Negative Obligations of the Company. Without limiting the generality of the foregoing, from the date of this Agreement until the earlier of the Effective Time and the date, if any, on which this Agreement is terminated in accordance with Section 8.1, except (a) as prohibited or required by applicable Law or by any Governmental Entity, (b) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, or (c) as otherwise required or permitted by this Agreement, unless Parent shall otherwise consent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall not, and shall not permit any of its Subsidiaries to: (a) amend, modify, waive, rescind or otherwise propose any change in its certificate of incorporation, bylaws or similar organizational documents, or the terms of any security of the Company or any Subsidiary, other than in immaterial respects in relation to any Subsidiary of the Company; (b) (i) merge or consolidate itself or any of its Subsidiaries with any other Person, or (ii) adopt any plan to restructure, reorganize or completely or partially liquidate; (c) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, securities or assets (i) constituting a business or (ii) otherwise outside of the Ordinary Course with a value or purchase price in excess of $250,000, other than, with respect to clause (ii), acquisitions pursuant to Contracts in effect as of the date of this Agreement that have been disclosed to Parent prior to the date of this Agreement or entered into after the date of this Agreement in compliance with this Agreement; (d) issue, sell, grant, pledge, dispose of, transfer or otherwise encumber, or authorize the issuance, sale, grant, pledge, disposition, transfer or encumbrance of, any shares of its capital stock, or other securities (including any options, warrants or any similar security exercisable for, or convertible into, such capital stock or similar security), except for the issuance of (i) shares of Company Common Stock upon the settlement of Company Equity Awards, in each case that are outstanding on the date of this Agreement or issued after the date of this Agreement in compliance with this Agreement or (ii) any securities of a direct or indirect wholly-owned Subsidiary of the Company to the Company or any other wholly-owned Subsidiary of the Company; (e) make any material loans, advances or capital contributions to or investments in any Person, other than (i) loans or advances in the Ordinary Course or (ii) capital contributions to or investments in any of the Company’s direct or indirect wholly-owned Subsidiaries; (f) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock, property or otherwise) in respect of any of its capital stock, except for dividends or distributions by any direct or indirect wholly-owned Subsidiary of the Company to the Company or to any other direct or indirect wholly-owned Subsidiary of the Company that are made in compliance with the Credit Agreement and the other contractual obligations of the Company and its Subsidiaries; (g) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a direct or indirect wholly-owned Subsidiary of the Company which remains a direct or indirect wholly-owned Subsidiary of the Company after consummation of such transaction); (h) purchase, repurchase, redeem, exchange or otherwise acquire any shares of the capital stock of the Company or any of its Subsidiaries, or any other equity interests or any rights, warrants or options to acquire any such shares or interests (other than (i) pursuant to the cashless exercise of Company Stock Options or the forfeiture of, or withholding of Taxes with respect to, Company Equity Awards in connection with any Taxable event related to such Company Equity Awards, in each case in accordance with the terms of the Company Stock Plan and award agreement as in effect on the date of this Agreement (or as modified or entered into after the date of this Agreement in accordance with the terms of this Agreement) or (ii) purchases, repurchases, redemptions, exchanges or other acquisitions of securities of any direct or indirect wholly-owned Subsidiary of the Company by the Company or any other wholly-owned Subsidiary of the Company); (i) create, incur, guarantee or assume any material indebtedness for borrowed money, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) transactions among the Company and its direct or indirect wholly-owned Subsidiaries or among the Company’s direct or indirect wholly-owned Subsidiaries, (B) borrowings under the Credit Agreement that are incurred in the Ordinary Course, or (C) indebtedness for borrowed money incurred to replace, renew, extend, refinance or refund any existing indebtedness and in amounts not materially in excess of such existing indebtedness, provided that such amounts are prepayable at any time without penalty or premium; (j) make or authorize any capital expenditures or series of capital expenditures except for capital expenditures in excess of $3,500,000 in any fiscal quarter; (k) (i) enter into any Contract that would have been a Company Material Contract pursuant to clause (i) (Item 601(b)(10)), (iv) (Joint Venture Agreements), (vii) (Restrictive Covenants), (viii) (“Most Favored Nation” Status), (ix) (Sales to Health Plans), (xi) (Standstill Agreements), (xii) (Put and Call Rights), (xiii) (Related Party Agreements) or (xiv) (Governmental Contracts) of the definition thereof had it been entered into prior to this Agreement or, with respect to any other category of Company Material Contracts, outside of the Ordinary Course, or (ii) except in the Ordinary Course (A) amend or terminate any Company Material Contract or (B) cancel, modify or waive any material debts, rights or claims thereunder; (l) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of, or grant or permit any Lien (other than Permitted Liens) on, any of its material properties, licenses, operations, assets, product lines or businesses, including any equity interests of any of the Company’s Subsidiaries, except (other than with respect to equity interests of any Subsidiary of the Company) (i) pursuant to Contracts in effect prior to the execution of this Agreement or entered into after the date of this Agreement in compliance with this Agreement, (ii) sales, leases or licenses of inventory, equipment and other assets in the Ordinary Course, (iii) inventory, equipment and other assets in the Ordinary Course, (iv) sales, leases, licenses or other dispositions to the Company or any of its Subsidiaries, or (v) the abandonment, lapse, expiration or other disposition of Intellectual Property in the Ordinary Course or for the purpose of disposing of obsolete or worthless assets (as determined in the Company’s reasonable business judgment); (m) except as required by Contracts in effect prior to the date of this Agreement, Company Benefit Plans as in effect on the date of this Agreement or applicable Law, (i) increase the compensation or other benefits payable or provided to the Company’s or its Subsidiaries’ officers, directors, individual independent contractors or employees (except for increases in base salary or wages made in the Ordinary Course