Negative Obligations of the Company. Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 6.1 or Section 6.2 of the Company Disclosure Schedule, (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent), or (iv) as approved in advance by Parent in writing, at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees of Parent constitute at least a majority of the Company Board pursuant to Section 2.4(a) and the Effective Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following: (a) amend, or propose to adopt any amendments to, its certificate of incorporation or bylaws or comparable organizational documents; (b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (i) the issuance and sale of shares of Company Common Stock pursuant to Company Stock Awards outstanding prior to the date hereof, (ii) the issuance of shares pursuant to the Company ESPP and (iii) Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares of Company Common Stock granted in the ordinary course of business after the date of this Agreement; (c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities, except to the extent that such acquisition or redemption is pursuant to the terms of any Employee Plan (as then in effect) or any agreement subject to any such Employee Plan; (d) other than dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock; (e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries; (f) (i) incur or assume any long-term or short-term indebtedness for borrowed money or issue any debt securities, except for loans or advances to or from direct or indirect wholly-owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company, (iii) except for advances made in the ordinary course of business consistent with past practice, make any loans or advances to employees of the Company or any of its Subsidiaries, (iv) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries assets, tangible or intangible, or create or suffer to exist any Lien (other than Permitted Liens) thereupon; (g) except as may be required by applicable Law or the terms of any Employee Plan, including the Company 2009 Executive Bonus Plan, as in effect on the date hereof (copies of which have been provided to Parent), enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan in any material respect, or increase or decrease the compensation or fringe benefits of any employee or director of the Company or any of its Subsidiaries (except for normal increases of cash compensation in the ordinary course of business consistent with past practice to any current or future employees below the rank of Vice President or whose base salary does not exceed $200,000 per annum), pay any bonus or special remuneration (whether in cash, equity or otherwise) to any employee, consultant, independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Plan; (h) forgive any Loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective Affiliates; (i) make any deposits or contributions of cash or other property to, or take any other action to fund, or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts subject to the Employee Plans, other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts subject to the Employee Plans in effect as of the date hereof; (j) enter into, amend, or extend any Collective Bargaining Agreement or similar Contract; (i) acquire, lease (as lessee) or license (as licensee) any property or assets with a fair market value in excess of $5,000,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as in effect on the date hereof; or (ii) sell, lease (as lessor), license (as licensor) or dispose of any property or assets with a net book value in excess of $100,000 in any individual transaction, except (A) transactions required pursuant to existing Contracts as in effect on the date hereof or (B) transactions in the ordinary course of business consistent with past practice; (l) except as may be required as a result of a change in applicable Laws or in GAAP, make any change in any of the accounting principles or practices used by it; (i) make or change any Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its Subsidiaries, (ii) change any material Tax accounting method, (iii) settle or compromise any material U.S. federal, state, local or non-U.S. Tax liability or (iv) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes; (n) enter into any Company Intellectual Property Agreement or amend any Company Intellectual Property Agreements or grant any release or relinquishment of any rights under any Company Intellectual Property Agreements, except (i) to customers and (ii) non-exclusive in-bound licenses for commercially available technology, in each case in the ordinary course of business consistent with past practice;
Appears in 4 contracts
Samples: Merger Agreement (Emc Corp), Merger Agreement (Emc Corp), Merger Agreement (Data Domain, Inc.)
Negative Obligations of the Company. Except (i) as expressly contemplated or expressly permitted by this Agreement, (ii) as set forth in Section 6.1 or Section 6.2 of the Company Disclosure Schedule, (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent), or (iv) as approved in advance by Parent in writing, such approval not to be unreasonably withheld, conditioned or delayed, at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees (x) the Appointment Time, (y) the Effective Time and (z) the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) and the Effective TimeArticle IX, the Company shall not do any of the following not, and shall not permit cause its Subsidiaries to do any of the followingnot to:
(a) amend, or propose to adopt any amendments to, amend its certificate of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (i) the issuance and sale of shares of Company Common Stock Shares pursuant to Company Stock Awards Options or other equity awards outstanding prior to the date hereof, (ii) the issuance of shares pursuant to the Company ESPP and (iii) Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares of Company Common Stock granted in the ordinary course of business after the date of this Agreementhereto;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities, except to the extent that such acquisition or redemption is pursuant to the terms of any Employee Plan (as then in effect) or any agreement subject to any such Employee Plan;
(d) other than cash dividends or distributions made by any direct or indirect wholly-wholly owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its SubsidiariesSubsidiaries (other than the transactions contemplated hereby, including the Offer and the Merger);
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money debt or issue any debt securities, in excess of $500,000, except for (A) short-term debt incurred to fund (x) operations of the business in the ordinary course of business consistent with past practice or (y) fees and expenses in connection with the transactions contemplated by this Agreement, and (B) loans or advances to or from direct or indirect wholly-wholly owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly-wholly owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person except for travel advances made in the ordinary course of business consistent with past practice, make any loans or advances practice to employees of the Company or any of its Subsidiaries, Subsidiaries or (iv) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens) thereuponEncumbrances);
(g) except as may be required by applicable Law or the terms of any Employee Plan, including the Company 2009 Executive Bonus Plan, Plan as in effect on the date hereof (copies of which have been provided to Parent)hereof, enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan bonus, profit sharing, compensation, severance, termination, option, restricted stock, restricted stock unit, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any director, officer or employee in any material respect, manner or increase or decrease in any manner the compensation or fringe benefits of any employee director, officer or director of the Company or any of its Subsidiaries (except for normal increases of cash compensation in the ordinary course of business consistent with past practice to any current or future employees below the rank of Vice President or whose base salary does not exceed $200,000 per annum)employee, pay any special bonus or special remuneration (whether in cash, equity or otherwise) to any director, officer or employee, consultant, independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan plan or arrangement as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Planhereof;
(h) forgive any Loans loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective Affiliates;
(i) make any deposits or contributions of cash or other property to, to or take any other action to fund, fund or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts agreements subject to the Employee Plans, Plans or any other similar Contract of the Company other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts agreements subject to the Employee Plans in effect as of the date hereof;
(j) enter into, amend, or extend any Collective Bargaining Agreement or similar ContractAgreement;
(i) acquire, lease (as lessee) or license (as licensee) any property or assets with a fair market value in excess of $5,000,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as in effect on the date hereof; or (iik) sell, lease (as lessor)lease, license (as licensor) license, transfer or dispose of any property or assets with a net book value in excess of $100,000 assets, or any portion thereof or interest therein, in any individual transactionsingle transaction or series of related transactions, except either (Ai) transactions required pursuant to under an existing Contracts as in effect on Contract of the date hereof Company or any of its Subsidiaries, or (Bii) transactions the sale of goods or provision of services in the ordinary course of business consistent with past practicepractice or grants of licenses pursuant to Ordinary Course Customer Contracts;
(l) except as may be required as a result of a change in applicable Laws Law or in GAAP, make any change in any of the accounting principles or practices used by it;
(m) (i) make or change any material Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its Subsidiarieselection, (ii) change file any material amended Tax accounting methodReturn, (iii) settle or compromise any material U.S. federalTax liability, state, local (iv) adopt or non-U.S. change any material Tax liability accounting method or (ivv) consent to any extension or waiver of any limitation period with respect to any material claim or assessment for material Taxes; ;
(n) acquire or license any material Intellectual Property Rights from any third party, other than pursuant to Contracts in existence as of the date hereof, transfer or grant any exclusive rights to any Company Intellectual Property to any third party, or grant any license to any Company Product or to any Company Intellectual Property except pursuant to an Ordinary Course Customer Contract or a non-exclusive license of Company Intellectual Property in the ordinary course of business;
(i) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee); (ii) modify, amend or exercise any right to renew any Lease or other lease or sublease of real property, or waive any term or condition thereof or grant any consents thereunder; (iii) grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment or charge affecting any Leased Real Property or other real property, or any interest therein or part thereof; (iv) make any material changes in the construction or condition of any such property; (v) enter into any agreement to purchase or sell any interest in real property; or (vi) violate the terms of or terminate any Lease;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, (ii) enter into, or amend, any Contract other than in the ordinary course of business that would be or reasonably be expected to be, material to the business, operations or financial condition of the Company Intellectual Property Agreement and its Subsidiaries, taken together as a whole, (iii) enter into or amend any Contract with a competitor of Parent, including the competitor set forth on Section 1.1(l) of the Company Intellectual Property Agreements Disclosure Schedule, or grant (iv) authorize, incur or commit to incur any release new capital expenditure(s), individually or relinquishment in the aggregate, with obligations to the Company or any of its Subsidiaries in excess of $500,000; provided, however, that none of the foregoing shall limit any rights under capital expenditure required pursuant to existing Contracts or otherwise contemplated by the Company’s current capital expenditure budget made available to Parent; and provided further, that none of the foregoing shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the Company Intellectual Property Agreementsor its Subsidiaries, except taken as a whole;
(q) commence, settle or compromise any pending or threatened Legal Proceeding or pay, waive, discharge or satisfy or agree to pay, waive, discharge or satisfy any claim, liability or obligation (absolute or accrued, asserted or unasserted, contingent or otherwise), other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings, claims and other Liabilities (i) to customers and expressly reflected or reserved against in full on the Balance Sheet or incurred since the date of the Balance Sheet in the ordinary course of business consistent with past practice or (ii) nonthe settlement, compromise, discharge or satisfaction of which (A) does not involve payment of money in excess of $250,000 individually or $500,000 in the aggregate with other such settlements, and (B) does not include any other obligation to be performed by the Company or its Subsidiaries following the Effective Time that is, individually or in the aggregate, material to the Company;
(r) except as required by Law or GAAP, revalue in any material respect any of its properties or assets including without limitation writing-exclusive in-bound licenses for commercially available technology, in each case off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
(s) except as required by Law, convene any regular or special meeting (or any adjournment or postponement thereof) of the Company Stockholders other than the Company Stockholders’ Meeting;
(t) except as required by Law, terminate, modify, or waive any right under any material Permit; or (u) enter into a Contract to do any of the foregoing.
Appears in 3 contracts
Samples: Merger Agreement (Nuance Communications, Inc.), Merger Agreement (Transcend Services Inc), Merger Agreement (Nuance Communications, Inc.)
Negative Obligations of the Company. Except as (iw) as expressly contemplated required or permitted by this Agreement, (iix) as set forth in Section 6.1 5.1 or Section 6.2 5.2 of the Company Disclosure Schedule, (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent), Letter or (ivy) as approved in advance by Parent in writingwriting (which approval shall not be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) Article VIII and the Effective Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(a) amend, or propose to adopt any amendments to, amend its certificate articles of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for other than (i) the issuance and sale of shares of Company Common Stock pursuant to Company Stock Compensatory Awards outstanding as of or prior to the date hereof, (ii) grants to newly hired employees of Company Compensatory Awards pursuant to binding commitments prior to the issuance date hereof as set forth on Section 5.2 of shares the Company Disclosure Letter or (iii) pursuant to the Company ESPP and (iii) Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares of Company Common Stock granted in the ordinary course of business after the date of this AgreementESPP;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary SecuritiesSecurities other than (i) in full or partial payment of the exercise price and any applicable Taxes pursuant to any exercise, except to the extent that such acquisition vesting or redemption is settlement of Company Compensatory Awards or (ii) pursuant to the terms forfeiture of any Employee Plan (as then in effect) or any agreement subject to any such Employee PlanCompany Compensatory Awards;
(d) other than (i) dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any Subsidiaries or (ii) regular quarterly cash dividends by the Company with customary record or and payment dates for the payment on shares of any dividends or distributions on capital stockCompany Common Stock not in excess of $0.05 per share per quarter, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its SubsidiariesSubsidiaries (other than the transactions contemplated hereby, including the Merger);
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money debt or issue any debt securities, except for (A) short-term debt incurred to fund operations of the business in the ordinary course of business consistent with past practice and (B) loans or advances to or from direct or indirect wholly-owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person except for routine advances made in the ordinary course of business consistent with past practice to employees of the Company or any of its Subsidiaries or (iv) mortgage or pledge any of its or its Subsidiaries’ material assets, tangible or intangible, or voluntarily create or suffer to exist any Lien thereupon (other than Permitted Liens) other than in the ordinary course of business consistent with past practice, make any loans or advances to employees of the Company or any of its Subsidiaries, (iv) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries assets, tangible or intangible, or create or suffer to exist any Lien (other than Permitted Liens) thereupon;
(g) except as may be required by applicable Applicable Law or as required by the terms of any Employee Plan, including the Company 2009 Executive Bonus Plan, as in effect on the date hereof (copies of which have been provided to Parent), enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan in any material respect, or increase or decrease the compensation or fringe benefits of any employee or director of the Company or any of its Subsidiaries (except for normal increases of cash compensation in the ordinary course of business consistent with past practice to any current or future employees below the rank of Vice President or whose base salary does not exceed $200,000 per annum), pay any bonus or special remuneration (whether in cash, equity or otherwise) to any employee, consultant, independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan as in effect as of the date hereof hereof, enter into, adopt, amend (including acceleration of vesting), modify or amend terminate any bonus, profit sharing, compensation, severance, termination, option, restricted stock, restricted stock unit, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the targets compensation, benefit or welfare of any director, officer, employee, consultant or independent contractor in any manner or increase in any manner the goals compensation or fringe benefits of any director, officer, employee, consultant or independent contractor or pay any special bonus or special remuneration to any director, officer, employee, consultant or independent contractor, or pay any benefit not required by any plan or arrangement as in effect as of the 2009 Executive Bonus Plandate hereof;
(h) forgive any Loans loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective Affiliates;
(i) make any deposits or contributions of cash or other property to, to or take any other action to fund, fund or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts agreements subject to the Employee Plans, Plans or any other Contract of the Company or any of its Subsidiaries other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts agreements subject to the Employee Plans in effect as of the date hereof;
(j) enter into, amend, or extend any Collective Bargaining Agreement or similar ContractAgreement;
(ik) acquire, lease (as lessee) other than terminations or license (as licensee) any property or assets with a fair market value in excess of $5,000,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as in effect on the date hereof; or (ii) sell, lease (as lessor), license (as licensor) or dispose of any property or assets with a net book value in excess of $100,000 in any individual transaction, except (A) transactions required pursuant to existing Contracts as in effect on the date hereof or (B) transactions demotions in the ordinary course of business consistent with past practice, hire, terminate, demote or promote or offer to hire, or promote any employee or potential employee, or encourage any employees to resign from or terminate his relationship with the Company or any of its Subsidiaries, in each case, other than as expressly contemplated by this Agreement; provided that the Company and its Subsidiaries may replace an employee that terminates his or her employment with the Company upon (i) the Company providing Parent with a written notice of the proposed replacement and (ii) Parent failing to make a reasonable objection to such replacement within five (5) Business Days; provided further that the Company and its Subsidiaries shall be entitled to hire or offer to hire any employees or potential employee after July 31, 2015 without the consent of Parent;
(l) acquire, sell, lease, license or dispose of any property or assets material to the Company and its Subsidiaries, taken as a whole, in any single transaction or series of related transactions;
(m) except as may be required as a result of a change in applicable Laws Applicable Law or in GAAP, make any change in any of the accounting principles or practices used by it;
(n) (i) make or change any material Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its Subsidiarieselection, (ii) change amend any material Tax accounting methodReturn, (iii) settle or compromise any material U.S. federalLiability for Taxes, state, local (iv) adopt or non-U.S. change any material Tax liability accounting method or (ivv) consent to any extension or waiver of any limitation period with respect to any material claim or assessment for material Taxes; ;
(no) (i) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) or (ii) modify, amend or exercise any right to renew any lease or sublease of real property or waive or violate any term or condition thereof or grant any consents thereunder, other than extensions of expiring leases not to exceed a period of six months;
(p) abandon, cancel or knowingly allow to lapse or fail to maintain or protect any material Company Owned Intellectual Property Agreement Rights;
(q) (i) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, (ii) other than in the ordinary course of business consistent with past practice, enter into, renew, amend any Company Intellectual Property Agreements or grant any release or relinquishment of any material rights under any Material Contract or Company Intellectual Property AgreementsIP Agreement or (iii) other than capital expenditures contemplated by the Company’s capital expenditures set forth in Section 5.2(q) of the Company Disclosure Letter, except incur any new capital expenditure(s) that, individually or in the aggregate, would create obligations to the Company or any of its Subsidiaries in excess of $200,000;
(r) settle or compromise any pending or threatened Legal Proceeding other than the settlement or compromise of a Legal Proceeding (i) to customers and reflected or reserved against in full in the Balance Sheet or (ii) nonthat does not include any obligation (other than the payment of money of $200,000 or less) to be performed by the Company or its Subsidiaries following the Effective Time that is or would reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole;
(s) except as required by Applicable Law or GAAP, revalue in any material respect any of its properties or assets including writing-exclusive in-bound licenses for commercially available technology, in each case off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
(t) change pricing or royalties set or charged by persons who have licensed Intellectual Property Rights to the Company or any of its Subsidiaries;
(u) enter into or amend any material agreement pursuant to which any other party is granted development, manufacturing or similar rights of any type or scope with respect to any products or technology of the Company or any of its Subsidiaries;
(v) except as required by applicable Laws, convene any regular or special meeting (or any adjournment or postponement thereof) of the shareholders of the Company; and
(w) authorize, commit or enter into a Contract to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Micrel Inc), Merger Agreement (Microchip Technology Inc)
Negative Obligations of the Company. Except Without limiting the generality of Section 5.1, except as (i) as expressly contemplated or permitted required by this Agreement, (ii) required by Applicable Law, (iii) as set forth in Section 6.1 or Section 6.2 5.2 of the Company Disclosure Schedule, (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent)Letter, or (iv) as approved in advance by Parent in writingwriting (such approval not to be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) Article VIII and the Effective Time, the Company shall not do any of the following not, and shall not permit its Subsidiaries to do (it being understood that if any action is permitted by any of the following:following sub-sections of this Section 5.2, such action shall be deemed permitted pursuant to Section 5.1):
(a) amend, modify, waive, rescind or propose to adopt otherwise change the Charter Documents of the Company or any amendments to, organizational or governing documents of its certificate of incorporation or bylaws or comparable organizational documentsSubsidiaries;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issuetransfer, sell convey, dispose, grant or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (i) the issuance and sale of shares Company Shares pursuant to the exercise of Company Common Stock pursuant to Company Stock Awards Options outstanding prior to the date hereofhereof in accordance with their existing terms, or (ii) to the issuance of shares extent required pursuant to the terms of the Company ESPP and (iii) Company Restricted Stock Units to purchase up to an aggregate Plans or other agreement, in all cases, existing as of 250,000 shares of Company Common Stock granted in the ordinary course of business after the date of this Agreement;
(c) repurchase, acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities, except other than (i) the acquisition by the Company of Company Shares in connection with the surrender of Company Shares by holders of Company Options in order to pay the extent that exercise price of Company Options or in connection with the satisfaction of Tax withholding obligations in respect of Company Options, (ii) the withholding of Company Shares to satisfy Tax obligations with respect to Company Options, (iii) the acquisition by the Company of Company Shares in connection with the net exercise of Company Options and (iv) the acquisition by the Company of Company Options in connection with the forfeiture of such acquisition or redemption is pursuant to awards, in the case of (ii)-(iv), consistent with the terms of any Employee Plan (such Company Options in effect as then in effect) or any agreement subject to any such Employee Planof the date hereof;
(d) other than cash dividends or distributions made by any direct or indirect wholly-wholly owned Subsidiary of the Company to the Company or one of its the Company’s Subsidiaries, set (i) split, combine, reclassify, subdivide, exchange, recapitalize or enter into any record or payment dates for the payment similar transaction in respect of any dividends or distributions on capital stockshare capital, split, combine or reclassify any shares of capital stock, (ii) declare, authorize, set aside aside, make or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stockshare capital, or (iii) make any other actual, constructive or deemed distribution in respect of the shares of capital stockshare capital;
(e) propose (i) merge or consolidate the Company or any of its Subsidiaries with any Person or otherwise enter into a joint venture with any Person or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its SubsidiariesSubsidiaries (other than the transactions contemplated hereby, including the Merger), or (ii) acquire or dispose of any Person or business or division thereof or solicit any such transaction;
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money or issue any debt securities, except for loans securities or advances to assume or from direct or indirect wholly-owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for guarantee the obligations of any Person (other Person except with respect to obligations of than the Company and any direct or indirect wholly-wholly owned Subsidiary of the Company), except (A) borrowings in the ordinary course of business under the Company’s existing credit facilities in an amount not to exceed $2,000,000 in the aggregate, (B) transactions between the Company and any wholly owned Subsidiary of the Company or between wholly owned Subsidiaries of the Company, or (iiiC) except for advances made letters of credit, guarantees, surety bonds and similar instruments issued in the ordinary course of business consistent with past practicebusiness, make any loans including the pledging of cash or advances to employees of other security as may be required by the Company or any of its Subsidiaries, (iv) acquireissuer, or make (ii) prepay, redeem or repurchase any capital contributions long‑term or short-term debt to the extent that any prepayment, make-whole or investments breakage costs, premiums or penalties would be payable in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries assets, tangible or intangible, or create or suffer to exist any Lien (other than Permitted Liens) thereuponconnection therewith;
(g) except as may be required by applicable (i) Applicable Law or the terms of (ii) any Employee Plan, including the Company 2009 Executive Bonus Plan, as Plan in effect on as of the date hereof of this Agreement, or (copies iii) any Collective Bargaining Agreement in effect as of which have been provided to Parent)the date of this Agreement, (A) enter into, adopt, amend (including an amendment to provide for the acceleration of vesting)materially amend, modify or terminate any Employee Plan (excluding offer letters and employment agreements that provide for no severance or change in any material respect, or control benefits other than those required by Applicable Law); (B) increase or decrease the compensation or fringe benefits of any employee director, officer or director employee; (C) award, grant or pay any (1) special bonus or special remuneration or (2) other bonus or remuneration the payment of which other bonus or remuneration would require the approval of the Company Shareholders, in any such case, to any director, officer, Independent Contractor or employee; or (D) take any action to accelerate any payment or benefit, or the funding of any payment or benefit, payable or to become payable to any director, officer, Independent Contractor or employee, except in the ordinary course of business; provided, however, that the foregoing clauses (A) through (D) shall not restrict the Company or any of its Subsidiaries (except for normal increases from entering into or making available to newly hired employees or to employees in the context of cash compensation promotions based on job performance or workplace requirements, in each case as permitted by this Agreement and in the ordinary course of business business, plans, agreements, benefits and compensation arrangements that have a value that is consistent with the past practice of making compensation and benefits. Except as specifically contemplated by and in accordance with the terms of this Agreement, the Company and its Subsidiaries shall not take any action to any current accelerate the vesting or future employees below the rank settlement of Vice President or whose base salary does not exceed $200,000 per annum), pay any bonus or special remuneration (whether in cash, equity or otherwise) to any employee, consultant, independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus PlanCompany Options;
(h) forgive or make any Loans loans or advances to any Person, including employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective Affiliates, other than (i) loans or advances by the Company to any of its wholly owned Subsidiaries, or by any of the Company’s wholly owned Subsidiaries to another wholly owned Subsidiary of the Company, or (ii) loans or advances to employees in the ordinary course of business in an amount not to exceed $200,000 in the aggregate for all such loans or advances; provided that in the case of any member of the Senior Management, only the advancement of business expenses in the ordinary course of business shall be permitted pursuant to this subclause (ii);
(i) make any deposits or contributions of cash or other property to, or take any other action to fund, fund or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts subject to the material Employee Plans, other than deposits and contributions that are than, in each case, as required pursuant to the terms of the by (i) Applicable Law or (ii) any Employee Plans or any Contracts subject to the Employee Plans Plan in effect as of on the date hereofof this Agreement;
(j) enter intointo negotiations relating to the creation of any worker’s union, amendcollective bargaining agreement, or extend any Collective Bargaining Agreement trade union agreement or similar Contractagreement or arrangement under which any employee or Independent Contractor would be subject or would otherwise receive any benefit;
(ik) hire anyone to fill a position of Senior Management;
(l) terminate the employment of any member of the Senior Management other than for cause;
(m) acquire, lease sell, lease, license, encumber or dispose of any property (as lesseeincluding Real Property) or license (as licensee) assets of the Company or any property of its Subsidiaries or assets any Third Party with a fair market value in excess of $5,000,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as in effect on the date hereof; or (ii) sell, lease (as lessor), license (as licensor) or dispose of any property or assets with a net book value in excess of $100,000 1,000,000 in any individual single transaction or series of related transactions or solicit any such transaction, except for (Ai) transactions required pursuant to existing Contracts as in effect on the date hereof purchases or (B) transactions sales made in the ordinary course of business consistent business, (ii) with past practicerespect to leases, licenses or other similar grants of Real Property, any grant, amendment, extension, modification, or renewal in the ordinary course of business, (iii) disposition of obsolete tangible assets or expired or stale inventory, and (iv) transactions between or among the Company and its wholly owned Subsidiaries;
(ln) except as may be required as a result of a change in applicable Laws Applicable Law or in GAAPU.S. GAAP (or any interpretation thereof), and except as required by and Governmental Entity, make any material change in any of the accounting principles or practices used by itthe Company;
(i) make make, change or change any Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in revoke any material respect the Tax liability or Tax attributes of the Company or any of its Subsidiaries, election; (ii) change amend any income or other material Tax accounting method, Return; (iii) settle or compromise any material U.S. federal, state, local Liability for Taxes; (iv) adopt or non-U.S. make any material change to any Tax liability or accounting method; or (ivv) consent to any extension or waiver of any limitation period with respect to any material claim or assessment for Taxes;
(p) except in the ordinary course of business, sell, assign, transfer, abandon, cancel, allow to lapse, fail to maintain or protect or grant any security interest in, to or under any material Taxes; Company IP;
(nq) (i) enter into any Company Intellectual Property Agreement Restricted Contract, or amend any Company Intellectual Property Agreements or grant any release or relinquishment of any rights under any Company Intellectual Property Agreements, except (i) to customers and (ii) nonmaterially amend, cancel or terminate or waive, release or assign any material rights or claims with respect to any Material Contract or any Restricted Contract entered into pursuant to sub-exclusive in-bound licenses for commercially available technologysection (i), other than, in each the case of this clause (ii), in the ordinary course of business or as otherwise permitted pursuant to Section 5.2;
(r) (i) form or commence the operations of, any business or any corporation, partnership, limited liability company, business association or other similar business organization or Person that is not wholly owned by the Company or its Subsidiaries or (ii) enter into any new line of business;
(i) waive, release, assign, settle or compromise any Legal Proceeding pending or threatened against the Company or any of its Subsidiaries, other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings, that is solely for monetary damages (without any admission of Liability or adverse consequence or restrictions on the Company or any of its Subsidiaries or Parent or Merger Sub) for an amount that is not in excess of $1,000,000 in the aggregate, or (ii) commence any litigation or arbitration (other than (A) in the ordinary course of business, (B) in connection with an appeal for the loss of a bid, or (C) cases if not commenced expeditiously would reasonably be expected to result in material harm to the Company and its Subsidiaries, taken as whole);
(t) incur any capital expenditure except for (i) those contemplated by the capital expenditure budget for the relevant fiscal year, which capital expenditure budget has been made available to Parent prior to the date of this Agreement, and (ii) any unbudgeted capital expenditure, in an amount not to exceed $500,000 in the aggregate;
(u) enter into any Contract or transaction between the Company or any of its Subsidiaries, on the one hand, and any Affiliate of the Company or any of its Subsidiaries, on the other hand, other than in the ordinary course of business and on terms no less favorable to the Company or any of its Subsidiaries, as applicable, than the terms governing similar transactions with Third Parties;
(v) apply for or accept any Government Grant from any Governmental Entity (other than in the ordinary course of business and in any case that are not and would not reasonably be expected to be subject to any obligation to pay royalty or similar payments);
(i) amend or modify the compensation terms or any other obligations of the Company contained in the engagement letters with the respective Company Financial Advisors in a manner adverse to the Company, any of its Subsidiaries or Parent or (ii) engage other financial advisors in connection with the transactions contemplated by this Agreement, in each case, except in connection with an Acquisition Proposal not solicited in breach of Section 6.1;
(x) enter into, amend or cancel any insurance policies other than: (i) in the ordinary course of business, and (ii) the “tail” insurance policy to be purchased by the Company pursuant to Section 6.3 and Section 6.16(c);
(y) hire any employee without requiring them to execute the Company’s standard form of confidentiality and inventions assignment agreement;
(z) take any action that would cause, or at the time of taking such action would reasonably be expected to cause, the Company or any of its Subsidiaries to be in material violation of any of the terms of its material Permits; or
(aa) authorize, offer, agree, commit or enter into a Contract to do any of the foregoing. Notwithstanding the foregoing, nothing in this Agreement is intended to give Parent, directly or indirectly, the right to control or direct the business or operations of the Company or its Subsidiaries at any time prior to the Effective Time, and the Company and its Subsidiaries shall not be required to violate any Applicable Law. Prior to the Effective Time, the Company and its Subsidiaries shall exercise, consistent with past practice;the terms and conditions of this Agreement, complete control and supervision over their own business and operations.
