contracts (including, without limitation, the Existing Credit Agreement, and all Loan Documents (as defined therein); and (ii) the Company shall cause each of its Subsidiaries to, use its commercially reasonable efforts to conduct ensure that each of the Acquired Corporations (A) preserves intact its current business in the ordinary course consistent organization, (B) preserves its existing relationships and goodwill with the manner in which such business was being conducted prior to the date of this Agreement and use its commercially reasonable efforts to preserve its present business and organization substantially intact and to maintain such relations with all customers, suppliers, employees, contractors, distributors suppliers and others having significant business dealings with it and with all Governmental Entities, (C) keeps available the services of its current officers and other employees. Without limiting the generality of the foregoing, except (u) as may be required by Law, (w) with the prior written consent of Parent (which consent, solely with respect to the extent reasonably necessary to preserve substantially intact its present business and organization, clauses (h) and (Bl) of this Section 6.1, shall not be unreasonably delayed, conditioned or withheld), (x) as required or specifically contemplated by this Agreement, (y) as set forth in Section 6.1 of the Company Disclosure Schedule or (z) with respect to actions or omissions taken by or at the direction of Parent, Sub or any Designated Family Member, including in such person’s capacity as a director, officer or employee of any of the Acquired Corporations, during the Pre-Closing Period, neither the Company nor any of its Subsidiaries shallwill:
(a) amend issue, deliver, sell, grant, dispose of, pledge or otherwise encumber, or authorize or propose the Company’s certificate issuance, sale, grant, disposition, pledge or other encumbrance of incorporation or bylaws;
(bi) split, combine or reclassify any shares of the Company’s capital stock;
(c) declare, set aside stock of any class or pay any dividend (whether payable in cash, stock or property) with respect to any shares of the Company’s capital stock, except prior to the Acceptance Time for the regular quarterly cash dividend in the amount of $.01 per issued and outstanding Company Share declared and paid on its historical schedule consistent with past practice;
(d) form any Subsidiary;
(e) issue, sell, pledge, dispose of or encumber any additional shares of its capital stock, or securities convertible or exchangeable for, or options or rights to acquire, any shares of its capital stock, other than (i) Company Shares reserved for issuance upon exercise of Company Options outstanding on the date of this Agreement (or granted pursuant to clause “(ii)” or clause “(iii)” of this clause “(e)”), (ii) Company Options or shares of restricted stock granted to new employees in connection with their initial hiring by the Company consistent with the past practices of the Company with respect to newly hired employees and (iii) Company Options or shares of restricted stock granted to employees of the Company and its Subsidiaries at times and in amounts consistent with past practices of the Company;
(f) transfer, dispose of or lease, or materially encumber, any material tangible assets ownership interest of the Company or any of its Subsidiaries, other than (i) pursuant to written contracts or commitments existing as of the date of this Agreement (copies of which have been made available to Parent) any securities or (ii) tangible assets with a value not in excess of $100,000 individually or $1,000,000 in the aggregate;
(g) dispose of or abandonrights convertible into, exchangeable for, or grant or allow evidencing the right to be prematurely terminated licenses or similar rights to, any material Company IP (other than (i) nonexclusive licenses granted in the ordinary course of business consistent with past practice or (ii) implied licenses arising from sales of products);
(h) repurchase, redeem or otherwise acquire subscribe for any shares of the capital stock of the Company, except shares repurchased from employees or former employees of the Company or any of its Subsidiaries pursuant to (i) the exercise of repurchase or cancellation rights, or (ii) elections by employees or former employees to sell or otherwise transfer Company Shares to the Company to satisfy withholding obligations, in each case pursuant to the Company Option Plan or applicable award;
(i) incur any indebtedness for borrowed money or guarantee any such indebtedness, except for borrowings incurred or made in the ordinary course of business (under credit facilities in existence as of the date of this Agreement) that do not result in the total indebtedness for borrowed money of the Company and its Subsidiaries exceeding $30,000,000 outstanding at any one time;
(j) adopt or amend in any material respect any Company Benefit Plan, or increase the compensation or fringe benefits of any director, officer or employee other ownership interest of the Company or any of its Subsidiaries, except for (i) or any increases committed rights, warrants, options, calls, commitments or any other agreements of any character to prior purchase or acquire any shares of 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 capital stock or any other ownership interest of the date Company or any of this Agreement (as previously disclosed to Parent) and its Subsidiaries, or (ii) increases any other securities of the Company or any of its Subsidiaries in amounts and at times consistent with past practicesrespect of, provided that any such increase pursuant to this clause “(ii)” for any officer does not exceed 5% of then current compensation of such officerin lieu of, or in substitution for, Common Stock outstanding on the date hereof;
(kb) accelerate the payment redeem, purchase or vesting of benefits or amounts payable or to become payable under any Company Benefit Planotherwise acquire, or amend in propose to redeem, purchase or otherwise acquire, any material respect outstanding shares of capital stock or other securities of any Company Benefit Plan in a manner inconsistent with the foregoing, except as required by any existing agreement, plan or applicable Legal RequirementAcquired Corporations;
(lc) enter into split, combine, subdivide or amend reclassify any Common Stock or modify declare, accrue, set aside for payment or pay any dividend in respect of any material respect Common Stock or otherwise make any Employment Agreement;
(m) materially amend any CT Contract payments to stockholders in their capacity as such, except for dividends by a wholly owned Subsidiary of the Company or Material Contract described in clause “(i),” clause “(ii),” clause “(iii),” clause “(iv),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement) or prematurely terminate any CT Contract or Material Contract described in clause “(ii),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement)by Preferred Growth Properties, except, in each case (other than in the case of a CT Contract), LLC in the ordinary course of business and consistent with past practice or where the failure to amend or terminate any such Material Contract could, in the good faith judgment of the Company, have a material adverse impact on the Companypractices;
(nd) enter into acquire, sell, lease, license or dispose of any new agreement assets or contract described right other than in clause “(i),” clause “(iv),” clause “(vii),” clause “(viii)” or clause “(xiv)” the ordinary course of Section 3.8(a)business and consistent with past practices;
(oe) enter into (i) incur, issue or assume any agreement, indebtedness or guarantee or otherwise become liable for any indebtedness (including any option agreement, relating to increasing the acquisition or disposition of any business, business line or Entity (whether by merger, sale of stock, sale of assets or otherwise);
(p) change any of its methods of accounting or accounting practices indebtedness under Contracts in any material respect;
(q) make or rescind any material Tax election, settle or compromise any material claim with respect to Taxes, consent to any extension or waiver existence as of the limitation period applicable to any material Tax claim or enter into any material agreement with any taxing authority relating to Taxes;
(r) make any capital expenditure in excess date hereof), other than loans and letters of $250,000 individually or $1,850,000 in credit under the aggregate in any fiscal month;
(s) adopt any plan of complete or partial liquidation, dissolution, restructuring or other reorganization of the Company or, except in accordance with the rights of the Company under Section 5.2, adopt any plan providing for, or enter into, an Alternative Acquisition Existing Credit Agreement provided that Excess Availability (as defined in Section 5.2(f));