consistent with past practices during the Company’s annual review process for employees who are not officers); (ii) enter into any employment, change of control, severance or retention agreement with any employee, director or officer of the Company, other than (x) agreements providing for severance or termination pay in the Ordinary Course for terminated employees other than executive officers or any employee with a target annual compensation opportunity in excess of $150,000, in each case, in return for a general release of claims against the Company, and (y) other than offer letters (and related compensation arrangements set forth in such offer letters) entered into in the Ordinary Course with any newly hired employees or individual independent contractors of the Company or any of its Subsidiaries who are not executive officers or that do not provide such individual with a target annual compensation opportunity in excess of $150,000; (iii) establish, adopt, enter into or amend any Company Benefit Plan; (iv) change in any material respect any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by applicable Law; (v) forgive any loans to directors or executive officers of the Company or any of its Subsidiaries; or (vi) hire or terminate without cause any executive officer or any employee with a target annual compensation opportunity in excess of $150,000; (n) other than in respect of claims, liabilities or obligations in connection with any stockholder litigation against the Company and/or its officers, directors, employees and Representatives relating to this Agreement, the Merger and/or the transactions contemplated by this Agreement, which are subject to Section 6.10, (i) waive, release, settle or compromise any claim for an amount materially in excess of the amount of the corresponding reserve established on the consolidated balance sheet of the Company as reflected in the most recent applicable Company SEC Document, except (A) for any settlements or compromises involving total aggregate payments not in excess of $150,000 individually or $500,000 in the aggregate (net of amounts covered by insurance or indemnification agreements with third parties), so long as such settlements or compromises do not materially restrict the operations of the business of the Company and its Subsidiaries, taken as a whole, or (B) waivers of rights with respect to suppliers or customers in the Ordinary Course, or (ii) enter into any consent decree, injunction or similar restraint or form of equitable relief in settlement of any claim or audit that would materially restrict the operations of the business of the Company or its Subsidiaries after the Effective Time, except as would not be material to the Company and its Subsidiaries, taken as a whole; (o) alter or amend any existing material accounting methods, principles or practices, except as may be required by changes in GAAP or applicable Law (including Regulation S-X of the Exchange Act) and agreed to by the Company’s independent public accountants; (p) (i) make, change or rescind any Tax election that, individually or in the aggregate, would materially and adversely affect the Tax liability of the Company or any Subsidiary of the Company, (ii) adopt or change any Tax accounting method in respect of a material amount of Taxes, (iii) adopt or change any Tax accounting period that, individually or in the aggregate, would materially and adversely affect the Tax liability of the Company or any Subsidiary of the Company, (iv) amend any material Tax Return, (v) settle, compromise, concede or abandon any Tax liability, claim or assessment or enter into any closing agreement with respect to a material amount of Taxes, (vi) surrender any right to claim a refund of material Taxes, (vii) waive or extend any statute of limitations with respect to a material amount of Taxes, or (viii) seek or obtain any ruling from a Taxing Authority with respect to Taxes; (q) effectuate a “plant closing” or “mass layoff” as those terms are defined in WARN; or (r) enter into any Contract, or otherwise obligate itself in a legally binding manner, to take any of the foregoing actions.
Appears in 1 contract
Negative Obligations of the Company. Without limiting the generality of the foregoing, from the date of this Agreement until the earlier of the Effective Time and the date, if any, on which this Agreement is terminated in accordance with Section 8.1, except Except (ai) as prohibited or required expressly permitted by applicable Law or by any Governmental Entitythis Agreement, (bii) as set forth in Section Section 5.1 or Section Section 5.2 of the Company Disclosure Letter, (iii) as required by applicable Law or Order, or (civ) as otherwise required or permitted consented to by this Agreement, unless Parent shall otherwise consent (which consent shall not be unreasonably withheld, conditioned delayed or delayed)conditioned) 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 the termination of this Agreement pursuant to Article VIII and the Effective Time, the Company shall notnot do, cause or permit, and shall cause its Subsidiaries not to do, cause or permit any of its Subsidiaries tothe following:
(a) amend, modifyor propose to adopt any amendments to, waive, rescind or otherwise propose any change in its certificate of incorporation, incorporation or bylaws or similar comparable organizational documentsdocuments or change the authorized capital stock or equity interests of the Company or its Subsidiaries;
(b) issue, deliver, transfer, sell, dispose of, pledge or otherwise encumber, or authorize or propose the terms issuance, transfer, sale, disposition or pledge or other encumbrance of (i) any shares of capital stock of any security class or any other ownership interest of the Company or any Subsidiaryof its Subsidiaries, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of capital stock or any other than in immaterial respects in relation to any Subsidiary ownership interest of the Company;
(b) (i) merge Company or consolidate itself any of its Subsidiaries, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of capital stock or any other ownership interest of the Company or any of its Subsidiaries with or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of capital stock or any other Personownership interest of the Company or any of its Subsidiaries, or (ii) adopt any plan other securities of the Company or any of its Subsidiaries in respect of, in lieu of, or in substitution for, Company Common Stock outstanding on the date hereof, except for the issuance and sale of shares of Company Common Stock pursuant to restructure, reorganize or completely or partially liquidateCompany Options outstanding prior to the date hereof;
(c) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectlyindirectly acquire, securities repurchase, redeem or assets propose to redeem, purchase or otherwise acquire any Company Securities or Subsidiary Securities (i) constituting a business or (ii) otherwise outside other than repurchases of the Ordinary Course with a value or purchase price in excess of $250,000, other than, with respect to clause (ii), acquisitions Company Securities pursuant to Contracts in effect the terms and conditions of Company Stock-Based Awards outstanding as of the date of this Agreement that have been disclosed or subsequently granted pursuant to Parent prior to the date of this Agreement or entered into after the date of this Agreement in compliance with this AgreementSection 5.2(b)(ii) above);