Appears in 2 contracts
Samples: Merger Agreement (Gilat Satellite Networks LTD), Merger Agreement (Gilat Satellite Networks LTD)
Negative Obligations of the Company. Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 6.1 or Section 6.2 of the Company Disclosure Schedule, Letter or (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent), or (iv) as approved in advance by Parent in writingwriting (such consent not to be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) Article IX and the Effective Appointment Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(a) amend, or propose to adopt any amendments to, its certificate of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (i) the issuance and sale of shares of Company Common Stock pursuant to Company Stock Awards outstanding prior to the date hereof, (ii) the issuance of shares pursuant to the Company ESPP and (iii) Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares of Company Common Stock granted in the ordinary course of business after the date of this Agreement;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities, except to the extent that such acquisition or redemption is pursuant to the terms of any Employee Plan (as then in effect) or any agreement subject to any such Employee Plan;
(d) other than dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend dividends on, or make any other distribution distributions (whether in cash, shares stock or property or any combination thereofproperty) in respect of, any of any shares of its capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization stock or other reorganization equity interests, except for dividends by a wholly owned Subsidiary of the Company or any of to its Subsidiaries;
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money or issue any debt securities, except for loans or advances to or from direct or indirect wholly-owned Subsidiariesparent, (ii) assumepurchase, guarantee, endorse redeem or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations acquire shares of any other Person except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company, (iii) except for advances made in the ordinary course of business consistent with past practice, make any loans or advances to employees of the Company or any of its Subsidiaries, (iv) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in of the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its Company or its Subsidiaries assetsor any options, tangible or intangiblewarrants, or create rights to acquire any such shares or suffer to exist any Lien other equity interests or (other than Permitted Liensiii) thereupon;
(g) except as may be required by applicable Law split, combine, reclassify or otherwise amend the terms of any Employee Planof its capital stock or other equity interests;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien any shares of its capital stock or other equity interests or any securities convertible into, or exchangeable for, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of the Company on a deferred basis or other rights linked to the value of Company Shares, including the Company 2009 Executive Bonus Plan, pursuant to Contracts as in effect on the date hereof (copies other than (i) the issuance of which have been Company Shares upon the exercise of Company Options outstanding on September 9, 2010 in accordance with their terms as in effect on such date, (ii) the issuance of Company Shares pursuant to the ESPP with respect to employees previously enrolled in the ESPP, however no new enrollments or increases in current purchase rates shall be permitted after the Agreement Date (other than pursuant to the enrollment period open as of the Agreement Date, provided to Parentthat such enrollment period shall end on September 15, 2010), enter into, adopt, amend and (including an amendment iii) grants to provide for the acceleration of vesting), modify or terminate any Employee Plan in any material respect, or increase or decrease the compensation or fringe benefits of any employee or director of the Company or any of its Subsidiaries (except for normal increases of cash compensation newly hired employees issued in the ordinary course of business consistent in amount with past practice or guidelines established prior to any current or future employees below the rank negotiations of Vice President or whose base salary does not exceed $200,000 per annum)the transactions contemplated hereby, pay any bonus or special remuneration (whether in cashand with respect to other terms, equity or otherwise) to any employeeincluding vesting, consultant, independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Companypractice), or pay any benefit not required by any Employee Plan as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Plan;
(hc) forgive any Loans amend, authorize or propose to any employees, officers amend its certificate of incorporation or directors of the Company by-laws (or any of its Subsidiaries, or any of their respective Affiliatessimilar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) make any deposits by merging or contributions consolidating with, purchasing a substantial equity interest in or a substantial portion of cash the assets of, making an investment in or other property to, loan or take any other action capital contribution to fund, or in any other way secure the payment of compensation manner, any corporation, partnership, association or benefits under the Employee Plans other business organization or Contracts subject to the Employee Plans, other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts subject to the Employee Plans in effect as of the date hereof;
(j) enter into, amend, or extend any Collective Bargaining Agreement or similar Contract;
(i) acquire, lease (as lessee) or license (as licensee) any property or assets with a fair market value in excess of $5,000,000 in the aggregate per fiscal quarterdivision thereof, except transactions required pursuant to existing Contracts as in effect on for loans, advances, contributions or investments between or among the date hereof; Company and any direct or indirect wholly owned Subsidiaries or (ii) sellany assets that are otherwise material to the Company and its Subsidiaries, lease (as lessor), license (as licensor) or dispose of any property or assets with a net book value in excess of $100,000 in any individual transaction, except (A) transactions required pursuant to existing Contracts as in effect on the date hereof or (B) transactions other than in the ordinary course of business consistent with past practice;
(le) except as may be required as a result directly or indirectly sell, lease, license, sell and leaseback, abandon, or otherwise dispose of a change (other than by way of an action contemplated by clause (f) below) in applicable Laws whole or in GAAP, make any change in part any of its material properties, assets or rights or any interest therein, except (i) the accounting principles non-exclusive licenses under Intellectual Property Rights in the ordinary course of business, (ii) sales of Company Products or practices inventory in the ordinary course of business, and (iii) disposition of equipment and property no longer used by itin the operation of business;
(f) directly or indirectly mortgage or otherwise subject to any Lien in whole or in part any of its material properties, assets or rights or any interest therein;
(g) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(h) (i) make incur, create, assume or change otherwise become liable for, any Tax election thatindebtedness for borrowed money, individually any obligations under conditional or in the aggregateinstallment sale Contracts or other retention Contracts relating to purchased property, would be reasonably expected any capital lease obligations or any guarantee or any such indebtedness of any other Person, issue or sell any debt securities, options, warrants, calls or other rights to adversely affect in acquire any material respect the Tax liability or Tax attributes debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of any other Person, enter into any “keepwell” or other agreement to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing except accounts payable to trade creditors (collectively, “Indebtedness”), or amend, modify or refinance any Indebtedness or (ii) change except for advances to employees for travel and business expenses in the ordinary course of business, make any loans, advances or capital contributions to, or investments in, any other Person, other than the Company or any direct or indirect wholly owned Subsidiary of the Company;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto in excess of $250,000, in the aggregate, except those provided for in the capital expenditure budget set forth in Section 6.2(i) of the Company Disclosure Letter;
(j) (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), in excess of $250,000, in the aggregate, other than the payment, discharge or satisfaction in the ordinary course of business or as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of the Company included in the Company SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Tax accounting method, Indebtedness or (iii) waive, release, grant or transfer any right of material value;
(k) compromise, settle or agree to settle any Action (including any Action relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages in an amount not, individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, the Company;
(l) change its financial or tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP, Regulation S-X promulgated under the Exchange Act or applicable Law;
(m) settle or compromise any material U.S. federalliability for Taxes, stateamend any material Tax Return, local or non-U.S. Tax liability or (iv) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes; (n) enter into any Company Intellectual Property Agreement material Contract with or amend request any Company Intellectual Property Agreements material ruling from any Governmental Entity relating to Taxes, make, change or grant revoke any release material Tax election, change any method of accounting for Tax purposes, take any material position on a Tax Return inconsistent with a position taken on a Tax Return previously filed, take any other action to materially impair (other than through actual utilization or relinquishment of any rights under any Company Intellectual Property Agreements, except (i) to customers and (ii) non-exclusive in-bound licenses for commercially available technology, in each case in the ordinary course of business consistent with past practice) any tax asset reflected in the Company SEC Documents filed most recently prior to the date hereof, extend or waive any statute of limitations with respect to Taxes, or surrender any claim for a material refund of Taxes;
(n) change its fiscal year;
(i) grant any current or former director, officer, employee or independent contractor any increase in compensation, bonus or other benefits, or any such grant of any type of compensation or benefits to any current or former director, officer, employee or independent contractor not previously receiving or entitled to receive such type of compensation or benefit, or pay any bonus of any kind or amount to any current or former director, officer, employee or independent contractor (other than increases and grants of compensation or benefits and payments of bonuses, in each case, in the ordinary course of business, that do not exceed $500,000 in the aggregate), (ii) grant or pay to any current or former director, officer, employee or independent contractor any severance, change in control or termination pay, or modifications thereto or increases therein, (iii) pay any benefit or grant or amend any award (including in respect of stock options, stock appreciation rights, performance units, restricted stock or other stock-based or stock-related awards or the removal or modification of any restrictions in any Company Plan or awards made thereunder) except (1) as required to comply with any applicable Law or any Company Plan in effect as of the date hereof, (2) the issuance of Company Shares upon the exercise of Company Options outstanding on September 9, 2010 in accordance with their terms as in effect on such date, (3) the issuance of Company Shares pursuant to the ESPP with respect to employees enrolled in the ESPP as of the Agreement Date (other than pursuant to the enrollment period open as of the Agreement Date, provided that such enrollment period shall end on September 15, 2010), and (4) grants to newly hired employees issued in the ordinary course of business), (iv) adopt or enter into any collective bargaining agreement or other labor union contract, (v) take any action to accelerate the vesting or payment of any compensation or benefit under any Company Plan or other Contract except as required by any Company Plan in effect as of the date hereof or (vi) adopt any new employee benefit plan or arrangement or amend, modify or terminate any existing Company Plan, in each case for the benefit of any current or former director, officer, employee or independent contractor, other than as required by applicable Law or by any Company Plan in effect as of the date hereof;
(p) fail to use commercially reasonable efforts to keep in force insurance policies or replacement or revised provisions regarding insurance coverage with respect to material assets, operations and activities of the Company and its Subsidiaries as currently in effect;
(q) renew or enter into any non-compete, exclusivity or similar agreement that would restrict or limit, in any material respect, the Company or any of its Subsidiaries from engaging or competing in any line of business or geographic area;
(r) enter into any new lease of real property or amend the terms of any existing lease of real property, other than in the ordinary course of business;
(s) sell, lease, license, encumber or otherwise dispose of any properties, assets or any shares or other interests in any Subsidiary except (i) the non-exclusive licenses under Intellectual Property Rights in the ordinary course of business, (ii) sales of Company Products or inventory in the ordinary course of business and (iii) disposition of immaterial equipment and property no longer used in the operation of business;
(t) (i) grant any exclusive rights with respect to any Owned Company IP or divest any Owned Company IP, or (ii) modify Company’s standard warranty terms for its products or services or amend or modify any product or service warranties in effect as of the date hereof in any material manner that is adverse to Company or any of its Subsidiaries, if the applicable warranty terms or warranty, as so amended or modified, differs materially from the warranty provisions embedded in the agreements contained in the folders named “04.01.05 Customer Agmts ($2MM or above)”, “04.01.05 New Customer Agmts” or “04.01.11 Customer Agmts on Customer Paper ($2mm or above)” of the electronic data room maintained by Fenwick & West LLP (as long as such agreements were available in the electronic data room before 5:00 p.m. (Pacific time) on September 8, 2010);
(u) enter into any agreement or commitment the effect of which would be to grant to a third party following the Merger any actual or potential right of license to any Intellectual Property Rights owned by Parent or any of its Subsidiaries (other than the Surviving Corporation and its Subsidiaries); or
(v) authorize any of, or commit, resolve or agree to take any of, the foregoing actions. Notwithstanding the foregoing, nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company or its Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective businesses, assets and operations.
Appears in 2 contracts
Samples: Merger Agreement (Hewlett Packard Co), Merger Agreement (ArcSight Inc)
Negative Obligations of the Company. Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 6.1 or Section 6.2 5.2 of the Company Disclosure Schedule, Schedule or (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent), or (iv) as approved in advance by Parent in writingwriting (which approval will not be unreasonably withheld or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) Article VIII and the Effective Appointment Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(a) amend, or propose to adopt any amendments to, amend its certificate of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for the (i) the issuance and sale of Company Shares pursuant to Company Options or other equity awards outstanding on the date of this Agreement or (ii) the grant (in one grant or a series of grants) of Company Options (but not the issuance of shares of Company Restricted Stock or the grant of Restricted Stock Units) with respect to not more than 1,500 shares of Company Common Stock pursuant to Company Stock Awards outstanding prior to the date hereof, (ii) the issuance of shares pursuant to the Company ESPP any employee and (iii) Company Restricted Stock Units to purchase up to not more than an aggregate of 250,000 25,000 shares of Company Common Stock granted to all employees, with each grant at an exercise price equal to the fair market value of the Company Common Stock as of the date of grant, solely to employees of the Company hired after the date of this Agreement in the ordinary course of business after consistent in amounts with past practice and with terms and conditions consistent with the date terms of this Agreementthe Company Option Plans (including with respect to vesting and acceleration);
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities; provided, except to however, that nothing in this clause (c) shall prohibit (i) tax withholding and exercise price settlement upon the extent that such acquisition exercise of Company Options or redemption is the lapse of the risk of forfeiture under Company Restricted Stock outstanding on the date of this Agreement, or (ii) repurchases of Company Restricted Stock in connection with the termination of the services relationship pursuant to written Contracts in effect on the terms date of any Employee Plan (as then in effect) or any agreement subject to any such Employee Planthis Agreement;
(d) other than cash dividends (which do not result in, or distributions give rise to, a material Tax liability to the Company or any of its Subsidiaries) made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stockSubsidiaries , split, combine or reclassify any shares of capital stockstock of the Company or its Subsidiaries, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stockstock of the Company or its Subsidiaries, or make any other actual, constructive or deemed distribution in respect of the shares of capital stockstock of the Company or its Subsidiaries;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its SubsidiariesSubsidiaries (other than the transactions contemplated hereby, including the Offer and the Merger);
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money debt or issue any debt securities, except for loans or advances to or from direct or indirect wholly-owned Subsidiaries, securities (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person except for travel advances made in the ordinary course of business consistent with past practice, make any loans or advances practice to employees of the Company or any of its Subsidiaries, Subsidiaries or (iv) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted LiensEncumbrances), except in each case for (A) thereuponshort-term debt incurred to fund operations of the business in the ordinary course of business consistent with past practice, (B) loans or advances to direct or indirect wholly-owned Subsidiaries and (C) replacement letters of credit entered into in the ordinary course of business consistent with past practice containing substantially the same material terms (including the same beneficiary and the same letter of credit amount) as the letter of credit for which it replaces;
(g) except as may be required by applicable Law or the terms of any Employee Plan, including the Company 2009 Executive Bonus Plan, as in effect on the date hereof (copies of which have been provided to Parent)Legal Requirements, enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan bonus, profit sharing, compensation, severance, termination, option, restricted stock, restricted stock unit, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund, policy or other arrangement for the compensation, benefit or welfare of any director, officer or employee in any material respect, manner or increase or decrease in any manner the compensation or fringe benefits of any employee director, officer or director of the Company or any of its Subsidiaries (except for normal increases of cash compensation in the ordinary course of business consistent with past practice to any current or future employees below the rank of Vice President or whose base salary does not exceed $200,000 per annum)employee, pay any special bonus or special remuneration (whether in cash, equity or otherwise) to any director, officer or employee, consultant, independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan plan or arrangement as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Planhereof;
(h) forgive any Loans loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective AffiliatesAffiliates (other than loans, advances or capital contributions to directly or indirectly wholly-owned Subsidiaries);
(i) make any deposits or contributions of cash or other property to, to or take any other action to fund, fund or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts agreements subject to the Employee Plans, Plans or any other Contract of the Company other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts agreements subject to the Employee Plans in effect as of the date hereof;
(j) enter into, amend, or extend any Collective Bargaining Agreement or similar ContractAgreement;
(ik) acquire, lease (as lessee) or license (as licensee) any property or assets with a fair market value in excess of $5,000,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as in effect on the date hereof; or (ii) sell, lease (as lessor)lease, license (as licensor) or dispose of any property or tangible assets with a net book value in excess of $100,000 in any individual transactionsingle transaction or series of related transactions, except either (Ai) transactions required pursuant to existing Contracts as which are not material to the Company, individually or in effect on the date hereof aggregate or (Bii) transactions the license of Company Products in the ordinary course of business consistent with past practicepractice on a non-exclusive basis;
(l) except as may be required as a result of a change in applicable Laws Legal Requirements or in GAAP, make any change in any of the accounting principles or practices used by it;
(m) (i) make or change any material Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its Subsidiarieselection, (ii) change file any material income Tax accounting methodReturn or any amended Tax Return, (iii) settle or compromise any material U.S. federalTax liability, state, local (iv) adopt or non-U.S. change any Tax liability accounting method or (ivv) consent to any extension or waiver of any limitation period with respect to any material claim or assessment for material Taxes; ;
(n) enter into any a Company Intellectual Property IP Agreement (except for the grants of non-exclusive licenses with respect to Company IP in the ordinary course of business consistent with past practice) or amend any Company Intellectual Property Agreements IP Agreement (except where such amendment is solely the grant of non-exclusive licenses with respect to Company IP in the ordinary course of business consistent with past practice) or grant any release or relinquishment of any rights under any Company Intellectual Property Agreements, except IP Agreement;
(i) to customers and enter into any Lease (whether as a lessor, sublessor, lessee or sublessee) or (ii) materially modify, amend or exercise any material right to renew any Lease or waive term or condition thereof or grant any consents thereunder; grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment or charge affecting any real property or any part thereof;
(p) (i) sell, lease, license or transfer to any person or entity any rights to any Company Intellectual Property Rights (except for non-exclusive ingrants in the ordinary course of business consistent with past practices), (ii) purchase or license any Intellectual Property Rights or enter into any Contract or modify any existing Contract with respect to the Intellectual Property Rights of any person or entity (except for (A) Shrink-bound licenses for commercially available technologyWrap Software or (B) Approved Freeware that is used by the Company or its Subsidiaries but not incorporated into or used in connection with any Company Products; (iii) enter into any Contract or modify any existing Contract with respect to the development of any Intellectual Property Rights with a third party, or (iv) enter into or amend any Contract pursuant to which any other party is granted marketing, distribution, development, manufacturing or similar rights of any type or scope with respect to any Company Products or Technology of the Company;
(q) (i) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, (ii) enter into any Contract (other than in each case the ordinary course of business) which would reasonably be expected to result in a Company Material Adverse Effect or (iii) authorize, incur or commit to incur any new capital expenditures with obligations to the Company or any of its Subsidiaries in excess of $100,000 on an individual basis or $500,000 in the aggregate in any consecutive three-month period; provided, however, that nothing in this clause (q) shall prohibit the Company from making any capital expenditure required pursuant to any Contract to which the Company is a party on the date hereof and which is set forth in the Company Disclosure Schedule;
(r) settle or compromise any pending or threatened Legal Proceeding (including any litigation commenced after the date hereof against the Company or any of its directors by any Company Stockholders (on their own behalf or on behalf of the Company) relating to this Agreement or the transactions contemplated hereby (including the Offer and the Merger)) or pay, discharge or satisfy or agree to pay, discharge or satisfy any Liability, other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings and Liabilities:
(i) that are reflected or reserved against in full in the Balance Sheet or incurred since June 30, 2007 in the ordinary course of business consistent with past practice; or (ii) that do not (A) include any obligation (other than the payment of money) to be performed by the Company or its Subsidiaries following the Effective Time that is, individually or in the aggregate, material to the Company, (B) involve payments by the Company or any of its Subsidiaries that exceed, individually or in the aggregate, $250,000, or (C) contain an admission of liability by the Company or its Subsidiaries;
(s) except as required by applicable Legal Requirements or GAAP, revalue in any material respect any of its properties or assets including writing-off notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(t) except as required by applicable Legal Requirements, convene any regular or special meeting (or any adjournment or postponement thereof) of the Company Stockholders other than the Company Stockholders’ Meeting;
(u) hire any employee or contractor without requiring them to execute the Company’s applicable standard form of confidentiality and inventions assignment agreement, other than contractors who are not reasonably expected to have access to any confidential information of the Company or any of its Subsidiaries;
(i) waive any transfer restriction contained in any agreement evidencing any outstanding Company Restricted Stock or (ii) otherwise take any action to permit any holder of Company Restricted Stock to tender any shares of Company Restricted Stock in the Offer; or
(w) enter into a Contract to do any of the foregoing or knowingly take or fail to take any action (A) which causes or results, or is reasonably likely to cause or result, in any of the conditions to the Offer set forth in Annex A hereto not being satisfied or in any of the representations and warranties of the Company set forth in this Agreement to be inaccurate as of the time of such action or the expiration date of the Offer, or (B) that would materially impair the ability of the Company to consummate the transactions contemplated hereby (including the Offer and the Merger) in accordance with the terms hereof or materially delay such consummation).
Appears in 2 contracts
Samples: Merger Agreement (Autodesk Inc), Merger Agreement (Moldflow Corp)
Negative Obligations of the Company. Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 6.1 or Section 6.2 of the Company Disclosure Schedulerequired by Law, (iii) as required by applicable Law or set forth in Section 5.2 of the terms of any Employee Plan (copies of which have been provided to Parent)Company Disclosure Letter, or (iv) as approved in advance by Parent in writingwriting (which approval shall not be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) 9.1 and the Effective Time, the Company shall not do any of the following not, and shall not permit cause its Subsidiaries to not, do any of the following:
(a) amend, or propose to adopt any amendments to, to or amend its certificate certificates of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, promise to issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, other equity-based commitments, subscriptions, rights to purchase or otherwise) any Company Securities of its securities or any Subsidiary Securitiessecurities of any of its Subsidiaries, except for (i) the issuance and sale of shares of Company Common Stock pursuant to the Company Stock Awards ESPP (in accordance with Section 2.7(d)(iii)) or the exercise or settlement of stock options, restricted stock units or other equity compensation awards outstanding prior to the date hereof, (ii) the issuance in each case, in accordance with terms as of shares pursuant to the Company ESPP and (iii) Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares of Company Common Stock granted in the ordinary course of business after the date of this Agreementhereof;
(c) acquire acquire, repurchase or redeem, directly or indirectly, or amend amend, any Company Securities of its securities or Subsidiary Securities, except to the extent that such acquisition or redemption is pursuant to the terms any securities of any Employee Plan (as then in effect) or any agreement subject to any such Employee Planof its Subsidiaries;
(d) other than cash dividends or distributions made by any of its direct or indirect wholly-owned Subsidiary of the Company Subsidiaries to the Company themselves or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company themselves or any of its SubsidiariesSubsidiaries (other than the transactions contemplated hereby);
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money debt or issue any debt securities, except for loans or advances to or from direct or indirect wholly-owned SubsidiariesSubsidiaries in the ordinary course of business consistent with past practices or advances to employees and consultants for travel and other business related expenses in the ordinary course of business, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the any material obligations of any other Person except with respect to obligations of any of its direct or indirect wholly-owned Subsidiaries of the CompanySubsidiaries, (iii) except for advances made in the ordinary course of business consistent with past practice, make any loans or advances to employees of the Company or any of its Subsidiaries, (iv) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect a wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; Subsidiary) or (viv) mortgage or pledge any of its their or its Subsidiaries Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien (other than thereupon, except for Permitted Liens) thereupon;
(g) except as may be required by applicable Law or the terms of any Employee Plan, including the Company 2009 Executive Bonus Plan, as in effect to satisfy contractual obligations existing on the date hereof under any Company Employee Plan set forth on Section 3.15(a) of the Company Disclosure Letter or any Company Material Contract set forth on Section 3.13(a)(ii) of the Company Disclosure Letter; (copies of which have been provided to Parent), i) enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan bonus, profit sharing, compensation, severance, termination, option, restricted stock, restricted stock unit, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance, change of control, or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any consultant, director, officer or employee in any manner or increase in any material respect, or increase or decrease manner the compensation or fringe benefits of any consultant, director, officer or employee of the Company or director any Subsidiary of the Company, or (ii) pay any special bonus, remuneration, benefit or other payment to any director, officer or employee of the Company or any Subsidiary of the Company not required by any plan or arrangement as in effect as of the date hereof that are set forth on Section 3.15 of the Company Disclosure Letter; provided, however, that this paragraph (g) shall not prevent the Company or any of its Subsidiaries from entering into employment agreements, offer letters or retention agreements with non-officer employees in the ordinary course of business consistent with past practices and which are terminable at-will and without any severance, change of control or similar obligations of the Company, its Subsidiaries (except for normal increases or, after the Closing, Parent or its Subsidiaries, in their capacity, after giving effect to the Merger, as Affiliates of cash compensation the Company);
(h) promote any officer or employee of the Company or any Subsidiary of the Company, other than in the ordinary course of business consistent with past practice or hire any employee with a title of vice president or above or terminate the employment of any employee other than for cause;
(i) forgive any loans to any current or future employees below the rank of Vice President or whose base salary does not exceed $200,000 per annum)its employees, pay any bonus or special remuneration (whether in cash, equity or otherwise) to any employee, consultant, independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Plan;
(h) forgive any Loans to any employees, officers or directors of the Company or any of its Subsidiaries, Subsidiaries or any of their respective Affiliates;
(ij) make any deposits or contributions of cash or other property to, or take any other action to fund, fund or in any other way secure the payment of compensation or benefits under the any Company Employee Plans or Contracts any agreements subject to the Company Employee PlansPlans or any other Contract of the Company, other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts subject to the such Company Employee Plans in effect as of the date hereofhereof or as required by applicable Law, and other than discretionary matching contributions made pursuant to the Company 401(k) Plan as in effect on September 30, 2014 in the ordinary course of business consistent with, and at levels that do not exceed, past practice;
(jk) enter into, amend, or extend any Collective Bargaining Agreement or similar Contractcollective bargaining agreement;
(il) acquire, lease (as lessee) sell, lease, transfer, or license (as licensee) dispose of any material property or assets with a fair market value assets, or any portion thereof or interest therein, in excess any single transaction or series of $5,000,000 in the aggregate per fiscal quarterrelated transactions (by merger, consolidation, restructuring, recapitalization, reorganization, share purchase, asset purchase or similar transaction), except for (i) transactions required pursuant to existing Contracts as in effect set forth on Section 3.13(a) of the date hereof; or Company Disclosure Letter, (ii) sell, lease (as lessor), license (as licensor) or dispose acquisitions of any property or operating assets with a net book value in excess of $100,000 in any individual transaction, except (A) transactions required pursuant to existing Contracts as in effect on the date hereof or (B) transactions in the ordinary course of business consistent with past practice, (iii) sales of inventory or products in the ordinary course of business, (iv) acquisitions not involving the acquisition of a business or Person that are not in excess of $150,000, individually, or $350,000, in the aggregate or (iv) dispositions of obsolete, surplus or worn out assets that are no longer used or useful in the conduct of the business of the Company or its Subsidiaries;
(lm) except as may be required as a result of a change by changes in applicable Laws or in GAAPGAAP after the date hereof, make any change in any of the accounting principles or practices used by iteither of them;
(n) make or change any material Tax election, adopt or change any Tax accounting method in respect of a material Tax, settle or compromise any material Tax liability or assessment by any Governmental Authority, change any material Tax accounting method or surrender any right to claim a material Tax refund, or consent to the extension or waiver of the limitations period applicable to a material Tax claim or assessment;
(i) acquire or license any material Intellectual Property Right from any third party (except for commercially available Intellectual Property Rights licensed from third parties on a non-exclusive basis for use in connection with the Company’s research, development and product commercialization activities in the ordinary course of business and consistent with past practices), (ii) grant any license or other right or forbearance (including any right or covenant of non-assertion) with respect to any material Company Intellectual Property other than non-exclusive licenses granted in the ordinary course of business consistent with past practice that do not materially impair, restrict, limit, or otherwise adversely affect the Company or any of its Subsidiaries, (iii) grant any license or other right or forbearance (including any right or covenant of non-assertion) with respect to any Intellectual Property Right owned by or licensed to Parent or any of its Subsidiaries, (iv) divest any material Company Intellectual Property, or (v) except in the ordinary course of business consistent with past practice, modify any standard warranty term for any Company Product in any material respect, or materially amend or modify any product or service warranty;
(p) enter into, amend in any material respect, or terminate any Contract that would be a Company Material Contract or amend in any material respect any Company Material Contract or waive or grant any release or relinquishment of any material rights under any Company Material Contract;
(q) (i) enter into any lease or sublease of real property, (ii) materially modify, amend or exercise any right to renew any lease or sublease of real property, or waive any term or condition thereof or grant any consents thereunder; (iii) grant or otherwise create or consent to the creation of any material easement, covenant, restriction, assessment or charge affecting any leased real property or other real property, or any interest therein or part thereof; or (iv) make any material changes in the construction of any such property, in each case other than in the ordinary course of business consistent with past practice;
(r) [Intentionally Omitted];
(s) acquire (by merger, consolidation or change acquisition of equity or assets or otherwise) any Tax election other Person, including any securities of such Person or all or substantially all of such Person’s assets;
(t) authorize, incur or commit to incur any new capital expenditure(s) that, individually or in the aggregate, would be reasonably expected exceed $2,000,000;
(u) commence any Action (except in connection with a breach of this Agreement or any other agreements contemplated hereby or demand notices that do not threaten litigation to adversely affect enforce any rights under a Company Material Contract or material purchase orders) or settle or compromise any pending or threatened Action, other than the settlement, compromise, payment, discharge or satisfaction of Actions (i) reflected or reserved against in full on the Company Balance Sheet and involving only the payment of money up to the amount reflected or reserved against on the Company Balance Sheet and without any material respect admission of wrongdoing or culpability by the Tax liability Company or Tax attributes any Subsidiary of the Company and without any other obligations of the Company or any of its Subsidiaries, (ii) change fully paid for by the insurance providers under the Company’s existing insurance policies without any material Tax accounting methodadmission of wrongdoing or culpability by the Company or any Subsidiary of the Company and without any other obligations of the Company or any of its Subsidiaries, (iii) settle or compromise any material U.S. federal, state, local or non-U.S. Tax liability or (iv) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes; (n) enter into any Company Intellectual Property Agreement or amend any Company Intellectual Property Agreements or grant any release or relinquishment of any rights under any Company Intellectual Property Agreements, except (i) to customers and (ii) nonrelating to a breach of this Agreement or any other agreements contemplated hereby;
(v) except as required by GAAP, revalue in any material respect any of its properties or assets, including writing-exclusive in-bound licenses for commercially available technology, in each case off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
(w) except as required by applicable Law, convene any regular or special meeting of its stockholders (or any postponement or adjournment thereof) or propose any matters for consideration and vote of its stockholders at the Company Stockholder Meeting other than this Agreement and the Merger (including the Requisite Parachute Vote);
(x) except as required by applicable Law, terminate or modify or waive in any material respect any right under (i) any material Company Permit or (ii) any non-material Company Permit (other than in the ordinary course of business consistent with past practice);
(y) waive any of its rights under any material confidentiality, non-disclosure, employee non-solicitation and other similar agreements to which it is a party;
(z) adopt or otherwise implement any stockholder rights plan, “poison pill” or other comparable agreement or plan designed to have the effect of delaying, deferring or discouraging Parent, Merger Sub One or Merger Sub Two from consummating the transactions contemplated by this Agreement; (aa) authorize any of, or agree or commit to take, any of foregoing actions.