the Existing Credit Agreement) shall be greater than or equal to, (tA) prior to the Drawdown Borrowing, the sum of (w) the Drawdown Amount, plus (x) the greater of (a) 30% of the Maximum Borrowing Amount (as such term is defined in the Existing Credit Agreement) or (b) $15 million, and (B) at the Drawdown Borrowing or thereafter, the greater of (y) 30% of the Maximum Borrowing Amount (as such term is defined in the Existing Credit Agreement) or (z) $15 million; (ii) make any loans, advances (other than expense advances made to directors or officers or other employees in the ordinary course of business and consistent with past practices) or capital contributions to, or investments in, any other Person Person, other than (i) loans or advances to customers in the form of trade credit or deferred purchase price arrangements in the ordinary course of business, (ii) by the Company or any Subsidiary of the Company to or in the Company or any wholly owned Subsidiary of the Company, ; or (iii) pursuant sell or transfer, or create, assume or suffer to exist any contract or other legal obligation set forth in Part 5.1(t) of the Company Disclosure Schedule or (iv) advances to employees Lien on, any accounts receivable (other than officers of the Company) in the ordinary course of business and consistent with past practice, not to exceed $10,000 in each individual case and $500,000 in the aggregatepractices);
(uf) settle modify, amend, supplement or compromise terminate, or waive any Legal Proceeding or enter into any consent decreeprovision of, injunction or similar restraint or form of equitable relief in settlement of any Legal Proceeding, other than (i) settlements and compromises that relate to Taxes (which are the subject of Section 5.1(q)) and (ii) any settlement, compromise, consent decree, injunction, restraint or relief in an amount less than $500,000 that would not limit or restrict in any material respect the ability of the Company Existing Credit Agreement or any of its Subsidiaries to engage other Loan Document (as defined in or conduct any business in any geographic area or restrict the Company’s right to use any material Company IP or license any material Company IP from any other Person;
(v) terminate, cancel, amend or modify any material insurance policy maintained by the Company or any of its Subsidiaries which is not promptly replaced by a comparable amount of insurance coverage;
(w) redeem the Company Rights or amend, modify or terminate the Company Rights Agreement, or render it inapplicable to (or otherwise exempt from the application of the Company Rights Agreement) any Person or action (other than Parent and Acquisition Sub in connection with the delivery and performance of this Existing Credit Agreement);
(xg) fail establish, adopt, enter into or amend any Benefit Plan, pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation (including equity-based compensation, whether payable in stock, cash or other property) or remuneration payable to, any of its directors or any of its officers, other than as required by Law or by written agreements in effect on or prior to repurchase the date of this Agreement with such person;
(h) enter into or become bound by, terminate or amend any Company Material Contract, other than in the ordinary course of business and consistent with past practices;
(i) change any of its accounting methods unless required by Law or GAAP;
(j) 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 Corporations, or form any Subsidiary;
(i) acquire any equity interest or other interest in any other Entity; or (ii) 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;
(l) make any capital expenditure (except that the Acquired Corporations may make any capital expenditure that when added to all other capital expenditures made on behalf of the Acquired Corporations during the Pre-Closing Period does not exceed $9,300,000 in the aggregate);
(m) make any pledge of any of its assets or permit any of its assets to become subject to any Liens, except for Permitted Liens or Liens that do not materially detract from the value of such assets or materially impair the operations of any of the Acquired Corporations;
(i) promote any employee or change any employee’s title except for employees having a title of Vice President or below in the ordinary course of business and consistent with past practices; or (ii) hire any employee or retain any individual independent contractor with annual target cash compensation in excess of $200,000;
(o) except in the ordinary course of business and consistent with past practices, make or change any material Tax election, adopt or change any material method of Tax accounting, file any material amended Tax Return, enter into any tax allocation agreement, tax sharing agreement, tax indemnity agreement relating to any material Tax, surrender the right to claim a material Tax refund, settle or compromise any claim, notice, audit report, or assessment in respect of any material Tax, consent to any waiver of the statute of limitations period applicable to any material Tax claim or assessment, or request any material Tax ruling;
(p) commence any Legal Proceeding, except (i) with respect to routine collection matters in the ordinary course of business and consistent with past practices, (ii) Legal Proceedings to enforce this Agreement or the Voting Agreement, (iii) Legal Proceedings in connection with this Agreement undertaken in accordance with Section 6.13, or (iv) Legal Proceedings in connection with the terms of applicable repurchase rights any shares of restricted stock of the Company that, by virtue of any termination of employment of a holder thereof or otherwise, become Voting Agreement;
(q) subject to repurchase at Section 6.13, settle any time prior to the Acceptance TimeLegal Proceeding or other material claim; or
(yr) enter into any commitment or agreement Contract to take do any of the actions described foregoing. Anything to the contrary in clauses “this Section 6.1 notwithstanding, this Section 6.1 shall not limit the ability of (a)” through “) any Subsidiary of the Company that is not a Loan Party to make Restricted Payments to any Loan Party or to make or repay loans or advances to or otherwise transfer assets to or make Investments in the Company or any other Loan Party or (x)” b) the Company or any other Loan Party to create, incur, assume or suffer to exist Liens on property of this sentencesuch Person for the benefit of the Secured Parties with respect to the Obligations or under the Loan Documents, in each case to the extent such limitation is prohibited by Section 6.09 of the Existing Credit Agreement as in effect on the date hereof. Capitalized terms used but not defined in the immediately preceding sentence shall have the meanings ascribed to such terms in the Existing Credit Agreement as in effect on the date hereof.
Appears in 1 contract
Interim Operations of the Company. The Company agrees that, during the period from the date of this Agreement through the earlier of (xa) the time that the designees of Parent Except as provided in Section 1.4(a) have been elected to or designated as members of, and shall constitute a majority of, the Company’s Board of Directors, or (y) the date of termination of this Agreement, except otherwise (i) required by this Agreement (including, for the avoidance of doubt, with respect to or as contemplated by the extent Parent shall otherwise consent in writing (which consent, in Pre-Closing Reorganization and the case of actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, and in New Brewery Completion or the case of any commitment or agreement described in clause “(y)” below to take any of the actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, is not to be unreasonably withheld, conditioned or delayedABC Merger Agreement), (ii) as set forth in the Company Disclosure Schedule (including Part 5.1 thereof)required by applicable Law, (iii) as necessary to implement or otherwise effectuate an Agreed Arrangement or as otherwise expressly contemplated approved in writing by this Agreement Buyer or (iv) as may be required by any Legal Requirementset forth on Section 4.1(a) of the Seller Disclosure Letter, (A) from the Execution Date until the Closing, Seller shall cause the Company shall, and shall cause each of its Subsidiaries to, to use its commercially reasonable efforts to conduct its business in the ordinary course consistent with the manner in which such of business was being conducted prior and, to the date of this Agreement and extent consistent therewith, Seller shall cause the Company to use its commercially reasonable efforts to preserve its present business and organization substantially organizations intact and to maintain such relations existing significant business relationships (including customers and suppliers) and relationships with customers, suppliers, employees, contractors, distributors and others having business dealings with it to the extent reasonably necessary to preserve substantially intact its present business and organization, and (B) neither the Company nor any of its Subsidiaries shall:
(a) amend the Company’s certificate of incorporation or bylaws;Governmental Authorities.