(d) issue(i) split, sellcombine, grantsubdivide, pledgerecapitalize, dispose ofexchange, transfer readjust, reclassify or otherwise encumber, or authorize the issuance, sale, grant, pledge, disposition, transfer or encumbrance of, alter any shares of its capital stock, or other securities (including any options, warrants or any similar security exercisable for, or convertible into, such capital stock or similar security), except for the issuance of (i) shares of Company Common Stock upon the settlement of Company Equity Awards, in each case that are outstanding on the date of this Agreement or issued after the date of this Agreement in compliance with this Agreement or (ii) any securities of a direct or indirect wholly-owned Subsidiary of the Company to the Company or any other wholly-owned Subsidiary of the Company;
(e) make any material loans, advances or capital contributions to or investments in any Person, other than (i) loans or advances in the Ordinary Course or (ii) capital contributions to or investments in any of the Company’s direct or indirect wholly-owned Subsidiaries;
(f) declare, set aside, make aside or pay any dividend or other distribution (whether in cash, stock, shares or property or otherwiseany combination thereof) in respect of any shares of its capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock, except for cash dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or to any other direct or indirect wholly-owned Subsidiary one of the Company that are made in compliance with the Credit Agreement and the other contractual obligations of the Company and its Subsidiaries;
(ge) split(i) incur or assume any long-term or short-term debt or issue any debt securities, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a (A) trade payables incurred in the ordinary course of business, and (B) loans or advances to direct or indirect wholly-wholly owned Subsidiary Subsidiaries made in the ordinary course of business, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the Company which remains a obligations of any other Person, except with respect to obligations of direct or indirect wholly-wholly owned Subsidiary Subsidiaries of the Company after consummation Company, (iii) make any loans, advances or capital contributions to or investments in any other Person, except for travel advances in the ordinary course of such transaction);
(h) purchase, repurchase, redeem, exchange or otherwise acquire any shares of the capital stock business consistent with past practice to employees of the Company or any of its Subsidiaries, or (iv) mortgage, pledge or otherwise encumber any other equity interests of its or its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any rights, warrants or options to acquire any such shares or interests lien thereupon (other than Permitted Liens);
(f) (i) pursuant to enter into, adopt, amend (including acceleration of vesting), modify or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the cashless exercise compensation, benefit or welfare of Company Stock Options or the forfeiture ofany director, officer, employee, or withholding of Taxes with respect toconsultant in any manner, other than the Company Equity Awards in connection with any Taxable event related to such Company Equity Awards, in each case in accordance with the terms Stockholders’ adoption of the Company 2009 Stock Option Plan (but not any grants or issuances thereunder), and award agreement except in any such case (A) as may be required by applicable Law or Order, (B) in effect on the date ordinary course of this Agreement (or as modified or entered into after the date of this Agreement in accordance business and consistent with the terms of this Agreement) past practice, or (ii) purchasesincrease the compensation (salary, repurchases, redemptions, exchanges bonus or other acquisitions of securities otherwise) of any direct director, officer, employee, or indirect wholly-owned Subsidiary consultant, pay any special bonus or special remuneration to any director, officer, employee, or consultant, or pay any benefit not required by any plan or arrangement as in effect as of the Company date hereof, except in any such case (A) as may be required by applicable Law or Order, or (B) in the Company ordinary course of business and consistent with past practice.
(g) waive, release, grant or transfer any other wholly-owned Subsidiary rights or claims of the Company)material value pursuant to any Material Contract;
(ih) createadopt a plan of complete or partial liquidation, incurdissolution, guarantee or assume any material indebtedness for borrowed moneymerger, or issue or sell any debt securities or warrants acquisition, consolidation, restructuring, recapitalization or other rights to acquire any debt security reorganization of the Company or any of its Subsidiaries, except for (A) transactions among other than the Company and its direct or indirect wholly-owned Subsidiaries or among the Company’s direct or indirect wholly-owned Subsidiaries, (B) borrowings under the Credit Agreement that are incurred in the Ordinary Course, or (C) indebtedness for borrowed money incurred to replace, renew, extend, refinance or refund any existing indebtedness and in amounts not materially in excess of such existing indebtedness, provided that such amounts are prepayable at any time without penalty or premiumMerger;
(j) make or authorize any capital expenditures or series of capital expenditures except for capital expenditures in excess of $3,500,000 in any fiscal quarter;
(k) (i) enter into any Contract that would have been a Company Material Contract pursuant to clause (i) (Item 601(b)(10)), (iv) (Joint Venture Agreements), (vii) (Restrictive Covenants), (viii) (“Most Favored Nation” Status), (ix) (Sales to Health Plans), (xi) (Standstill Agreements), (xii) (Put and Call Rights), (xiii) (Related Party Agreements) or (xiv) (Governmental Contracts) of the definition thereof had it been entered into prior to this Agreement or, with respect to any other category of Company Material Contracts, outside of the Ordinary Course, or (ii) except than in the Ordinary Course (A) amend or terminate any Company Material Contract or (B) cancelordinary course of business consistent with past practice, modify or waive any material debts, rights or claims thereunder;
(l) transferacquire, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of, pledge or grant or permit encumber any Lien (other than Permitted Liens) on, any of its material properties, licenses, operations, assets, product lines or businesses, including any equity interests of any assets of the Company’s Company and/or its Subsidiaries;