Appears in 2 contracts
Samples: Merger Agreement (Entropic Communications Inc), Merger Agreement (Maxlinear Inc)
Negative Obligations of the Company. Except (ix) as expressly contemplated required under the terms of this Agreement or permitted as required by this Agreementapplicable Law, (iiy) as set forth in Section 6.1 or Section 6.2 5.4 of the Company Disclosure Schedule, (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent), Schedule or (ivz) as approved in advance by Parent in writingwriting (such approval not to be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees of Parent constitute at least a majority of the Company Board pursuant to Section 2.4(a) and the Effective TimePre-Closing Period, the Company Acquired Corporations shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(a) amend(i) establish a record date for, declare, set aside or pay any dividends on, or propose make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, (ii) except as contemplated in connection with exercise or vesting of any Company Options, Company RSUs, Company LTPP Units, Company DSUs or Company Warrants in accordance with its terms, purchase, redeem or otherwise acquire shares of capital stock or other equity interests of the Acquired Corporations or any options, warrants, or rights to adopt acquire any amendments tosuch shares or other equity interests or (iii) split, combine, reclassify or otherwise amend the terms of any of its certificate capital stock or other equity interests or authorize the issuance of incorporation any other securities in respect of, in lieu of or bylaws in substitution for equity, or comparable organizational documentsrepurchase any of its equity interests;
(b) authorize for issuance, issue, sell, deliver deliver, grant, pledge, transfer, encumber or agree or commit to issue, sell sell, deliver, deliver, grant, pledge, transfer or deliver encumber (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities Shares, any securities of any Subsidiary or any Subsidiary Securitiesinstrument convertible into or exchangeable for any capital stock, equity interest or other security of the Acquired Corporations, except for (i) the issuance and sale of shares of Company Common Stock Shares pursuant to the exercise or settlement of the Company Stock Equity Awards or Company Warrants outstanding prior to the date hereofAgreement Date;
(c) adopt, amend, authorize or propose to amend its certificate of incorporation or bylaws (or similar charter or organizational documents);
(d) create or form any Subsidiary, acquire any equity interest in any other Person or enter into any joint venture, partnership, limited liability corporation or similar arrangement;
(e) acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof, except any such transactions that are for cash consideration not in excess of $1,000,000 individually, or $5,000,000 for all such transactions by the Acquired Corporations in the aggregate, and except for loans, advances, contributions or investments between or among the Company and any direct or indirect wholly owned Subsidiaries or (ii) the issuance of shares pursuant any assets that are otherwise material to the Company ESPP Acquired Corporations, in each case, outside of the ordinary course of business;
(f) sell, lease, license, sublicense, sell and leaseback, abandon, transfer, assign, exchange, mortgage, pledge or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights or any interest therein, except (iiii) Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares sales of Company Common Stock granted Products in the ordinary course of business, (ii) non-exclusive licenses in the ordinary course of business, (iii) disposition of immaterial equipment and property no longer used in the operation of business after and (iv) Permitted Liens incurred in the date ordinary course of this Agreementbusiness;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities, except to the extent that such acquisition or redemption is pursuant to the terms of any Employee Plan (as then in effect) or any agreement subject to any such Employee Plan;
(d) other than dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(eg) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its SubsidiariesAcquired Corporations, except for the Transactions;
(fh) (i) incur or assume any long-term or short-term indebtedness for borrowed money or issue any debt securitiesincur, except for loans or advances to or from direct or indirect wholly-owned Subsidiaries, (ii) assume, guarantee, endorse guarantee or otherwise become liable for, any Indebtedness, or responsible amend, modify or refinance any Indebtedness, or (whether directlyii) make any loans, contingently advances or otherwise) for the obligations of capital contributions to, or investments in, or enter into transactions that would create Indebtedness of, any other Person except with respect to obligations of Person, in each case, other than the Company or any direct or indirect wholly-wholly owned Subsidiaries Subsidiary of the Company, (iii) except for advances made Company or otherwise in the ordinary course of business consistent business;
(i) incur any capital expenditure or authorization or commitment with past practicerespect thereto (except that the Acquired Corporations may incur any capital expenditure, make authorization or commitment that does not exceed (A) $750,000 individually and $7,500,000 in the aggregate during any loans fiscal quarter or advances (B) the thresholds in a capital expense budget made available to employees Parent for such capital expenditure, authorization or commitment);
(j) (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), in excess of $400,000 individually or $600,000 in the aggregate, other than the payment, discharge or satisfaction of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of the Company or any of its Subsidiaries, (iv) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity included in the ordinary course Company SEC Documents (for amounts not in excess of business consistent with past practice), whether by merger, consolidation, asset purchase such reserves) or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries assets, tangible or intangible, or create or suffer to exist any Lien (other than Permitted Liens) thereupon;
(g) except as may be required by applicable Law or the terms of any Employee Plan, including the Company 2009 Executive Bonus Plan, as in effect on incurred since the date hereof (copies of which have been provided to Parent), enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan in any material respect, or increase or decrease the compensation or fringe benefits of any employee or director of the Company or any of its Subsidiaries (except for normal increases of cash compensation such financial statements in the ordinary course of business consistent with past practice to any current or future employees below incurred in connection with this Agreement and the rank of Vice President or whose base salary does not exceed $200,000 per annumTransactions (including legal and financial advisors fees and expenses), pay any bonus or special remuneration (whether in cash, equity or otherwise) to any employee, consultant, independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Plan;
(h) forgive any Loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective Affiliates;
(i) make any deposits or contributions of cash or other property to, or take any other action to fund, or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts subject to the Employee Plans, other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts subject to the Employee Plans in effect as of the date hereof;
(j) enter into, amend, or extend any Collective Bargaining Agreement or similar Contract;
(i) acquire, lease (as lessee) or license (as licensee) any property or assets with a fair market value in excess of $5,000,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as in effect on the date hereof; or (ii) sellcancel any material Indebtedness (iii) waive, lease release, grant or transfer any right of material value or (as lessor)iv) commence any Action, license (as licensor) or dispose of any property or assets except in connection with a net book value in excess breach of $100,000 in this Agreement or any individual transaction, except (A) transactions required pursuant to existing Contracts as in effect on the date hereof other agreements contemplated hereby or (B) transactions in the ordinary course of business consistent with past practice;
(k) compromise, settle or release any Action or threatened Action (including any Action relating to this Agreement or the Transactions) other than compromises, settlements or releases that involve only the payment of money damages in an amount not greater than $600,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, the Acquired Corporations; provided that (i) the settlement of any Action or claim brought by the stockholders of the Acquired Corporations against the Acquired Corporations and/or any of their directors relating to the Transactions or any breach of this Agreement or any other agreements contemplated hereby shall be subject to Section 2.10 or Section 6.6, as applicable, and (ii) this Section 5.4(k) shall not permit the Acquired Corporations to settle, release, waive or compromise any Action or claim that (A) provides for the grant to any third party of a license or other grant of rights to (or covenant not to xxx with respect to) any Intellectual Property Rights or the splitting of any revenues in respect of any Company Product or (B) would impose any restrictions or changes on the business or operations of, or the admission of wrongdoing by, the Acquired Corporations;
(l) change its financial accounting methods, accounting periods, principles or practices, except insofar as may have been required by a change in GAAP, Regulation S-X promulgated under the Exchange Act or applicable Law;
(m) revalue any of its assets, including without limitation writing down the value of inventory or writing off notes or accounts receivable other than in the ordinary course of business or as required by GAAP consistently applied;
(n) (i) settle, compromise or enter into any closing agreement or advance pricing agreement with respect to any liability for material Taxes, (ii) amend any material Tax Return, (iii) enter into any Contract with, or request any ruling from, any Governmental Entity, in each case relating to material Taxes, (iv) make, change, rescind or revoke any material Tax election, (v) change any Tax accounting period for purposes of a material Tax or material method of Tax accounting, (vi) take any material position on a Tax Return inconsistent with a position taken on a Tax Return previously filed, (vii) extend or waive any statute of limitations with respect to a material Tax, (viii) surrender any claim for a material refund of Taxes or (ix) fail to timely file correct and complete any material Tax Returns as required by applicable Tax Law;
(o) change its fiscal year;
(p) except (i) as may be required as a result by the terms of a change in applicable Laws or in GAAP, make any change in any of the accounting principles or practices used by it;
(iCompany Employee Plan listed on Section 3.13(a) make or change any Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its SubsidiariesDisclosure Schedule, (ii) change any material Tax accounting methodrequired pursuant to the terms of this Agreement, or (iii) settle required by applicable Law, (A) grant any Company Associate any equity or compromise any material U.S. federalequity-based compensation, state(B) materially increase the compensation, local bonus or non-U.S. Tax liability or (iv) consent to any extension or waiver other benefits of any limitation period with respect to any claim or assessment for material Taxes; (n) enter into any Company Intellectual Property Agreement or amend any Company Intellectual Property Agreements or grant any release or relinquishment of any rights under any Company Intellectual Property Agreements, except (i) to customers and (ii) non-exclusive in-bound licenses for commercially available technology, in each case in Associate outside the ordinary course of business consistent with past practicepractice during the 12 months prior to the date of the Agreement, (C) adopt or enter into any collective bargaining agreement or other similar labor union contract, (D) take any action to accelerate the vesting or payment of any material compensation or material benefit under any Company Employee Plan, (E) establish or adopt any new material Company Employee Plan, or amend or modify any material Company Employee Plan;
(i) hire any employee or engage any independent consultant or contractor (who is a natural person), other than hiring or engaging any non-executive officer employee or independent consultant or contractor (who is a natural person) in the ordinary course of business with an annual base salary or other compensation of less than $150,000 or (ii) hire, promote or terminate (other than for cause or in accordance with the terms of any agreement currently in effect) any Company Associate other than actions taken in the ordinary course of business with respect to any non-executive officer employee with an annual base salary of less than $150,000;
(r) reduce the amount of any insurance coverage provided by existing insurance policies;
(s) renew or enter into any non-compete, exclusivity or similar agreement that would restrict or limit, in any material respect, the Acquired Corporations from engaging or competing in any line of business or geographic area;
(t) enter into any new lease of Real Property or materially amend the terms of any existing lease of Real Property;
(u) forgive any loans to any employees, officers or directors of the Acquired Corporations, or any of their respective Affiliates or associates;
(v) (i) enter into any new line of business or (ii) start to conduct a line of business of the Acquired Corporations in a geographic area where it is not conducted as of the Agreement Date;
(w) outside of the ordinary course of business, (i) amend, modify, terminate or waive, or exercise any material right or remedy under, any Company Material Contract or (ii) enter into or become bound by, or seek to amend, terminate or waive, or exercise any material right or remedy under, any Contract which if entered into prior to the Agreement Date would have been a Company Material Contract;
(x) commence any new offering period under the ESPP;
(y) adopt or implement any stockholder rights plan or similar arrangement; or
(z) authorize any of, or commit, resolve or agree to take any of, the foregoing actions. Notwithstanding the foregoing, nothing contained in this Agreement shall give Parent or Purchaser, directly or indirectly, the right to control or direct the operations of the Acquired Corporations prior to the Acceptance Time. Prior to the Acceptance Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective businesses, assets and operations.
Appears in 2 contracts
Samples: Merger Agreement (Primo Water Corp), Merger Agreement (Cott Corp /Cn/)
Negative Obligations of the Company. Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 6.1 or Section 6.2 5.2 of the Company Disclosure Schedule, Schedule or (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent), or (iv) as approved in advance by Parent in writingwriting (which approval shall not be unreasonably withheld, delayed or conditioned), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) Article VIII hereof and the Effective Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(a) amend, or propose to adopt any amendments to, to or amend its certificate of incorporation or bylaws or comparable organizational documents; provided, however, that nothing in this paragraph (a) shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the Company or its Subsidiaries, taken as a whole;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (i) the issuance and sale of shares of Company Common Stock pursuant to Company Stock Awards Options outstanding prior to the date hereof, hereof and (ii) the issuance of shares pursuant grants to the Company ESPP and (iii) Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares newly hired employees of Company Common Stock granted Options issued in the ordinary course of business after consistent with past practice, with a per share exercise price that is no less than the then-current market price of a share of Company Common Stock and not subject to any accelerated vesting or other provision that would be triggered as a result of the consummation of the transactions contemplated hereby by this Agreement so long as the aggregate number of shares of Company Common Stock subject to such additional Company Options does not exceed the sum of (x) thirty thousand (30,000), plus (y) the number of shares of Company Common Stock subject to any Company Option (or portion thereof) outstanding as of the date hereof that is subsequently canceled, terminated or forfeited as the result of this Agreementthe voluntary or involuntary termination of employment of any employee;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities, except for repurchases, redemptions or acquisitions required by or in connection with the respective terms, as of the date hereof, of any Company Option Plans as in effect on the date of this Agreement in the ordinary course of the operations of such plan consistent with past practice and only to the extent consistent with Section 6.21; provided, however, that such acquisition or redemption is pursuant nothing in this paragraph (c) shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the terms of any Employee Plan (Company or its Subsidiaries, taken as then in effect) or any agreement subject to any such Employee Plana whole;
(d) other than cash dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock; provided, however, that nothing in this paragraph (d) shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the Company or its Subsidiaries, taken as a whole;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the transactions contemplated by this Agreement); provided, however, that nothing in this paragraph (e) shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the Company or its Subsidiaries, taken as a whole;
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money debt or issue any debt securities, except for (A) short-term debt incurred to fund operations of the business in the ordinary course of business consistent with past practice and (B) loans or advances to or from direct or indirect wholly-owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person except for travel advances made in the ordinary course of business consistent with past practice, make any loans or advances practice to employees of the Company or any of its Subsidiaries, Subsidiaries or (iv) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens) thereuponEncumbrances);
(g) except as may be required by applicable Law or the terms of any Employee Plan, including the Company 2009 Executive Bonus Plan, as in effect on the date hereof (copies of which have been provided to Parent)Legal Requirements, enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any director, officer or employee in any material respect, manner or increase or decrease in any manner the compensation or fringe benefits of any employee director, officer or director of the Company or any of its Subsidiaries (except for normal increases of cash compensation in the ordinary course of business consistent with past practice to any current or future employees below the rank of Vice President or whose base salary does not exceed $200,000 per annum)employee, pay any special bonus or special remuneration (whether in cash, equity or otherwise) to any director, officer or employee, consultant, independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan plan or arrangement as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Planhereof;
(h) forgive any Loans loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective AffiliatesAffiliates or Associates;
(i) make any deposits or contributions of cash or other property to, to or take any other action to fund, fund or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts agreements subject to the Employee Plans, Plans or any other Contract of the Company other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts agreements subject to the Employee Plans in effect as of the date hereof;
(j) enter into, amend, or extend any Collective Bargaining Agreement or similar ContractAgreement;
(ik) acquire, lease (as lessee) or license (as licensee) any property or assets with a fair market value in excess of $5,000,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as in effect on the date hereof; or (ii) sell, lease (as lessor)lease, license (as licensor) or dispose of any property or assets with a net book value in excess of $100,000 in any individual transactionsingle transaction or series of related transactions, except either (Ai) transactions required pursuant to existing Contracts as which are not material to the Company, individually or in effect on the date hereof aggregate or (Bii) transactions the sale of goods or grants of non-exclusive licenses with respect to Company IP in the ordinary course of business consistent with past practice;
(l) except as may be required as a result of a change in applicable Laws Legal Requirements or in GAAP, make any change in any of the accounting principles or practices used by it;
(i) make or change any material Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its Subsidiaries(unless required by applicable Legal Requirements), (ii) change any material Tax accounting method, (iii) settle or compromise any material U.S. federal, state, local or non-U.S. foreign income Tax liability, other than with respect to any proceeding relating to a Tax liability that (A) is in progress as of the date hereof, (B) is in an amount less than or equal to the liability or reserve that has been recorded with respect thereto on the Balance Sheet or (ivC) is in an amount less than $100,000 in the aggregate with all other such Liabilities or (iii) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes; ;
(n) enter into any Company Intellectual Property Agreement IP Licenses or amend any Company Intellectual Property Agreements IP Licenses or grant any release or relinquishment of any rights under any Company Intellectual Property Agreements, except IP Licenses;
(i) to customers and enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) or (ii) non-modify, amend or exercise any right to renew any lease or sublease of real property;
(p) grant any exclusive in-bound licenses rights with respect to any Company IP, divest any Company IP, except if such divestiture or divestures, individually or in the aggregate, are not material to the Company, or materially modify the Company’s standard warranty terms for commercially available technologyCompany Products or services or amend or modify any product or service warranty in any manner that is likely to be materially adverse to the Company or any of its Subsidiaries;
(q) (i) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, (ii) enter into any Contract other than in the ordinary course of business which would be reasonably expected to result in a Company Material Adverse Effect or (iii) authorize, incur or commit to incur any new capital expenditure(s) which individually exceed $25,000 or, in each case the aggregate, exceed $250,000; provided, however, that none of the foregoing shall limit any capital expenditure required pursuant to existing Contracts; and provided, further, that none of the foregoing shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the Company or its Subsidiaries, taken as a whole;
(r) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any claim, liability or obligation (absolute or accrued, asserted or unasserted, contingent or otherwise), other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings, claims and other Liabilities (i) reflected or reserved against in full in the Balance Sheet or incurred since April 2, 2006 in the ordinary course of business consistent with past practice or (ii) the settlement, compromise, discharge or satisfaction of which does not include any obligation (other than the payment of money) to be performed by the Company or its Subsidiaries following the Effective Time that is not, individually or in the aggregate, material to the Company;
(s) except as required by applicable Legal Requirements or GAAP, revalue in any material respect any of its properties or assets including writing-off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
(t) except as required by applicable Legal Requirements, convene any regular or special meeting (or any adjournment or postponement thereof) of the stockholders of the Company other than the Company Stockholders’ Meeting;
(u) enter into a Contract to do any of the foregoing or knowingly take any action which results or is reasonably likely to result in any of the conditions to the Merger set forth in Article VII hereof not being satisfied, or would make any of the representations or warranties of the Company contained in this Agreement untrue or incorrect in any material respect, or that would materially impair the ability of the Company to consummate the transactions contemplated hereby in accordance with the terms hereof or materially delay such consummation; or
(v) authorize, recommend, agree, make any commitment, or announce an intention to take any of the actions prohibited by this Section 5.2.
Appears in 2 contracts
Samples: Merger Agreement (Sirenza Microdevices Inc), Merger Agreement (Micro Linear Corp /Ca/)
Negative Obligations of the Company. Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 6.1 or Section 6.2 of the Company Disclosure Schedule, Schedule or (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent), or (iv) as approved in advance by Parent in writingwriting (which approval will not be unreasonably withheld or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) Article IX and the Effective Appointment Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(a) amend, or propose to adopt any amendments to, to or amend its certificate of incorporation or bylaws or comparable organizational documents; provided, however, that nothing in this paragraph (a) shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the Company or its Subsidiaries, taken as a whole;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (i) the issuance and sale of shares of Company Common Stock Shares pursuant to Company Stock Awards Options outstanding prior to the date hereofhereof and purchase rights under the Company ESPP, (ii) the issuance grants of shares pursuant to purchase rights under the Company ESPP ESPP, and (iii) grants to newly hired employees of Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares of Company Common Stock granted under the Company’s 2006 Equity Incentive Plan issued in the ordinary course of business after consistent with past practice and not subject to any accelerated vesting or other provision that would be triggered as a result of the date consummation of this Agreementthe transactions contemplated hereby (including the Offer and the Merger), so long as the aggregate number of Shares subject to such additional Company Restricted Stock does not exceed 7,500;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities; provided, except however, that nothing in this paragraph (c) shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the extent that such acquisition Company or redemption is pursuant to the terms of any Employee Plan (its Subsidiaries, taken as then in effect) or any agreement subject to any such Employee Plana whole;
(d) other than cash dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock; provided, however, that nothing in this paragraph (d) shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the Company or its Subsidiaries, taken as a whole;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the transactions contemplated hereby, including the Offer and the Merger); provided, however, that nothing in this paragraph (e) shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the Company or its Subsidiaries, taken as a whole;
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money debt or issue any debt securities, except for (A) short-term debt incurred to fund operations of the business or for cash management purposes, in each case in the ordinary course of business consistent with past practice and (B) loans or advances to or from direct or indirect wholly-owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person except for travel advances made in the ordinary course of business consistent with past practice, make any loans or advances practice to employees of the Company or any of its Subsidiaries, Subsidiaries or (iv) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens) thereuponEncumbrances);
(g) except as may be required by applicable Law or the terms of any Employee Plan, including the Company 2009 Executive Bonus Plan, as in effect on the date hereof (copies of which have been provided to Parent)Legal Requirements, enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any director, officer or employee in any material respect, manner or increase or decrease in any manner the compensation or fringe benefits of any employee director, officer or director employee, pay any special bonus or special remuneration or any benefit to any director, officer or employee, in each case that is not required by any plan or arrangement as in effect as of the date hereof; provided, however, that this paragraph (g) shall not prevent the Company or any of its Subsidiaries (except for normal increases of cash compensation from entering into at-will offer letters with new non-officer employees in the ordinary course of business consistent with past practice to any current or future employees below the rank of Vice President or whose base salary does not exceed $200,000 per annum), pay any bonus or special remuneration (whether in cash, equity or otherwise) to any employee, consultant, independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Planbusiness;
(h) forgive any Loans loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective AffiliatesAffiliates or Associates;
(i) make any deposits or contributions of cash or other property to, to or take any other action to fund, fund or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts agreements subject to the Employee Plans, Plans or any other Contract of the Company other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts agreements subject to the Employee Plans in effect as of the date hereof;
(j) enter into, amend, or extend any Collective Bargaining Agreement or similar ContractAgreement;
(ik) acquire, lease (as lessee) or license (as licensee) any property or assets with a fair market value in excess of $5,000,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as in effect on the date hereof; or (ii) sell, lease (as lessor)lease, license (as licensor) or dispose of any property or assets with a net book value in excess of $100,000 in any individual transactionsingle transaction or series of related transactions which are material to the Company, individually or in the aggregate, except either (Ai) transactions required pursuant to existing Contracts as in effect on Contracts, (ii) the date hereof sale of goods or (B) transactions grants of non-exclusive licenses with respect to Company IP in the ordinary course of business consistent with past practice, or (iii) the purchase of goods or services in the ordinary course of business consistent with the Company’s past practices;
(l) except as may be required as a result of a change in applicable Laws Legal Requirements or in GAAP, make any change in any of the accounting principles or practices used by it;
(i) make or change any material Tax election that(unless required by applicable Legal Requirements, individually or provided that in such event the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes Company shall give Parent advance written notice of the Company election or any of its Subsidiarieschange to the election and an opportunity to discuss in good faith such election or change prior thereto), (ii) change any material Tax accounting method, (iii) settle or compromise any material U.S. federalTax liability, state, local (iii) adopt or non-U.S. change any Tax liability accounting method or (iv) consent to any extension or waiver of any limitation period with respect to any material claim or assessment for material Taxes; ;
(n) enter into any a Company Intellectual Property IP Agreement or amend in any material respect any Company Intellectual Property Agreements IP Agreement or grant any release or relinquishment of any rights under any Company Intellectual Property Agreements, except (i) to customers and (ii) non-exclusive in-bound licenses for commercially available technologyIP Agreement or terminate a Company IP agreement, in each case other than in the ordinary course of business consistent with past practice;
(i) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) or (ii) modify, amend or exercise any right to renew any lease or sublease of real property or waive term or condition thereof or grant any consents thereunder; grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment or charge affecting any real property or any part thereof; commit any waste or nuisance on any such property; or make any material changes in the construction or condition of any such property;
(p) (i) grant any rights or licenses with respect to any Company IP (except as provided in Section 6.2(k)), (ii) sell, lease or otherwise divest any rights in any Company IP, (iii) purchase or license (except as provided Section 6.2(k)) any Intellectual Property Rights or enter into any agreement or modify any existing agreement with respect to the Intellectual Property Rights of any person or entity, (iv) enter into any agreement or modify any existing agreement with respect to the development of any Intellectual Property or Intellectual Property Rights with a third party, other than consulting and other similar service Contracts entered into in the ordinary course of business consistent with the Company’s past practices, or (v) enter into or amend any Contract pursuant to which any other party is granted marketing, distribution, development, manufacturing or similar rights of any type or scope with respect to any products or technology of the Company, other than, in the case of clause (v), any Contract entered into in the ordinary course of business consistent with the Company’s past practices;
(q) (i) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, (ii) enter into any Contract other than in the ordinary course of business which would be reasonably expected to result in a Company Material Adverse Effect or (iii) authorize, incur or commit to incur any new capital expenditure(s) which, individually or in the aggregate, is or are material to the Company; provided, however, that none of the foregoing shall limit any capital expenditure required pursuant to existing Contracts; and provided, further, that none of the foregoing shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the Company or its Subsidiaries, taken as a whole;
(r) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any claim, liability or obligation (absolute or accrued, asserted or unasserted, contingent or otherwise), other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings, claims and other Liabilities (i) reflected or reserved against in full in the Balance Sheet or incurred since September 30, 2006 in the ordinary course of business consistent with past practice or (ii) the settlement, compromise, discharge or satisfaction of which does not include any obligation (other than the payment of money) to be performed by the Company or its Subsidiaries following the Effective Time that is not, individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole;
(s) except as required by applicable Legal Requirements or GAAP, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
(t) except as required by applicable Legal Requirements, convene any regular or special meeting (or any adjournment or postponement thereof) of the stockholders of the Company other than the Company Stockholders’ Meeting;
(u) hire any employee without requiring them to execute the Company’s standard form of confidentiality and inventions assignment agreement;
(v) enter into a Contract to do any of the foregoing;
(w) knowingly take any action with the intention of (i) causing any of the conditions to the Offer set forth in Annex A hereto to not be satisfied, or (ii) making any of the representations or warranties of the Company contained in this Agreement untrue or incorrect in any material respect, or (iii) materially impairing the ability of the Company to consummate the transactions contemplated hereby (including the Offer and the Merger) in accordance with the terms hereof or materially delay such consummation.
Appears in 2 contracts
Samples: Merger Agreement (Polycom Inc), Merger Agreement (Spectralink Corp)
Negative Obligations of the Company. Except (i) as expressly contemplated or permitted by this Agreement, (ii) as required by Law, (iii) as set forth in Section 6.1 or Section 6.2 of the Company Disclosure Schedule, (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent)Letter, or (iv) as approved in advance by Parent in writingwriting (which approval shall not be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) 10.1 and the Effective Time, the Company shall not do any of the following not, and shall not permit cause its Subsidiaries to not, do any of the following:
(a) amend, or propose to adopt any amendments to, to or amend its certificate certificates of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, promise to issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, restricted stock units, warrants, other equity-based commitments, subscriptions, rights to purchase or otherwise) any Company Securities of its securities or any Subsidiary Securitiessecurities of any of its Subsidiaries, except for (i) the issuance and sale of shares of Company Common Stock pursuant to the Company Stock ESPP (in accordance with Section 3.6(d)(viii)), (ii) the grant and issuance of vested Company restricted stock units pursuant to the Annual Incentive Awards (in accordance with Section 3.6(d)(vii)), or (iii) the exercise or settlement of stock options, restricted stock units or other equity compensation awards outstanding prior to the date hereof, (ii) the issuance in each case, in accordance with terms as of shares pursuant to the Company ESPP and (iii) Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares of Company Common Stock granted in the ordinary course of business after the date of this Agreementhereof;
(c) acquire acquire, repurchase or redeem, directly or indirectly, or amend amend, any Company Securities of its securities or Subsidiary Securities, except to the extent that such acquisition or redemption is pursuant to the terms any securities of any Employee Plan (as then in effect) or any agreement subject to any such Employee Planof its Subsidiaries;
(d) other than cash dividends or distributions made by any of its direct or indirect wholly-owned Subsidiary of the Company Subsidiaries to the Company themselves or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company themselves or any of its SubsidiariesSubsidiaries (other than the transactions contemplated hereby);
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money debt or issue any debt securities, except for (A) loans or advances to or from direct or indirect wholly-owned SubsidiariesSubsidiaries in the ordinary course of business consistent with past practices or advances to employees and consultants for travel and other business related expenses in the ordinary course of business and (B) trade payables incurred in the ordinary course of business consistent with past practices, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the any material obligations of any other Person except with respect to obligations of any of its direct or indirect wholly-owned Subsidiaries of the CompanySubsidiaries, (iii) except for advances made in the ordinary course of business consistent with past practice, make any loans or advances to employees of the Company or any of its Subsidiaries, (iv) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect a wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; Subsidiary) or (viv) mortgage or pledge any of its their or its Subsidiaries Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien (other than thereupon, except for Permitted Liens) thereupon;
(g) except as may be required by applicable Law or the terms of any Employee Plan, including the Company 2009 Executive Bonus Plan, as in effect to satisfy contractual obligations existing on the date hereof under any Company Employee Plan set forth on Section 4.15(a) of the Company Disclosure Letter or any Company Material Contract set forth on Section 4.13(a)(ii) of the Company Disclosure Letter; (copies of which have been provided to Parent), i) enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan bonus, profit sharing, compensation, severance, termination, option, restricted stock, restricted stock unit, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance, change of control, or other employee benefits agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any consultant, director, officer or employee in any manner or increase in any material respect, or increase or decrease manner the compensation or fringe benefits of any consultant, director, officer or employee of the Company or director any Subsidiary of the Company, or (ii) pay any special bonus, remuneration, benefit or other payment to any director, officer or employee of the Company or any Subsidiary of the Company not required by any plan or arrangement as in effect as of the date hereof that are set forth on Section 4.15 of the Company Disclosure Letter; provided, however, that this paragraph (g) shall not prevent the Company or any of its Subsidiaries from (except for normal increases x) entering into employment agreements, offer letters or retention agreements with non-officer employees in the ordinary course of cash compensation business consistent with past practices and which are terminable at will and without any severance, change of control or similar obligations of the Company, its Subsidiaries (or after the Closing, Parent or its Subsidiaries, in their capacity, after giving effect to the Merger, as Affiliates of the Company), or (y) taking any actions pursuant to the Annual Incentive Awards in accordance with Section 3.6(d)(vii) of this Agreement;
(h) promote any officer or employee of the Company or any Subsidiary of the Company, other than in the ordinary course of business consistent with past practice or hire any employee with a title of vice president or above or terminate the employment of any employee other than for cause;
(i) forgive any loans to any current or future employees below the rank of Vice President or whose base salary does not exceed $200,000 per annum)its employees, pay any bonus or special remuneration (whether in cash, equity or otherwise) to any employee, consultant, independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Plan;
(h) forgive any Loans to any employees, officers or directors of the Company or any of its Subsidiaries, Subsidiaries or any of their respective Affiliates;
(ij) make any deposits or contributions of cash or other property to, or take any other action to fund, fund or in any other way secure the payment of compensation or benefits under the any Company Employee Plans or Contracts any agreements subject to the Company Employee PlansPlans or any other Contract of the Company, other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts subject to the such Company Employee Plans in effect as of the date hereofhereof or as required by applicable Law, and other than discretionary matching contributions made pursuant to the Company 401(k) Plan in the ordinary course of business consistent with, and at levels that do not exceed, past practice;
(jk) enter into, amend, or extend any Collective Bargaining Agreement or similar Contractcollective bargaining agreement;
(il) acquire, lease (as lessee) sell, lease, transfer, or license (as licensee) dispose of any material property or assets with a fair market value assets, or any portion thereof or interest therein, in excess any single transaction or series of $5,000,000 in the aggregate per fiscal quarterrelated transactions (including by merger, consolidation, restructuring, recapitalization, reorganization, share purchase, asset purchase or similar transaction), except for (i) transactions required pursuant to existing Contracts as in effect set forth on Section 4.13(b) of the date hereof; or Company Disclosure Letter, (ii) sell, lease (as lessor), license (as licensor) or dispose acquisitions of any property or operating assets with a net book value in excess of $100,000 in any individual transaction, except (A) transactions required pursuant to existing Contracts as in effect on the date hereof or (B) transactions in the ordinary course of business consistent with past practice, (iii) sales of inventory or products in the ordinary course of business, (iv) acquisitions not involving the acquisition of a business or Person that are not in excess of $150,000, individually, or $350,000, in the aggregate or (v) dispositions of obsolete, surplus or worn out assets that are no longer used or useful in the conduct of the business of the Company or its Subsidiaries;
(lm) except as may be required as a result of a change by changes in applicable Laws or in GAAPGAAP after the date hereof, make any change in any of the accounting principles or practices used by iteither of them;
(n) make or change any material Tax election, adopt or change any Tax accounting method, amend any material Tax Return, settle or compromise any material Tax liability or assessment by any Governmental Authority, surrender any right to claim a material Tax refund, or consent to the extension or waiver of the limitations period applicable to a material Tax claim or assessment;
(i) acquire or license any material Intellectual Property Right from any third party (except for commercially available Intellectual Property Rights licensed from third parties on a non-exclusive basis for use in connection with the Company’s research, development and product commercialization activities in the ordinary course of business and consistent with past practices), (ii) grant any license or other right or forbearance (including any right or covenant of non-assertion) with respect to any material Company Intellectual Property Rights other than non-exclusive licenses granted in the ordinary course of business consistent with past practice that do not impair, restrict, limit, or otherwise adversely affect the Company or any of its Subsidiaries in any material respect, (iii) grant any license or other right or forbearance (including any right or covenant of non-assertion) with respect to any Intellectual Property Right owned by or licensed to Parent or any of its Subsidiaries, (iv) divest or abandon any material Company Intellectual Property Rights, or (v) except in the ordinary course of business consistent with past practice, modify any standard warranty term for any Company Product in any material respect, or materially amend or modify any product or service warranty;
(p) enter into, amend in any material respect, or terminate any Contract that would be a Company Material Contract, or amend in any material respect any Company Material Contract or waive or grant any release or relinquishment of any material rights under any Company Material Contract;
(q) (i) enter into any lease or sublease of real property, (ii) materially modify, amend or exercise any right to renew any lease or sublease of real property, or waive any term or condition thereof or grant any consents thereunder; (iii) grant or otherwise create or consent to the creation of any material easement, covenant, restriction, assessment or charge affecting any leased real property or other real property, or any interest therein or part thereof; or (iv) make any material change in the cost of construction of any such property, in each case other than in the ordinary course of business consistent with past practice;
(r) acquire (by merger, consolidation or change acquisition of equity or assets or otherwise) any Tax election other Person, including any securities of such Person or all or substantially all of such Person’s assets;
(s) authorize, incur or commit to incur any new capital expenditure(s) that, individually or in the aggregate, would be reasonably expected exceed $2,000,000;
(t) commence any Action (except in connection with a breach of this Agreement or any other agreements contemplated hereby or demand notices that do not threaten litigation to adversely affect enforce any rights under a Company Material Contract or material purchase orders) or settle or compromise any pending or threatened Action, other than the settlement, compromise, payment, discharge or satisfaction of Actions (i) reflected or reserved against in full on the Company Balance Sheet and involving only the payment of money up to the amount reflected or reserved against on the Company Balance Sheet and without any material respect admission of wrongdoing or culpability by the Tax liability Company or Tax attributes any Subsidiary of the Company and without any other obligations of the Company or any of its Subsidiaries, (ii) change fully paid for by the insurance providers under the Company’s existing insurance policies without any material Tax accounting methodadmission of wrongdoing or culpability by the Company or any Subsidiary of the Company and without any other obligations of the Company or any of its Subsidiaries, or (iii) settle relating to a breach of this Agreement or compromise any other agreements contemplated hereby;
(u) except as required by GAAP, revalue in any material U.S. federalrespect any of its properties or assets, state, local including writing-off notes or non-U.S. Tax liability or (iv) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes; (n) enter into any Company Intellectual Property Agreement or amend any Company Intellectual Property Agreements or grant any release or relinquishment of any rights under any Company Intellectual Property Agreements, except (i) to customers and (ii) non-exclusive in-bound licenses for commercially available technology, in each case accounts receivable other than in the ordinary course of business consistent with past practice;
(v) except as required by applicable Law, convene any regular or special meeting of its stockholders (or any postponement or adjournment thereof) or propose any matters for consideration and vote of its stockholders at any Company stockholder meeting, other than this Agreement and the Merger;
(w) except as required by applicable Law, terminate or modify or waive in any material respect any right under (i) any material Company Permit or (ii) any non-material Company Permit (other than in the ordinary course of business consistent with past practice);
(x) waive any of its rights under any material confidentiality, non-disclosure, employee non-solicitation and other similar agreements to which it is a party;
(y) adopt or otherwise implement any stockholder rights plan, “poison pill” or other comparable agreement or plan designed to have the effect of delaying, deferring or discouraging Parent or Merger Sub from consummating the transactions contemplated by this Agreement; or
(z) authorize any of, or agree or commit to take, any of foregoing actions.