(b) splitExcept as otherwise (w) required by this Agreement (including, combine for the avoidance of doubt, with respect to or reclassify any shares as contemplated by the Pre-Closing Reorganization and the New Brewery Completion or the ABC Merger Agreement), (x) required by applicable Law, (y) approved in writing by Buyer (such approval not to be unreasonably withheld, delayed or conditioned) or (z) set forth on Section 4.1(b) of the Company’s capital stockSeller Disclosure Letter, from the Execution Date until the Closing, Seller shall cause the Company not to:
(i) amend, modify, repeal, replace or supplement, or otherwise adopt any change in, its Organizational Documents or waive any provisions thereof;
(c) declare, set aside or pay any dividend (whether payable in cash, stock or property) with respect to any shares of the Company’s capital stock, except prior to the Acceptance Time for the regular quarterly cash dividend in the amount of $.01 per issued and outstanding Company Share declared and paid on its historical schedule consistent with past practice;
(d) form any Subsidiary;
(e) issue, sell, pledge, dispose of or encumber any additional shares of its capital stock, or securities convertible or exchangeable for, or options or rights to acquire, any shares of its capital stock, other than (i) Company Shares reserved for issuance upon exercise of Company Options outstanding on the date of this Agreement (or granted pursuant to clause “(ii)” or clause “(iii)” of this clause “(e)”), (ii) Company Options merge or shares of restricted stock granted to new employees in connection with their initial hiring by the Company consistent with the past practices of consolidate the Company with respect to newly hired employees and (iii) Company Options any other Person, or shares of restricted stock granted to employees of restructure, reorganize or completely or partially liquidate or otherwise enter into any agreement or arrangement imposing, individually or in the Company and its Subsidiaries at times and in amounts consistent with past practices aggregate, any changes or restrictions on the assets, operations or business of the Company;
(fiii) transfer(A) acquire (including by merger, dispose consolidation or acquisition of equity interests or lease, or materially encumber, any material tangible assets of the Company or any of its Subsidiariesother business combination) (x) any corporation, partnership or other than (i) pursuant to written contracts or commitments existing as of the date of this Agreement (copies of which have been made available to Parent) business organization or (iiy) tangible any assets with a value not in excess outside of $100,000 individually or $1,000,000 in the aggregate;
(g) dispose of or abandon, or grant or allow to be prematurely terminated licenses or similar rights to, any material Company IP (other than (i) nonexclusive licenses granted in the ordinary course of business consistent with past practice from any other Person in any transaction or series of related transactions or (ii) implied licenses arising from sales of products);
(h) repurchase, redeem or otherwise acquire any shares of the capital stock of the Company, except shares repurchased from employees or former employees of the Company or any of its Subsidiaries pursuant to (i) the exercise of repurchase or cancellation rights, or (ii) elections by employees or former employees to sell or otherwise transfer Company Shares to the Company to satisfy withholding obligations, in each case pursuant to the Company Option Plan or applicable award;
(i) incur any indebtedness for borrowed money or guarantee any such indebtedness, except for borrowings incurred or made in the ordinary course of business (under credit facilities in existence as of the date of this Agreement) that do not result in the total indebtedness for borrowed money of the Company and its Subsidiaries exceeding $30,000,000 outstanding at any one time;
(j) adopt or amend in any material respect any Company Benefit Plan, or increase the compensation or fringe benefits of any director, officer or employee of the Company or any of its Subsidiaries, except for (i) any increases committed to prior to the date of this Agreement (as previously disclosed to Parent) and (ii) increases in amounts and at times consistent with past practices, provided that any such increase pursuant to this clause “(ii)” for any officer does not exceed 5% of then current compensation of such officer;
(k) accelerate the payment or vesting of benefits or amounts payable or to become payable under any Company Benefit Plan, or amend in any material respect any Company Benefit Plan in a manner inconsistent with the foregoing, except as required by any existing agreement, plan or applicable Legal Requirement;
(l) enter into or amend or modify in any material respect any Employment Agreement;
(m) materially amend any CT Contract or Material Contract described in clause “(i),” clause “(ii),” clause “(iii),” clause “(iv),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement) or prematurely terminate any CT Contract or Material Contract described in clause “(ii),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement), except, in each case (other than in the case of a CT Contract), in the ordinary course of business consistent with past practice or where the failure to amend or terminate any such Material Contract could, in the good faith judgment of the Company, have a material adverse impact on the Company;
(n) enter into any new agreement or contract described in clause “(i),” clause “(iv),” clause “(vii),” clause “(viii)” or clause “(xiv)” of Section 3.8(a);
(o) enter into any agreement, including any option agreement, relating to the acquisition or disposition of any business, business line or Entity (whether by merger, sale of stock, sale of assets or otherwise);
(p) change any of its methods of accounting or accounting practices in any material respect;
(q) make or rescind any material Tax election, settle or compromise any material claim with respect to Taxes, consent to any extension or waiver of the limitation period applicable to any material Tax claim or enter into any material agreement with any taxing authority relating to Taxes;
(r) make any capital expenditure in excess of $250,000 individually or $1,850,000 in the aggregate in any fiscal month;
(s) adopt any plan of complete or partial liquidation, dissolution, restructuring or other reorganization of the Company or, except in accordance with the rights of the Company under Section 5.2, adopt any plan providing for, or enter into, an Alternative Acquisition (as defined in Section 5.2(f));
(tB) make any loans, advances or capital contributions toto any Person, other than, in the case of clauses (A) and (B) of this Section 4.1(b)(iii), in either case (1) for consideration less than $25,000 in any individual transaction or series of related transactions or $100,000 in the aggregate; or (2) if such acquisition would reasonably be expected to prevent, materially delay or materially impair the ability of Seller to consummate the Transactions prior to the Outside Date;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, guarantee, lease, license, or investments inauthorize the issuance, sale, pledge, disposition, grant, transfer, encumbrance, guarantee, lease or license of, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of capital stock, membership interests, partnership interests or other Person equity interests of the Company, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or other than rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(iv) loans or advances to customers in the form of trade credit or deferred purchase price arrangements except in the ordinary course of business, declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise with respect to any of its capital stock;
(iivi) by the Company reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any Subsidiary of its capital stock, membership interests, partnership interests or other equity interests or securities convertible or exchangeable into or exercisable for any capital stock;
(vii) create, incur, assume, guarantee, endorse, suffer to exist or otherwise be liable with respect to any Indebtedness for borrowed money or guarantees of the Company same, or issue or sell any debt securities or warrants or other rights to or in the Company or acquire any Subsidiary debt security of the Company, (iii) pursuant to except for any contract or other legal obligation set forth in Part 5.1(t) of the Company Disclosure Schedule foregoing that will be discharged on or prior to the Closing;
(viii) incur or commit to, or make or authorize any payment of, or accrual or commitment for, any capital expenditure or expenditures, except (A) capital expenditures of less than $50,000 in the aggregate, (B) contractually obligated capital expenditures in connection with the Koko Marina Pub Lease or (ivC) advances any capital expenditure to employees the extent reasonably necessary to avoid a material business interruption as a result of any act of God, pandemic, war, terrorism, earthquake, fire, hurricane, storm, flood, civil disturbance, explosion, partial or entire failure of utilities or public information technology systems, infectious diseases or pandemics, including COVID-19) or any other similar cause not reasonably within the control of Seller or the Company;
(ix) other than officers of the Company) in the ordinary course of business consistent or in connection with past practiceany matter to the extent such matter is permitted by any other clause of this Section 4.1(b), not (A) enter into any Contract that would have been a Material Contract had it been entered into prior to exceed the Execution Date or (B) amend, modify in any material respect, assign or terminate or allow to expire, let lapse, amend or otherwise modify any Material Contract or Commingled Contract (other than expirations or non-renewals of any such Contract in accordance with its terms, it being understood that prior to the expirations or non-renewals of any such Contract, Seller shall consult with Buyer with respect thereto) or otherwise waive, release or assign any material rights, claims or benefits of the Company thereunder;
(x) make any material changes with respect to financial accounting policies or procedures of the Company, except as required by Law or by GAAP or statutory or regulatory accounting rules or interpretations with respect thereto or by any Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization);
(xi) except (A) as is required in order to comply with the requirements of or necessary to satisfy the DOJ with respect to its review of the ABC Merger or (B) as related to any delay related to obtaining regulatory clearance of the ABC Merger, settle any action, suit, claim, hearing, arbitration, investigation or other proceeding for an amount in excess of $10,000 25,000 in each individual case the aggregate per annum;
(xii) sell, lease, license, encumber (including by the grant of any option thereon) or permit or suffer to exist the creation of any Lien (other than Permitted Liens) upon, lapse, abandon or otherwise dispose of any material assets or property or Intellectual Property Rights, except (A) pursuant to existing contracts or commitments, (B) other than with respect to Intellectual Property Rights owned by the Company or included in the Kona Licensed IP, in the ordinary course of business and in no event in an amount exceeding $500,000 50,000 in the aggregate, (C) with respect to Intellectual Property Rights, the grant of non-exclusive licenses in the ordinary course of business or (D) dispositions of surplus, obsolete or worthless assets no longer useful to the operation of the Company;
(uxiii) settle except as required by the Benefit Plans as in effect on the Execution Date, (A) increase the compensation or compromise benefits (including severance) payable or provided to the Company’s employees, (B) enter into any Legal Proceeding employment, change of control, severance or retention agreement with, or grant any incentive award to, any employee of the Company, (C) establish, adopt, enter into, amend, terminate or commence participation in any Benefit Plan or any arrangement that would have been a Benefit Plan had it been entered into prior to this Agreement, (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) other than in the ordinary course of business, or (F) enter into or amend or terminate any collective bargaining, labor union or similar agreement;
(xiv) elect (or otherwise cause or allow) for the Company to be classified as anything other than as a disregarded entity for United States federal income Tax purposes;
(xv) make, revoke or change any material Tax election, adopt or change any material accounting method or period, or enter into any consent decreeclosing agreement, injunction settlement or similar restraint or form of equitable relief in settlement compromise of any Legal Proceedingclaim or assessment, in each case in respect of any material amount of Taxes or consent to any extension or waiver of any limitation period with respect to any material claim or assessment for Taxes;
(xvi) amend, modify, terminate, cancel or let lapse a material Insurance Policy, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of internationally recognized standing are in full force and effect, in each case, providing coverage substantially similar to or greater than the coverage under the terminated, canceled or lapsed Insurance Policies when taken as a whole; provided that Seller shall reasonably consult with Buyer in the event that premiums are not substantially similar to those of such terminated, canceled or lapsed Insurance Policy, as applicable, as in effect as of the date of this Agreement;
(xvii) (A) enter into any line of business or product line other than (i) settlements the existing lines of business and compromises that relate to Taxes (which are the subject of Section 5.1(q)) and (ii) any settlement, compromise, consent decree, injunction, restraint or relief in an amount less than $500,000 that would not limit or restrict in any material respect the ability products lines of the Company or business as of the Execution Date, (B) enter into any line of its Subsidiaries to engage in or conduct any business in any geographic area outside of the State of Hawaii and (C) materially lower the quality and testing standards currently in existence with respect to any material products or restrict product lines, except for, in the case of clauses (A) and (B), extensions of the business or product lines that are currently contemplated by the Company’s right to use any material Company IP or license any material Company IP from any other Person;
(v) terminate, cancel, amend or modify any material insurance policy maintained by the Company or any of its Subsidiaries which is not promptly replaced by a comparable amount of insurance coverage;
(w) redeem the Company Rights or amend, modify or terminate the Company Rights Agreement, or render it inapplicable to (or otherwise exempt from the application of the Company Rights Agreement) any Person or action (other than Parent and Acquisition Sub in connection with the delivery and performance of this Agreement);
(x) fail to repurchase in accordance with the terms of applicable repurchase rights any shares of restricted stock of the Company that, by virtue of any termination of employment of a holder thereof or otherwise, become subject to repurchase at any time prior to the Acceptance Time; or
(yxviii) enter into any commitment agree, authorize or agreement commit to take do any of the actions described foregoing.