(j) settle any pending or threatened Legal Proceeding, except (other than with respect to equity interests of any Subsidiary of the Company) (i) pursuant to Contracts in effect prior to the execution of this Agreement or entered into including, without limitation, as may be brought by Company Stockholders and Legal Proceedings initiated after the date of this Agreement in compliance with this Agreement, (ii) sales, leases or licenses of inventory, equipment and other assets in the Ordinary Course, (iii) inventory, equipment and other assets in the Ordinary Course, (iv) sales, leases, licenses or other dispositions to the Company or any of its Subsidiaries, or (v) the abandonment, lapse, expiration or other disposition of Intellectual Property in the Ordinary Course or for the purpose of disposing of obsolete or worthless assets (as determined in the Company’s reasonable business judgment)hereof;
(mk) except as required by Contracts in effect prior to the date of this Agreementapplicable Law or Order or GAAP, Company Benefit Plans as in effect on the date of this Agreement or applicable Law, (i) increase the compensation or other benefits payable or provided to the Company’s or its Subsidiaries’ officers, directors, individual independent contractors or employees (except for increases in base salary or wages made in the Ordinary Course consistent with past practices during the Company’s annual review process for employees who are not officers); (ii) enter into any employment, change of control, severance or retention agreement with any employee, director or officer of the Company, other than (x) agreements providing for severance or termination pay in the Ordinary Course for terminated employees other than executive officers or any employee with a target annual compensation opportunity in excess of $150,000, in each case, in return for a general release of claims against the Company, and (y) other than offer letters (and related compensation arrangements set forth in such offer letters) entered into in the Ordinary Course with any newly hired employees or individual independent contractors of the Company or revalue any of its Subsidiaries who are not executive officers properties or that do not provide such individual with a target annual compensation opportunity in excess of $150,000; assets, including writing-off notes or accounts receivable;
(iiil) establish, adopt, enter into or amend any Company Benefit Plan; (iv) change in any material respect any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by as a result of a change in applicable Law; (v) forgive Law or Order or in GAAP, make any loans to directors or executive officers change in any of the Company accounting principles or practices used by it;
(i) make or change any material Tax election, change any method of its Subsidiaries; Tax accounting, amend any Tax Return, or file any Tax Return inconsistent with past practice, (ii) settle or compromise any material federal, state, local or foreign audit, investigation, claim, or income Tax liability, or (viiii) hire consent to any extension or terminate without cause waiver of any executive officer limitation period with respect to any claim or any employee with a target annual compensation opportunity in excess of $150,000assessment for material Taxes;
(n) other than in respect of claimsmake or commit to make any capital expenditures that are, liabilities or obligations in connection with any stockholder litigation against the Company and/or its officers, directors, employees and Representatives relating to this Agreement, the Merger and/or the transactions contemplated by this Agreement, which are subject to Section 6.10, (i) waive, release, settle or compromise any claim for an amount materially in excess of the amount of the corresponding reserve established on the consolidated balance sheet of the Company as reflected in the most recent applicable Company SEC Document, except (A) for any settlements or compromises involving total aggregate payments not in excess of $150,000 individually or $500,000 in the aggregate (net of amounts covered by insurance or indemnification agreements with third parties), so long as such settlements or compromises do not materially restrict the operations of the business of among the Company and its Subsidiaries, taken as a wholein excess of $600,000;
(o) enter into, terminate, violate, or modify any Material Contract outside the ordinary course of business consistent with past practice;
(Bp) waivers hire any employee or consultant, except for the replacement of rights any current employee whose employment is terminated or resigns for any reason (with respect to suppliers such replacement employee not receiving greater than $50,000 in salary and bonuses);
(q) acquire (including by merger, consolidation or customers in the Ordinary Courseacquisition of stock or assets) any other business, Person or any material equity interest therein;
(r) enter into, terminate, or modify any material lease for real property or acquire any real property;
(iis) enter into any consent decreehedge, injunction swap or similar restraint other derivative transaction; or
(t) enter into a Contract or form of equitable relief in settlement of binding obligation to take any claim or audit that would materially restrict the operations of the actions prohibited by this Section 5.2. The parties hereto acknowledge and hereby agree that the restrictions set forth in this Section 5.2 are not intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the business or operations of the Company or its Subsidiaries after at any time prior to the Effective Time. Prior to the Effective Time, except as would not be material to the Company and its SubsidiariesSubsidiaries shall exercise, taken as a whole;
(o) alter or amend any existing material accounting methodsconsistent with the terms and conditions of this Agreement, principles or practices, except as may be required by changes in GAAP or applicable Law (including Regulation S-X of the Exchange Act) control and agreed to by the Company’s independent public accountants;
(p) (i) make, change or rescind any Tax election that, individually or in the aggregate, would materially supervision over their own business and adversely affect the Tax liability of the Company or any Subsidiary of the Company, (ii) adopt or change any Tax accounting method in respect of a material amount of Taxes, (iii) adopt or change any Tax accounting period that, individually or in the aggregate, would materially and adversely affect the Tax liability of the Company or any Subsidiary of the Company, (iv) amend any material Tax Return, (v) settle, compromise, concede or abandon any Tax liability, claim or assessment or enter into any closing agreement with respect to a material amount of Taxes, (vi) surrender any right to claim a refund of material Taxes, (vii) waive or extend any statute of limitations with respect to a material amount of Taxes, or (viii) seek or obtain any ruling from a Taxing Authority with respect to Taxes;
(q) effectuate a “plant closing” or “mass layoff” as those terms are defined in WARN; or
(r) enter into any Contract, or otherwise obligate itself in a legally binding manner, to take any of the foregoing actionsoperations.