Appears in 2 contracts
Samples: Merger Agreement (Maxlinear Inc), Merger Agreement (Exar Corp)
Negative Obligations of the Company. Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 6.1 or Section 6.2 of the Company Disclosure Schedule, (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent), or (iviii) as approved in advance by Parent in writing, at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees of Parent constitute at least a majority of the Company Board pursuant to Section 2.4(a) Purchase Time and the Effective Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(a) amend, or propose to adopt any amendments to, its certificate of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (i) the issuance and sale of shares of Company Common Stock pursuant to Company Stock Awards outstanding prior to the date hereof, (ii) the issuance of shares pursuant to the Company ESPP and (iii) Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares of Company Common Stock granted in the ordinary course of business after the date of this Agreement;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities, except to the extent that such acquisition or redemption is pursuant to the terms of any Employee Plan (as then in effect) or any agreement subject to any such Employee Plan;
(d) other than dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money or issue any debt securities, except for loans or advances to or from direct or indirect wholly-owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company, (iii) except for advances made in the ordinary course of business consistent with past practice, make any loans or advances to employees of the Company or any of its Subsidiaries, (iv) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries assets, tangible or intangible, or create or suffer to exist any Lien (other than Permitted Liens) thereupon;
(g) except as may be required by applicable Law or the terms of any Employee Plan, including the Company 2009 Executive Bonus Plan, as in effect on the date hereof (copies of which have been provided to Parent), enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan in any material respect, or increase or decrease the compensation or fringe benefits of any employee or director of the Company or any of its Subsidiaries (except for normal increases of cash compensation in the ordinary course of business consistent with past practice to any current practice) or future employees below the rank of Vice President or whose base salary does not exceed $200,000 per annum), pay any bonus or special remuneration (whether in cash, equity or otherwise) to any employee, consultant, independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Companypractice), or pay any benefit not required by any Employee Plan as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Plan;
(h) forgive any Loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective Affiliates;
(i) make any deposits or contributions of cash or other property to, or take any other action to fund, or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts subject to the Employee Plans, other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts subject to the Employee Plans in effect as of the date hereof;
(j) enter into, amend, or extend any Collective Bargaining Agreement or similar Contract;
(i) acquire, lease (as lessee) or license (as licensee) any property or assets with a fair market value in excess of $5,000,000 1,000,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as in effect on the date hereof; or (ii) sell, lease (as lessor), license (as licensor) or dispose of any property or assets with a net book value in excess of $100,000 1,000,000 in any individual transaction, except (A) transactions required pursuant to existing Contracts as in effect on the date hereof or (B) transactions in the ordinary course of business consistent with past practice;
(lj) except as may be required as a result of a change in applicable Laws or in GAAP, make any change in any of the accounting principles or practices used by it;
(k) (i) make or change any Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its Subsidiaries, (ii) change any material Tax accounting method, (iii) settle or compromise any material U.S. federal, state, local or non-U.S. Tax liability or (iv) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes; ;
(nl) enter into any Company Intellectual Property Agreement or amend any Company Intellectual Property Agreements or grant any release or relinquishment of any rights under any Company Intellectual Property Agreements, except (i) to customers and (ii) non-exclusive in-bound licenses for commercially available technology, in each case other than in the ordinary course of business consistent with past practice, (i) enter into, renew, extend or terminate (other the termination of a Material Contract pursuant to its terms as in effect as of the date hereof) any Material Contract (or any Contract that would have been a Material Contract if it had been in effect on the date hereof); or (ii) make any material amendment or change in any such Material Contract;
(m) enter into a Contract to do any of the foregoing or make any formal or informal arrangement or understanding, whether or not binding, with respect to any of the foregoing;
(n) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any claim, liability or obligation absolute or accrued, asserted or unasserted, contingent or otherwise), other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings, claims and other liabilities that (i) are reflected or reserved against in full in the Company Balance Sheet or incurred since the date of the Company Balance Sheet in the ordinary course of business consistent with past practice, (ii) are covered by existing insurance policies, or (iii) otherwise do not involve the payment of money in excess of $500,000 in the aggregate, in each case where the settlement, compromise, discharge or satisfaction of which does not include any obligation (other than the payment of money not in excess of $500,000 in the aggregate above the amounts reflected or reserved in the Balance Sheet in respect of such Legal Proceeding) to be performed by the Company or its Subsidiaries following the Effective Time;
(o) grant any exclusive rights with respect to any Company Intellectual Property or divest any Company Intellectual Property;
(p) make any representations or issue any communications to any current or former employee, independent contractor or director that are inconsistent with this Agreement or the transactions contemplated thereby, including any representations regarding offers of employment from Parent, any Subsidiary of the Parent, or the Surviving Corporation; or
(q) take any action which would (i) materially impair the Company’s ability to consummate the transactions contemplated by this Agreement in accordance with the terms hereof and applicable Law or (ii) materially delay the consummation of the Offer or the Merger and the other transactions contemplated by this Agreement.
Appears in 2 contracts
Samples: Merger Agreement (Ramtron International Corp), Merger Agreement (Cypress Semiconductor Corp /De/)
Negative Obligations of the Company. Except as (i1) as may be required by Applicable Law, (2) expressly contemplated required or permitted by this Agreement, (ii3) as set forth in Section 6.1 or Section 6.2 of the Company Disclosure Schedule, (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided consented to Parent), or (iv) as approved in advance by Parent in writingwriting (such consent not to be unreasonably withheld, conditioned or delayed), (4) for any actions taken reasonably and in good faith to respond to COVID-19 or other epidemic or pandemic, including compliance with COVID-19 Measures, or (5) set forth on Section 5.02 of the Company Disclosure Letter, at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) ARTICLE VIII and the Effective Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(a) amend, or propose to adopt any amendments to, its amend the Company’s certificate of incorporation or bylaws or comparable organizational documentsbylaws;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for other than (i) grants of Company Equity Awards to directors and employees subject to the terms as set forth on the Company Disclosure Letter, (ii) the issuance and sale of shares of Company Common Stock pursuant to the exercise of Company Stock Options, Company Warrants or the vesting or settlement of other Company Equity Awards outstanding prior (including in order to the date hereof, (iisatisfy Tax withholding obligations) the issuance of shares pursuant to the Company ESPP and or (iii) Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares of Company Common Stock granted in the ordinary course of business after the date of this Agreement;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities, except to the extent that such acquisition or redemption is pursuant to the terms of any Employee Plan (as then in effect) or any agreement subject to any such Employee Plan;
(d) other than dividends or distributions made by any direct or indirect wholly-owned Subsidiary of transactions among the Company to the Company and its wholly owned Subsidiaries or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money or issue any debt securities, except for loans or advances to or from direct or indirect wholly-owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly-among wholly owned Subsidiaries of the Company, (iii) except for advances made in the ordinary course of business consistent with past practice, make any loans or advances to employees of the Company or any of its Subsidiaries, (iv) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries assets, tangible or intangible, or create or suffer to exist any Lien (other than Permitted Liens) thereupon;
(g) except as may be required by applicable Law or the terms of any Employee Plan, including the Company 2009 Executive Bonus Plan, as in effect on the date hereof (copies of which have been provided to Parent), enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan in any material respect, or increase or decrease the compensation or fringe benefits of any employee or director of the Company or any of its Subsidiaries (except for normal increases of cash compensation in the ordinary course of business consistent with past practice to any current or future employees below the rank of Vice President or whose base salary does not exceed $200,000 per annum), pay any bonus or special remuneration (whether in cash, equity or otherwise) to any employee, consultant, independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Plan;
(h) forgive any Loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective Affiliates;
(i) make any deposits or contributions of cash or other property to, or take any other action to fund, or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts subject to the Employee Plans, other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts subject to the Employee Plans in effect as of the date hereof;
(j) enter into, amend, or extend any Collective Bargaining Agreement or similar Contract;
(i) acquire, lease (as lessee) or license (as licensee) any property or assets with a fair market value in excess of $5,000,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as in effect on the date hereof; or (ii) sell, lease (as lessor), license (as licensor) or dispose of any property or assets with a net book value in excess of $100,000 in any individual transaction, except (A) transactions required pursuant to existing Contracts as in effect on the date hereof or (B) transactions in the ordinary course of business consistent with past practice;
(l) except as may be required as a result of a change in applicable Laws or in GAAP, make any change in any of the accounting principles or practices used by it;
(i) make or change any Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its Subsidiaries, (ii) change any material Tax accounting method, (iii) settle or compromise any material U.S. federal, state, local or non-U.S. Tax liability or (iv) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes; (n) enter into any Company Intellectual Property Agreement or amend any Company Intellectual Property Agreements or grant any release or relinquishment of any rights under any Company Intellectual Property Agreements, except (i) to customers and (ii) non-exclusive in-bound licenses for commercially available technology, in each case in the ordinary course of business consistent with past practice;
Appears in 2 contracts
Samples: Merger Agreement (Bioceres Crop Solutions Corp.), Merger Agreement (Marrone Bio Innovations Inc)
Negative Obligations of the Company. Except (i) as expressly contemplated or permitted by this AgreementAgreement (including the Canadian Exchange Transaction), (ii) as set forth in Section 6.1 or Section 6.2 5.2 of the Company Disclosure Schedule, or (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent), or (iv) as approved in advance by Parent in writing, at all times during the period commencing with the execution and an delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) Article VIII and the Effective Appointment Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:following (it being understood and hereby agreed that any action taken by the Company after the execution and delivery of this Agreement that is either (A) permitted by the terms of this Section 5.2, or (B) approved in advance by Parent in writing pursuant to this Section 5.2, shall not be deemed to constitute a breach of, or inaccuracy in, any of the representations and warranties of the Company set forth in this Agreement):
(a) (i) waive any stock repurchase rights, accelerate, amend, (ii) change the period of exercisability of any Company Options or propose to adopt shares of restricted stock of the Company, (iii) reprice any amendments toCompany Options, its certificate of incorporation or bylaws or comparable organizational documents(iv) authorize cash payments in exchange for any Company Options;
(b) authorize (i) grant any severance or termination pay or benefits, or payments or benefits triggered by a change of control or merger (including, without limitation, the Offer or the Merger) to any officer or employee, except pursuant to outstanding written Contracts or existing written policies previously disclosed in writing, delivered to or made available to Parent, (ii) adopt any new severance plan, or (iii) amend, modify or alter in any respect any severance plan or Contract existing on the date hereof relating to the employment of any employee;
(i) transfer or license to any Person, or otherwise extend, amend or modify, any rights to the Company Intellectual Property, or (ii) enter into grants to transfer or license to any Person future patent rights, other than, in the case of the foregoing clauses (i) and (ii) of this Section 5.2(c), for issuancenon-exclusive licenses granted to customers in the ordinary course of business containing discounts and terms that are consistent with past practice;
(d) (i) declare, issue, sell, deliver set aside or agree pay any dividends on or commit to issue, sell or deliver make any other distributions (whether through in cash, stock, equity securities or property) in respect of any capital stock, (ii) split, combine or reclassify any capital stock, or (iii) issue or authorize the issuance of any other securities in respect of, in lieu of, or granting in substitution for any capital stock;
(e) purchase, redeem or otherwise acquire, directly or indirectly, any shares of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securitiescapital stock, except for (i) repurchases of unvested shares at cost in connection with the issuance termination of a contractual relationship in effect on the date hereof, or (ii) the redemption, retraction or purchase of Company Exchangeable Preferred Stock;
(f) (i) issue, deliver, sell, authorize, pledge or otherwise encumber (or propose any of the foregoing with respect to) any shares of capital stock or other securities convertible into, or exercisable or exchangeable for, shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into, or exercisable or exchangeable for, shares of capital stock, or (ii) enter into other Contracts obligating it to issue any such shares of capital stock or securities convertible into, or exercisable or exchangeable for, such shares of capital stock, other than, in the case of the foregoing clauses (i) and (ii) of this Section 5.2(f), the issuance, delivery and/or sale of (A) shares of Company Common Stock pursuant to the exercise of Company Stock Awards Options outstanding prior to on the date hereof, (ii) the issuance of shares pursuant to the Company ESPP and (iiiB) Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares of Company Common Stock granted issuable to participants in the Company ESPP consistent with the terms thereof, (C) shares of Company Common Stock issuable upon the redemption, retraction or purchase of shares of Company Exchangeable Preferred Stock, and (D) the granting of Company Stock Options to newly-hired employees of the Company (other than directors, officers and other executive level employees) in the ordinary course of business after consistent with past practice in an amount not to exceed Seventy Five Thousand (75,000) shares of Company Common Stock in the aggregate (in the event that the condition set forth in clause (i) of the first paragraph of Annex A hereto shall have been satisfied on or prior to the Initial Termination Date) or One Hundred Thousand (100,000) shares of Company Common Stock in the aggregate (in the event that the condition set forth in clause (i) of the first paragraph of Annex A hereto shall not have been satisfied on or prior to the Initial Termination Date); provided, however, that (1) none of such Company Stock Options, pursuant to their respective terms, will vest or be exercised prior to the one (1) year anniversary of the grant date thereof, (2) the recipients of this Agreementeach such Company Stock Option waives any and all rights to acceleration of the vesting of such Company Stock Options under the applicable Company Option Plan, and (3) the agreement pursuant to which each such Company Stock Option is granted does not provide for the acceleration of benefits or vesting thereunder under any circumstances;
(cg) cause, permit or propose any amendments to the Company Charter Documents (or in the case of any Subsidiaries of the Company, similar governing instruments of such Subsidiaries);
(h) (i) acquire or redeem, directly agree to acquire by merging or indirectlyconsolidating with, or amend by purchasing any Company Securities equity interest in or Subsidiary Securitiesa portion of the assets of, except or by any other manner, any business or any Person or division thereof, or (ii) otherwise acquire or agree to the extent enter into any joint ventures, strategic partnerships or alliances; provided, however, that such acquisition or redemption is pursuant to the terms of any Employee Plan (as then this Section 5.2(h)(ii) shall not prohibit the Company from granting non-exclusive licenses to customers in effect) or any agreement subject to any such Employee Planthe ordinary course of business containing discounts and terms that are consistent with past practice;
(di) other than dividends sell, lease, license, encumber or distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment otherwise dispose of any dividends properties or distributions on capital stock, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization assets of the Company or any of its Subsidiaries, except (i) pursuant to non-exclusive licenses granted to end users and penultimate end users in the ordinary course of business containing discounts and terms that are consistent with past practice, and (ii) the sale, lease or other disposition of properties or assets that are not material, individually or in the aggregate, to the business of the Company and its Subsidiaries, taken as a whole;
(fj) (i) enter into, modify, amend or terminate any existing lease or other Contract affecting the use, possession or operation of any Leased Real Property or any part thereof, (ii) grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment or charge affecting any Leased Real Property or any part thereof, (iii) convey, assign, sublease or otherwise transfer all or any portion of any Leased Real Property or any interest or rights therein, (iv) commit any waste or nuisance on any Leased Real Property, or (v) make any material changes in the construction or condition of any Leased Real Property;
(k) (i) incur or assume any long-term or short-term indebtedness for borrowed money or guarantee any such indebtedness of another Person, (ii) issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, except for loans (iii) enter into any “keep well” or advances other Contract to maintain any financial statement condition, or from direct (iv) enter into any arrangement having the economic effect of any of the foregoing, in each case other than (A) in connection with the financing of working capital consistent with past practice, or indirect wholly-owned Subsidiaries(B) borrowings under existing credit facilities not in excess of Fifty Thousand Dollars ($50,000) in the aggregate;
(l) (i) adopt or amend any employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, (ii) assume, guarantee, endorse enter into any employment contract or otherwise become liable or responsible collective bargaining agreement (whether directly, contingently or otherwise) for other than offer letters and letter agreements entered into in the obligations ordinary course of any other Person except business consistent with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Companypast practice with employees who are terminable “at will”), (iii) except for advances made pay any bonus or remuneration to any director, officer or other employee, other than in the ordinary course of business consistent with past practice, make or (iv) increase the salaries or wage rates or fringe benefits (including, without limitation, rights to severance or indemnification) of its directors, officers, employees or consultants except, in each case, as may be required by applicable law or by any loans existing benefit plan, policy program or advances Contract;
(m) (i) pay, discharge, settle or satisfy any litigation (whether or not commenced prior to employees the date hereof) or any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any Person from or knowingly fail to enforce any confidentiality or other similar Contract to which the Company or any of its Subsidiaries, Subsidiaries is a party or of which the Company or any of its Subsidiaries is a beneficiary;
(ivn) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity except in the ordinary course of business consistent with past practice), whether by merger(i) modify, consolidation, asset purchase amend or other business combinationterminate any material Contract or any Contract listed or described in Section 3.18(a)(iv) hereof to which the Company or any Subsidiary thereof is a party, or (ii) waive, or delay the exercise of, release or assign any material rights or claims thereunder;
(o) except as required by formation of any joint venture GAAP or other business organization or by contributions to capital; or (v) mortgage or pledge applicable law, revalue any of its assets or its Subsidiaries assetsmake any change in accounting methods, tangible principles or intangible, or create or suffer to exist any Lien (other than Permitted Liens) thereuponpractices;
(gp) except as may be required by applicable Law incur or the terms of enter into any Employee Plan, including the Company 2009 Executive Bonus Plan, as in effect on the date hereof (copies of which have been provided to Parent), enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan in any material respect, or increase or decrease the compensation or fringe benefits of any employee or director of Contract requiring the Company or any of its Subsidiaries to pay in excess of Fifty Thousand Dollars (except for normal increases of cash compensation $50,000) in any individual case or Two Hundred Thousand Dollars ($200,000) in the ordinary course of business consistent with past practice to any current or future employees below the rank of Vice President or whose base salary does not exceed $200,000 per annum), pay any bonus or special remuneration (whether in cash, equity or otherwise) to any employee, consultant, independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Plan;
(h) forgive any Loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective Affiliatesaggregate;
(i) make any deposits Tax election or contributions of cash or other property to, or take any other action to fund, or change in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts subject to the Employee Plans, other than deposits and contributions accounting methods that are required pursuant to the terms of the Employee Plans or any Contracts subject to the Employee Plans in effect as of the date hereof;
(j) enter into, amend, or extend any Collective Bargaining Agreement or similar Contract;
(i) acquire, lease (as lessee) or license (as licensee) any property or assets with a fair market value in excess of $5,000,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as in effect on the date hereof; or (ii) sell, lease (as lessor), license (as licensor) or dispose of any property or assets with a net book value in excess of $100,000 in any individual transaction, except (A) transactions required pursuant to existing Contracts as in effect on the date hereof or (B) transactions in the ordinary course of business consistent is inconsistent with past practice;
(l) , except as may be required as a result of a change in applicable Laws or in GAAP, make for any change in any of the accounting principles or practices used methods that is required by it;
(i) make or change any Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its SubsidiariesGAAP, (ii) change any material Tax accounting method, (iii) settle or compromise any material U.S. federalTax liability, state, local or non-U.S. Tax liability or (iviii) consent to any extension or waiver of any limitation period with respect to Taxes;
(r) agree in writing or otherwise to take any claim or assessment for material Taxes; (nof the actions described in Section 5.2(a) enter into any Company Intellectual Property Agreement or amend any Company Intellectual Property Agreements or grant any release or relinquishment of any rights under any Company Intellectual Property Agreementsthrough Section 5.2(q) above, except (i) to customers and (ii) non-exclusive in-bound licenses for commercially available technology, in each case in the ordinary course of business consistent with past practice;inclusive.
Appears in 2 contracts
Samples: Merger Agreement (Insilicon Corp), Merger Agreement (Synopsys Inc)
Negative Obligations of the Company. Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 6.1 or Section 6.2 5.2 of the Company Disclosure Schedule, Letter or (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent), or (iv) as approved in advance by Parent in writing, which approval shall not be unreasonably withheld, conditioned or delayed, at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees (x) the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(aArticle VIII and (y) and the Effective Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(a) amend, or propose to adopt any amendments to, to or amend its certificate articles of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (i) the issuance and sale of shares of Company Common Stock Shares pursuant to Company Stock Awards Options or other equity awards outstanding prior to the date hereto; provided, however, that if the Merger has not been consummated on or prior to the date that is sixty (60) days from the date hereof, (ii) the issuance of shares pursuant to the Company ESPP and (iii) Company Restricted Stock Units may make option grants consistent with past practices to purchase up to an aggregate of 250,000 shares of Company Common Stock granted in the ordinary course of business after the date of this Agreementnew hires;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities, except to the extent that such acquisition or redemption is pursuant to the terms of any Employee Plan (as then in effect) or any agreement subject to any such Employee Plan;
(d) other than cash dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its SubsidiariesSubsidiaries (other than the transactions contemplated hereby, including the Merger);
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money debt or issue any debt securities, except for (A) short-term debt incurred to fund operations of the business in the ordinary course of business consistent with past practice and (B) loans or advances to or from direct or indirect wholly-owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person except for travel advances made in the ordinary course of business consistent with past practice, make any loans or advances practice to employees of the Company or any of its Subsidiaries, Subsidiaries or (iv) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens) thereupon);
(g) except as may be required by applicable Law or the terms of any Employee Plan, including the Company 2009 Executive Bonus Plan, as in effect on the date hereof (copies of which have been provided to Parent)Laws, enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan bonus, profit sharing, compensation, severance, termination, option, restricted stock, restricted stock unit, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any director, officer or employee in any material respect, manner or increase or decrease in any manner the compensation or fringe benefits of any employee director, officer or director of the Company or any of its Subsidiaries (except for normal increases of cash compensation in the ordinary course of business consistent with past practice to any current or future employees below the rank of Vice President or whose base salary does not exceed $200,000 per annum)employee, pay any special bonus or special remuneration (whether in cash, equity or otherwise) to any director, officer or employee, consultant, independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan plan or arrangement as in effect as of the date hereof or amend except that the targets or Company may make awards under the goals of the 2009 Executive Profit Sharing Bonus PlanIncentive Plan consistent with past practices and may terminate and make distributions under its Non-Qualified Deferred Compensation Plan (“NQDCP”);
(h) forgive any Loans loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective AffiliatesAffiliates or Associates;
(i) make any deposits or contributions of cash or other property to, to or take any other action to fund, fund or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts agreements subject to the Employee Plans, Plans or any other Contract of the Company other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts agreements subject to the Employee Plans in effect as of the date hereof;
(j) enter into, amend, or extend any Collective Bargaining Agreement or similar ContractAgreement;
(ik) acquire, lease (as lessee) or license (as licensee) any property or assets with a fair market value in excess of $5,000,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as in effect on the date hereof; or (ii) sell, lease (as lessor)lease, license (as licensor) or dispose of any property or assets with a net book value in excess of $100,000 in any individual transactionsingle transaction or series of related transactions, except either (Ai) transactions required pursuant to existing Contracts as which are not material to the Company, individually or in effect on the date hereof aggregate, or (Bii) transactions in connection with the manufacture or sale of goods or grants of non-exclusive licenses with respect to Company IP in the ordinary course of business consistent with past practicepractice or (iii) transactions involving movement of investments between cash and short-term securities;
(l) except as may be required as a result of a change in applicable Laws or in GAAP, make any change in any of the accounting principles or practices used by it;
(m) (i) make or change any material Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its Subsidiarieselection, (ii) change file any material Tax accounting methodReturn or any amended Tax Return, (iii) settle or compromise any material U.S. federalLiability for Taxes, state, local (iv) adopt or non-U.S. change any Tax liability accounting method or (ivv) consent to any extension or waiver of any limitation period with respect to any material claim or assessment for material Taxes; ;
(n) enter into any Company Intellectual Property Agreement or amend any a Company Intellectual Property Agreements IP Agreement (except for the grants of non-exclusive licenses with respect to Company IP in the ordinary course of business consistent with past practice) or grant any release or relinquishment of any rights under any Company Intellectual Property Agreements, except IP Agreement;
(i) to customers and enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) or (ii) nonmodify, amend or exercise any right to renew any lease or sublease of real property or waive or violate any term or condition thereof or grant any consents thereunder; grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment, Lien or charge affecting any real property or any part thereof; convey any interest in any Real Property; commit any waste or nuisance on any such property; or make any material changes in the construction or condition of any such property;
(p) (i) sell, lease, license (except as provided in Section 5.2(k)) or transfer to any person or entity any rights to any Company IP, (ii) purchase or license (except as provided in Section 5.2(k)) any Intellectual Property Rights or enter into any agreement or modify any existing agreement with respect to the Intellectual Property Rights of any person or entity (except as provided in Section 5.2(k)), (iii) enter into any agreement or modify any existing agreement with respect to the development of any Intellectual Property or Intellectual Property Rights with a third party, or (iv) change pricing or royalties set or charged by the Company to its customers or licensees, or the pricing or royalties set or charged by persons who have licensed Intellectual Property or Intellectual Property Rights to the Company; (v) enter into or amend any agreement pursuant to which any other party is granted marketing, distribution, or similar rights of any type or scope with respect to any products or technology of the Company; or (vi) enter into or amend any agreement pursuant to which any other party is granted development, manufacturing or similar rights of any type or scope with respect to any products or technology of the Company;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, (ii) enter into any Material Contract (other than in the ordinary course of business consistent with past practice) or amend any Material Contract or grant any release or relinquishment of any rights under any Material Contract or (iii) authorize, incur or commit to incur any new capital expenditure(s), individually or in the aggregate, with obligations to the Company or any of its Subsidiaries in excess of $250,000; provided that Parent approval of capital expenditures in excess of $250,000 which are necessary to fulfill existing Contracts shall not be unreasonably withheld;
(r) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any claim, Liability or obligation (absolute or accrued, asserted or unasserted, contingent or otherwise), other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings, claims and other Liabilities (i) reflected or reserved against in full in the Balance Sheet or incurred since the date of the Balance Sheet in the ordinary course of business consistent with past practice or (ii) the settlement, compromise, discharge or satisfaction of which does not include any obligation (other than the payment of money) to be performed by the Company or its Subsidiaries following the Effective Time that, individually or in the aggregate, is not and could not be material to the Company and its Subsidiaries, taken as a whole;
(s) except as required by applicable Laws or GAAP, revalue in any material respect any of its properties or assets including without limitation writing-exclusive in-bound licenses for commercially available technology, in each case off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
(t) except as required by applicable Laws, convene any regular or special meeting (or any adjournment or postponement thereof) of the shareholders of the Company other than the Company Shareholders’ Meeting;
(u) hire any employee without requiring them to execute the Company’s standard form of confidentiality and inventions assignment agreement; or
(v) enter into a Contract to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Supertex Inc)
Negative Obligations of the Company. Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 6.1 or Section 6.2 4.2 of the Company Disclosure Schedule, Schedule or (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent), or (iv) as approved in advance by Parent in writingwriting (which approval shall not be unreasonably withheld, delayed or conditioned), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) Article VII and the Effective Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(a) amend, or propose to adopt any amendments to, its certificate articles of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (i) the issuance and sale of shares of Company Common Stock pursuant to Company Stock Awards outstanding prior to the date hereof, (ii) the issuance of shares pursuant to the Company ESPP and (iii) Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares of Company Common Stock granted in the ordinary course of business after the date of this Agreement;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities, except to the extent that such acquisition or redemption is pursuant to the terms of any Employee Plan (as then in effect) or any agreement subject to any such Employee Plan;
(d) other than cash dividends or distributions made by any direct or indirect wholly-wholly owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money debt or issue any debt securities, except for loans or advances to or from direct or indirect wholly-wholly owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly-wholly owned Subsidiaries of the Company, (iii) make any loans or advances except for travel or other advances made in the ordinary course of business consistent with past practice, make any loans or advances practice to employees of the Company or any of its Subsidiaries, (iv) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company)Person, by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien (other than Permitted Liens) thereupon;
(g) except as may be required by applicable Law or the terms of any Employee Plan, including the Company 2009 Executive Bonus Plan, as in effect on the date hereof (copies of which have been provided to Parent), enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan bonus, profit sharing, compensation, severance, termination, Company Stock Award, restricted stock, restricted stock unit, appreciation right, performance unit, stock equivalent, share purchase agreement, equity-based compensation award (whether payable in stock, cash or otherwise), pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any director, officer or employee in any material respect, or increase or decrease manner (other than at-will employment offers to employees below the compensation or fringe benefits of any employee or director of the Company or any of its Subsidiaries (except for normal increases of cash compensation executive level entered into in the ordinary course of business consistent with past practice to and Section 4.2(i) hereof) or increase in any current manner the compensation or future employees below the rank fringe benefits of Vice President any director, officer, consultant or whose base salary does not exceed $200,000 per annum)employee, pay any special bonus or special remuneration (whether in cash, equity or otherwise) to any employeedirector, consultantofficer, independent contractor consultant or director employee (other than ordinary course bonuses made paid to non-executive employees that are not more than $2,500, individually, or $50,000, in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Companyaggregate), or pay any benefit not required by any Employee Plan plan or arrangement as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Planhereof;
(h) forgive any Loans loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective Affiliates;
(i) hire employees at the executive level or higher or, other than in the ordinary course of business consistent with past practice, any other employees;
(j) terminate any employees of the Company or its Subsidiaries or otherwise cause any employees of the Company or its Subsidiaries to resign, in each case other than (x) in the ordinary course of business consistent with past practice or (y) for cause or poor performance (documented in accordance with the Company’s past practices);
(k) make any deposits or contributions of cash or other property to, or take any other action to fund, or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts subject to the Employee Plans, other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts subject to the Employee Plans in effect as of the date hereof;
(jl) enter into, amend, or extend any Collective Bargaining Agreement or similar ContractAgreement;
(im) acquire, lease (as lessee) or license (as licensee) any property or assets with a fair market value in excess of $5,000,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as in effect on the date hereof; or (ii) sell, lease (as lessor)lease, license (as licensor) or dispose of any property or assets with a net book value in excess of $100,000 in any individual transactionsingle transaction or series of related transactions, except either (Ai) transactions required pursuant to existing Contracts as which are not material to the Company, individually or in effect on the date hereof aggregate or (Bii) transactions the sale of goods or grants of non-exclusive licenses with respect to Company Intellectual Property Rights in the ordinary course of business consistent with past practice;
(ln) except as may be required as a result of a change in applicable Laws Law or in GAAP, make any change in any of the accounting principles or practices used by it;
(i) make or change any material Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its Subsidiarieselection, (ii) change file any income or other material Tax accounting methodReturn (including material sales, use, receipts or other similar Tax Returns) or any amended Tax Return, unless in each case such Tax Return has been provided to Parent for review and comment within a reasonable period prior to the due date for filing, (iii) settle or compromise any material U.S. federalLiability for Taxes, state, local (iv) adopt or non-U.S. change any material Tax liability accounting method or (ivv) consent to any extension or waiver of any limitation period with respect to any material claim or assessment for material Taxes; ;
(np) enter into any Company Intellectual Property Agreement IP Licenses or amend any Company Intellectual Property Agreements IP Licenses or grant any release or relinquishment of any rights under any Company Intellectual Property AgreementsIP Licenses, except (i) to customers and (ii) non-exclusive in-bound licenses for commercially available technology, in each case in the ordinary course of business consistent with past practice;
(q) grant any exclusive rights with respect to any Company Intellectual Property, divest any Company Intellectual Property, except if such divestiture or divestures, individually or in the aggregate, are not material to the Company, or materially modify the Company’s standard warranty terms for Company Products or services or amend or modify any product or service warranty in any manner that is likely to be materially adverse to the Company or any of its Subsidiaries;
(r) terminate, fail to renew, abandon, cancel, let lapse, or fail to continue to prosecute or defend any Company Registered Intellectual Property or other material Company Intellectual Property, other than the expiration of Registered Intellectual Property upon its statutory term;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein or (ii) authorize, incur or commit to incur any new capital expenditure(s) (excluding capitalized internally developed software development costs), individually or in the aggregate, with obligations to the Company or any of its Subsidiaries in excess of $300,000; provided, however, that none of the foregoing shall limit any capital expenditure required pursuant to existing Contracts that have been made available to Parent;
(t) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any claim, liability or obligation (absolute or accrued, asserted or unasserted, contingent or otherwise), other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings, claims and other Liabilities (i) that are reflected or reserved against in full in the Balance Sheet (for amounts not in excess of such reserves), (ii) accounts payable, trade payables and other expenses incurred in the ordinary course of business consistent with past practice since the date of the Balance Sheet or (iii) otherwise do not involve the payment of money in excess of $100,000 in the aggregate, in each case, in which the settlement, compromise, discharge or satisfaction of which does not include any obligation (other than the payment of money) to be performed by the Company or its Subsidiaries following the Effective Time;
(u) except as required by applicable Law or GAAP, revalue in any material respect any of its properties or assets including writing-off notes or accounts receivable;
(v) except as required by applicable Law, convene any regular or special meeting (or any adjournment or postponement thereof) of the shareholders of the Company other than the Company Shareholder Meeting;
(w) enter into, renew, extend or terminate (i) any Material Contract (or any Contract that would have been a Material Contract were it effective as of the date hereof) described in clauses (iii), (iv) or (vii) of Section 2.13(a), (ii) any other Material Contract (or other Contract that would have been a Material Contract were it effective as of the date hereof) other than in the ordinary course of business consistent with past practice, or (iii) any Contract referenced in Section 2.25 (or any other Contract with any broker or finder in connection with the Merger or any other transaction contemplated by this Agreement) or any Contract or other transaction of the type described in Section 2.24; or make any material change in any such Material Contract or Contract, plan, arrangement or other transaction described in clauses (i)-(iii) of this Section 4.2(w);
(i) enter into any lease, sublease, license or other occupancy agreement with respect to real property (whether as a lessor, sublessor, lessee or sublessee), (ii) modify, amend or exercise any right to renew any Lease or waive or violate any term or condition thereof or grant any consents thereunder; (iii) convey any interest in any Leased Real Property or enter into any agreement to acquire or sell any interest in real property; or (iv) make any material changes in the construction or condition of any such property;
(y) enter into any new line of business or change its material operating policies in any material respect, except as required by Law or by policies imposed by any Governmental Authority;
(i) other than in the ordinary course of business consistent with past practice, introduce any material new products or services or any material marketing campaigns or (ii) introduce any material new sales compensation or incentive programs or arrangements;
(aa) enter into a Contract to do any of the foregoing or make any other binding arrangement or understanding with respect to any of the foregoing; or
(bb) knowingly take any action which results or is reasonably likely to result in any of the conditions to the Merger set forth in Article VI not being satisfied, or would make any of the representations or warranties of the Company contained in this Agreement untrue or incorrect in any material respect, or that would materially impair or delay the ability of the Company to consummate the transactions contemplated hereby (including the Merger) in accordance with the terms hereof or materially delay such consummation.