(c) Seller shall cause the Company to use its commercially reasonable efforts prior to the Closing to maintain its level, type and quality of inventory in clauses “the ordinary course of business (ataking into account operational emergencies, force majeure events, supply shortages and contemplated demand for the Company’s products)” through “.
(x)” d) Nothing contained in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct the operations of Seller or its Affiliates, including the Company, prior to the Closing. Prior to the Closing, Seller shall exercise, consistent with the terms and conditions of this sentenceAgreement, complete control and supervision over Seller and its Affiliates’, including the Company’s, operations.
Appears in 1 contract
Samples: Membership Interest Purchase Agreement (Craft Brew Alliance, Inc.)
Interim Operations of the Company. The Company agrees that, during During the period from the date of this Agreement hereof through the earlier of (x) the time that the designees of Parent as provided in Section 1.4(a) have been elected to or designated as members of, Effective Time and shall constitute a majority of, the Company’s Board of Directors, or (y) the date of termination of this AgreementAgreement in accordance with its terms, except (i) to the extent Parent shall otherwise consent in writing (which consent, in the case of actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, and in the case of any commitment or agreement described in clause “(y)” below to take any of the actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, is not to be unreasonably withheld, conditioned or delayed), (ii) as set forth in the Company Disclosure Schedule (including Part 5.1 thereof), (iii) as necessary to implement or otherwise effectuate an Agreed Arrangement or as otherwise expressly contemplated by this Agreement or (iv) as may be required by any Legal Requirement, (A) the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to conduct its business in the ordinary course consistent with past practice. Without limiting the manner in which such business was being conducted prior to generality of the foregoing, during the period from the date hereof through the earlier of the Effective Time and the date of termination of this Agreement in accordance with its terms, the Company shall, and shall cause its Subsidiaries to, use its commercially reasonable efforts to (i) preserve its present business and organization substantially intact and to maintain such relations with customers, suppliers, employees, contractors, distributors and others having business dealings with it to the extent reasonably necessary to preserve substantially intact its present business and organization, (ii) keep available the services of its directors, officers, employees and consultants and (iii) maintain its existing business relationships and goodwill with those Persons having significant business relationships with it. Without limiting the generality of the foregoing, except (A) with Parent’s prior written consent (which consent shall not, in the case of clauses (f), (h), (j), (k), (n) or (o) below, be unreasonably withheld, conditioned or delayed), (B) neither as set forth in Section 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 business of any Acquired Company being conducted in the ordinary 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, nor shall it permit any of its Subsidiaries shallto, do any of the following:
(a) amend the Company Certificate of Incorporation, the Company Bylaws or other comparable charter or Organizational Documents of the Company’s certificate of incorporation Subsidiaries (whether by merger, consolidation or bylawsotherwise);
(b) split, combine or reclassify take any shares actions set forth on Section 5.1(b) of the Company’s capital stockCompany Disclosure Schedule, in each case subject to the limitations, exceptions and other obligations of the Company as set forth therein;
(c) (i) declare, set aside or pay any dividend dividends on, or make any other distributions (whether payable in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any Company Securities or Company Subsidiary Securities, 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 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 propertyauthorize the issuance of 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 Company Common Stock by the Company in satisfaction of the applicable exercise price or withholding Taxes with respect to any Company Compensatory Awards;
(d) (i) issue, deliver, sell, grant, pledge, transfer, subject to any Lien or dispose of any Company Securities or Company Subsidiary Securities, other than the issuance of shares of Company Common Stock upon the exercise or settlement of 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; or (ii) amend any term of any Company Securities or Company Subsidiary Securities (in each case, whether by merger, consolidation or otherwise) or of any award under any Company Benefit Plan based on any Company Securities or Company Subsidiary Securities;
(e) adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization, each with respect to the Acquired Companies;
(f) except to the extent required by the terms of any Company Benefit Plan as in effect on the date hereof and made available to Parent: (i) increase the salary, wages, benefits, bonuses or other compensation payable or to become payable to any employee or non-employee service provider of any Acquired Company’s , except for increases in annual base cash compensation made in the ordinary course of business consistent with past practice; (ii) adopt, enter into, terminate or amend 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; (iii) pay to any employee or non-employee service provider of any Acquired Company any benefit or amount other than regular salary or wages or grant any such person any award under any Company Benefit Plan; (iv) take any action to fund or in any other way secure the payment of compensation or benefits under any employee plan, Contract or arrangement or Company Benefit Plan; (v) take any action to accelerate the vesting or payment of any compensation or benefit under any Company Benefit Plan; (vi) materially change any actuarial or other assumption used to calculate funding obligations with respect to any Company Benefit Plan or change the manner in which contributions to any Company Benefit Plan are made or the basis on which such contributions are determined; (vii) make any material determination under any Company Benefit Plan that is inconsistent with the ordinary course of business consistent with past practice; (viii) hire any employee at the level of Senior Vice President or above or terminate, other than for cause, the employment of any employee at the level of Senior Vice President or above; or (ix) induce, or attempt to induce, any employee or non-employee service provider to terminate his or her employment or engagement with any Acquired Company;
(g) 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, except prior to the Acceptance Time for the regular quarterly cash dividend purchase of assets, merger, consolidation, or otherwise), other than supplies or inventory in the amount ordinary course of $.01 per issued and outstanding Company Share declared and paid on its historical schedule business consistent with past practice;
(dh) form any Subsidiary;
(e) issuesell, selllease, license, pledge, transfer, assign, abandon, allow to lapse or expire, fail to maintain, covenant not to assert, subject to any Lien or otherwise dispose of any Company Intellectual Property, assets or encumber any additional shares of its capital stock, or securities convertible or exchangeable for, or options or rights to acquire, any shares of its capital stock, other than properties except (i) Company Shares reserved for issuance upon exercise in the ordinary course of Company Options outstanding on the date of this Agreement (or granted business pursuant to clause “(ii)” or clause “(iii)” of this clause “(e)”), (ii) Company Options or shares of restricted stock granted to new employees in connection with their initial hiring by the Company consistent with the past practices of the Company with respect to newly hired employees and (iii) Company Options or shares of restricted stock granted to employees of the Company and its Subsidiaries at times and in amounts consistent with past practices of the Company;
(f) transfer, dispose of or lease, or materially encumber, any material tangible assets of the Company or any of its Subsidiaries, other than (i) pursuant to written contracts or commitments Contracts existing as of the date of this Agreement (copies of which have been hereof and made available to Parent) or , (ii) tangible assets with non-exclusive licenses that are merely incidental to the transaction contemplated by a value not in excess of $100,000 individually or $1,000,000 in the aggregate;
(g) dispose of or abandon, or grant or allow to be prematurely terminated licenses or similar rights to, any material Company IP (other than (i) nonexclusive licenses granted Contract entered into in the ordinary course of business consistent with past practice or (ii) implied licenses arising from sales of products);
(h) repurchase, redeem or otherwise acquire any shares of the capital stock of the Company, except shares repurchased from employees or former employees of the Company or any of its Subsidiaries pursuant to (i) the exercise of repurchase or cancellation rights, or (ii) elections by employees or former employees to sell or otherwise transfer Company Shares and to the Company to satisfy withholding obligationsextent permitted by this Section 5.1, in each case pursuant to the Company Option Plan or applicable award;