Appears in 1 contract
Samples: Merger Agreement (Open Text Corp)
Negative Obligations of the Company. Without limiting the generality of the foregoing, from the date of this Agreement until the earlier of the Effective Time and the date, if any, on which this Agreement is terminated in accordance with Section 8.1, except Except (ai) as prohibited or required by applicable Law or by any Governmental Entity, (b) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, or (c) as otherwise required contemplated or permitted by this Agreement, unless (ii) as set forth in Section 5.2 of the Company Disclosure Letter or (iii) as approved in advance by Parent shall otherwise consent in writing (which consent shall such approval not to be unreasonably withheld, conditioned or delayeddelayed with respect to the matters described in clauses “(i),” “(j),” “(p),” “(r),” “(s),” “(t)” and “(u)” of this Section 5.2), at all times during the Pre-Closing Period, the Company and its Subsidiaries shall not, not do any of the following and shall not permit its Subsidiaries to do any of its Subsidiaries tothe following:
(a) amend, modify, waive, rescind or otherwise propose any change in its certificate of incorporation, bylaws or similar organizational documents, or the terms of any security of the Company or any Subsidiary, other than in immaterial respects in relation to any Subsidiary of the Company;
(b) (i) merge declare, set aside or consolidate itself pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its Subsidiaries with any other Person, or (ii) adopt any plan to restructure, reorganize or completely or partially liquidate;
(c) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, securities or assets (i) constituting a business or (ii) otherwise outside of the Ordinary Course with a value or purchase price in excess of $250,000, other than, with respect to clause (ii), acquisitions pursuant to Contracts in effect as of the date of this Agreement that have been disclosed to Parent prior to the date of this Agreement or entered into after the date of this Agreement in compliance with this Agreement;
(d) issue, sell, grant, pledge, dispose of, transfer or otherwise encumber, or authorize the issuance, sale, grant, pledge, disposition, transfer or encumbrance of, any shares of its capital stock, or other securities (including any options, warrants or any similar security exercisable for, or convertible into, such capital stock or similar security)other equity interests, except for the issuance of (i) shares of Company Common Stock upon the settlement of Company Equity Awards, in each case that are outstanding on the date of this Agreement or issued after the date of this Agreement in compliance with this Agreement or (ii) any securities of dividends by a direct or indirect wholly-wholly owned Subsidiary of the Company to the Company or any other wholly-owned Subsidiary of the Company;
(e) make any material loans, advances or capital contributions to or investments in any Person, other than (i) loans or advances in the Ordinary Course or (ii) capital contributions to or investments except in any connection with the exercise of the Company’s direct or indirect wholly-owned Subsidiaries;
(f) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock, property or otherwise) in respect of any of its capital stock, except for dividends or distributions by any direct or indirect wholly-owned Subsidiary of the Company Options outstanding prior to the Company Agreement Date, purchase, redeem or to any other direct or indirect wholly-owned Subsidiary of the Company that are made in compliance with the Credit Agreement and the other contractual obligations of the Company and its Subsidiaries;
(g) split, combine, subdivide or reclassify its outstanding otherwise acquire shares of capital stock (except for any such transaction by a direct or indirect wholly-owned Subsidiary of the Company which remains a direct or indirect wholly-owned Subsidiary of the Company after consummation of such transaction);
(h) purchase, repurchase, redeem, exchange or otherwise acquire any shares of the capital stock other equity interests of the Company or its Subsidiaries or any of its Subsidiariesoptions, warrants, or any other equity interests or any rights, warrants or options rights to acquire any such shares or interests other equity interests, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other than equity interests;
(b) 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 Shares or any securities of any Subsidiary, except for the issuance of Company Shares pursuant to Company Options outstanding prior to the date hereof;
(c) adopt, amend, authorize or propose to amend its articles of incorporation or bylaws (or similar organizational documents), except for amendments as required by Law in connection with the exercise of any outstanding Company Options;
(d) create or form any Subsidiary;
(e) directly or indirectly acquire or agree to acquire (i) pursuant to by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the cashless exercise of Company Stock Options or the forfeiture assets of, making an investment in or withholding 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 Taxes with respect to$1,000,000 individually, Company Equity Awards in connection with any Taxable event related to or $2,500,000 for all such Company Equity Awards, in each case in accordance with the terms of transactions by the Company Stock Plan and award agreement as its Subsidiaries in effect on the date of this Agreement (aggregate, and except for loans, advances, contributions or as modified investments between or entered into after among the date of this Agreement in accordance with the terms of this Agreement) Company and any direct or indirect wholly owned Subsidiaries, or (ii) purchases, repurchases, redemptions, exchanges or other acquisitions of securities of any direct or indirect wholly-owned Subsidiary of assets that are otherwise material to the Company by and its Subsidiaries, other than in the Company or any other wholly-owned Subsidiary ordinary course of the Company)business consistent with past practice;
(f) directly or indirectly sell, lease, license, sell and leaseback, abandon, mortgage 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 (i) createthe abandonment or non-exclusive licenses under Intellectual Property Rights in the ordinary course of business consistent with past practice, incur(ii) sales of inventory of API and Products in the ordinary course of business consistent with past practice, guarantee and (iii) disposition of equipment and property no longer used in the operation of business;
(g) propose or assume any material indebtedness for borrowed moneyadopt a plan of complete or partial liquidation, or issue or sell any debt securities or warrants dissolution, merger, consolidation, restructuring, recapitalization or other rights to acquire any debt security reorganization of the Company or any of its Subsidiaries, except for (A) the transactions among the Company and its direct or indirect wholly-owned Subsidiaries or among the Company’s direct or indirect wholly-owned Subsidiaries, (B) borrowings under the Credit Agreement that are incurred in the Ordinary Course, or (C) indebtedness for borrowed money incurred to replace, renew, extend, refinance or refund any existing indebtedness and in amounts not materially in excess of such existing indebtedness, provided that such amounts are prepayable at any time without penalty or premiumcontemplated by this Agreement;
(j) make or authorize any capital expenditures or series of capital expenditures except for capital expenditures in excess of $3,500,000 in any fiscal quarter;