Appears in 1 contract
Samples: Merger Agreement
Negative Obligations of the Company. Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 6.1 or Section 6.2 of the Company Disclosure Schedule, Schedule or (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent), or (iv) as approved in advance by Parent in writingwriting (which approval shall not be unreasonably withheld or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) Article IX and the Effective Appointment Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(a) amend, or propose to adopt any amendments to, to or amend its certificate of incorporation or bylaws or comparable organizational documents; provided, however, that nothing in this paragraph (a) shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the Company or its Subsidiaries, taken as a whole;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (i) the issuance and sale of shares of Company Common Stock Shares pursuant to Company Stock Awards Options outstanding prior to the date hereofhereof and purchase rights under the Company ESPP, (ii) the issuance grants of shares pursuant to purchase rights under the Company ESPP ESPP, and (iii) Company Restricted Stock Units grants to purchase up to an aggregate of 250,000 shares newly hired employees of Company Common Stock granted Options issued in the ordinary course of business after consistent with past practice, with a per share exercise price no less than the then-current market price of a Company Share and not subject to any accelerated vesting or other provision that would be triggered as a result of the consummation of the transactions contemplated hereby (including the Offer and the Merger), so long as (A) the aggregate number of Shares subject to such additional Stock Options does not exceed the sum of (x) five hundred thousand (500,000), plus (y) the number of Company Shares subject to any Stock Option (or portion thereof) outstanding as of the date hereof that is subsequently canceled, terminated or forfeited as the result of this Agreementthe voluntary or involuntary termination of employment of any employee and (B) the aggregate number of Company Shares subject to Stock Options granted to any individual newly hired employee does not exceed the current stock grant guidelines previously made available to Parent;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities; provided, except however, that nothing in this paragraph (c) shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the extent that such acquisition Company or redemption is pursuant to the terms of any Employee Plan (its Subsidiaries, taken as then in effect) or any agreement subject to any such Employee Plana whole;
(d) other than cash dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock; provided, however, that nothing in this paragraph (d) shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the Company or its Subsidiaries, taken as a whole;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the transactions contemplated hereby, including the Offer and the Merger); provided, however, that nothing in this paragraph (e) shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the Company or its Subsidiaries, taken as a whole;
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money debt or issue any debt securities, except for (A) short-term debt incurred to fund operations of the business or for cash management purposes, in each case in the ordinary course of business consistent with past practice and (B) loans or advances to or from direct or indirect wholly-owned SubsidiariesSubsidiaries in the ordinary course of business consistent with past practices, (ii) other than in the ordinary course of business, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the any material obligations of any other Person except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company, (iii) make any material loans, advances or capital contributions to or investments in any other Person except for travel advances made in the ordinary course of business consistent with past practice, make any loans or advances practice to employees of the Company or any of its Subsidiaries, Subsidiaries or (iv) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens) thereuponEncumbrances);
(g) except as may be required by applicable Law or the terms of any Employee PlanLegal Requirements, including the Company 2009 Executive Bonus Plan, as in effect on the date hereof (copies of which have been provided to Parent), A) enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any director, officer or employee in any material respect, manner or increase or decrease in any manner the compensation or fringe benefits of any director, officer or employee, or (B) pay any special bonus, remuneration or benefit to any director, officer or employee not required by any plan or director arrangement as in effect as of the date hereof; provided, however, that this paragraph (g) shall not prevent the Company or any of its Subsidiaries (except for normal increases of cash compensation i) from entering into employment agreements or offer letters with new employees in the ordinary course of business consistent with past practice to any current business, or future (ii) from increasing annual compensation and/or from providing for or amending bonus arrangements for non-officer employees below the rank of Vice President or whose base salary does not exceed $200,000 per annum), pay any bonus or special remuneration (whether in cash, equity or otherwise) to any employee, consultant, independent contractor or director (other than bonuses made in the ordinary course of business compensation reviews (to the extent that such compensation increases and new or amended bonus arrangements are consistent with past practice with respect and do not result in a material increase in benefits or compensation expense to employees who are not executive officers the Company or directors any of the Companyits Subsidiaries), or pay any benefit not required by any Employee Plan as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Plan;
(h) forgive any Loans loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective AffiliatesAffiliates or Associates;
(i) make any deposits or contributions of cash or other property to, to or take any other action to fund, fund or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts agreements subject to the Employee Plans, Plans or any other Contract of the Company other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts agreements subject to the Employee Plans in effect as of the date hereof;
(j) enter into, amend, or extend any Collective Bargaining Agreement or similar ContractAgreement;
(ik) acquire, lease (as lessee) sell, lease, license or license (as licensee) dispose of any material property or assets with a fair market value in excess any single transaction or series of $5,000,000 in the aggregate per fiscal quarterrelated transactions, except either (i) transactions required pursuant to existing Contracts as in effect on the date hereof; or (ii) sell, lease (as lessor), license (as licensor) the sale of goods or dispose grants of any property or assets non-exclusive licenses with a net book value in excess of $100,000 in any individual transaction, except (A) transactions required pursuant respect to existing Contracts as in effect on the date hereof or (B) transactions Company IP in the ordinary course of business consistent with past practice;
(l) except as may be required as a result of a change in applicable Laws Legal Requirements or in GAAP, or a change in the interpretation of GAAP with respect to Tax matters or as a result of or arising from an audit review of the consolidated financial statements of the Company and its Subsidiaries, make any change in any of the accounting principles or practices used by it;
(i) make or change any material Tax election that, individually (unless required by applicable law) or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its Subsidiaries, (ii) change any material Tax accounting method, (iii) settle or compromise any material U.S. federal, state, local or non-U.S. foreign income Tax liability or (iv) consent to any extension or waiver of any limitation period liability, other than with respect to any claim proceeding relating to a Tax liability that (A) is in progress as of the date hereof, (B) is in an amount less than or assessment for material Taxes; equal to the liability or reserve that has been recorded with respect thereto on the balance sheet included in the Selected 2005 Financial Statements or (C) is in an amount less than $250,000 in the aggregate with all other such Liabilities;
(n) enter into any a Company Intellectual Property IP Agreement or amend in any material respect any Company Intellectual Property Agreements IP Agreement or grant any release or relinquishment of any material rights under any Company Intellectual Property Agreements, except IP Agreement;
(i) to customers and enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) or (ii) nonmodify, amend or exercise any right to renew any lease or sublease of real property;
(p) grant any exclusive rights with respect to any Company IP, divest any Company IP, except if such divestiture or divestures, individually or in the aggregate, are not material to the Company, or materially modify the Company’s standard warranty terms for Company Products or services or amend or modify any product or service warranty in any manner that is likely to be materially adverse to the Company and its Subsidiaries, taken as a whole;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, (ii) enter into any Contract other than in the ordinary course of business which would be reasonably expected to result in a Company Material Adverse Effect or (iii) authorize, incur or commit to incur any new capital expenditure(s) which, individually or in the aggregate, is or are material to the Company and its Subsidiaries, taken as a whole; provided, however, that none of the foregoing shall limit any capital expenditure required pursuant to existing Contracts; and provided, further, that none of the foregoing shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the Company or its Subsidiaries, taken as a whole;
(r) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any claim, liability or obligation (absolute or accrued, asserted or unasserted, contingent or otherwise), other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings, claims and other Liabilities (i) reflected or reserved against in full in the balance sheet included in the Selected 2005 Financial Statements or incurred since December 31, 2005 in the ordinary course of business consistent with past practice or (ii) the settlement, compromise, discharge or satisfaction of which does not include any obligation (other than the payment of money) to be performed by the Company or its Subsidiaries following the Appointment Time that is not, individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole;
(s) except as required by applicable Legal Requirements or GAAP, revalue in any material respect any of its properties or assets, including writing-exclusive in-bound licenses for commercially available technology, in each case off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
(t) except as required by applicable Legal Requirements, convene any regular or special meeting (or any adjournment or postponement thereof) of the stockholders of the Company other than the Company Stockholders’ Meeting; or
(u) enter into a Contract to do any of the foregoing or knowingly take any action which results or is reasonably likely to result in any of the conditions to the Offer set forth in Annex A hereto not being satisfied, or knowingly take any action which would make any of the representations or warranties of the Company contained in this Agreement untrue or incorrect in any material respect at the scheduled expiration date of the Offer, or that would materially impair the ability of the Company to consummate the transactions contemplated hereby (including the Offer and the Merger) in accordance with the terms hereof or materially delay such consummation.
Appears in 1 contract
Negative Obligations of the Company. Except as (i1) as may be required by Applicable Law, (2) expressly contemplated required or permitted by this Agreement, (ii3) as set forth in Section 6.1 5.1 or Section 6.2 5.2 of the Company Disclosure Schedule, (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent), Letter or (iv4) as approved in advance by Parent in writing, not to be unreasonably withheld, conditioned or delayed, at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) Article VIII and the Effective Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(a) amend, or propose to adopt any amendments to, amend its certificate of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for other than (i) grants of Company Compensatory Awards to employees subject to the terms as set forth on Section 5.2(b) of the Company Disclosure Letter and (ii) the issuance and sale of shares of Company Common Stock pursuant to Company Stock Awards outstanding prior to the date hereof, (ii) the issuance of shares pursuant to the Company ESPP and (iii) Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares exercise of Company Common Stock granted Options or the vesting or settlement of other Company Compensatory Awards, in all cases in the ordinary course of business after the date of this Agreementand consistent with past practice;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary SecuritiesSecurities other than (i) in full or partial payment of the exercise price and any applicable Taxes pursuant to any exercise, except to the extent that such acquisition vesting or redemption is settlement of Company Compensatory Awards or (ii) pursuant to the terms forfeiture of any Employee Plan (as then in effect) or any agreement subject to any such Employee Plan;
Company Compensatory Awards; Table of Contents (d) other than dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine combine, subdivide, amend the terms of or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money or issue any debt securities, except for loans or advances to or from direct or indirect wholly-owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company, (iii) except for advances made in the ordinary course of business consistent with past practice, make any loans or advances to employees of the Company or any of its Subsidiaries, (iv) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries assets, tangible or intangible, or create or suffer to exist any Lien (other than Permitted Liens) thereupon;
(g) except as may be required by applicable Law or the terms of any Employee Plan, including the Company 2009 Executive Bonus Plan, as in effect on the date hereof (copies of which have been provided to Parent), enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan in any material respect, or increase or decrease the compensation or fringe benefits of any employee or director of the Company or any of its Subsidiaries (except for normal increases of cash compensation in the ordinary course of business consistent with past practice to any current or future employees below the rank of Vice President or whose base salary does not exceed $200,000 per annum), pay any bonus or special remuneration (whether in cash, equity or otherwise) to any employee, consultant, independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Plan;
(h) forgive any Loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective Affiliates;
(i) make any deposits or contributions of cash or other property to, or take any other action to fund, or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts subject to the Employee Plans, other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts subject to the Employee Plans in effect as of the date hereof;
(j) enter into, amend, or extend any Collective Bargaining Agreement or similar Contract;
(i) acquire, lease (as lessee) or license (as licensee) any property or assets with a fair market value in excess of $5,000,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as in effect on the date hereof; or (ii) sell, lease (as lessor), license (as licensor) or dispose of any property or assets with a net book value in excess of $100,000 in any individual transaction, except (A) transactions required pursuant to existing Contracts as in effect on the date hereof or (B) transactions in the ordinary course of business consistent with past practice;
(l) except as may be required as a result of a change in applicable Laws or in GAAP, make any change in any of the accounting principles or practices used by it;
(i) make or change any Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its Subsidiaries, (ii) change any material Tax accounting method, (iii) settle or compromise any material U.S. federal, state, local or non-U.S. Tax liability or (iv) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes; (n) enter into any Company Intellectual Property Agreement or amend any Company Intellectual Property Agreements or grant any release or relinquishment of any rights under any Company Intellectual Property Agreements, except (i) to customers and (ii) non-exclusive in-bound licenses for commercially available technology, in each case in the ordinary course of business consistent with past practice;
Appears in 1 contract
Negative Obligations of the Company. Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 6.1 5.1 or Section 6.2 5.2 of the Company Disclosure Schedule, (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent)Plan, or (iv) as approved in advance by Parent in writingwriting (which approval shall not be unreasonably withheld or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) Article VIII and the Effective Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(a) amend, or propose to adopt any amendments to, its certificate of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (i) the issuance and sale of shares of Company Common Stock pursuant to Company Stock Awards outstanding prior to the date hereof, hereof and (ii) the issuance of shares pursuant grants to the Company ESPP and (iii) Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares newly hired employees of Company Common Stock granted Awards issued in the ordinary course of business after consistent with past practice, with a per share exercise price (if applicable) that is no less than the then-current fair market value of a share of Company Common Stock and not subject to any accelerated vesting or other provision that would be triggered solely as a result of the consummation of the transactions contemplated by this Agreement so long as the aggregate number of shares of Company Common Stock subject to such additional Company Stock Awards does not exceed the sum of (x) 50,000, plus (y) the number of shares of Company Common Stock subject to any Company Stock Awards (or portion thereof) outstanding as of the date hereof that is subsequently canceled, terminated or forfeited as the result of this Agreementthe voluntary or involuntary termination of employment of any employee;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities, except to the extent that such acquisition or redemption is pursuant to the terms of any Employee Plan (as then in effecteffect on the date hereof) or any agreement subject to any such Employee Plan;
(d) other than dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money or issue any debt securities, except for loans or advances to or from direct or indirect wholly-owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company, (iii) except for advances made in the ordinary course of business consistent with past practice, make any loans or advances to employees of the Company or any of its Subsidiaries, (iv) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries Subsidiaries' assets, tangible or intangible, or create or suffer to exist any Lien (other than Permitted Liens) thereupon;
(g) except as may be required by applicable Law or the terms of any Employee Plan, including the Company 2009 Executive Bonus Plan, Plan as in effect on the date hereof (copies of which have been provided to Parent)hereof, enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan in any material respect, or increase or decrease the compensation or fringe benefits of any director, executive officer or employee or director of the Company or any of its Subsidiaries (except for normal increases of cash compensation in the ordinary course of business consistent with past practice to any current or future employees below the rank of Vice President or employee whose base salary does not exceed $200,000 150,000 per annum), pay any bonus or special remuneration (whether in cash, equity or otherwise) to any employeedirector, consultant, independent contractor officer or director employee (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Planhereof;
(h) forgive any Loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective Affiliates;
(i) make any deposits or contributions of cash or other property to, or take any other action to fund, or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts subject to the Employee Plans, other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts subject to the Employee Plans in effect as of the date hereof;
(j) enter into, amend, or extend any Collective Bargaining Agreement or similar ContractAgreement;
(i1) acquire, lease (as lessee) or license (as licensee) any property or assets with a fair market value in excess of $5,000,000 500,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as in effect on the date hereof; or (ii2) sell, lease (as lessor), license (as licensor) or dispose of any property or assets with a net book fair market value in excess of $100,000 500,000 in any individual transactionthe aggregate per fiscal quarter, except (Ai) transactions required pursuant to existing Contracts as in effect on the date hereof hereof, (ii) sales of Loans and sales of investment securities subject to repurchase, in each case in the ordinary course of business consistent with past practice, or (Biii) transactions pledges of assets to secure public deposits accepted in the ordinary course of business consistent with past practice;
(l) except as may be required as a result of a change in applicable Laws or in GAAP, make any change in any of the accounting principles or practices used by it;
(i) make or change any material Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its Subsidiarieselection, (ii) change any material Tax accounting method, (iii) settle or compromise any material U.S. federal, state, local or non-U.S. Tax liability or (iviii) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes; ;
(n) enter into any Company Intellectual Property Agreement IP Licenses or amend any Company Intellectual Property Agreements IP Licenses or grant any release or relinquishment of any rights under any Company Intellectual Property AgreementsIP Licenses, except (i) to customers and (ii) non-exclusive in-bound licenses for commercially available technology, in each case in the ordinary course of business consistent with past practice;
(o) grant any exclusive rights with respect to any Company Intellectual Property, divest any Company Intellectual Property, except if such divestiture or divestures, individually or in the aggregate, are not material to the Company, or materially modify the Company's standard warranty terms for Company Products or services or amend or modify any product or service warranty in any manner that is likely to be materially adverse to the Company or any of its Subsidiaries;
(p) authorize, incur or commit to incur any capital expenditure(s) which, individually or in the aggregate, is or are material to the Company, other than pursuant to existing Contracts as in effect on the date hereof;
(q) at any time permit the net capital of thinkorswim, Inc. to be less than the greater of (x) an amount equal to 81/3% of the "aggregate indebtedness" (as defined in subparagraph (c)(i) of the Net Capital Rule) of thinkorswim, Inc., and (y) $2.5 million;
(1) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any claim, liability or obligation (absolute or accrued, asserted or unasserted, contingent or otherwise), other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings, claims and other Liabilities that (i) are reflected or reserved against in full in the Balance Sheet or incurred since the date of the Balance Sheet in the ordinary course of business consistent with past practice, (ii) are covered by existing insurance policies, or (iii) otherwise do not involve the payment of money in excess of $250,000 in the aggregate, in each case where the settlement, compromise, discharge or satisfaction of which does not include any obligation (other than the payment of money not in excess of $250,000 in the aggregate above the amounts reflected or reserved in the Balance Sheet in respect of such Legal Proceeding) to be performed by the Company or its Subsidiaries following the Effective Time; or (2) take any action described in Section 5.2(r)(2) of the Company Disclosure Schedule;
(s) except as required by applicable Laws or GAAP, revalue in any material respect any of its properties or assets including writing-off notes or accounts receivable;
(t) except as required by applicable Laws, convene any regular or special meeting (or any adjournment or postponement thereof) of the stockholders of the Company other than the Company Stockholder Meeting;
(u) other than in the ordinary course of business consistent with past practice, (i) enter into, renew, extend or terminate any Material Contract (or any Contract that would have been a Material Contract if it had been in effect on the date hereof); or (ii) make any material amendment or change in any such Material Contract;
(i) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee); (ii) modify, amend or exercise any right to renew any lease or sublease of real property; or (iii) make application for the opening, relocation or closing of any, or open, relocate or close any, branch office or other real property;
(w) enter into any new line of business or change its material operating policies in any material respect, except as required by Law or by policies imposed by any Governmental Authority;
(x) enter into any securitizations of any Loans or create any special purpose funding or variable interest entity;
(y) enter into a Contract to do any of the foregoing or make any formal or informal arrangement or understanding, whether or not binding, with respect to any of the foregoing; or
(z) knowingly take any action which (i) results or is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied, (ii) has or is reasonably likely to have in a Material Adverse Effect on the Company, (iii) would materially impair the Company's ability to consummate the transactions contemplated by this Agreement in accordance with the terms hereof and applicable Legal Requirements or (iv) would materially delay the consummation of the Merger and the other transactions contemplated by this Agreement.
Appears in 1 contract
Negative Obligations of the Company. Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 6.1 or Section 6.2 of the Company Disclosure Schedule, Schedule or (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent), or (iv) as approved in advance by Parent in writing, at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) Article IX and the Effective Appointment Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(a) amend, or propose to adopt any amendments to, to or amend its certificate of incorporation or bylaws or comparable organizational documents; provided, however, that nothing in this paragraph (a) shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the Company or its Subsidiaries, taken as a whole;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (i) the issuance and sale of shares of Company Common Stock Shares pursuant to Company Stock Awards Options outstanding prior to the date hereof, hereof and (ii) the issuance of shares pursuant grants to the Company ESPP and (iii) Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares newly hired employees of Company Common Stock granted Options issued in the ordinary course of business after consistent with past practice, with a per share exercise price no less than the then-current market price of a Company Share and not subject to any accelerated vesting or other provision that would be triggered as a result of the consummation of the transactions contemplated hereby (including the Offer and the Merger) and/or termination of employment, so long as (A) the aggregate number of Shares subject to such additional Stock Options does not exceed the sum of (x) One Hundred and Fifty Thousand (150,000), plus (y) the number of Company Shares subject to any Stock Option (or portion thereof) outstanding as of the date hereof that is subsequently canceled, terminated or forfeited as the result of this Agreementthe voluntary or involuntary termination of employment of any employee and (B) the aggregate number of Company Shares subject to Stock Options granted to any individual newly hired employee does not exceed Twenty-Five Thousand (25,000);
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities; provided, except however, that nothing in this paragraph (c) shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the extent that such acquisition Company or redemption is pursuant to the terms of any Employee Plan (its Subsidiaries, taken as then in effect) or any agreement subject to any such Employee Plana whole;
(d) other than cash dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock; provided, however, that nothing in this paragraph (d) shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the Company or its Subsidiaries, taken as a whole;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the transactions contemplated hereby, including the Offer and the Merger); provided, however, that nothing in this paragraph (e) shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the Company or its Subsidiaries, taken as a whole;
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money debt or issue any debt securities, except for (A) short-term debt incurred to fund operations of the business in the ordinary course of business consistent with past practice and (B) loans or advances to or from direct or indirect wholly-owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company, (iii) except for advances made in the ordinary course of business consistent with past practice, make any loans loans, advances or advances to employees of the Company or any of its Subsidiaries, (iv) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries assets, tangible or intangible, or create or suffer to exist any Lien (other than Permitted Liens) thereupon;
(g) except as may be required by applicable Law or the terms of any Employee Plan, including the Company 2009 Executive Bonus Plan, as in effect on the date hereof (copies of which have been provided to Parent), enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan in any material respect, or increase or decrease the compensation or fringe benefits of any employee or director of the Company or any of its Subsidiaries (except for normal increases of cash compensation travel advances in the ordinary course of business consistent with past practice to any current or future employees below the rank of Vice President or whose base salary does not exceed $200,000 per annum), pay any bonus or special remuneration (whether in cash, equity or otherwise) to any employee, consultant, independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Plan;
(h) forgive any Loans to any employees, officers or directors of the Company or any of its Subsidiaries or (iv) mortgage or pledge any of its or its Subsidiaries’ assets, tangible or intangible, or any stock of any of its Subsidiaries, or create or suffer to exist any Lien thereupon (other than Permitted Liens);
(g) other than in the ordinary course and except as may be required by applicable Legal Requirements, enter into, adopt, amend (including acceleration of vesting), modify or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, phantom stock, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any director or officer;
(h) grant to any director, officer, employee or consultant of the Company or any of their respective Affiliates;its Subsidiaries any increase in compensation, bonus or other benefits except (A) increases in connection with promotions in the ordinary course of business, (B) increases in base salaries in accordance with past practices so long as such increases do not exceed 4% per year in aggregate, (C) grants of non-plan bonuses that do not exceed $100,000 per quarter in aggregate, or (D) bonuses granted in accordance with existing bonus plans, policies agreements or arrangements listed in the Company Disclosure Schedule, (i) grant to any director, officer, employee or consultant of the Company or any of its Subsidiaries any severance or termination pay or benefits or any increase in severance, change of control or termination pay or benefits, in each case except in connection with actual termination of any such Person to the extent required under applicable Legal Requirements or the existing plans, policies, agreements or arrangements listed in the Company Disclosure Schedule, (ii) establish, adopt, enter into or amend any Employee Plan (other than offer letters that contemplate “at will” employment) or collective bargaining agreement, (iii) except as required pursuant to applicable Legal Requirements or the existing plans, policies, agreements or arrangements listed in the Company Disclosure Schedule, take any action to accelerate any rights or benefits or take any action to fund or in any other way secure the payment of compensation or benefits under any Employee Plan or (iv) make any Person (after the date of this Agreement) a beneficiary of any retention or severance plan under which such Person is not as of the date of this Agreement a beneficiary which would entitle such Person to vesting, acceleration or any other right as a consequence of consummation of the transactions contemplated by this Agreement.