(i) incur any indebtedness commercial purpose of which is primarily for borrowed money or guarantee any such indebtedness, except for borrowings incurred or made in the ordinary course of business (under credit facilities in existence as of the date of this Agreement) that do not result in the total indebtedness for borrowed money of the Company and its Subsidiaries exceeding $30,000,000 outstanding at any one time;
(j) adopt or amend in any material respect any Company Benefit Plan, or increase the compensation or fringe benefits of any director, officer or employee of the Company or any of its Subsidiaries, except for (i) any increases committed to prior to the date of this Agreement (as previously disclosed to Parent) and (ii) increases in amounts and at times consistent with past practices, provided that any such increase pursuant to this clause “(ii)” for any officer does not exceed 5% of then current compensation of such officer;
(k) accelerate the payment or vesting of benefits or amounts payable or to become payable under any Company Benefit Plan, or amend in any material respect any Company Benefit Plan in a manner inconsistent with the foregoing, except as required by any existing agreement, plan or applicable Legal Requirement;
(l) enter into or amend or modify in any material respect any Employment Agreement;
(m) materially amend any CT Contract or Material Contract described in clause “(i),” clause “(ii),” clause “(iii),” clause “(iv),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement) or prematurely terminate any CT Contract or Material Contract described in clause “(ii),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement), except, in each case (something other than in the case of a CT Contract), in the ordinary course of business consistent with past practice or where the failure to amend or terminate any such Material Contract could, in the good faith judgment of the Company, have a material adverse impact on the Company;
(n) enter into any new agreement or contract described in clause “(i),” clause “(iv),” clause “(vii),” clause “(viii)” or clause “(xiv)” of Section 3.8(a);
(o) enter into any agreement, including any option agreement, relating to the acquisition or disposition of any business, business line or Entity (whether by merger, sale of stock, sale of assets or otherwise);
(p) change any of its methods of accounting or accounting practices in any material respect;
(q) make or rescind any material Tax election, settle or compromise any material claim with respect to Taxes, consent to any extension or waiver of the limitation period applicable to any material Tax claim or enter into any material agreement with any taxing authority relating to Taxes;
(r) make any capital expenditure in excess of $250,000 individually or $1,850,000 in the aggregate in any fiscal month;
(s) adopt any plan of complete or partial liquidation, dissolution, restructuring or other reorganization of the Company or, except in accordance with the rights of the Company under Section 5.2, adopt any plan providing for, or enter into, an Alternative Acquisition (as defined in Section 5.2(f));
(t) make any loans, advances or capital contributions to, or investments in, any other Person other than (i) loans or advances to customers in the form of trade credit or deferred purchase price arrangements in the ordinary course of business, (ii) by the Company or any Subsidiary of the Company to or in the Company or any Subsidiary of the Companylicense, (iii) pursuant to any contract sales of inventory or other legal obligation set forth in Part 5.1(t) of the Company Disclosure Schedule or (iv) advances to employees (other than officers of the Company) used equipment in the ordinary course of business consistent with past practice, not to exceed $10,000 in each individual case and $500,000 (iv) Permitted Liens incurred in the aggregateordinary course of business consistent with past practice;
(ui) settle (i) extend, amend, waive, cancel or compromise modify any Legal Proceeding 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 which an Acquired Company controls the prosecution thereof as of the date of this Agreement, except for such issuances, registrations or 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 Acquired Company or (iii) divulge, furnish or make accessible any Company 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;
(j) amend in any material respect or voluntarily terminate any Material Contract, or enter into any consent decreenew 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 renewals of existing Contracts (to the extent shall have been made available to Parent) on substantially similar (or more favorable to the Company) terms made in the ordinary course of business consistent with past practice;
(k) waive, injunction release or similar restraint assign any material rights, claims or form of equitable relief in settlement benefits of any Legal ProceedingAcquired Company;
(l) 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 (in which event the applicable Acquired Company shall use commercially reasonable efforts to renew, replace or extend such policies) or changes to such policies made in the ordinary course consistent with past practice;
(m) change any of the accounting methods used by the Company, except for such changes that are required by GAAP or Regulation S-X promulgated under the Exchange Act, in each case as agreed to by its independent public accountants;
(n) (i) settlements and compromises that relate create, incur, assume, suffer to Taxes exist or 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 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; (which are ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the subject obligations of any 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 Acquired Companies;
(o) incur any capital expenditures (or any obligations or liabilities in respect thereof), other than capital expenditures on a quarterly basis for each fiscal quarter as set forth in the capital expenditure plan included in Section 5.1(q5.1(o) of the Company Disclosure Schedule;
(p) settle, or offer or propose to settle, (i) any dispute, claim or Legal Proceeding (except with respect to immaterial routine matters in the ordinary course of business)) and , (ii) any settlement, compromise, consent decree, injunction, restraint Legal Proceeding by any stockholder of the Company or relief in an amount less than $500,000 that would not limit or restrict in any material respect the ability of other dispute against the Company or any of its Subsidiaries to engage officers or directors and its stockholders or (iii) any Transaction Litigation, other than in or conduct any business in any geographic area or restrict the Company’s right to use any material Company IP or license any material Company IP from any other Personaccordance with Section 5.12;
(vq) terminatemake, cancelchange or rescind any material Tax election, change any annual Tax accounting period, adopt or change any material method of Tax accounting, amend any income or modify other material Tax Returns except to the extent 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 insurance policy maintained by Tax claim, audit or assessment, surrender any right to claim a material Tax refund, secure an extension or expansion of the PPP Loan or incur any similar Indebtedness, or claim any other Tax relief or Tax benefit under any Law that grants to any Person the ability to (i) defer any Taxes or (ii) borrow or otherwise secure financing (including any loans under Applicable PPP Laws), in each case as a result of, or in connection with, the effects of the COVID-19 pandemic, including under the CARES Act, the Families First Coronavirus Response Act, the Consolidated Appropriations Act of 2021, and the American Rescue Plan Act of 2021;
(r) effect any extraordinary transactions that are inconsistent with past custom and practice or that could result in Tax liability to Parent, the Company, any Acquired Company or any of its Subsidiaries which is not promptly replaced by their respective Affiliates in a comparable amount of insurance coverage;
(w) redeem the Company Rights or amend, modify or terminate the Company Rights Agreement, or render it inapplicable to Taxable period (or otherwise exempt from portion thereof) beginning after the application Closing Date in excess of the Company Rights Agreement) any Person or action (other than Parent and Acquisition Sub in connection Tax liability associated with the delivery and performance conduct of this Agreement);
(x) fail to repurchase its business in accordance the ordinary course consistent with the terms of applicable repurchase rights any shares of restricted stock of the Company that, by virtue of any termination of employment of a holder thereof or otherwise, become subject to repurchase at any time prior to the Acceptance Timepast practice; or
(ys) enter into any commitment authorize, commit or agreement agree to take any of the actions described foregoing actions. Notwithstanding the foregoing, nothing contained in clauses “(a)” through “(x)” this Agreement shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the operations of this sentencethe Acquired Companies prior to the Effective Time.
Appears in 1 contract
Samples: Merger Agreement (Leaf Group Ltd.)