(kh) (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 Company or any of its Subsidiaries, guarantee any debt securities of any other Person, enter into any Contract that would have been a Company Material Contract pursuant “keepwell” or other agreement to clause (i) 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 (Item 601(b)(10)collectively, “Indebtedness”), (ivor amend, modify or refinance any Indebtedness, (ii) (Joint Venture Agreements)make any loans, (vii) (Restrictive Covenants)advances or capital contributions to, (viii) (“Most Favored Nation” Status)or investments in, (ix) (Sales to Health Plans)any other Person, (xi) (Standstill Agreements), (xii) (Put and Call Rights), (xiii) (Related Party Agreements) other than the Company or (xiv) (Governmental Contracts) any direct or indirect wholly owned Subsidiary of the definition thereof had it been entered into prior to this Agreement orCompany, other than in the ordinary course of business consistent with respect to any other category of Company Material Contracts, outside of the Ordinary Coursepast practice, or (iiiii) except syndicate or issue, attempt to syndicate or issue or announce the syndication or issuance of any debt facility or debt security that competes with Parent’s financing activities in connection with the Ordinary Course Offer (A) amend or terminate any Company Material Contract or (B) cancel, modify or waive any material debts, rights or claims thereunder;
(l) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of, or grant or permit any Lien (other than Permitted Liens) on, any of its material properties, licenses, operations, assets, product lines or businesses, including any equity interests renewal or refinancing of any of the Company’s Subsidiariesexisting debt facilities or securities);
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto in excess of $500,000 individually or $1,000,000 in the aggregate, except those provided for in the capital expenditure budget previously Made Available to Parent;
(other than with respect to equity interests of any Subsidiary of the Companyj) (i) pursuant to Contracts pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), in effect prior to an excess of $500,00 individually or $1,000,000 in the execution aggregate, other than the payment, discharge or satisfaction of this Agreement claims, liabilities or entered into after 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 consistent with past practice or incurred in connection with this Agreement in compliance with this Agreementand the transactions contemplated hereby (including legal and financial advisors fees and expenses), (ii) salescancel any material Indebtedness or (iii) waive, leases release, grant or licenses transfer any right of inventorymaterial value;
(k) compromise, equipment and settle or agree to settle any Action (including any Action relating to this Agreement or the transactions contemplated hereby) other assets than compromises, settlements or agreements that involve only the payment of money damages in an amount not greater than $500,000 individually or $1,000,000 in the Ordinary Courseaggregate, 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, compromise or enter into any closing agreement with respect to any liability for Taxes, amend any material Tax Return, enter into any material Contract with or request any material ruling from any Governmental Entity relating to Taxes, make, change or revoke any 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, extend or waive any statute of limitations with respect to Taxes, 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;
(n) change its fiscal year;
(o) except as may be required by applicable Law or the terms of any applicable Contract or Employee Benefit Plan as in effect on the Agreement Date, and except in the context of new hires whose base salary is less than $50,000, in each case in the ordinary course of business consistent with past practice, (i) grant any new, current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries any material increase in compensation, bonus or other benefits, or grant any type of material compensation, bonus or benefits to any new, current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries not previously receiving or entitled to receive such type of compensation, bonus or benefit, or pay any material bonus to any new, current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries, (ii) grant or pay to any new, current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries or Affiliates any severance, change in control or termination pay, or modifications thereto or increases therein, (iii) inventorypay any benefit or grant or amend any award (including in respect of stock options, equipment and restricted stock units, restricted stock or other assets stock-based or stock-related awards or the removal or modification of any restrictions in any Company Equity Plan or awards made thereunder) except the Ordinary Courseissuance of Company Shares upon the exercise of Company Options outstanding on the Agreement Date, (iv) sales, leases, licenses adopt or enter into any collective bargaining agreement or other dispositions similar labor union contract except as required by Law, (v) take any action to accelerate the vesting or payment of any compensation or benefit under any Company Equity Plan or other Employee Benefit Plan or other Contract except as required pursuant to Section 6.7 or Section 6.8(f) hereof, (vi) adopt any new employee benefit plan (that would be an Employee Benefit Plan upon adoption) or arrangement or amend, modify or terminate any existing Company Equity Plan or other Employee Benefit Plan (except pursuant to Section 6.7 or Section 6.8(f) hereof), in each case, for the benefit of any new, current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries, or (vvii) the abandonment, lapse, expiration contribute to any trust or other disposition of Intellectual Property in arrangement funding any Employee Benefit Plan, except to the Ordinary Course or for the purpose of disposing of obsolete or worthless assets (as determined in the Company’s reasonable business judgment);
(m) except as extent required by Contracts in effect prior to the date existing terms of this Agreementsuch Employee Benefit Plan, Company Benefit Plans trust or other funding arrangement as in effect on the date Agreement Date, by any collective bargaining agreement or other labor union contract, or by any written Employment Agreement as in effect as of the Agreement Date (or which may be entered into pursuant to the terms of this Agreement or applicable LawAgreement); provided, (i) increase the compensation or other benefits payable or provided however, that notwithstanding anything to the Company’s contrary herein, the Company may pay out bonuses under the terms of any Employee Benefit Plan or Contract as in effect on the Agreement Date for any completed fiscal year (or any portion thereof completed prior to the Acceptance Time) to its Subsidiaries’ officersemployees based on the achievement of performance targets adopted prior to the Agreement Date;
(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, directors, individual independent contractors operations and activities of the Company and its Subsidiaries as currently in effect;
(q) renew or employees (except for increases in base salary or wages made in the Ordinary Course consistent with past practices during the Company’s annual review process for employees who are not officers); (ii) enter into any employmentnon-compete, change of control, severance exclusivity or retention similar agreement with any employee, director that would restrict or officer of the Company, other than (x) agreements providing for severance or termination pay in the Ordinary Course for terminated employees other than executive officers or any employee with a target annual compensation opportunity in excess of $150,000limit, in each caseany material respect, in return for a general release of claims against the Company, and (y) other than offer letters (and related compensation arrangements set forth in such offer letters) entered into in the Ordinary Course with any newly hired employees or individual independent contractors of the Company or any of its Subsidiaries who are not executive officers from engaging or that do not provide such individual with a target annual compensation opportunity in excess of $150,000; (iii) establish, adopt, enter into or amend any Company Benefit Plan; (iv) change competing in any material respect any actuarial line of business or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by applicable Lawgeographic area; (v) forgive any loans to directors or executive officers of the Company or any of its Subsidiaries; or (vi) hire or terminate without cause any executive officer or any employee with a target annual compensation opportunity in excess of $150,000;