(i) make any deposits or contributions of cash or other property to, to or take any other action to fund, fund or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts agreements subject to the Employee Plans, Plans or any other Contract of the Company other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts agreements subject to the Employee Plans in effect as of the date hereof;
(j) enter into, amend, or extend any Collective Bargaining Agreement or similar ContractAgreement;
(i) acquire, lease (as lessee) or license (as licensee) any property or assets with a fair market value in excess of $5,000,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as in effect on the date hereof; or (ii) sell, lease (as lessor), license (as licensor) or dispose of any property or assets with a net book value in excess of $100,000 in any individual transaction, except (A) transactions required pursuant to existing Contracts as in effect on the date hereof or (B) transactions in the ordinary course of business consistent with past practice;
(lk) except as may be required as a result of a change in applicable Laws Legal Requirements or in GAAP, make any change in any of the accounting principles or practices used by it;
(i) make or change any material Tax election that(unless required by applicable Legal Requirements) or (ii) settle or compromise any material federal, individually state, local or foreign income Tax liability, other than, with respect to any proceeding relating to a Tax liability that is in progress as of the date hereof, for amounts not exceeding $250,000 in the aggregate;
(i) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) or (ii) modify, amend or exercise any right to renew any lease or sublease of real property;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, (ii) enter into any Contract other than in the ordinary course of business which would be reasonably expected to adversely affect result in a Company Material Adverse Effect or (iii) authorize, incur or commit to incur any new capital expenditure(s) which exceed Three Hundred Thousand Dollars ($300,000) taken as a whole or which exceed One Hundred Thousand Dollars ($100,000) for any single capital expenditure or any related group of capital expenditures; provided, however, that none of the foregoing shall limit any capital expenditure required pursuant to existing Contracts; and provided, further, that none of the foregoing shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the Company or its Subsidiaries, taken as a whole;
(o) sell, lease, license, pledge, abandon, cancel, surrender, or allow to lapse or expire, or otherwise dispose of or encumber any material respect properties or material assets (including Intellectual Property and the Tax liability or Tax attributes capital stock of any of the Company’s Subsidiaries) of the Company or any of its Subsidiaries, other than licensing in the ordinary course of business;
(iip) change adopt or implement any material Tax accounting methodstockholder rights plan, “poison pill” anti-takeover plan or other similar plan that, in each case, is applicable to Oracle Corporation, Parent, Merger Sub or the transactions contemplated by this Agreement, or amend or terminate the Rights Agreement Amendment;
(iii) settle or compromise any material U.S. federal, state, local or non-U.S. Tax liability or (iv) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes; (nq) enter into any Company Intellectual Property Agreement transaction, commitment or amend Contract, or relinquish or terminate any Company Intellectual Property Agreements Contract or grant other right, in any release individual case with an annual value in excess of $250,000 or relinquishment an aggregate value in excess of any rights under any Company Intellectual Property Agreements$1,000,000, except other than (i) to customers and entering into software license agreements under which the Company or any of its Subsidiaries is the licensor in the ordinary course of business; (ii) non-exclusive in-bound licenses for commercially available technology, capital expenditures made in each case compliance with Section 6.2(n)(iii) hereof; (iii) service or maintenance contracts entered into in the ordinary course of business consistent pursuant to which the Company or any of its Subsidiaries is providing services to customers; (iv) termination of leases in connection with past practicerestructuring or otherwise that do not have a material adverse impact on the business of the Company or its Subsidiaries; (v) non-exclusive distribution agreements entered into in the ordinary course of business that provide for distribution of a Company software product by a third party; (vi) non-exclusive OEM agreements that are terminable without penalty within six months of the date of agreement; (vii) anything permitted under Section 6.2(l)(ii) or 6.2(r) hereof;
(r) institute, settle, or agree to settle any material proceeding pending or threatened before any arbitrator, court or other Governmental Entity (for the avoidance of doubt, any settlement or Proceeding, consent decree which involves a conduct remedy or injunctive or similar relief or has a restrictive impact on business or involves payments in excess of $500,000 shall be deemed to be material), other than any proceeding brought by the Company against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(s) agree to: (i) any exclusivity provision or covenant of the Company or any of its Subsidiaries not to compete with the business of any other Person; or (ii) any other covenant of the Company or any of its Subsidiaries restricting in any material respect the development, manufacture, marketing or distribution of the products or services of the Company or any of its Subsidiaries or otherwise limiting in any material respect the freedom of the Company or any of its Subsidiaries to compete in any line of business or with any Person or in any area or to own, operate, sell, transfer, pledge or otherwise dispose of or encumber any material assets or that would so limit the freedom of Parent or any of its Affiliates in any material respect after the consummation of the transactions contemplated hereby; or
(t) enter into a Contract or otherwise agree to take any of the actions referenced or described by this Section 6.2.
Appears in 1 contract
Negative Obligations of the Company. Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 6.1 5.1 or Section 6.2 5.2 of the Company Disclosure Schedule, (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent), or (iv) as approved in advance by Parent in writing, at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) Article VIII and the Effective Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(a) amend, or propose to adopt any amendments to, its certificate of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (i) the issuance and sale of shares of Company Common Stock pursuant to Company Stock Awards outstanding prior to the date hereof, (ii) the issuance of shares pursuant to the Company ESPP and (iii) Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares of Company Common Stock granted in the ordinary course of business after the date of this Agreement;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities, except to the extent that such acquisition or redemption is pursuant to the terms of any Employee Plan (as then in effect) or any agreement subject to any such Employee Plan;
(d) other than dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money or issue any debt securities, except for loans or advances to or from direct or indirect wholly-owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company, (iii) except for advances made in the ordinary course of business consistent with past practice, make any loans or advances to employees of the Company or any of its Subsidiaries, (iv) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries assets, tangible or intangible, or create or suffer to exist any Lien (other than Permitted Liens) thereupon;
(g) except as may be required by applicable Law or the terms of any Employee Plan, including the Company 2009 Executive Bonus Plan, as in effect on the date hereof (copies of which have been provided to Parent), enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan in any material respect, or increase or decrease the compensation or fringe benefits of any employee or director of the Company or any of its Subsidiaries (except for normal increases of cash compensation in the ordinary course of business consistent with past practice to any current or future employees below the rank of Vice President or whose base salary does not exceed $200,000 per annum), pay any bonus or special remuneration (whether in cash, equity or otherwise) to any employee, consultant, independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Plan;
(h) forgive any Loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective Affiliates;
(i) make any deposits or contributions of cash or other property to, or take any other action to fund, or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts subject to the Employee Plans, other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts subject to the Employee Plans in effect as of the date hereof;
(j) enter into, amend, or extend any Collective Bargaining Agreement or similar Contract;
(i1) acquire, lease (as lessee) or license (as licensee) any property or assets with a fair market value in excess of $5,000,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as in effect on the date hereof; or (ii2) sell, lease (as lessor), license (as licensor) or dispose of any property or assets with a net book value in excess of $100,000 in any individual transaction, except (A) transactions required pursuant to existing Contracts as in effect on the date hereof or (B) transactions in the ordinary course of business consistent with past practice;
(l) except as may be required as a result of a change in applicable Laws or in GAAP, make any change in any of the accounting principles or practices used by it;
(i) make or change any Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its Subsidiaries, (ii) change any material Tax accounting method, (iii) settle or compromise any material U.S. federal, state, local or non-U.S. Tax liability or (iv) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes; (n) enter into any Company Intellectual Property Agreement or amend any Company Intellectual Property Agreements or grant any release or relinquishment of any rights under any Company Intellectual Property Agreements, except (i) to customers and (ii) non-exclusive in-bound licenses for commercially available technology, in each case in the ordinary course of business consistent with past practice;
Appears in 1 contract
Samples: Merger Agreement (NetApp, Inc.)
Negative Obligations of the Company. Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 6.1 or Section 6.2 5.2 of the Company Disclosure Schedule, Schedule or (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent), or (iv) as approved in advance by Parent in writingwriting (which approval shall not be unreasonably withheld, delayed or conditioned), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) Article VIII hereof and the Effective Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(a) amend, or propose to adopt any amendments to, to or amend its certificate of incorporation or bylaws or comparable organizational documents; provided, however, that the Company may effect a reverse stock split in order to regain compliance with Nasdaq Marketplace Rule 4450(a)(5);
(b) (i) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (iA) the issuance and sale of shares of Company Common Stock pursuant to the Company ESPP or pursuant to Company Options and Company Restricted Stock Awards Units outstanding prior to the date hereof, (ii) the issuance of shares pursuant to the Company ESPP hereof and (iiiB) grants to newly hired employees of Company Options and Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares of Company Common Stock granted issued in the ordinary course of business after consistent with past practice, with a per share exercise price (with respect to Company Stock Options) that is no less than the date then-current market price of this Agreementa share of Company Common Stock and not subject to any accelerated vesting or other provision that would be triggered as a result of the consummation of the Merger or (ii) except for the acceleration of vesting of certain outstanding Company Options or other amendments in connection with the Merger, amend any term of any Company Capital Stock or Company Derivative Security (in each case, whether by merger, consolidation or otherwise), other than in each case in connection with a transaction between Company and any of its Subsidiaries or between such Subsidiaries;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities, except to for repurchases, redemptions or acquisitions required by or in connection with the extent that such acquisition or redemption is pursuant to respective terms, as of the terms date hereof, of any Employee Plan (Company Option Plans as then in effect) effect on the date of this Agreement in the ordinary course of the operations of such plan consistent with past practice or any agreement subject except as necessary to any such Employee Plancomply with Section 6.12;
(d) other than cash dividends or distributions made by any direct or indirect wholly-wholly owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock; provided, however, that the Company may effect a reverse stock split in order to regain compliance with Nasdaq Marketplace Rule 4450(a)(5);
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its SubsidiariesSubsidiaries (other than the transactions contemplated by this Agreement);
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money Indebtedness or issue any debt securities, except for (A) short-term debt incurred to fund operations of the business in the ordinary course of business consistent with past practice that does not exceed $100,000 individually or $500,000 in the aggregate and (B) loans or advances to or from direct or indirect wholly-wholly owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly-wholly owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person except for travel advances made in the ordinary course of business consistent with past practice, make any loans or advances practice to employees of the Company or any of its Subsidiaries, Subsidiaries or (iv) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens) thereuponEncumbrances);
(g) except as may be required by applicable Law or the terms of any Employee Plan, including the Company 2009 Executive Bonus Plan, as in effect on the date hereof (copies of which have been provided to Parent)Legal Requirements, enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any director, officer or employee in any material respect, manner or increase or decrease in any manner the compensation or fringe benefits of any employee director, officer or director employee, pay any special bonus or special remuneration to any director, officer or employee, or pay any benefit not required by any plan or arrangement as in effect as of the Company or any of its Subsidiaries (date hereof, in each case except for normal increases of cash compensation in the ordinary course of business consistent with past practice to any current or future employees below the rank of Vice President or whose base salary does not exceed $200,000 per annum), pay any bonus or special remuneration (whether in cash, equity or otherwise) to any employee, consultant, independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Planpractices;
(h) forgive any Loans loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective AffiliatesAffiliates or Associates;
(i) make enter into any deposits or contributions of cash or other property to, or take any other action to fund, or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts subject to the Employee Plans, other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts subject to the Employee Plans in effect as of the date hereofCollective Bargaining Agreement;
(j) enter intoacquire, amendsell, lease, license or extend dispose of any Collective Bargaining Agreement material property or similar Contract;
material assets in any single transaction or series of related transactions, except either (i) acquire, lease (as lessee) or license (as licensee) any property or assets with a fair market value in excess of $5,000,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as in effect on the date hereof; or (ii) sell, lease (as lessor), license (as licensor) the sale of goods or dispose grants of any property or assets non-exclusive licenses with a net book value in excess of $100,000 in any individual transaction, except (A) transactions required pursuant respect to existing Contracts as in effect on the date hereof or (B) transactions Company IP in the ordinary course of business consistent with past practicebusiness;
(lk) except as may be required as a result of a change in applicable Laws Legal Requirements or in GAAP, make any material change in any of the accounting principles or practices used by it;
(i) make or change any material Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its Subsidiaries(unless required by applicable Legal Requirements), (ii) change any material Tax accounting method, (iii) settle or compromise any material U.S. federal, state, local or non-U.S. foreign income Tax liability, other than with respect to any proceeding relating to a Tax liability that (A) is in progress as of the date hereof, (B) is in an amount less than or equal to the liability or reserve that has been recorded with respect thereto on the Balance Sheet or (ivC) is in an amount less than $100,000 in the aggregate with all other such Liabilities or (iii) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes; ;
(nm) (i) enter into any Company Intellectual Property Agreement lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) or (ii) modify, amend or exercise any Company Intellectual Property Agreements right to renew any lease or sublease of real property;
(n) grant any release exclusive rights with respect to any material Company IP, or relinquishment of divest any rights under any material Company Intellectual Property Agreements, except IP;
(i) to customers and acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, (ii) non-exclusive in-bound licenses for commercially available technologyenter into any Contract other than in the ordinary course of business which would be reasonably expected to result in a Company Material Adverse Effect or (iii) authorize, incur or commit to incur any new capital expenditure(s) which individually exceed $50,000 or, in each case the aggregate, exceed $500,000; provided, however, that none of the foregoing shall limit any capital expenditure required pursuant to existing Contracts;
(p) enter into any agreement or arrangement that limits or otherwise restricts in any material respect the Company or any of its Subsidiaries or any successor thereto or that would reasonably be expected to, after the Effective Time, limit or restrict Parent or any of its Subsidiaries (including the Surviving Entity or any of its Subsidiaries) in any material respect from engaging or competing in any material line of business in which such Person or any Party hereto engages in as of the date hereof, in any location or with any Person, other than modifications, renewals or extensions of agreements or arrangements (provided that such modifications, renewals or extensions do not materially increase limitations or restrictions on business);
(q) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any claim, liability or obligation (absolute or accrued, asserted or unasserted, contingent or otherwise), other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings, claims and other Liabilities (i) reflected or reserved against in full in the Balance Sheet or incurred since March 31, 2008 in the ordinary course of business consistent with past practice or (ii) the settlement, compromise, discharge or satisfaction of which does not include any obligation (other than the payment of money) to be performed by the Company or its Subsidiaries following the Effective Time that is not, individually or in the aggregate, material to the Company;
(r) except as required by applicable Legal Requirements or GAAP, (i) revalue in any material respect any of its properties or assets or (ii) effect any material write-down or write-off of inventory, notes or accounts receivable other than in the ordinary course of business consistent with past practice;
(s) fail to use all commercially reasonable efforts to maintain in full force and effect insurance coverage substantially similar to insurance coverage maintained on the date hereof;
(t) enter into, modify, amend or terminate any material Contract outside the ordinary course of business consistent with past practice, or waive, release or assign any material rights or claims (other than write-offs or other compromises of notes or accounts receivable in the ordinary course of business consistent with past practice);
(u) in connection with the self-disclosure described in Section 7.3(d), (i) hold itself out as a legal or de facto agent, broker, or representative of Parent or its Affiliates; (ii) bind Parent or its Affiliates, or create or assume, directly or indirectly, any express or implied obligation on behalf of Parent or its Affiliates; or (iii) prepare, complete or file any such self-disclosure that has been prepared or finalized without Parent’s involvement and consultation;
(v) invest funds in debt securities or other instruments maturing more than 90 days after the date of investment; or
(w) authorize, recommend, agree, make any commitment, or announce an intention to take any of the actions prohibited by this Section 5.2.
Appears in 1 contract
Negative Obligations of the Company. Except as (i1) as may be required by Applicable Law, (2) expressly contemplated required or permitted by this Agreement, (ii3) as set forth in Section 6.1 5.1 or Section 6.2 5.2 of the Company Disclosure Schedule, (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent), Letter or (iv4) as approved in advance by Parent in writing, not to be unreasonably withheld, conditioned or delayed, at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) Article VIII and the Effective Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(a) amend, or propose to adopt any amendments to, amend its certificate of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for other than (i) grants of Company Compensatory Awards to employees subject to the terms as set forth on Section 5.2(b) of the Company Disclosure Letter and (ii) the issuance and sale of shares of Company Common Stock pursuant to Company Stock Awards outstanding prior to the date hereof, (ii) the issuance of shares pursuant to the Company ESPP and (iii) Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares exercise of Company Common Stock granted Options or the vesting or settlement of other Company Compensatory Awards, in all cases in the ordinary course of business after the date of this Agreementand consistent with past practice;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary SecuritiesSecurities other than (i) in full or partial payment of the exercise price and any applicable Taxes pursuant to any exercise, except to the extent that such acquisition vesting or redemption is settlement of Company Compensatory Awards or (ii) pursuant to the terms forfeiture of any Employee Plan (as then in effect) or any agreement subject to any such Employee PlanCompany Compensatory Awards;
(d) other than dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine combine, subdivide, amend the terms of or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than (i) the transactions contemplated hereby, including the Merger, and (ii) transactions between the Company and any direct or indirect wholly owned Company Subsidiary or between direct or indirect wholly owned Company Subsidiaries);
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money debt or issue any debt securities, except for (A) short-term debt incurred to fund operations of the business in the ordinary course of business consistent with past practice and (B) loans or advances to or from direct or indirect wholly-owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person except for travel advances made in the ordinary course of business consistent with past practice, make any loans or advances practice to employees or members of the Company Board of the Company or any of its Subsidiaries, Subsidiaries or (iv) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens), and (C) thereuponpurchase money financings and capital leases entered into in the ordinary course of business with a value of $1,000,000 individually and $5,000,000 in the aggregate;
(g) except (A) as may be required by applicable Law Applicable Law, the terms of this Agreement, or the terms of any Employee Plan, including Plan or (B) as set forth on Section 5.2(g) of the Company 2009 Executive Bonus PlanDisclosure Letter, as in effect on the date hereof (copies of which have been provided to Parent), i) enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan in any material respect, or increase or decrease the compensation or fringe benefits of any employee or director of the Company or any of its Subsidiaries (except for normal increases of cash compensation in the ordinary course of business consistent with past practice to (other than employment agreement or offer letters for employees at the vice president level or below) or (ii) increase in any current manner the compensation or future employees below the rank fringe benefits of Vice President any director, officer, employee, consultant or whose base salary does not exceed $200,000 per annum), independent contractor or pay any special bonus or special remuneration (whether in cash, equity or otherwise) to any director, officer, employee, consultant, consultant or independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Plancontractor;
(h) forgive any Loans loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective Affiliates;
(i) make any deposits or contributions of cash or other property to, to or take any other action to fund, fund or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts agreements subject to the Employee Plans, Plans or any other Contract of the Company or any of its Subsidiaries other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts agreements subject to the Employee Plans in effect as of the date hereof;
(j) enter into, amend, or extend any Collective Bargaining Agreement or similar ContractAgreement;
(ik) hire, terminate, demote or promote or offer to hire, or promote any employee or potential employee with a title of vice president or above, or encourage any employees with a title of vice president or above to resign from or terminate his relationship with the Company or any of its Subsidiaries, in each case, other than as expressly contemplated by this Agreement;
(l) acquire, lease (as lessee) or license (as licensee) any property or assets with a fair market value in excess of $5,000,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as in effect on the date hereof; or (ii) sell, lease (as lessor)lease, license (as licensor) or dispose of any property or assets material to the Company and its Subsidiaries, taken as a whole, in any single transaction or series of related transactions or acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, except in each case for (i) acquisitions from wholly-owned Company Subsidiaries, (ii) investments in equity and debt instruments that constitute cash, cash equivalents or debt investments with a net book value maturity date of less than 365 days consistent with the Company’s past cash management programs, (iii) the purchase of equipment, supplies and inventory in excess the ordinary course of $100,000 business, (iv) inbound licenses of Intellectual Property Rights in any individual transaction, except the ordinary course of business and (Av) transactions required pursuant to existing Contracts as in effect on the date hereof or (B) transactions non-exclusive licenses granted in the ordinary course of business consistent with past practice;
(lm) except as may be required as a result of a change in applicable Laws Applicable Law or in GAAPGAAP or SEC rules and regulations, make any material change in any of the accounting principles or practices used by it;
(i) make (other than in the ordinary course of preparing and filing Tax Returns) or change any material Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its Subsidiarieselection, (ii) change amend any material Tax accounting methodReturn, (iii) settle or compromise any material U.S. federalLiability for Taxes, state, local (iv) adopt or non-U.S. change any Tax liability accounting method or (ivv) consent to any extension or waiver of any limitation period with respect to any material claim or assessment for material Taxes; ;
(ni) enter into any Company Intellectual Property Agreement lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) or (ii) modify, amend or exercise any right to renew any lease or sublease of real property or waive or violate any term or condition thereof or grant any consents thereunder or (iii) purchase any interest in real property (or enter any agreement to do so);
(p) abandon, cancel or allow to lapse or fail to maintain or protect any Company Intellectual Property Agreements Rights, except pursuant to the exercise of good faith business judgment by the Company following notice to Parent;
(q) other than in the ordinary course of business consistent with past practice, enter into, renew, amend or grant any release or relinquishment of any rights under any Material Contract;
(r) other than capital expenditures contemplated by the Company’s capital expenditures set forth in Section 5.2(r) of the Company Intellectual Property AgreementsDisclosure Letter, except incur any new capital expenditure(s) that, individually or in the aggregate, would create obligations to the Company or any of its Subsidiaries in excess of the amount set forth in Section 5.2(r) of the Company Disclosure Letter;
(s) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any claim, Liability or obligation (absolute or accrued, asserted or unasserted, contingent or otherwise), other than the settlement or compromise of a Legal Proceeding (i) to customers and reflected or reserved against in full in the Company Balance Sheet or (ii) nonthat does not include any obligation (other than the payment of money of an aggregate of $500,000 or less in excess of available insurance coverage (including deductibles and retentions) maintained by the Company or its Subsidiaries relating to the payment of such amounts) to be performed by the Company or its Subsidiaries following the Effective Time that is or would reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole;
(t) except as required by Applicable Law or GAAP, revalue in any material respect any of its properties or assets including writing-exclusive in-bound licenses for commercially available technology, in each case off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
(u) grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment, Lien or charge affecting any real property or any part thereof, other than Permitted Liens; convey any interest in any Real Property;
(v) sell, lease, license or transfer to any person or entity any rights to any Company IP except for non-exclusive licenses granted in the ordinary course of business consistent with past practice; and
(w) authorize, commit or enter into a Contract to do any of the foregoing actions that are prohibited pursuant to this Section 5.2.
Appears in 1 contract
Samples: Merger Agreement (Oclaro, Inc.)
Negative Obligations of the Company. Except (ix) as expressly required under or contemplated by the terms of this Agreement or permitted as required by this Agreementapplicable Law, (iiy) as set forth in Section 6.1 or Section 6.2 5.3 of the Company Disclosure Schedule, (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent), Letter or (ivz) as approved in advance by Parent in writing, which consent, with respect to Section 5.3(x), shall not be unreasonably withheld, delayed or conditioned, at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees of Parent constitute at least a majority of the Company Board pursuant to Section 2.4(a) and the Effective TimePre-Closing Period, the Company shall not do any of the following (and shall not permit cause its Subsidiaries to not) do any of the following:
(a) amend(i) establish a record date for, declare, set aside or pay any dividends on, or propose make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of the Acquired Corporations or any options, warrants, or rights to adopt acquire any amendments tosuch shares or other equity interests, other than in connection with the exercise of Company Options and in connection with withholding to satisfy the exercise price and/or Tax obligations with respect to Company Options, or (iii) split, combine, reclassify or otherwise amend the terms of any of its certificate capital stock or other equity interests or authorize the issuance of incorporation any other securities in respect of, in lieu of or bylaws in substitution for equity, or comparable organizational documentsrepurchase or otherwise acquire, directly or indirectly, any of its equity interests;
(b) authorize for issuance, issue, sell, deliver deliver, grant, pledge, transfer, encumber or agree or commit to issue, sell sell, deliver, grant, pledge, transfer or deliver encumber (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities Shares, any securities of any Subsidiary or any Subsidiary Securitiesinstrument convertible into or exchangeable for any capital stock, equity interest or other security of the Company, except for (i) the issuance and sale of shares of Company Common Stock Shares pursuant to Company Stock Awards Options outstanding prior to the date hereofAgreement Date and except that the Company may issue Company Options to new employees who were offered Company Options as part of offer letters that were executed prior to the Agreement Date, as set forth in Section 5.3(b) of the Company Disclosure Letter;
(c) adopt, amend, authorize or propose to amend its certificate of incorporation or bylaws (or similar charter or organizational documents);
(d) create or form any Subsidiary, acquire any equity interest in any other Person or enter into any joint venture, partnership, limited liability corporation or similar arrangement;
(e) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) the issuance of shares pursuant any assets that are otherwise material to the Company ESPP Acquired Corporations;
(f) directly or indirectly sell, lease, license, sublicense, sell and leaseback, abandon, transfer, assign, exchange, mortgage, pledge or otherwise encumber or subject to any Lien (iiiother than Permitted Liens) Company Restricted Stock Units or otherwise dispose in whole or in part of any of its material properties, assets or rights or any interest therein, except (i) for entering into non-exclusive outbound licenses to purchase up service providers or where no rights to an aggregate of 250,000 shares of Company Common Stock granted develop or commercialize any Product have been granted, clinical trial agreements and materials transfer agreements in the ordinary course of business after and (ii) pursuant to dispositions of obsolete, surplus or worn out assets that are no longer useful in the date conduct of this Agreementthe business of the Acquired Corporations;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities, except to the extent that such acquisition or redemption is pursuant to the terms of any Employee Plan (as then in effect) or any agreement subject to any such Employee Plan;
(d) other than dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(eg) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its SubsidiariesAcquired Corporations, except for the Transactions;
(fh) (i) incur, create, assume or otherwise become liable for, any indebtedness for borrowed money, any obligations under conditional or installment sale Contracts or other retention Contracts relating to purchased property, any capital lease obligations or any guarantee or any such indebtedness of any other Person, issue or sell any debt securities, options, warrants, calls or other rights to acquire any debt securities of the Acquired Corporations, guarantee any debt securities of any other Person, enter into any “keep well” or other agreement to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing except accounts payable to trade creditors (collectively, “Indebtedness”), or amend, modify or refinance any Indebtedness, or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, except for, in each case, intercompany loans among the Acquired Corporations in the ordinary course of business and advances to employees and consultants for travel and other business-related expenses in the ordinary course of business;
(i) incur or assume commit to incur any long-term capital expenditure or short-term indebtedness authorization or commitment with respect thereto (except that the Acquired Corporations may make any capital expenditure that (i) is provided for borrowed in the Company’s capital expense budget Made Available to Parent or Parent’s Representatives prior to the Agreement Date, which expenditures shall be in accordance with the categories set forth in such budget or (ii) when added to all other capital expenditures made on behalf of the Acquired Corporations since the Agreement Date but not provided for in the Company’s capital expense budget Made Available to Parent or Parent’s Representatives prior to the Agreement Date, does not exceed $250,000 individually and $500,000 in the aggregate during any fiscal quarter);
(j) compromise, settle or release any Legal Proceeding or threatened Legal Proceeding, other than any Legal Proceeding relating to a breach of this Agreement or pursuant to a settlement that does not relate to any of the Transactions and that (i) results in compromises, settlements or releases that involve only the payment of money damages in an amount not greater than $500,000 in the aggregate, in any case without the imposition of any equitable relief on, or issue the admission of wrongdoing by, the Acquired Corporations, or (ii) result solely in a monetary obligation that is funded by an indemnity obligation to, or an insurance policy of, any debt securitiesAcquired Corporation and the payment of monies by the Acquired Corporations that together with any settlement made under subsection “(i)” are not more than $500,000 in the aggregate (not funded by an indemnity obligation or through insurance policies); provided that (x) the settlement of any Legal Proceeding or claim brought by the stockholders of the Acquired Corporations against the Acquired Corporations and/or any of their directors relating to the Transactions shall be subject to Section 2.7 or Section 6.8, as applicable, and (y) this Section 5.3(j) shall not permit the Acquired Corporations to settle, release, waive or compromise any Legal Proceeding or claim that (A) provides for the grant to any third party of a license or other grant of rights to (or covenant not to xxx with respect to) any Intellectual Property Rights or the splitting of any revenues in respect of any Product or (B) would impose any restrictions or changes on the business or operations of, or the admission of wrongdoing by, the Acquired Corporations;
(k) commence any Legal Proceeding, except (i) in such cases where the Company reasonably determines in good faith that the failure to commence suit would result in a material impairment of a valuable asset of its business (provided that the Company consults with Parent and considers in good faith the views and comments of Parent with respect to such Legal Proceedings prior to commencement thereof) or (ii) in connection with a breach of this Agreement or any other agreements contemplated hereby;
(l) change its financial or Tax accounting methods, accounting periods, principles or practices, except insofar as may have been required by a change in GAAP, Regulation S-X promulgated under the Exchange Act or applicable Law;
(m) revalue any of its assets, including writing down the value of inventory or writing off notes or accounts receivable other than in the ordinary course of business or as required by GAAP;
(n) (i) settle, compromise or enter into any closing agreement with respect to any liability for loans or advances to or from direct or indirect wholly-owned SubsidiariesTaxes, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of amend any other Person except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Companymaterial Tax Return, (iii) enter into any Material Contract with or request any material ruling from any Governmental Entity relating to Taxes, (iv) make, change, rescind or revoke any material Tax election, (v) change any method of accounting for Tax purposes, (vi) take any material position on a Tax Return inconsistent with a position taken on a Tax Return previously filed, (vii) extend or waive any statute of limitations with respect to Taxes, (viii) surrender any claim for a material refund of Taxes or fail to timely file correct and complete Tax Returns as required by applicable Tax Law (ix) make or file any Tax election (other than a Tax election that is consistent with a Tax election made in a previous period and that would not materially increase the Taxes payable by the Company or any other Acquired Corporation) or (x) incur any Taxes as a result of distributing, lending, transferring or otherwise repatriating any cash amounts into the United States;
(o) change its fiscal year;
(p) except for advances made (i) as provided in clause (a) and (b) of this Section 5.3, (ii) to the extent expressly set forth in Section 6.3 or (iii) as may be required by the terms of any Employee Benefit Plan set forth in Section 3.13(a) of the Company Disclosure Letter (as in effect on the Agreement Date), (A) hire any employee or engage any independent contractor or consultant (who is a natural person), (B) increase the compensation or benefits of any of its current or former non-employee directors, officers, employees or other service providers, other than annual cost of living increases in the ordinary course of business consistent in amount with past practice, make (C) grant, promise or pay any loans severance or advances termination pay to employees of the Company any current or any of its Subsidiariesformer non-employee director, (iv) acquireofficer, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase employee or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries assets, tangible or intangible, or create or suffer to exist any Lien (other than Permitted Liens) thereupon;
(g) except as may be required by applicable Law or the terms of service provider not provided for under any Employee Plan, including the Company 2009 Executive Bonus Plan, Benefit Plan as in effect on the date hereof Agreement Date, (copies of which have been provided to Parent)D) establish, adopt, enter into, adopt, materially amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Benefit Plan, except as required by applicable Laws, or grant any bonuses other than sales commissions pursuant to any sales commission plans in effect as of the Agreement Date and payments set forth on Section 3.13(a) of the Company Disclosure Letter, (E) grant, promise or pay any “single-trigger,” change in control or similar benefit, including any gross-up payments, to any current or former non-employee director, officer, employee or other service provider not provided for under any Employee Benefit Plan as in effect on the Agreement Date or (F) accelerate the payment, funding or vesting of any Company Option except for any mandatory acceleration under any Employee Benefit Plan or Material Contract in effect on the Agreement Date;
(q) terminate any employee that would result in acceleration of vesting of options held by the terminated employee or the right to receive enhanced severance benefits for a termination in connection with a change of control under any Employee Benefit Plan;
(r) adopt or enter into any collective bargaining agreement or other similar labor union contract;
(s) fail to use commercially reasonable efforts to keep in force insurance policies or replacement or revised provisions regarding insurance coverage with respect to material assets, operations and activities of the Company as currently in effect or materially reduce the amount of any insurance coverage provided by existing insurance policies;
(t) renew or enter into any non-compete, exclusivity or similar agreement that would restrict or limit, in any material respect, or increase or decrease the compensation or fringe benefits of any employee or director of the Company from engaging or competing in any of its Subsidiaries (except for normal increases of cash compensation in the ordinary course line of business consistent with past practice to any current or future employees below the rank of Vice President or whose base salary does not exceed $200,000 per annum), pay any bonus or special remuneration (whether in cash, equity or otherwise) to any employee, consultant, independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Plangeographic area;
(hu) enter into any new lease of real property, materially amend the terms of any existing lease of real property or acquire any interest in real property;
(v) forgive any Loans loans to any employees, officers or directors of the Company or any of its SubsidiariesCompany, or any of their respective the Company’s Affiliates;
(w) amend, modify, terminate or waive, or exercise any material right or remedy under, any Material Contract or enter into or become bound by, or seek to amend, terminate or waive, or exercise any material right or remedy under, any Contract which if entered into prior to the Agreement Date would have been a Material Contract, excluding any non-exclusive license agreements to service providers or where no rights to develop or commercialize any Product have been granted and materials transfer agreements entered into in the ordinary course of business;
(x) publicly disclose any clinical data relating to or resulting from the Company’s pending clinical trials or any analysis or work product created by or on behalf of the Company based in whole or in part on such clinical data;
(i) make enter into any deposits or contributions new line of cash or other property to, or take any other action to fund, or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts subject to the Employee Plans, other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts subject to the Employee Plans in effect as of the date hereof;
(j) enter into, amend, or extend any Collective Bargaining Agreement or similar Contract;
(i) acquire, lease (as lessee) or license (as licensee) any property or assets with a fair market value in excess of $5,000,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as in effect on the date hereof; business or (ii) sell, lease (as lessor), license (as licensor) or dispose of any property or assets with start to conduct a net book value in excess of $100,000 in any individual transaction, except (A) transactions required pursuant to existing Contracts as in effect on the date hereof or (B) transactions in the ordinary course line of business consistent with past practiceof the Acquired Corporations in a geographic area where it is not conducted as of the Agreement Date;
(lz) adopt or implement any stockholder rights plan or similar arrangement;
(aa) except as may be required as a result of a change set forth in applicable Laws or in GAAPSection 5.2(d), make any change investment in any marketable securities with existing cash or cash equivalents or with proceeds received upon the maturity, or sale, of the accounting principles or practices used by itexisting investments in marketable securities;
(ibb) make or change except as otherwise permitted by this Section 5.3, grant any Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its Subsidiaries, (ii) change any material Tax accounting method, (iii) settle or compromise any material U.S. federal, state, local or non-U.S. Tax liability or (iv) consent to any extension or waiver of any limitation period rights with respect to any claim Owned Company IP or assessment for material Taxesdivest any Owned Company IP; or
(ncc) enter into authorize any of, or commit, resolve or agree to take any of, the foregoing actions in this Section 5.3. Notwithstanding the foregoing, nothing contained in this Agreement shall give Parent or Purchaser, directly or indirectly, the right to control or direct the operations of the Company Intellectual Property Agreement prior to the Offer Acceptance Time in violation of the HSR Act or amend any Company Intellectual Property Agreements other Antitrust Laws, or grant any release or relinquishment of any rights under any Company Intellectual Property Agreements, except (i) to customers and (ii) non-exclusive in-bound licenses for commercially available technology, in each case in the ordinary course of business consistent with past practice;otherwise.