Interim Operations of the Company. The Company agrees that, during the period from From the date of this Agreement through and until the Effective Time or the earlier termination of this Agreement in accordance with its terms, except (xa) as specifically required by this Agreement, (b) as set forth on Section 5.1 of the time that the designees of Company Disclosure Letter, (c) as required by applicable Law, (d) as consented to in writing by Parent as provided in Section 1.4(a) have been elected to or designated as members of, and shall constitute a majority of, the Company’s Board of Directors, or (y) after the date of termination of this Agreement, except (i) Agreement and prior to the extent Parent Effective Time, which consent shall otherwise consent in writing (which consent, in the case of actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, and in the case of any commitment or agreement described in clause “(y)” below to take any of the actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, is not to be unreasonably withheld, conditioned or delayed, (e) as contemplated by or in connection with the BBGS Agreement, (f) for any actions necessary or appropriate in connection with the BBGS Sale, (g) as required to comply with the then-applicable Approved Budget (as such term is defined in the Credit Agreement), or (iih) as set forth in connection with efforts to preserve the liquidity of the Company Disclosure Schedule (including Part 5.1 thereofwith respect to actions customarily taken by businesses in a similar financial situation taken in order to maximize cash, it being understood that this clause (h) shall not be construed to permit the Company to defer payables in a manner that is materially inconsistent with the Company’s course of conduct between April 1, 2018 and the date hereof), (iii) as necessary to implement or otherwise effectuate an Agreed Arrangement or as otherwise expressly contemplated by this Agreement or (iv) as may be required by any Legal Requirement, (A) the Company shall, agrees that:
(i) each of the Company and shall cause each of its Subsidiaries to, will use its commercially reasonable efforts to conduct its business only in the ordinary course of business consistent with the manner in which such business was being conducted prior to the date of this Agreement past practice and use its commercially reasonable efforts to (A) preserve intact its present business organizations, goodwill and ongoing businesses and (B) preserve its present business and organization substantially intact and to maintain such relations relationships with customers, suppliers, employeesvendors, contractorslicensors, distributors licensees, Governmental Entities and others having other Persons with whom it has material business dealings relations, provided that, for the avoidance of doubt, the Company may take actions not within the ordinary course of business (1) as required by the BBGS Transaction Documents, (2) in connection with it the Company’s rights to solicit, initiate, facilitate, encourage, respond to, discuss, and engage with respect to Alternative Transaction Proposals as permitted under Section 5.2 (the extent reasonably necessary to preserve substantially intact its present business and organization“Alternative Transaction Process” ), and (B3) as specifically contemplated or required by the Credit Agreement or the Consent Agreement;
(ii) the Company will not amend its Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws and the Company’s Subsidiaries will not amend their certificates of incorporation, bylaws or other comparable charter or organizational documents;
(iii) neither the Company nor any of its Subsidiaries shall:
will (a) amend the Company’s certificate of incorporation or bylaws;
(b) split, combine or reclassify any shares of the Company’s capital stock;
(cA) declare, set aside or pay any dividend (or other distribution, whether payable in cash, stock or other property) , with respect to any shares of the Company’s its capital stock, except prior for dividends or other distributions to the Acceptance Time for the regular quarterly cash dividend in the amount Company or any of $.01 per issued and outstanding Company Share declared and paid on its historical schedule consistent with past practice;
Subsidiaries, (d) form any Subsidiary;
(eB) issue, sell, transfer, pledge, dispose of or encumber or agree to issue, sell, transfer, pledge, dispose of or encumber any additional shares of its capital stock, stock or securities convertible or exchangeable for, or options or rights to acquire, any shares of its capital stock, other than (i) Company Shares reserved for issuance upon exercise of Company Options outstanding on the date of this Agreement (or granted pursuant to clause “(ii)” or clause “(iii)” of this clause “(e)”), (ii) Company Options or shares of restricted stock granted to new employees in connection with their initial hiring by the Company consistent with the past practices of the Company with respect to newly hired employees and (iii) Company Options or shares of restricted stock granted to employees of the Company and its Subsidiaries at times and in amounts consistent with past practices of the Company;
(f) transfer, dispose of or lease, or materially encumber, any material tangible assets Rights of the Company or any of its Subsidiaries, other than (i) in respect of the shares of the Company’s capital stock reserved for issuance and issued pursuant to written contracts the Company Equity Awards, (C) split, combine or commitments existing as reclassify the Shares or any other outstanding capital stock of the date Company or any of this Agreement (copies the Subsidiaries of which have been made available to Parent) the Company or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution therefor or (iiD) tangible assets with a value not in excess redeem, purchase or otherwise acquire, directly or indirectly, any capital stock or other Rights of $100,000 individually the Company or $1,000,000 any of its Subsidiaries, except, in the aggregatecase of each of clauses (A) through (D), as required by any Company Plan, Company Stock Plan or any Company Equity Awards issued thereunder;
(giv) dispose except as required by applicable Law or under the terms of any Company Plan, and except for annual salary or abandon, or grant or allow to be prematurely terminated licenses or similar rights to, any material Company IP (other than (i) nonexclusive licenses granted wage rate adjustments in the ordinary course of business consistent with past practice or practice, and in the case of clauses (iiA) implied licenses arising from sales and (B) of productsthis Section 5.1(iv);
(h) repurchase, redeem or otherwise acquire any shares of the capital stock of the Company, except shares repurchased from employees for increases or former employees of payments that are made for retention purposes and do not exceed $500,000 in the aggregate on an annual basis, the Company or will not and will not permit any of its Subsidiaries pursuant to (iA) increase the exercise of repurchase compensation, severance or cancellation rightstermination pay payable or to become payable to any officers, or (ii) elections by directors, employees or former employees to sell or otherwise transfer Company Shares to the Company to satisfy withholding obligations, in each case pursuant to the Company Option Plan or applicable award;
(i) incur any indebtedness for borrowed money or guarantee any such indebtedness, except for borrowings incurred or made in the ordinary course of business (under credit facilities in existence as of the date of this Agreement) that do not result in the total indebtedness for borrowed money of the Company and its Subsidiaries exceeding $30,000,000 outstanding at any one time;
(j) adopt or amend in any material respect any Company Benefit Plan, or increase the compensation or fringe benefits of any director, officer or employee consultants of the Company or any of its Subsidiaries, except for (iB) any increases committed to prior to the date of this Agreement (as previously disclosed to Parent) and (ii) increases in amounts and at times consistent with past practices, provided that any such increase pursuant to this clause “(ii)” for any officer does not exceed 5% of then current compensation of such officer;
(k) accelerate the payment pay or vesting of benefits or amounts payable or to become payable under any Company Benefit Planaward, or amend in commit to pay or award, any material respect bonuses, retention or incentive compensation to any Company Benefit Plan in a manner inconsistent with the foregoingof its directors, except as required by any existing agreementofficers or employees; (C) establish, plan or applicable Legal Requirement;
(l) adopt, enter into or amend or modify in any material respect any Employment Agreement;
(m) materially amend any CT Contract or Material Contract described in clause “(i),” clause “(ii),” clause “(iii),” clause “(iv),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement) or prematurely terminate any CT Contract or Material Contract described in clause “(ii),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement)into, except, in each case (other than in the case of a CT Contract), in the ordinary course of business consistent with past practice or where the failure to amend or terminate any such Material Contract couldcollective bargaining agreement or Company Plan; (D) take any action to amend or waive any performance or vesting criteria or accelerate vesting, in exercisability or funding under any Company Plan (except as would mitigate the good faith judgment application of Section 280G of the Company, have a material adverse impact on Code (as reasonably determined by the Company;
)), (nE) enter into any new agreement or contract described in clause “(i),” clause “(iv),” clause “(vii),” clause “(viii)” or clause “(xiv)” of Section 3.8(a);
(o) enter into any agreementinvoluntarily terminate, including any option agreementother than for cause, relating to the acquisition or disposition employment of any business, business line or Entity (whether by merger, sale of stock, sale of assets or otherwise);
(p) change any of its methods of accounting or accounting practices in any material respect;
(q) make or rescind any material Tax election, settle or compromise any material claim with respect to Taxes, consent to any extension or waiver of the limitation period applicable to any material Tax claim or enter into any material agreement with any taxing authority relating to Taxes;