(n) other than in respect of claims, liabilities or obligations in connection with any stockholder litigation against the Company and/or its officers, directors, employees and Representatives relating to this Agreement, the Merger and/or the transactions contemplated by this Agreement, which are subject to Section 6.10, (i) waive, release, settle or compromise any claim for an amount materially in excess of the amount of the corresponding reserve established on the consolidated balance sheet of the Company as reflected in the most recent applicable Company SEC Document, except (A) for any settlements or compromises involving total aggregate payments not in excess of $150,000 individually or $500,000 in the aggregate (net of amounts covered by insurance or indemnification agreements with third parties), so long as such settlements or compromises do not materially restrict the operations of the business of the Company and its Subsidiaries, taken as a whole, or (B) waivers of rights with respect to suppliers or customers in the Ordinary Course, or (ii) enter into any consent decree, injunction or similar restraint or form of equitable relief in settlement of any claim or audit that would materially restrict the operations of the business of the Company or its Subsidiaries after the Effective Time, except as would not be material to the Company and its Subsidiaries, taken as a whole;
(o) alter or amend any existing material accounting methods, principles or practices, except as may be required by changes in GAAP or applicable Law (including Regulation S-X of the Exchange Act) and agreed to by the Company’s independent public accountants;
(p) (i) make, change or rescind any Tax election that, individually or in the aggregate, would materially and adversely affect the Tax liability of the Company or any Subsidiary of the Company, (ii) adopt or change any Tax accounting method in respect of a material amount of Taxes, (iii) adopt or change any Tax accounting period that, individually or in the aggregate, would materially and adversely affect the Tax liability of the Company or any Subsidiary of the Company, (iv) amend any material Tax Return, (v) settle, compromise, concede or abandon any Tax liability, claim or assessment or enter into any closing agreement with respect to a material amount of Taxes, (vi) surrender any right to claim a refund of material Taxes, (vii) waive or extend any statute of limitations with respect to a material amount of Taxes, or (viii) seek or obtain any ruling from a Taxing Authority with respect to Taxes;
(q) effectuate a “plant closing” or “mass layoff” as those terms are defined in WARN; or
(r) enter into any Contractnew material lease of real property or materially amend the terms of any existing material lease of real property, or otherwise obligate itself other than in a legally binding manner, to take any the ordinary course of the foregoing actions.business;
Appears in 1 contract
Negative Obligations of the Company. Without limiting the generality of the foregoing, from the date of this Agreement until the earlier of the Effective Time and the date, if any, on which this Agreement is terminated in accordance with Section Section 8.1, except (a) as prohibited or required by applicable Law or by any Governmental Entity, (b) as set forth in Section Section 5.1 or Section Section 5.2 of the Company Disclosure Letter, or (c) as otherwise required or permitted by this Agreement, unless Parent shall otherwise consent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall not, and shall not permit any of its Subsidiaries to:
(a) amend, modify, waive, rescind or otherwise propose any change in its certificate of incorporation, bylaws or similar organizational documents, or the terms of any security of the Company or any Subsidiary, other than in immaterial respects in relation to any Subsidiary of the Company;
(b) (i) merge or consolidate itself or any of its Subsidiaries with any other Person, or (ii) adopt any plan to restructure, reorganize or completely or partially liquidate;
(c) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, securities or assets (i) constituting a business or (ii) otherwise outside of the Ordinary Course with a value or purchase price in excess of $250,000, other than, with respect to clause (ii), acquisitions pursuant to Contracts in effect as of the date of this Agreement that have been disclosed to Parent prior to the date of this Agreement or entered into after the date of this Agreement in compliance with this Agreement;
(d) issue, sell, grant, pledge, dispose of, transfer or otherwise encumber, or authorize the issuance, sale, grant, pledge, disposition, transfer or encumbrance of, any shares of its capital stock, or other securities (including any options, warrants or any similar security exercisable for, or convertible into, such capital stock or similar security), except for the issuance of (i) shares of Company Common Stock upon the settlement of Company Equity Awards, in each case that are outstanding on the date of this Agreement or issued after the date of this Agreement in compliance with this Agreement or (ii) any securities of a direct or indirect wholly-owned Subsidiary of the Company to the Company or any other wholly-owned Subsidiary of the Company;
(e) make any material loans, advances or capital contributions to or investments in any Person, other than (i) loans or advances in the Ordinary Course or (ii) capital contributions to or investments in any of the Company’s direct or indirect wholly-owned Subsidiaries;
(f) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock, property or otherwise) in respect of any of its capital stock, except for dividends or distributions by any direct or indirect wholly-owned Subsidiary of the Company to the Company or to any other direct or indirect wholly-owned Subsidiary of the Company that are made in compliance with the Credit Agreement and the other contractual obligations of the Company and its Subsidiaries;
(g) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a direct or indirect wholly-owned Subsidiary of the Company which remains a direct or indirect wholly-owned Subsidiary of the Company after consummation of such transaction);
(h) purchase, repurchase, redeem, exchange or otherwise acquire any shares of the capital stock of the Company or any of its Subsidiaries, or any other equity interests or any rights, warrants or options to acquire any such shares or interests (other than (i) pursuant to the cashless exercise of Company Stock Options or the forfeiture of, or withholding of Taxes with respect to, Company Equity Awards in connection with any Taxable event related to such Company Equity Awards, in each case in accordance with the terms of the Company Stock Plan and award agreement as in effect on the date of this Agreement (or as modified or entered into after the date of this Agreement in accordance with the terms of this Agreement) or (ii) purchases, repurchases, redemptions, exchanges or other acquisitions of securities of any direct or indirect wholly-owned Subsidiary of the Company by the Company or any other wholly-owned Subsidiary of the Company);
(i) create, incur, guarantee or assume any material indebtedness for borrowed money, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) transactions among the Company and its direct or indirect wholly-owned Subsidiaries or among the Company’s direct or indirect wholly-owned Subsidiaries, (B) borrowings under the Credit Agreement that are incurred in the Ordinary Course, or (C) indebtedness for borrowed money incurred to replace, renew, extend, refinance or refund any existing indebtedness and in amounts not materially in excess of such existing indebtedness, provided that such amounts are prepayable at any time without penalty or premium;