Appears in 1 contract
Samples: Merger Agreement (Viela Bio, Inc.)
Negative Obligations of the Company. Except as (iv) as may be required by Applicable Law, any Governmental Entity of competent jurisdiction or the rules and regulation of NYSE, (w) expressly contemplated required or permitted by this Agreement, (iix) as set forth in Section 6.1 5.1 or Section 6.2 5.2 of the Company Disclosure Schedule, (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent)Letter, or (ivy) as approved in advance by Parent in writing, not to be unreasonably withheld, conditioned or delayed, at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) Article VIII and the Effective Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(a) amend, or propose to adopt any amendments to, amend its certificate of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for other than (i) grants of Company Compensatory Awards to employees subject to the terms as set forth on Section 5.2(b) of the Company Disclosure Letter and (ii) the issuance and sale of shares of Company Common Stock pursuant to (A) the exercise of Company Options or Company Stock Awards outstanding prior to Appreciation Units or the date hereofvesting or settlement of other Company Compensatory Awards, (ii) the issuance of shares pursuant to the Company ESPP and (iii) Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares of Company Common Stock granted in all cases in the ordinary course of business after consistent with past practice and pursuant to the Company Employee Plans in effect as of the date of this AgreementAgreement or (B) purchases of shares of Company Common Stock under the ESPP in accordance with its terms;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary SecuritiesSecurities other than (i) in full or partial payment of the exercise price and any applicable Taxes pursuant to any exercise, except to vesting or settlement of Company Compensatory Awards, (ii) the extent that such acquisition purchase of shares of Company Common Stock Under the ESPP in accordance with its terms, or redemption is (iii) pursuant to the terms forfeiture of any Employee Plan (as then in effect) or any agreement subject to any such Employee PlanCompany Compensatory Awards;
(d) other than dividends or distributions made by any direct or indirect wholly-owned Wholly Owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine combine, subdivide, amend the terms of or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(e) propose merge or adopt a plan of complete or partial liquidationconsolidate with any other Person (except for the transactions contemplated hereby, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization including the Merger and any such transactions solely among Wholly Owned Subsidiaries of the Company Company), or any of its Subsidiariesrestructure, reorganize or completely or partially liquidate;
(f) acquire, directly or indirectly, by merger, consolidation, acquisition of stock or assets or otherwise), any Person or equity interest therein;
(ig) incur or assume any long-term or short-term indebtedness for borrowed money or issue Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security), except for (i) incurring Indebtedness in replacement of existing Indebtedness for borrowed money in the ordinary course of business, (ii) letters of credits issued to the Company and its Subsidiaries in the ordinary course of business, (iii) loans or advances to or from direct or indirect wholly-owned Wholly Owned Subsidiaries, (iiiv) assume, guarantee, endorse Indebtedness incurred under revolving credit facilities and bank lines of credit either as provided for in Section 6.21 or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly-owned Subsidiaries as in effect as of the Company, (iii) except for advances made date hereof in the ordinary course of business consistent with past practice, make any loans or advances to employees of the Company or any of its Subsidiariesbusiness, (ivv) acquiretrade credit or trade payables in the ordinary course of business, (vi) loans, advances or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent and (vii) purchase money financings and capital leases entered into in the ordinary course of business with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation a value of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries assets, tangible or intangible, or create or suffer to exist any Lien (other less than Permitted Liens) thereupon$1,000,000 individually and $5,000,000 in the aggregate;
(gh) except as may be required by applicable Law or Applicable Law, the terms of this Agreement, the terms of any Employee Plan, including Plan or as set forth on Section 5.2(h) of the Company 2009 Executive Bonus PlanDisclosure Letter, as in effect on the date hereof (copies of which have been provided to Parent), i) enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan in any material respect, (other than employment agreements or increase or decrease the compensation or fringe benefits of any employee or director of the Company or any of its Subsidiaries (except for normal increases of cash compensation offer letters entered into in the ordinary course of business consistent with past practice to any current or future for employees below the rank vice president level that provide for no severance or change in control benefits other than those required by Applicable Law) or (ii) increase in any manner the compensation or fringe benefits of Vice President any director, officer, employee, consultant or whose base salary does not exceed $200,000 per annum), independent contractor or pay any special bonus or special remuneration (whether in cash, equity or otherwise) to any director, officer, employee, consultant, consultant or independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Plancontractor;
(hi) forgive any Loans loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective Affiliates;
(ij) make any deposits or contributions of cash or other property to, to or take any other action to fund, fund or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts agreements subject to the Employee Plans, Plans or any other Contract of the Company or any of its Subsidiaries other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts agreements subject to the Employee Plans in effect as of the date hereof;
(jk) enter into, amend, or extend any Collective Bargaining Agreement or similar ContractAgreement;
(il) acquirehire, lease (as lessee) terminate, demote or license (as licensee) promote or offer to hire, or promote any property employee or assets potential employee with the title of vice president or above, or encourage any employees with a fair market value title of vice president or above to resign from or terminate his relationship with the Company or any of its Subsidiaries, in excess of $5,000,000 in the aggregate per fiscal quartereach case, except transactions required pursuant to existing Contracts other than as in effect on the date hereof; or expressly contemplated by this Agreement;
(iim) sell, lease (as lessor)acquire, lease, license (as licensor) or dispose of any property or assets with a net book value in excess of $100,000 assets, in any individual transactioncase, except that are material to the Company and its Subsidiaries, taken as a whole, in any single transaction or series of related transactions (Aby merger, consolidation or acquisition of stock or assets) transactions required pursuant to existing Contracts as in effect on (which, for the date hereof or (B) transactions avoidance of doubt, will not restrict non-exclusive licenses granted in the ordinary course of business consistent with past practice);
(ln) except as may be required as a result of a change in applicable Laws Applicable Law or in GAAPGAAP or SEC rules and regulations, make any material change in any of the accounting principles or practices used by it;
(i) make or change any material Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its Subsidiarieselection, (ii) change amend any material Tax accounting methodReturn, (iii) settle or compromise any material U.S. federalLiability for Taxes, state, local (iv) adopt or non-U.S. change any Tax liability accounting method (other than as otherwise required by Applicable Law) or (ivv) consent to any extension or waiver of any limitation period with respect to any material claim or assessment for material Taxes; ;
(np) (i) enter into any Company Intellectual Property Agreement lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) or (ii) materially modify, amend or exercise any Company Intellectual Property Agreements right to renew any lease or sublease of real property or waive or violate any term or condition thereof or grant any release consents thereunder or relinquishment (iii) purchase any interest in real property (or enter any agreement to do so);
(q) abandon, cancel or allow to lapse or fail to maintain or protect any material Company IP, except pursuant to the exercise of good faith business judgment by the Company following notice to Parent;
(r) other than with respect to Material Contracts related to Indebtedness, which shall be governed by Section 5.2(g) and Section 6.16, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, other than Contracts entered into in the ordinary course of business consistent with past practices (except that this ordinary course business exception will not apply to any Contract of the nature described in clauses (i), (ii), (v), (vi), (viii), (ix), (x), (xi), (xiv), (xv), (xvi), or (xvii) of Section 3.11) and, for the avoidance of doubt, any Contracts entered into in connection with an action expressly permitted by any of the Subsections of this Section 5.2, including any amendment, modification or supplement to an existing Contract, which are governed by Section 5.2(s);
(s) other than with respect to Material Contracts related to Indebtedness, which shall be governed by Section 5.2(g) and Section 6.16, terminate or materially amend or otherwise materially modify or waive, or assign, convey, encumber or otherwise transfer, in whole or in part, any material rights or interests pursuant to or in, any Material Contract other than expirations or non-renewals of any such Contract in the ordinary course of business consistent with past practices, non-exclusive licenses, covenants not to xxx, releases, waivers or other rights under any Company Intellectual Property AgreementsRights owned or purported to be owned by the Company or any of its Subsidiaries, except in each case, granted in the ordinary course of business consistent with past practices;
(t) fail to maintain insurance policies in such amounts and against such risks and losses as are consistent with past practice;
(u) other than capital expenditures set forth in Section 5.2(u) of the Company Disclosure Letter (the “Disclosed Capital Expenditures”), incur any new capital expenditure(s) that, individually or in the aggregate, would create obligations to the Company or any of its Subsidiaries in excess of $5,000,000;
(v) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any claim, Liability or obligation (absolute or accrued, asserted or unasserted, contingent or otherwise), other than the settlement or compromise of a Legal Proceeding (i) to customers and reflected or reserved against in full in the Balance Sheet or (ii) nonthat does not include any obligation (other than the payment of money of $200,000 or less) to be performed by the Company or its Subsidiaries following the Effective Time that is or would reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole;
(w) except as required by Applicable Law or GAAP, revalue in any material respect any of its properties or assets including writing-exclusive in-bound licenses for commercially available technology, in each case off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
(i) grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment, Lien or charge affecting any real property or any part thereof, other than Permitted Liens, or (ii) convey any interest in any Real Property;
(y) sell, lease, license or transfer to any person or entity any rights to any Company IP except for non-exclusive licenses granted in the ordinary course of business consistent with past practice and sales, transfers and dispositions of inventory and products in the ordinary course of business consistent with past practice;
(z) amend any Company Privacy Policy in any material respect, publish any new Company Privacy Policy, or announce any pending material amendment to any Company Privacy Policy or any new Company Privacy Policy; and (aa) authorize, commit or enter into a Contract to do any of the foregoing. Notwithstanding the foregoing: (i) nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time, and the Company shall not be required to obtain advance approval from Parent to do any of the foregoing if in the reasonable opinion of the Company’s legal counsel obtaining such advance approval may violate Applicable Law; and (ii) nothing herein shall prevent the Company or any of its Subsidiaries from taking any reasonable action or omission in connection with any COVID-19 Measures or in light of any changes (or anticipated changes) in Applicable Laws, and no such actions or omissions shall be deemed to violate or breach this Agreement in any way or serve as a basis for Parent to terminate this Agreement or assert that any of the conditions to the Closing (including Section 7.2(b)) contained herein have not been satisfied; provided, however, before taking any action or omission in reliance upon clause (ii) of this paragraph, the Company will use reasonable efforts to consult with Parent to the extent permitted by Applicable Law and to the extent practicable before taking any such action or omission. Notwithstanding Section 9.2 of this Agreement, with respect to any consent required to be obtained by the Company from Parent in writing pursuant to Section 5.1 or Section 5.2 of this Agreement, (x) such request may be made by email to the General Counsel of Parent (with a copy to xxxxxxxxxxxxxx@xxxxxxxx.xxx) from the General Counsel of the Company and (y) such approval may be granted via email from the General Counsel of Parent to the General Counsel of the Company.
Appears in 1 contract
Samples: Merger Agreement (Neophotonics Corp)
Negative Obligations of the Company. Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 6.1 or Section 6.2 of the Company Disclosure Schedule, Schedule or (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent), or (iv) as approved in advance by Parent in writingwriting (which approval shall not be unreasonably withheld or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) Article IX and the Effective Appointment Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(a) amend, or propose to adopt any amendments to, to or amend its certificate of incorporation or bylaws or comparable organizational documents; provided, however, that nothing in this paragraph (a) shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the Company or its Subsidiaries, taken as a whole;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (i) the issuance and sale of shares of Company Common Stock Shares pursuant to Company Stock Awards Options outstanding prior to the date hereofhereof and purchase rights under the Company ESPP, (ii) the issuance grants of shares pursuant to purchase rights under the Company ESPP ESPP, and (iii) Company Restricted Stock Units grants to purchase up to an aggregate of 250,000 shares newly hired employees of Company Common Stock granted Options issued in the ordinary course of business after consistent with past practice, with a per share exercise price no less than the then-current market price of a Company Share and not subject to any accelerated vesting or other provision that would be triggered as a result of the consummation of the transactions contemplated hereby (including the Offer and the Merger), so long as (A) the aggregate number of Shares subject to such additional Stock Options does not exceed the sum of (x) five hundred thousand (500,000), plus (y) the number of Company Shares subject to any Stock Option (or portion thereof) outstanding as of the date hereof that is subsequently canceled, terminated or forfeited as the result of this Agreementthe voluntary or involuntary termination of employment of any employee and (B) the aggregate number of Company Shares subject to Stock Options granted to any individual newly hired employee does not exceed the current stock grant guidelines previously made available to Parent;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities; provided, except however, that nothing in this paragraph (c) shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the extent that such acquisition Company or redemption is pursuant to the terms of any Employee Plan (its Subsidiaries, taken as then in effect) or any agreement subject to any such Employee Plana whole;
(d) other than cash dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock; provided, however, that nothing in this paragraph (d) shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the Company or its Subsidiaries, taken as a whole;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the transactions contemplated hereby, including the Offer and the Merger); provided, however, that nothing in this paragraph (e) shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the Company or its Subsidiaries, taken as a whole;
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money debt or issue any debt securities, except for (A) short-term debt incurred to fund operations of the business or for cash management purposes, in each case in the ordinary course of business consistent with past practice and (B) loans or advances to or from direct or indirect wholly-owned SubsidiariesSubsidiaries in the ordinary course of business consistent with past practices, (ii) other than in the ordinary course of business, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the any material obligations of any other Person except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company, (iii) make any material loans, advances or capital contributions to or investments in any other Person except for travel advances made in the ordinary course of business consistent with past practice, make any loans or advances practice to employees of the Company or any of its Subsidiaries, Subsidiaries or (iv) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries Subsidiaries' assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens) thereuponEncumbrances);
(g) except as may be required by applicable Law or the terms of any Employee PlanLegal Requirements, including the Company 2009 Executive Bonus Plan, as in effect on the date hereof (copies of which have been provided to Parent), A) enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any director, officer or employee in any material respect, manner or increase or decrease in any manner the compensation or fringe benefits of any director, officer or employee, or (B) pay any special bonus, remuneration or benefit to any director, officer or employee not required by any plan or director arrangement as in effect as of the date hereof; provided, however, that this paragraph (g) shall not prevent the Company or any of its Subsidiaries (except for normal increases of cash compensation i) from entering into employment agreements or offer letters with new employees in the ordinary course of business consistent with past practice to any current business, or future (ii) from increasing annual compensation and/or from providing for or amending bonus arrangements for non-officer employees below the rank of Vice President or whose base salary does not exceed $200,000 per annum), pay any bonus or special remuneration (whether in cash, equity or otherwise) to any employee, consultant, independent contractor or director (other than bonuses made in the ordinary course of business compensation reviews (to the extent that such compensation increases and new or amended bonus arrangements are consistent with past practice with respect and do not result in a material increase in benefits or compensation expense to employees who are not executive officers the Company or directors any of the Companyits Subsidiaries), or pay any benefit not required by any Employee Plan as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Plan;
(h) forgive any Loans loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective AffiliatesAffiliates or Associates;
(i) make any deposits or contributions of cash or other property to, to or take any other action to fund, fund or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts agreements subject to the Employee Plans, Plans or any other Contract of the Company other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts agreements subject to the Employee Plans in effect as of the date hereof;
(j) enter into, amend, or extend any Collective Bargaining Agreement or similar ContractAgreement;
(ik) acquire, lease (as lessee) sell, lease, license or license (as licensee) dispose of any material property or assets with a fair market value in excess any single transaction or series of $5,000,000 in the aggregate per fiscal quarterrelated transactions, except either (i) transactions required pursuant to existing Contracts as in effect on the date hereof; or (ii) sell, lease (as lessor), license (as licensor) the sale of goods or dispose grants of any property or assets non-exclusive licenses with a net book value in excess of $100,000 in any individual transaction, except (A) transactions required pursuant respect to existing Contracts as in effect on the date hereof or (B) transactions Company IP in the ordinary course of business consistent with past practice;
(l) except as may be required as a result of a change in applicable Laws Legal Requirements or in GAAP, or a change in the interpretation of GAAP with respect to Tax matters or as a result of or arising from an audit review of the consolidated financial statements of the Company and its Subsidiaries, make any change in any of the accounting principles or practices used by it;
(i) make or change any material Tax election that, individually (unless required by applicable law) or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its Subsidiaries, (ii) change any material Tax accounting method, (iii) settle or compromise any material U.S. federal, state, local or non-U.S. foreign income Tax liability or (iv) consent to any extension or waiver of any limitation period liability, other than with respect to any claim proceeding relating to a Tax liability that (A) is in progress as of the date hereof, (B) is in an amount less than or assessment for material Taxes; equal to the liability or reserve that has been recorded with respect thereto on the balance sheet included in the Selected 2005 Financial Statements or (C) is in an amount less than $250,000 in the aggregate with all other such Liabilities;
(n) enter into any a Company Intellectual Property IP Agreement or amend in any material respect any Company Intellectual Property Agreements IP Agreement or grant any release or relinquishment of any material rights under any Company Intellectual Property Agreements, except IP Agreement;
(i) to customers and enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) or (ii) nonmodify, amend or exercise any right to renew any lease or sublease of real property;
(p) grant any exclusive rights with respect to any Company IP, divest any Company IP, except if such divestiture or divestures, individually or in the aggregate, are not material to the Company, or materially modify the Company's standard warranty terms for Company Products or services or amend or modify any product or service warranty in any manner that is likely to be materially adverse to the Company and its Subsidiaries, taken as a whole;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, (ii) enter into any Contract other than in the ordinary course of business which would be reasonably expected to result in a Company Material Adverse Effect or (iii) authorize, incur or commit to incur any new capital expenditure(s) which, individually or in the aggregate, is or are material to the Company and its Subsidiaries, taken as a whole; provided, however, that none of the foregoing shall limit any capital expenditure required pursuant to existing Contracts; and provided, further, that none of the foregoing shall prohibit the Company from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to the Company or its Subsidiaries, taken as a whole;
(r) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any claim, liability or obligation (absolute or accrued, asserted or unasserted, contingent or otherwise), other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings, claims and other Liabilities (i) reflected or reserved against in full in the balance sheet included in the Selected 2005 Financial Statements or incurred since December 31, 2005 in the ordinary course of business consistent with past practice or (ii) the settlement, compromise, discharge or satisfaction of which does not include any obligation (other than the payment of money) to be performed by the Company or its Subsidiaries following the Appointment Time that is not, individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole;
(s) except as required by applicable Legal Requirements or GAAP, revalue in any material respect any of its properties or assets, including writing-exclusive in-bound licenses for commercially available technology, in each case off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
(t) except as required by applicable Legal Requirements, convene any regular or special meeting (or any adjournment or postponement thereof) of the stockholders of the Company other than the Company Stockholders' Meeting; or
(u) enter into a Contract to do any of the foregoing or knowingly take any action which results or is reasonably likely to result in any of the conditions to the Offer set forth in Annex A hereto not being satisfied, or knowingly take any action which would make any of the representations or warranties of the Company contained in this Agreement untrue or incorrect in any material respect at the scheduled expiration date of the Offer, or that would materially impair the ability of the Company to consummate the transactions contemplated hereby (including the Offer and the Merger) in accordance with the terms hereof or materially delay such consummation.
Appears in 1 contract
Negative Obligations of the Company. Except as (iw) as expressly contemplated required or permitted by this Agreement, (iix) as set forth in Section 6.1 5.1 or Section 6.2 5.2 of the Company Disclosure Schedule, (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent), Letter or (ivy) as approved in advance by Parent in writingwriting (which approval shall not be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) Article VIII and the Effective Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(a) amend, or propose to adopt any amendments to, amend its certificate of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for other than (i) the issuance and sale of shares of Company Common Stock pursuant to Company Stock Compensatory Awards outstanding as of or prior to the date hereof, (ii) the issuance of shares pursuant grants to the Company ESPP and (iii) Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares newly hired employees of Company Common Stock granted Compensatory Awards issued in the ordinary course of business after consistent with past practice or (iii) pursuant to the date Company ESPP or any 401(k) plans maintained by the Company or any of this Agreementits Subsidiaries;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary SecuritiesSecurities other than (i) in full or partial payment of the exercise price and any applicable Taxes pursuant to any exercise, except to the extent that such acquisition vesting or redemption is settlement of Company Compensatory Awards or (ii) pursuant to the terms forfeiture of any Employee Plan (as then in effect) or any agreement subject to any such Employee PlanCompany Compensatory Awards;
(d) other than dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its SubsidiariesSubsidiaries (other than the transactions contemplated hereby, including the Merger);
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money debt or issue any debt securities, except for (A) short-term debt incurred to fund operations of the business in the ordinary course of business consistent with past practice and (B) loans or advances to or from direct or indirect wholly-owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person except for routine advances made in the ordinary course of business consistent with past practice to employees of the Company or any of its Subsidiaries or (iv) mortgage or pledge any of its or its Subsidiaries’ material assets, tangible or intangible, or voluntarily create or suffer to exist any Lien thereupon (other than Permitted Liens) other than in the ordinary course of business consistent with past practice;
(g) except as may be required by Applicable Law or as required by the terms of any Employee Plan as in effect as of the date hereof, enter into, adopt, amend (including acceleration of vesting), modify or terminate any bonus, profit sharing, compensation, severance, termination, option, restricted stock, restricted stock unit, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any director, officer, consultant or independent contractor or, other than in the ordinary course of business consistent with past practice, make any loans or advances to employees of the Company or any of its Subsidiariesemployee, (iv) acquirein each case, or make any capital contributions to or investments in any other Person (manner or increase in any manner the compensation or fringe benefits of any director, officer or, other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by mergeremployee, consolidationpay any special bonus or special remuneration to any director, asset purchase officer, consultant, independent contractor or other business combinationemployee, or by formation of pay any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries assets, tangible or intangible, or create or suffer to exist any Lien (other than Permitted Liens) thereupon;
(g) except as may be benefit not required by applicable Law any plan or the terms of any Employee Plan, including the Company 2009 Executive Bonus Plan, arrangement as in effect on as of the date hereof (copies of which have been provided hereof, other than, with respect to Parent)non-officer employees, enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan in any material respect, or increase or decrease the compensation or fringe benefits of any employee or director of the Company or any of its Subsidiaries (except for normal increases of cash compensation in the ordinary course of business consistent with past practice to any current or future employees below the rank of Vice President or whose base salary does not exceed $200,000 per annum), pay any bonus or special remuneration (whether in cash, equity or otherwise) to any employee, consultant, independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Planpractice;
(h) forgive any Loans loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective Affiliates;
(i) make any deposits or contributions of cash or other property to, to or take any other action to fund, fund or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts agreements subject to the Employee Plans, Plans or any other Contract of the Company other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts agreements subject to the Employee Plans in effect as of the date hereof;
(j) enter into, amend, or extend any Collective Bargaining Agreement or similar ContractAgreement;
(ik) other than terminations or demotions in the ordinary course of business consistent with past practice, hire, terminate, demote or promote or offer to hire, terminate, demote or promote any employees at the level of director or above or potential employee at the level of director or above, or encourage any employee at the level of director or above to resign from or terminate his relationship with the Company or any of its Subsidiaries, in each case, other than as expressly contemplated by this Agreement;
(l) acquire, lease (as lessee) or license (as licensee) any property or assets with a fair market value in excess of $5,000,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as in effect on the date hereof; or (ii) sell, lease (as lessor)lease, license (as licensor) or dispose of any property or assets with material to the Company and its Subsidiaries, taken as a net book value in excess of $100,000 whole, in any individual transactionsingle transaction or series of related transactions, except (A) transactions required pursuant to existing Contracts as in effect on the date hereof or (B) transactions in the ordinary course of business consistent with past practice;
(lm) except as may be required as a result of a change in applicable Laws Applicable Law or in GAAP, make any change in any of the accounting principles or practices used by it;
(i) make (other than in accordance with past practice) or change any material Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its Subsidiarieselection, (ii) change amend any material Tax accounting methodReturn, (iii) settle or compromise any material U.S. federalLiability for Taxes, state, local (iv) adopt or non-U.S. change any material Tax liability accounting method or (ivv) consent to any extension or waiver of any limitation period with respect to any material claim or assessment for material Taxes; ;
(no) (i) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) or (ii) modify, amend or exercise any right to renew any lease or sublease of real property or waive or violate any term or condition thereof or grant any consents thereunder;
(p) abandon, cancel or allow to lapse or fail to maintain or protect any material Company Intellectual Property Agreement or amend any Company Intellectual Property Agreements or grant any release or relinquishment of any rights under any Company Intellectual Property Agreements, except Rights;
(q) (i) to customers and acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, (ii) non-exclusive in-bound licenses for commercially available technology, in each case other than in the ordinary course of business consistent with past practice, enter into, renew, amend or grant any release or relinquishment of any material rights under any Material Contract or Company IP Agreement or (iii) other than capital expenditures contemplated by the Company’s capital expenditures set forth in Section 5.2(q) of the Company Disclosure Letter, incur any new capital expenditure(s) that, individually or in the aggregate, would create obligations to the Company or any of its Subsidiaries in excess of $300,000;
(r) settle or compromise any pending or threatened Legal Proceeding other than the settlement or compromise of a Legal Proceeding (i) reflected or reserved against in full in the Balance Sheet or (ii) that does not include any obligation (other than the payment of money of $300,000 or less) to be performed by the Company or its Subsidiaries following the Effective Time that is or would reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole;
(s) except as required by Applicable Law or GAAP, revalue in any material respect any of its properties or assets including writing-off notes or accounts receivable other than in the ordinary course of business consistent with past practice; or
(t) authorize, commit or enter into a Contract to do any of the foregoing.
Appears in 1 contract
Negative Obligations of the Company. Except as (iw) as expressly contemplated required or permitted by this Agreement, (iix) as set forth in Section 6.1 5.1 or Section 6.2 5.2 of the Company Disclosure Schedule, (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent), Letter or (ivy) as approved in advance by Parent in writingwriting (which approval shall not be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) Article VIII and the Effective Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(a) amend, or propose to adopt any amendments to, amend its certificate of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for other than (i) the issuance and sale of shares of Company Common Stock pursuant to Company Stock Compensatory Awards outstanding as of or prior to the date hereof, (ii) the issuance of shares pursuant grants to the Company ESPP and (iii) Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares newly hired employees of Company Common Stock granted Compensatory Awards issued in the ordinary course of business after consistent with past practice or (iii) pursuant to the date Company ESPP or any 401(k) plans maintained by the Company or any of this Agreementits Subsidiaries;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary SecuritiesSecurities other than (i) in full or partial payment of the exercise price and any applicable Taxes pursuant to any exercise, except to the extent that such acquisition vesting or redemption is settlement of Company Compensatory Awards or (ii) pursuant to the terms forfeiture of any Employee Plan (as then in effect) or any agreement subject to any such Employee PlanCompany Compensatory Awards;
(d) other than dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its SubsidiariesSubsidiaries (other than the transactions contemplated hereby, including the Merger);
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money debt or issue any debt securities, except for (A) short-term debt incurred to fund operations of the business in the ordinary course of business consistent with past practice and (B) loans or advances to or from direct or indirect wholly-owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person except for routine advances made in the ordinary course of business consistent with past practice to employees of the Company or any of its Subsidiaries or (iv) mortgage or pledge any of its or its Subsidiaries’ material assets, tangible or intangible, or voluntarily create or suffer to exist any Lien thereupon (other than Permitted Liens) other than in the ordinary course of business consistent with past practice;
(g) except as may be required by Applicable Law or as required by the terms of any Employee Plan as in effect as of the date hereof, enter into, adopt, amend (including acceleration of vesting), modify or terminate any bonus, profit sharing, compensation, severance, termination, option, restricted stock, restricted stock unit, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any director, officer, consultant or independent contractor or, other than in the ordinary course of business consistent with past practice, make any loans or advances to employees of the Company or any of its Subsidiariesemployee, (iv) acquirein each case, or make any capital contributions to or investments in any other Person (manner or increase in any manner the compensation or fringe benefits of any director, officer or, other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by mergeremployee, consolidationpay any special bonus or special remuneration to any director, asset purchase officer, consultant, independent contractor or other business combinationemployee, or by formation of pay any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries assets, tangible or intangible, or create or suffer to exist any Lien (other than Permitted Liens) thereupon;
(g) except as may be benefit not required by applicable Law any plan or the terms of any Employee Plan, including the Company 2009 Executive Bonus Plan, arrangement as in effect on as of the date hereof (copies of which have been provided hereof, other than, with respect to Parent)non-officer employees, enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan in any material respect, or increase or decrease the compensation or fringe benefits of any employee or director of the Company or any of its Subsidiaries (except for normal increases of cash compensation in the ordinary course of business consistent with past practice to any current or future employees below the rank of Vice President or whose base salary does not exceed $200,000 per annum), pay any bonus or special remuneration (whether in cash, equity or otherwise) to any employee, consultant, independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Planpractice;
(h) forgive any Loans loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective Affiliates;
(i) make any deposits or contributions of cash or other property to, to or take any other action to fund, fund or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts agreements subject to the Employee Plans, Plans or any other Contract of the Company other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts agreements subject to the Employee Plans in effect as of the date hereof;
(j) enter into, amend, or extend any Collective Bargaining Agreement or similar ContractAgreement;
(ik) other than terminations or demotions in the ordinary course of business consistent with past practice, hire, terminate, demote or promote or offer to hire, terminate, demote or promote any employees at the level of director or above or potential employee at the level of director or above, or encourage any employee at the level of director or above to resign from or terminate his relationship with the Company or any of its Subsidiaries, in each case, other than as expressly contemplated by this Agreement;
(l) acquire, lease (as lessee) or license (as licensee) any property or assets with a fair market value in excess of $5,000,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as in effect on the date hereof; or (ii) sell, lease (as lessor)lease, license (as licensor) or dispose of any property or assets with material to the Company and its Subsidiaries, taken as a net book value in excess of $100,000 whole, in any individual transactionsingle transaction or series of related transactions, except (A) transactions required pursuant to existing Contracts as in effect on the date hereof or (B) transactions in the ordinary course of business consistent with past practice;
(lm) except as may be required as a result of a change in applicable Laws Applicable Law or in GAAP, make any change in any of the accounting principles or practices used by it;
(i) make (other than in accordance with past practice) or change any material Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its Subsidiarieselection, (ii) change amend any material Tax accounting methodReturn, (iii) settle or compromise any material U.S. federalLiability for Taxes, state, local (iv) adopt or non-U.S. change any material Tax liability accounting method or (ivv) consent to any extension or waiver of any limitation period with respect to any material claim or assessment for material Taxes; ;
(no) (i) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) or (ii) modify, amend or exercise any right to renew any lease or sublease of real property or waive or violate any term or condition thereof or grant any consents thereunder;
(p) abandon, cancel or allow to lapse or fail to maintain or protect any material Company Intellectual Property Agreement or amend any Company Intellectual Property Agreements or grant any release or relinquishment of any rights under any Company Intellectual Property Agreements, except Rights;
(i) to customers and acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, (ii) non-exclusive in-bound licenses for commercially available technology, in each case other than in the ordinary course of business consistent with past practice, enter into, renew, amend or grant any release or relinquishment of any material rights under any Material Contract or Company IP Agreement or (iii) other than capital expenditures contemplated by the Company’s capital expenditures set forth in Section 5.2(q) of the Company Disclosure Letter, incur any new capital expenditure(s) that, individually or in the aggregate, would create obligations to the Company or any of its Subsidiaries in excess of $300,000;
(r) settle or compromise any pending or threatened Legal Proceeding other than the settlement or compromise of a Legal Proceeding (i) reflected or reserved against in full in the Balance Sheet or (ii) that does not include any obligation (other than the payment of money of $300,000 or less) to be performed by the Company or its Subsidiaries following the Effective Time that is or would reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole;
(s) except as required by Applicable Law or GAAP, revalue in any material respect any of its properties or assets including writing-off notes or accounts receivable other than in the ordinary course of business consistent with past practice; or
(t) authorize, commit or enter into a Contract to do any of the foregoing.