(r) make any capital expenditure employee having an annual salary in excess of $250,000 individually or (F) hire any new employee having an annual salary in excess of $1,850,000 in 250,000, other than to fill open positions and provided that the aggregate in any fiscal monthcompensation and benefits provided to such new employee does not materially exceed the aggregate compensation and benefits provided to the employee who previously filled such position;
(sv) adopt any plan of complete or partial liquidation, dissolution, restructuring or other reorganization of neither the Company ornor any of its Subsidiaries will (A) assume, except in accordance with guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the rights obligations of any other Person other than the Company under Section 5.2, adopt any plan providing foror its Subsidiaries and other than non-financial guarantees of day-to-day performance customary within the industries in which the Company and its Subsidiaries operate, or enter into, an Alternative Acquisition (as defined in Section 5.2(f));
(tB) make any loans, advances or capital contributions to, or investments in, any other Person other than (i) loans or advances to customers in the form of trade credit or deferred purchase price arrangements in the ordinary course of business, (ii) by the Company or any Subsidiary of the Company to or in the Company or any Subsidiary of the Company, (iii) pursuant to any contract or other legal obligation set forth in Part 5.1(t) of the Company Disclosure Schedule or (iv) advances to employees (other than officers of the Company) except in the ordinary course of business consistent with past practice;
(vi) other than borrowings and other credit extensions under the Credit Agreement, not neither the Company nor any of its Subsidiaries will incur any Indebtedness (including any Indebtedness that is revolving in nature) or modify any Indebtedness in any manner that would or could (A) increase the amount outstanding thereunder as of the date hereof individually or in the aggregate, or (B) be adverse to exceed the Company’s ability to satisfy its Indebtedness in full at the Effective Time with the proceeds of the Financing;
(vii) neither the Company nor any of its Subsidiaries will make any capital expenditure that is in excess of $10,000 in each individual case and 200,000 individually or $500,000 750,000 in the aggregate;
(uviii) neither the Company nor any of its Subsidiaries will change any of the accounting methods, principles or practices used by it unless required by a change in GAAP or applicable Law;
(ix) neither the Company nor any of its Subsidiaries will (A) amend any material Tax Return; (B) settle or compromise any Legal Proceeding or enter into any consent decree, injunction or similar restraint or form of equitable relief in settlement of any Legal Proceeding, other than (i) settlements and compromises that relate to Taxes (which are the subject of Section 5.1(q)) and (ii) any settlement, compromise, consent decree, injunction, restraint or relief in an amount less than $500,000 that would not limit or restrict in any material respect the ability of the Company or any of its Subsidiaries to engage in or conduct any business in any geographic area or restrict the Company’s right to use any material Company IP or license any material Company IP from any other PersonLiability for Taxes;
(v) terminate, cancel, amend or modify any material insurance policy maintained by the Company or any of its Subsidiaries which is not promptly replaced by a comparable amount of insurance coverage;
(w) redeem the Company Rights or amend, modify or terminate the Company Rights Agreement, or render it inapplicable to (or otherwise exempt from the application of the Company Rights Agreement) any Person or action (other than Parent and Acquisition Sub in connection with the delivery and performance of this Agreement);
(x) fail to repurchase in accordance with the terms of applicable repurchase rights any shares of restricted stock of the Company that, by virtue of any termination of employment of a holder thereof or otherwise, become subject to repurchase at any time prior to the Acceptance Time; or
(y) enter into any commitment or agreement to take any of the actions described in clauses “(a)” through “(x)” of this sentence.
Appears in 1 contract
Samples: Agreement and Plan of Merger
Interim Operations of the Company. The Company agrees that, during the period from From the date of this Agreement through and until the Effective Time or the earlier termination of this Agreement in accordance with its terms, except (xa) as specifically required by this Agreement, (b) as set forth on Section 5.1 of the time that the designees of Company Disclosure Letter, (c) as required by applicable Law, (d) as consented to in writing by Parent as provided in Section 1.4(a) have been elected to or designated as members of, and shall constitute a majority of, the Company’s Board of Directors, or (y) after the date of termination of this Agreement, except (i) Agreement and prior to the extent Parent Effective Time, which consent shall otherwise consent in writing (which consent, in the case of actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, and in the case of any commitment or agreement described in clause “(y)” below to take any of the actions described in clauses “(d),” “(i),” “(n),” “(p),” “(q),” “(t),” “(u)” and “(v)” below, is not to be unreasonably withheld, conditioned or delayed, (e) as contemplated by or in connection with the BBGS Agreement, (f) for any actions necessary or appropriate in connection with the BBGS Sale, (g) as required to comply with the then-applicable Approved Budget (as such term is defined in the Credit Agreement), or (iih) as set forth in connection with efforts to preserve the liquidity of the Company Disclosure Schedule (including Part 5.1 thereofwith respect to actions customarily taken by businesses in a similar financial situation taken in order to maximize cash, it being understood that this clause (h) shall not be construed to permit the Company to defer payables in a manner that is materially inconsistent with the Company’s course of conduct between April 1, 2018 and the date hereof), (iii) as necessary to implement or otherwise effectuate an Agreed Arrangement or as otherwise expressly contemplated by this Agreement or (iv) as may be required by any Legal Requirement, (A) the Company shall, agrees that:
(i) each of the Company and shall cause each of its Subsidiaries to, will use its commercially reasonable efforts to conduct its business only in the ordinary course of business consistent with the manner in which such business was being conducted prior to the date of this Agreement past practice and use its commercially reasonable efforts to (A) preserve intact its present business organizations, goodwill and ongoing businesses and (B) preserve its present business and organization substantially intact and to maintain such relations relationships with customers, suppliers, employeesvendors, contractorslicensors, distributors licensees, Governmental Entities and others having other Persons with whom it has material business dealings relations, provided that, for the avoidance of doubt, the Company may take actions not within the ordinary course of business (1) as required by the BBGS Transaction Documents, (2) in connection with it the Company’s rights to solicit, initiate, facilitate, encourage, respond to, discuss, and engage with respect to Alternative Transaction Proposals as permitted under Section 5.2 (the extent reasonably necessary to preserve substantially intact its present business and organization“Alternative Transaction Process” ), and (B3) as specifically contemplated or required by the Credit Agreement or the Consent Agreement;
(ii) the Company will not amend its Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws and the Company’s Subsidiaries will not amend their certificates of incorporation, bylaws or other comparable charter or organizational documents;
(iii) neither the Company nor any of its Subsidiaries shall:
will (a) amend the Company’s certificate of incorporation or bylaws;
(b) split, combine or reclassify any shares of the Company’s capital stock;
(cA) declare, set aside or pay any dividend (or other distribution, whether payable in cash, stock or other property) , with respect to any shares of the Company’s its capital stock, except prior for dividends or other distributions to the Acceptance Time for the regular quarterly cash dividend in the amount Company or any of $.01 per issued and outstanding Company Share declared and paid on its historical schedule consistent with past practice;
Subsidiaries, (d) form any Subsidiary;
(eB) issue, sell, transfer, pledge, dispose of or encumber or agree to issue, sell, transfer, pledge, dispose of or encumber any additional shares of its capital stock, stock or securities convertible or exchangeable for, or options or rights to acquire, any shares of its capital stock, other than (i) Company Shares reserved for issuance upon exercise of Company Options outstanding on the date of this Agreement (or granted pursuant to clause “(ii)” or clause “(iii)” of this clause “(e)”), (ii) Company Options or shares of restricted stock granted to new employees in connection with their initial hiring by the Company consistent with the past practices of the Company with respect to newly hired employees and (iii) Company Options or shares of restricted stock granted to employees of the Company and its Subsidiaries at times and in amounts consistent with past practices of the Company;
(f) transfer, dispose of or lease, or materially encumber, any material tangible assets Rights of the Company or any of its Subsidiaries, other than (i) in respect of the shares of the Company’s capital stock reserved for issuance and issued pursuant to written contracts the Company Equity Awards, (C) split, combine or commitments existing as reclassify the Shares or any other outstanding capital stock of the date Company or any of this Agreement (copies the Subsidiaries of which have been made available to Parent) the Company or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution therefor or (iiD) tangible assets with a value not in excess redeem, purchase or otherwise acquire, directly or indirectly, any capital stock or other Rights of $100,000 individually the Company or $1,000,000 any of its Subsidiaries, except, in the aggregatecase of each of clauses (A) through (D), as required by any Company Plan, Company Stock Plan or any Company Equity Awards issued thereunder;
(giv) dispose except as required by applicable Law or under the terms of any Company Plan, and except for annual salary or abandon, or grant or allow to be prematurely terminated licenses or similar rights to, any material Company IP (other than (i) nonexclusive licenses granted wage rate adjustments in the ordinary course of business consistent with past practice or practice, and in the case of clauses (iiA) implied licenses arising from sales and (B) of productsthis Section 5.1(iv);