Appears in 1 contract
Negative Obligations of the Company. Except as (iv) as may be required by Applicable Law, any Governmental Entity of competent jurisdiction or the rules and regulation of NYSE, (w) expressly contemplated required or permitted by this Agreement, (iix) as set forth in Section 6.1 5.1 or Section 6.2 5.2 of the Company Disclosure Schedule, (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent)Letter, or (ivy) as approved in advance by Parent in writing, not to be unreasonably withheld, conditioned or delayed, at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) Article VIII and the Effective Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(a) amend, or propose to adopt any amendments to, amend its certificate of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for other than (i) grants of Company Compensatory Awards to employees subject to the terms as set forth on Section 5.2(b) of the Company Disclosure Letter and (ii) the issuance and sale of shares of Company Common Stock pursuant to (A) the exercise of Company Options or Company Stock Awards outstanding prior to Appreciation Units or the date hereofvesting or settlement of other Company Compensatory Awards, (ii) the issuance of shares pursuant to the Company ESPP and (iii) Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares of Company Common Stock granted in all cases in the ordinary course of business after consistent with past practice and pursuant to the Company Employee Plans in effect as of the date of this AgreementAgreement or (B) purchases of shares of Company Common Stock under the ESPP in accordance with its terms;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary SecuritiesSecurities other than (i) in full or partial payment of the exercise price and any applicable Taxes pursuant to any exercise, except to vesting or settlement of Company Compensatory Awards, (ii) the extent that such acquisition purchase of shares of Company Common Stock Under the ESPP in accordance with its terms, or redemption is (iii) pursuant to the terms forfeiture of any Employee Plan (as then in effect) or any agreement subject to any such Employee PlanCompany Compensatory Awards;
(d) other than dividends or distributions made by any direct or indirect wholly-owned Wholly Owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine combine, subdivide, amend the terms of or Table of Contents reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(e) propose merge or adopt a plan of complete or partial liquidationconsolidate with any other Person (except for the transactions contemplated hereby, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization including the Merger and any such transactions solely among Wholly Owned Subsidiaries of the Company Company), or any of its Subsidiariesrestructure, reorganize or completely or partially liquidate;
(f) acquire, directly or indirectly, by merger, consolidation, acquisition of stock or assets or otherwise), any Person or equity interest therein;
(ig) incur or assume any long-term or short-term indebtedness for borrowed money or issue Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security), except for (i) incurring Indebtedness in replacement of existing Indebtedness for borrowed money in the ordinary course of business, (ii) letters of credits issued to the Company and its Subsidiaries in the ordinary course of business, (iii) loans or advances to or from direct or indirect wholly-owned Wholly Owned Subsidiaries, (iiiv) assume, guarantee, endorse Indebtedness incurred under revolving credit facilities and bank lines of credit either as provided for in Section 6.21 or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly-owned Subsidiaries as in effect as of the Company, (iii) except for advances made date hereof in the ordinary course of business consistent with past practice, make any loans or advances to employees of the Company or any of its Subsidiariesbusiness, (ivv) acquiretrade credit or trade payables in the ordinary course of business, (vi) loans, advances or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent and (vii) purchase money financings and capital leases entered into in the ordinary course of business with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation a value of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries assets, tangible or intangible, or create or suffer to exist any Lien (other less than Permitted Liens) thereupon$1,000,000 individually and $5,000,000 in the aggregate;
(gh) except as may be required by applicable Law or Applicable Law, the terms of this Agreement, the terms of any Employee Plan, including Plan or as set forth on Section 5.2(h) of the Company 2009 Executive Bonus PlanDisclosure Letter, as in effect on the date hereof (copies of which have been provided to Parent), i) enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan in any material respect, (other than employment agreements or increase or decrease the compensation or fringe benefits of any employee or director of the Company or any of its Subsidiaries (except for normal increases of cash compensation offer letters entered into in the ordinary course of business consistent with past practice to any current or future for employees below the rank vice president level that provide for no severance or change in control benefits other than those required by Applicable Law) or (ii) increase in any manner the compensation or fringe benefits of Vice President any director, officer, employee, consultant or whose base salary does not exceed $200,000 per annum), independent contractor or pay any special bonus or special remuneration (whether in cash, equity or otherwise) to any director, officer, employee, consultant, consultant or independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Plancontractor;
(hi) forgive any Loans loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective Affiliates;
(ij) make any deposits or contributions of cash or other property to, to or take any other action to fund, fund or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts agreements subject to the Employee Plans, Plans or any other Contract of the Company or any of its Subsidiaries other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts agreements subject to the Employee Plans in effect as of the date hereof;
(jk) enter into, amend, or extend any Collective Bargaining Agreement or similar ContractAgreement;
(il) acquirehire, lease (as lessee) terminate, demote or license (as licensee) promote or offer to hire, or promote any property employee or assets potential employee with the title of vice president or above, or encourage any employees with a fair market value title of vice president or above to resign from or terminate his relationship with the Company or any of its Subsidiaries, in excess of $5,000,000 in the aggregate per fiscal quartereach case, except transactions required pursuant to existing Contracts other than as in effect on the date hereof; or expressly contemplated by this Agreement;
(iim) sell, lease (as lessor)acquire, lease, license (as licensor) or dispose of any property or assets with a net book value in excess of $100,000 assets, in any individual transactioncase, except that are material to the Company and its Subsidiaries, taken as a whole, in any single transaction or series of related transactions (Aby merger, consolidation or acquisition of stock or assets) transactions required pursuant to existing Contracts as in effect on (which, for the date hereof or (B) transactions avoidance of doubt, will not restrict non-exclusive licenses granted in the ordinary course of business consistent with past practice);
(l) except as may be required as a result of a change in applicable Laws or in GAAP, make any change in any of the accounting principles or practices used by it;
(i) make or change any Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its Subsidiaries, (ii) change any material Tax accounting method, (iii) settle or compromise any material U.S. federal, state, local or non-U.S. Tax liability or (iv) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes; (n) enter into any Company Intellectual Property Agreement or amend any Company Intellectual Property Agreements or grant any release or relinquishment of any rights under any Company Intellectual Property Agreements, except (i) to customers and (ii) non-exclusive in-bound licenses for commercially available technology, in each case in the ordinary course of business consistent with past practice;
Appears in 1 contract
Negative Obligations of the Company. Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 6.1 or Section 6.2 5.2 of the Company Disclosure Schedule, Schedule or (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent), or (iv) as approved in advance by Parent in writingwriting (which approval shall not be unreasonably withheld, delayed or conditioned), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) Article VIII hereof and the Effective Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(a) amend, or : propose to adopt any amendments to, to or amend its certificate of incorporation or bylaws or comparable organizational documents; provided, however, that the Company may effect a reverse stock split in order to regain compliance with Nasdaq Marketplace Rule 4450(a)(5);
(bi) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (iA) the issuance and sale of shares of Company Common Stock pursuant to the Company ESPP or pursuant to Company Options and Company Restricted Stock Awards Units outstanding prior to the date hereof, (ii) the issuance of shares pursuant to the Company ESPP hereof and (iiiB) grants to newly hired employees of Company Options and Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares of Company Common Stock granted issued in the ordinary course of business after consistent with past practice, with a per share exercise price (with respect to Company Stock Options) that is no less than the date then-current market price of this Agreement;
a share of Company Common Stock and not subject to any accelerated vesting or other provision that would be triggered as a result of the consummation of the Merger or (cii) except for the acceleration of vesting of certain outstanding Company Options or other amendments in connection with the Merger, amend any term of any Company Capital Stock or Company Derivative Security (in each case, whether by merger, consolidation or otherwise), other than in each case in connection with a transaction between Company and any of its Subsidiaries or between such Subsidiaries; acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities, except to for repurchases, redemptions or acquisitions required by or in connection with the extent that such acquisition or redemption is pursuant to respective terms, as of the terms date hereof, of any Employee Plan (Company Option Plans as then in effect) effect on the date of this Agreement in the ordinary course of the operations of such plan consistent with past practice or any agreement subject except as necessary to any such Employee Plan;
(d) comply with Section 6.12; other than cash dividends or distributions made by any direct or indirect wholly-wholly owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(e) ; provided, however, that the Company may effect a reverse stock split in order to regain compliance with Nasdaq Marketplace Rule 4450(a)(5); propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its SubsidiariesSubsidiaries (other than the transactions contemplated by this Agreement);
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money Indebtedness or issue any debt securities, except for (A) short-term debt incurred to fund operations of the business in the ordinary course of business consistent with past practice that does not exceed $100,000 individually or $500,000 in the aggregate and (B) loans or advances to or from direct or indirect wholly-wholly owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly-wholly owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person except for travel advances made in the ordinary course of business consistent with past practice, make any loans or advances practice to employees of the Company or any of its Subsidiaries, Subsidiaries or (iv) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries Subsidiaries' assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens) thereupon;
(g) Encumbrances); except as may be required by applicable Law or the terms of any Employee Plan, including the Company 2009 Executive Bonus Plan, as in effect on the date hereof (copies of which have been provided to Parent)Legal Requirements, enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any director, officer or employee in any material respect, manner or increase or decrease in any manner the compensation or fringe benefits of any employee director, officer or director employee, pay any special bonus or special remuneration to any director, officer or employee, or pay any benefit not required by any plan or arrangement as in effect as of the Company or any of its Subsidiaries (date hereof, in each case except for normal increases of cash compensation in the ordinary course of business consistent with past practice to any current or future employees below the rank of Vice President or whose base salary does not exceed $200,000 per annum), pay any bonus or special remuneration (whether in cash, equity or otherwise) to any employee, consultant, independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Plan;
(h) practices; forgive any Loans loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective Affiliates;
Affiliates or Associates; enter into any Collective Bargaining Agreement; acquire, sell, lease, license or dispose of any material property or material assets in any single transaction or series of related transactions, except either (i) make any deposits or contributions of cash or other property to, or take any other action to fund, or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts subject to the Employee Plans, other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts subject to the Employee Plans in effect as of the date hereof;
(j) enter into, amend, or extend any Collective Bargaining Agreement or similar Contract;
(i) acquire, lease (as lessee) or license (as licensee) any property or assets with a fair market value in excess of $5,000,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as in effect on the date hereof; or (ii) sell, lease (as lessor), license (as licensor) the sale of goods or dispose grants of any property or assets non-exclusive licenses with a net book value in excess of $100,000 in any individual transaction, except (A) transactions required pursuant respect to existing Contracts as in effect on the date hereof or (B) transactions Company IP in the ordinary course of business consistent with past practice;
(l) business; except as may be required as a result of a change in applicable Laws Legal Requirements or in GAAP, make any material change in any of the accounting principles or practices used by it;
(i) make or change any material Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its Subsidiaries(unless required by applicable Legal Requirements), (ii) change any material Tax accounting method, (iii) settle or compromise any material U.S. federal, state, local or non-U.S. foreign income Tax liability, other than with respect to any proceeding relating to a Tax liability that (A) is in progress as of the date hereof, (B) is in an amount less than or equal to the liability or reserve that has been recorded with respect thereto on the Balance Sheet or (ivC) is in an amount less than $100,000 in the aggregate with all other such Liabilities or (iii) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes; ;
(ni) enter into any Company Intellectual Property Agreement lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) or (ii) modify, amend or exercise any Company Intellectual Property Agreements right to renew any lease or sublease of real property; grant any release exclusive rights with respect to any material Company IP, or relinquishment of divest any rights under any material Company Intellectual Property Agreements, except IP;
(i) to customers and acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, (ii) non-exclusive in-bound licenses for commercially available technologyenter into any Contract other than in the ordinary course of business which would be reasonably expected to result in a Company Material Adverse Effect or (iii) authorize, incur or commit to incur any new capital expenditure(s) which individually exceed $50,000 or, in each case the aggregate, exceed $500,000; provided, however, that none of the foregoing shall limit any capital expenditure required pursuant to existing Contracts; enter into any agreement or arrangement that limits or otherwise restricts in any material respect the Company or any of its Subsidiaries or any successor thereto or that would reasonably be expected to, after the Effective Time, limit or restrict Parent or any of its Subsidiaries (including the Surviving Entity or any of its Subsidiaries) in any material respect from engaging or competing in any material line of business in which such Person or any Party hereto engages in as of the date hereof, in any location or with any Person, other than modifications, renewals or extensions of agreements or arrangements (provided that such modifications, renewals or extensions do not materially increase limitations or restrictions on business); settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any claim, liability or obligation (absolute or accrued, asserted or unasserted, contingent or otherwise), other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings, claims and other Liabilities (i) reflected or reserved against in full in the Balance Sheet or incurred since March 31, 2008 in the ordinary course of business consistent with past practice or (ii) the settlement, compromise, discharge or satisfaction of which does not include any obligation (other than the payment of money) to be performed by the Company or its Subsidiaries following the Effective Time that is not, individually or in the aggregate, material to the Company; except as required by applicable Legal Requirements or GAAP, (i) revalue in any material respect any of its properties or assets or (ii) effect any material write-down or write-off of inventory, notes or accounts receivable other than in the ordinary course of business consistent with past practice;; fail to use all commercially reasonable efforts to maintain in full force and effect insurance coverage substantially similar to insurance coverage maintained on the date hereof; enter into, modify, amend or terminate any material Contract outside the ordinary course of business consistent with past practice, or waive, release or assign any material rights or claims (other than write-offs or other compromises of notes or accounts receivable in the ordinary course of business consistent with past practice); in connection with the self-disclosure described in Section 7.3(d), (i) hold itself out as a legal or de facto agent, broker, or representative of Parent or its Affiliates; (ii) bind Parent or its Affiliates, or create or assume, directly or indirectly, any express or implied obligation on behalf of Parent or its Affiliates; or (iii) prepare, complete or file any such self-disclosure that has been prepared or finalized without Parent's involvement and consultation; invest funds in debt securities or other instruments maturing more than 90 days after the date of investment; or authorize, recommend, agree, make any commitment, or announce an intention to take any of the actions prohibited by this Section 5.2.
Appears in 1 contract
Negative Obligations of the Company. Except as (ix) as expressly contemplated required or permitted by this Agreement, (iiy) as set forth in Section 6.1 5.1 or Section 6.2 5.2 of the Company Disclosure Schedule, (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent), Letter or (ivz) as approved in advance by Parent in writingwriting (which approval shall not be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) Article VIII and the Effective Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(a) amend, or propose to adopt any amendments to, amend its certificate of incorporation or bylaws or comparable organizational documentsdocuments other than, with respect to Subsidiaries of the Company, amendments necessary to comply with Applicable Law;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for other than (i) the issuance and sale of shares of Company Common Stock pursuant to Company Stock Compensatory Awards outstanding as of or prior to the date hereof, hereof or (ii) the issuance grants to newly hired employees of shares Company Compensatory Awards pursuant to binding commitments prior to the date hereof (which are reflected in Section 3.4(d) of the Company ESPP and (iii) Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares of Company Common Stock granted in the ordinary course of business after the date of this AgreementDisclosure Letter);
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary SecuritiesSecurities other than (i) in full or partial payment of the exercise price and any applicable Taxes pursuant to any exercise, except to the extent that such acquisition vesting or redemption is settlement of Company Compensatory Awards or (ii) pursuant to the terms forfeiture of any Employee Plan (as then in effect) or any agreement subject to any such Employee PlanCompany Compensatory Awards;
(d) other than dividends or distributions made by any direct or indirect wholly-wholly owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, material corporate restructuring, recapitalization or other material corporate reorganization of the Company or any of its SubsidiariesSubsidiaries (other than the transactions contemplated hereby, including the Merger);
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money debt or issue any debt securities, except for (A) debt incurred under the Company’s existing credit facilities as of the date hereof (provided that the aggregate principal amount outstanding under such facilities at any given time shall not exceed the sum of (1) the principal amount outstanding under such facilities as of the date hereof plus (2) $100,000,000) to fund operations of the business in the ordinary course of business consistent with past practice and (B) loans or advances to or from direct or indirect wholly-wholly owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly-wholly owned Subsidiaries of the Company, or (iii) make any loans, advances or capital contributions to or investments in any other Person except for (I) loans, advances, capital contributions and investments in or to any of the Company’s Subsidiaries and (II) routine advances made in the ordinary course of business consistent with past practice, make any loans or advances practice to employees of the Company or any of its Subsidiaries, (iv) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries assets, tangible or intangible, or create or suffer to exist any Lien (other than Permitted Liens) thereupon;
(g) except as may be required by applicable Law or Applicable Law, as required by the terms of any Employee Plan, including the Company 2009 Executive Bonus Plan, as in effect on the date hereof (copies of which have been provided to Parent), enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan in any material respect, or increase or decrease the compensation or fringe benefits of any employee or director of the Company or any of its Subsidiaries (except for normal increases of cash compensation in the ordinary course of business consistent with past practice to any current or future employees below the rank of Vice President or whose base salary does not exceed $200,000 per annum), pay any bonus or special remuneration (whether in cash, equity or otherwise) to any employee, consultant, independent contractor or director (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan as in effect as of the date hereof hereof, or amend in the targets ordinary course of business consistent with past practices (i) modify or terminate any bonus, profit sharing, compensation, change in control, retention, severance, termination, option, restricted stock, restricted stock unit, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, or other employee benefit agreement, trust, plan, fund or other arrangement for the goals compensation, benefit or welfare of any director, officer, employee, consultant or independent contractor or (ii) increase in any manner the compensation or fringe benefits of any director, officer, employee, consultant or independent contractor or pay any special bonus or special remuneration to any director, officer, employee, consultant, or independent contractor, or pay any benefit not required by any plan or arrangement not in effect as of the 2009 Executive Bonus Plandate of this Agreement;
(h) forgive any Loans loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective Affiliates;
(i) make any deposits or contributions of cash or other property to, to or take any other action to fund, fund or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts agreements subject to the Employee Plans, Plans or any other Contract of the Company or any of its Subsidiaries other than (x) deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts agreements subject to the Employee Plans in effect as of the date hereof, (y) as may be required by Applicable Law, or (z) in the ordinary course of business consistent with past practice;
(j) enter into, amend, or extend any Collective Bargaining Agreement or similar ContractAgreement;
(i) acquirehire, lease terminate, demote or promote or offer to hire, terminate, demote or promote any Senior Employee, other than (x) as lessee) expressly contemplated by this Agreement or license (as licensee) any property or assets with a fair market value in excess of $5,000,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as an Employee Plan in effect on as of the date hereof; , (y) as may be required by Applicable Law, or (iiz) sell, lease (as lessor), license (as licensor) or dispose of any property or assets with a net book value in excess of $100,000 in any individual transaction, except (A) transactions required pursuant to existing Contracts as in effect on the date hereof or (B) transactions in the ordinary course of business consistent with past practice;
(l) sell, lease (except as permitted by Section 5.2(o)), license or dispose of any property or asset that is material to the Company and its Subsidiaries, taken as a whole, in any single transaction or series of related transactions, except in the ordinary course of business consistent with past practice;
(m) except as may be required as a result of a change in applicable Laws Applicable Law or in GAAP, make any change in any of the accounting principles or practices used by it;
(i) make (other than in accordance with past practice or as required by Applicable Law) or change any material Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its Subsidiarieselection, (ii) change amend any material Tax accounting methodReturn, (iii) settle or compromise any material U.S. federalLiability for Taxes, state, local (iv) adopt or non-U.S. change any Tax liability accounting method or (ivv) consent to any extension or waiver of any limitation period with respect to any material claim or assessment for material Taxes; ;
(no) (i) enter into any Company Intellectual Property Agreement new lease or new sublease of real property (whether as a lessor, sublessor, lessee or sublessee), other than extensions or renewals of existing leases or subleases, with annual rental payments that exceed $1,000,000 or (ii) except in the ordinary course of business consistent with past practice, modify or amend any Lease or waive any term or condition thereof, except as would not be expected to be material to the Company Intellectual Property Agreements or any Subsidiary, taken as a whole;
(p) (i) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein or any assets that are material to the Company and its Subsidiaries taken as a whole (except with respect to assets acquired in the ordinary course of business consistent with past practice), (ii) other than in the ordinary course of business consistent with past practice, enter into, amend or grant any release or relinquishment of any material rights under any Material Contract or (iii) other than capital expenditures contemplated by the Company’s capital expenditures set forth in Section 5.2(p) of the Company Intellectual Property AgreementsDisclosure Letter, except incur any new capital expenditure(s) that would create obligations to the Company or any of its Subsidiaries in excess of $2,000,000 for any single item or $10,000,000 (per quarter) in the aggregate;
(q) settle or compromise any pending or threatened Legal Proceeding other than the settlement or compromise of a Legal Proceeding (i) to customers and reflected or reserved against in full on the Balance Sheet or (ii) nonthat does not include any obligation (other than the payment of money of $5,000,000 or less) to be performed by the Company or its Subsidiaries following the Effective Time that is or would reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole;
(r) except as required by Applicable Law or GAAP, revalue in any material respect any of its material properties or assets including writing-exclusive in-bound licenses for commercially available technology, in each case off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
(s) other than in the ordinary course of business consistent with past practice, (i) sell, lease, license (except as provided in Section 5.2(l)) or transfer to any person or entity any rights to any material Company Intellectual Property Rights, (ii) purchase or license (except as provided in Section 5.2(l)) any material Intellectual Property Rights or enter into any agreement or modify any existing agreement with respect to the Intellectual Property Rights of any person or entity at a cost of more than $5,000,000; or
(t) authorize, commit or enter into a Contract to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Microsemi Corp)
Negative Obligations of the Company. Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 6.1 5.1 or Section 6.2 5.2 of the Company Disclosure Schedule, (iii) as required by applicable Law or the terms of any Employee Plan (copies of which have been provided to Parent)Plan, or (iv) as approved in advance by Parent in writingwriting (which approval shall not be unreasonably withheld or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of such time as designees the termination of Parent constitute at least a majority of the Company Board this Agreement pursuant to Section 2.4(a) Article VIII and the Effective Time, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(a) amend, or propose to adopt any amendments to, its certificate of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (i) the issuance and sale of shares of Company Common Stock pursuant to Company Stock Awards outstanding prior to the date hereof, hereof and (ii) the issuance of shares pursuant grants to the Company ESPP and (iii) Company Restricted Stock Units to purchase up to an aggregate of 250,000 shares newly hired employees of Company Common Stock granted Awards issued in the ordinary course of business after consistent with past practice, with a per share exercise price (if applicable) that is no less than the then-current fair market value of a share of Company Common Stock and not subject to any accelerated vesting or other provision that would be triggered solely as a result of the consummation of the transactions contemplated by this Agreement so long as the aggregate number of shares of Company Common Stock subject to such additional Company Stock Awards does not exceed the sum of (x) 50,000, plus (y) the number of shares of Company Common Stock subject to any Company Stock Awards (or portion thereof) outstanding as of the date hereof that is subsequently canceled, terminated or forfeited as the result of this Agreementthe voluntary or involuntary termination of employment of any employee;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities, except to the extent that such acquisition or redemption is pursuant to the terms of any Employee Plan (as then in effecteffect on the date hereof) or any agreement subject to any such Employee Plan;
(d) other than dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(f) (i) incur or assume any long-term or short-term indebtedness for borrowed money or issue any debt securities, except for loans or advances to or from direct or indirect wholly-owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company, (iii) except for advances made in the ordinary course of business consistent with past practice, make any loans or advances to employees of the Company or any of its Subsidiaries, (iv) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (v) mortgage or pledge any of its or its Subsidiaries Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien (other than Permitted Liens) thereupon;
(g) except as may be required by applicable Law or the terms of any Employee Plan, including the Company 2009 Executive Bonus Plan, Plan as in effect on the date hereof (copies of which have been provided to Parent)hereof, enter into, adopt, amend (including an amendment to provide for the acceleration of vesting), modify or terminate any Employee Plan in any material respect, or increase or decrease the compensation or fringe benefits of any director, executive officer or employee or director of the Company or any of its Subsidiaries (except for normal increases of cash compensation in the ordinary course of business consistent with past practice to any current or future employees below the rank of Vice President or employee whose base salary does not exceed $200,000 150,000 per annum), pay any bonus or special remuneration (whether in cash, equity or otherwise) to any employeedirector, consultant, independent contractor officer or director employee (other than bonuses made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers or directors of the Company), or pay any benefit not required by any Employee Plan as in effect as of the date hereof or amend the targets or the goals of the 2009 Executive Bonus Planhereof;
(h) forgive any Loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective Affiliates;
(i) make any deposits or contributions of cash or other property to, or take any other action to fund, or in any other way secure the payment of compensation or benefits under the Employee Plans or Contracts subject to the Employee Plans, other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any Contracts subject to the Employee Plans in effect as of the date hereof;
(j) enter into, amend, or extend any Collective Bargaining Agreement or similar ContractAgreement;
(i1) acquire, lease (as lessee) or license (as licensee) any property or assets with a fair market value in excess of $5,000,000 500,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as in effect on the date hereof; or (ii2) sell, lease (as lessor), license (as licensor) or dispose of any property or assets with a net book fair market value in excess of $100,000 500,000 in any individual transactionthe aggregate per fiscal quarter, except (Ai) transactions required pursuant to existing Contracts as in effect on the date hereof hereof, (ii) sales of Loans and sales of investment securities subject to repurchase, in each case in the ordinary course of business consistent with past practice, or (Biii) transactions pledges of assets to secure public deposits accepted in the ordinary course of business consistent with past practice;
(l) except as may be required as a result of a change in applicable Laws or in GAAP, make any change in any of the accounting principles or practices used by it;
(i) make or change any material Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its Subsidiarieselection, (ii) change any material Tax accounting method, (iii) settle or compromise any material U.S. federal, state, local or non-U.S. Tax liability or (iviii) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes; ;
(n) enter into any Company Intellectual Property Agreement IP Licenses or amend any Company Intellectual Property Agreements IP Licenses or grant any release or relinquishment of any rights under any Company Intellectual Property AgreementsIP Licenses, except (i) to customers and (ii) non-exclusive in-bound licenses for commercially available technology, in each case in the ordinary course of business consistent with past practice;
(o) grant any exclusive rights with respect to any Company Intellectual Property, divest any Company Intellectual Property, except if such divestiture or divestures, individually or in the aggregate, are not material to the Company, or materially modify the Company’s standard warranty terms for Company Products or services or amend or modify any product or service warranty in any manner that is likely to be materially adverse to the Company or any of its Subsidiaries;
(p) authorize, incur or commit to incur any capital expenditure(s) which, individually or in the aggregate, is or are material to the Company, other than pursuant to existing Contracts as in effect on the date hereof;
(q) at any time permit the net capital of thinkorswim, Inc. to be less than the greater of (x) an amount equal to 8 1/3% of the “aggregate indebtedness” (as defined in subparagraph (c)(i) of the Net Capital Rule) of thinkorswim, Inc., and (y) $2.5 million;
(1) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any claim, liability or obligation (absolute or accrued, asserted or unasserted, contingent or otherwise), other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings, claims and other Liabilities that (i) are reflected or reserved against in full in the Balance Sheet or incurred since the date of the Balance Sheet in the ordinary course of business consistent with past practice, (ii) are covered by existing insurance policies, or (iii) otherwise do not involve the payment of money in excess of $250,000 in the aggregate, in each case where the settlement, compromise, discharge or satisfaction of which does not include any obligation (other than the payment of money not in excess of $250,000 in the aggregate above the amounts reflected or reserved in the Balance Sheet in respect of such Legal Proceeding) to be performed by the Company or its Subsidiaries following the Effective Time; or (2) take any action described in Section 5.2(r)(2) of the Company Disclosure Schedule;
(s) except as required by applicable Laws or GAAP, revalue in any material respect any of its properties or assets including writing-off notes or accounts receivable;
(t) except as required by applicable Laws, convene any regular or special meeting (or any adjournment or postponement thereof) of the stockholders of the Company other than the Company Stockholder Meeting;
(u) other than in the ordinary course of business consistent with past practice, (i) enter into, renew, extend or terminate any Material Contract (or any Contract that would have been a Material Contract if it had been in effect on the date hereof); or (ii) make any material amendment or change in any such Material Contract;
(i) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee); (ii) modify, amend or exercise any right to renew any lease or sublease of real property; or (iii) make application for the opening, relocation or closing of any, or open, relocate or close any, branch office or other real property;
(w) enter into any new line of business or change its material operating policies in any material respect, except as required by Law or by policies imposed by any Governmental Authority;
(x) enter into any securitizations of any Loans or create any special purpose funding or variable interest entity;
(y) enter into a Contract to do any of the foregoing or make any formal or informal arrangement or understanding, whether or not binding, with respect to any of the foregoing; or
(z) knowingly take any action which (i) results or is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied, (ii) has or is reasonably likely to have in a Material Adverse Effect on the Company, (iii) would materially impair the Company’s ability to consummate the transactions contemplated by this Agreement in accordance with the terms hereof and applicable Legal Requirements or (iv) would materially delay the consummation of the Merger and the other transactions contemplated by this Agreement.
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