(h) repurchase, redeem or otherwise acquire any shares of the capital stock of the Company, except shares repurchased from employees for increases or former employees of payments that are made for retention purposes and do not exceed $500,000 in the aggregate on an annual basis, the Company or will not and will not permit any of its Subsidiaries pursuant to (iA) increase the exercise of repurchase compensation, severance or cancellation rightstermination pay payable or to become payable to any officers, or (ii) elections by directors, employees or former employees to sell or otherwise transfer Company Shares to the Company to satisfy withholding obligations, in each case pursuant to the Company Option Plan or applicable award;
(i) incur any indebtedness for borrowed money or guarantee any such indebtedness, except for borrowings incurred or made in the ordinary course of business (under credit facilities in existence as of the date of this Agreement) that do not result in the total indebtedness for borrowed money of the Company and its Subsidiaries exceeding $30,000,000 outstanding at any one time;
(j) adopt or amend in any material respect any Company Benefit Plan, or increase the compensation or fringe benefits of any director, officer or employee consultants of the Company or any of its Subsidiaries, except for (iB) any increases committed to prior to the date of this Agreement (as previously disclosed to Parent) and (ii) increases in amounts and at times consistent with past practices, provided that any such increase pursuant to this clause “(ii)” for any officer does not exceed 5% of then current compensation of such officer;
(k) accelerate the payment pay or vesting of benefits or amounts payable or to become payable under any Company Benefit Planaward, or amend in commit to pay or award, any material respect bonuses, retention or incentive compensation to any Company Benefit Plan in a manner inconsistent with the foregoingof its directors, except as required by any existing agreementofficers or employees; (C) establish, plan or applicable Legal Requirement;
(l) adopt, enter into or amend or modify in any material respect any Employment Agreement;
(m) materially amend any CT Contract or Material Contract described in clause “(i),” clause “(ii),” clause “(iii),” clause “(iv),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement) or prematurely terminate any CT Contract or Material Contract described in clause “(ii),” clause “(vii),” clause “(viii),” clause “(x),” clause “(xi),” clause “(xiv)” or clause “(xvi)” of Section 3.8(a) (or any contracts that would be included as “Material Contracts” pursuant to such clauses if entered into after the date of this Agreement)into, except, in each case (other than in the case of a CT Contract), in the ordinary course of business consistent with past practice or where the failure to amend or terminate any such Material Contract couldcollective bargaining agreement or Company Plan; (D) take any action to amend or waive any performance or vesting criteria or accelerate vesting, in exercisability or funding under any Company Plan (except as would mitigate the good faith judgment application of Section 280G of the Company, have a material adverse impact on Code (as reasonably determined by the Company;
)), (nE) enter into any new agreement or contract described in clause “(i),” clause “(iv),” clause “(vii),” clause “(viii)” or clause “(xiv)” of Section 3.8(a);
(o) enter into any agreementinvoluntarily terminate, including any option agreementother than for cause, relating to the acquisition or disposition employment of any business, business line or Entity (whether by merger, sale of stock, sale of assets or otherwise);
(p) change any of its methods of accounting or accounting practices in any material respect;
(q) make or rescind any material Tax election, settle or compromise any material claim with respect to Taxes, consent to any extension or waiver of the limitation period applicable to any material Tax claim or enter into any material agreement with any taxing authority relating to Taxes;
(r) make any capital expenditure employee having an annual salary in excess of $250,000 individually or (F) hire any new employee having an annual salary in excess of $1,850,000 in 250,000, other than to fill open positions and provided that the aggregate in any fiscal monthcompensation and benefits provided to such new employee does not materially exceed the aggregate compensation and benefits provided to the employee who previously filled such position;
(sv) adopt any plan of complete or partial liquidation, dissolution, restructuring or other reorganization of neither the Company ornor any of its Subsidiaries will (A) assume, except in accordance with guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the rights obligations of any other Person other than the Company under Section 5.2, adopt any plan providing foror its Subsidiaries and other than non-financial guarantees of day-to-day performance customary within the industries in which the Company and its Subsidiaries operate, or enter into, an Alternative Acquisition (as defined in Section 5.2(f));
(tB) make any loans, advances or capital contributions to, or investments in, any other Person other than (i) loans or advances to customers in the form of trade credit or deferred purchase price arrangements in the ordinary course of business, (ii) by the Company or any Subsidiary of the Company to or in the Company or any Subsidiary of the Company, (iii) pursuant to any contract or other legal obligation set forth in Part 5.1(t) of the Company Disclosure Schedule or (iv) advances to employees (other than officers of the Company) except in the ordinary course of business consistent with past practice;
(vi) other than borrowings and other credit extensions under the Credit Agreement, not neither the Company nor any of its Subsidiaries will incur any Indebtedness (including any Indebtedness that is revolving in nature) or modify any Indebtedness in any manner that would or could (A) increase the amount outstanding thereunder as of the date hereof individually or in the aggregate, or (B) be adverse to exceed the Company’s ability to satisfy its Indebtedness in full at the Effective Time with the proceeds of the Financing;
(vii) neither the Company nor any of its Subsidiaries will make any capital expenditure that is in excess of $10,000 in each individual case and 200,000 individually or $500,000 750,000 in the aggregate;
(uviii) neither the Company nor any of its Subsidiaries will change any of the accounting methods, principles or practices used by it unless required by a change in GAAP or applicable Law;
(ix) neither the Company nor any of its Subsidiaries will (A) amend any material Tax Return; (B) settle or compromise any Legal Proceeding material Liability for Taxes; (C) make (other than in the ordinary course of business consistent with past practice), change or revoke any material Tax election; (D) change any method of Tax accounting, except as required by applicable Law; (E) enter into any “closing agreement” as described in Section 7121 of the Code (or any similar provision of state, local or foreign Law) or Tax ruling; (F) consent decreeto any extension or waiver of the limitations period applicable to any claim, injunction audit, or similar restraint or form assessment with respect of equitable relief in settlement of any Legal Proceeding, Taxes (other than in the ordinary course of business consistent with past practice); (iG) settlements and compromises that relate surrender any right to claim a material Tax refund, offset, or other reduction in Liability for Taxes; (H) request any relief under a voluntary disclosure program or initiate a voluntary disclosure agreement with any Governmental Entity with respect to Taxes (which are excluding, for the subject avoidance of doubt, the filing of routine Tax Returns); or (I) enter into any contractual obligation in respect of Taxes with any Governmental Entity.
(x) except in connection with the Alternative Transaction Process and as permitted by Section 5.1(q5.2(e)) and (ii) any settlement, compromise, consent decree, injunction, restraint or relief in an amount less than $500,000 that would not limit or restrict in any material respect the ability of neither the Company or nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, file a petition in bankruptcy under any provisions of federal or state bankruptcy or insolvency Law, or consent to engage in or conduct the filing of any business in bankruptcy petition against it under any geographic area or restrict the Company’s right to use any material Company IP or license any material Company IP from any other Personsimilar Law;
(vxi) terminate, cancel, amend or modify any material insurance policy maintained by neither the Company or nor any of its Subsidiaries which is not promptly will (A) enter into any Contract that would, if entered into prior to the date hereof, be a Company Material Contract specified in subsections (iv), (vii), (ix) or (xi) of Section 3.9(a), or (B) materially modify, materially amend, extend, or terminate any such Company Material Contract other than, in the case of extending or terminating, in the ordinary course of business consistent with past practice;
(xii) terminate, cancel or permit to lapse any existing insurance policy (unless replaced by a comparable amount of insurance coveragepolicy) covering the Company or its Subsidiaries;
(wxiii) redeem the Company Rights or amend, modify or terminate the Company Rights Agreement, or render it inapplicable to (or otherwise exempt from the application of the Company Rights Agreement) grant any Person or action Encumbrance (other than Parent and Acquisition Sub in connection with the delivery and performance of this AgreementPermitted Encumbrances);
(xxiv) fail to repurchase in accordance with the terms of applicable repurchase rights any shares of restricted stock of neither the Company that, by virtue nor any of any termination of employment of a holder thereof its Subsidiaries agree to take or otherwise, become subject to repurchase at any time prior to the Acceptance Time; or
(y) enter into make any commitment or agreement to take any of the actions described in the foregoing clauses “(aii) – (xiii)” through “(x)” . Nothing contained in this Agreement shall give the Parent Entities, directly or indirectly, the right to control or direct the Company’s operations prior to the Effective Time. Prior to the Effective Time, the Company will exercise, consistent with the terms and conditions of this sentenceAgreement, complete control and supervision over its operations.
Appears in 1 contract
Samples: Merger Agreement (Black Box Corp)