(j) make or authorize any capital expenditures or series of capital expenditures except for capital expenditures in excess of $3,500,000 in any fiscal quarter;
(k) (i) enter into any Contract that would have been a Company Material Contract pursuant to clause (i(i) (Item 601(b)(10)), (iv(iv) (Joint Venture Agreements), (vii(vii) (Restrictive Covenants), (viii(viii) (“Most Favored Nation” Status), (ix(ix) (Sales to Health Plans), (xi(xi) (Standstill Agreements), (xii(xii) (Put and Call Rights), (xiii(xiii) (Related Party Agreements) or (xiv(xiv) (Governmental Contracts) of the definition thereof had it been entered into prior to this Agreement or, with respect to any other category of Company Material Contracts, outside of the Ordinary Course, or (ii) except in the Ordinary Course (A) amend or terminate any Company Material Contract or (B) cancel, modify or waive any material debts, rights or claims thereunder;
(l) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of, or grant or permit any Lien (other than Permitted Liens) on, any of its material properties, licenses, operations, assets, product lines or businesses, including any equity interests of any of the Company’s Subsidiaries, except (other than with respect to equity interests of any Subsidiary of the Company) (i) pursuant to Contracts in effect prior to the execution of this Agreement or entered into after the date of this Agreement in compliance with this Agreement, (ii) sales, leases or licenses of inventory, equipment and other assets in the Ordinary Course, (iii) inventory, equipment and other assets in the Ordinary Course, (iv) sales, leases, licenses or other dispositions to the Company or any of its Subsidiaries, or (v) the abandonment, lapse, expiration or other disposition of Intellectual Property in the Ordinary Course or for the purpose of disposing of obsolete or worthless assets (as determined in the Company’s reasonable business judgment);
(m) except as required by Contracts in effect prior to the date of this Agreement, Company Benefit Plans as in effect on the date of this Agreement or applicable Law, (i) increase the compensation or other benefits payable or provided to the Company’s or its Subsidiaries’ officers, directors, individual independent contractors or employees (except for increases in base salary or wages made in the Ordinary Course consistent with past practices during the Company’s annual review process for employees who are not officers); (ii) enter into any employment, change of control, severance or retention agreement with any employee, director or officer of the Company, other than (x) agreements providing for severance or termination pay in the Ordinary Course for terminated employees other than executive officers or any employee with a target annual compensation opportunity in excess of $150,000, in each case, in return for a general release of claims against the Company, and (y) other than offer letters (and related compensation arrangements set forth in such offer letters) entered into in the Ordinary Course with any newly hired employees or individual independent contractors of the Company or any of its Subsidiaries who are not executive officers or that do not provide such individual with a target annual compensation opportunity in excess of $150,000; (iii) establish, adopt, enter into or amend any Company Benefit Plan; (iv) change in any material respect any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by applicable Law; (v) forgive any loans to directors or executive officers of the Company or any of its Subsidiaries; or (vi) hire or terminate without cause any executive officer or any employee with a target annual compensation opportunity in excess of $150,000;
(n) other than in respect of claims, liabilities or obligations in connection with any stockholder litigation against the Company and/or its officers, directors, employees and Representatives relating to this Agreement, the Merger and/or the transactions contemplated by this Agreement, which are subject to Section Section 6.10, (i) waive, release, settle or compromise any claim for an amount materially in excess of the amount of the corresponding reserve established on the consolidated balance sheet of the Company as reflected in the most recent applicable Company SEC Document, except (A) for any settlements or compromises involving total aggregate payments not in excess of $150,000 individually or $500,000 in the aggregate (net of amounts covered by insurance or indemnification agreements with third parties), so long as such settlements or compromises do not materially restrict the operations of the business of the Company and its Subsidiaries, taken as a whole, or (B) waivers of rights with respect to suppliers or customers in the Ordinary Course, or (ii) enter into any consent decree, injunction or similar restraint or form of equitable relief in settlement of any claim or audit that would materially restrict the operations of the business of the Company or its Subsidiaries after the Effective Time, except as would not be material to the Company and its Subsidiaries, taken as a whole;
(o) alter or amend any existing material accounting methods, principles or practices, except as may be required by changes in GAAP or applicable Law (including Regulation S-X of the Exchange Act) and agreed to by the Company’s independent public accountants;
(p) (i) make, change or rescind any Tax election that, individually or in the aggregate, would materially and adversely affect the Tax liability of the Company or any Subsidiary of the Company, (ii) adopt or change any Tax accounting method in respect of a material amount of Taxes, (iii) adopt or change any Tax accounting period that, individually or in the aggregate, would materially and adversely affect the Tax liability of the Company or any Subsidiary of the Company, (iv) amend any material Tax Return, (v) settle, compromise, concede or abandon any Tax liability, claim or assessment or enter into any closing agreement with respect to a material amount of Taxes, (vi) surrender any right to claim a refund of material Taxes, (vii) waive or extend any statute of limitations with respect to a material amount of Taxes, or (viii) seek or obtain any ruling from a Taxing Authority with respect to Taxes;
(q) effectuate a “plant closing” or “mass layoff” as those terms are defined in WARN; or
(r) enter into any Contract, or otherwise obligate itself in a legally binding manner, to take any of the foregoing actions.
Appears in 1 contract
Negative Obligations of the Company. Without limiting the generality of the foregoing, from the date of this Agreement until the earlier of the Effective Time and the date, if any, on which this Agreement is terminated in accordance with Section Section 8.1, except (a) as prohibited or required by applicable Law or by any Governmental Entity, (b) as set forth in Section Section 5.1 or Section Section 5.2 of the Company Disclosure Letter, or (c) as otherwise required or permitted by this Agreement, unless Parent shall otherwise consent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall not, and shall not permit any of its Subsidiaries to:
(a) amend, modify, waive, rescind or otherwise propose any change in its certificate of incorporation, bylaws bylaws, memorandum and articles of association or similar organizational documents, or the terms of any security of the Company or any Subsidiary, other than in immaterial respects in relation to any Subsidiary of the Company;
(b) (i) other than in accordance with the Merger, merge or consolidate itself or any of its Subsidiaries with any other Person, or (ii) adopt any plan to restructure, reorganize or completely or partially liquidate;
(c) acquire (by merger, consolidation, acquisition of stock stock, shares or assets or otherwise), directly or indirectly, securities or assets (i) constituting a business or (ii) otherwise outside of the Ordinary Course with a value or purchase price Course, in each case in excess of $250,00050,000, other than, with respect to clause (ii), acquisitions pursuant to Contracts in effect as of the date of this Agreement that have been disclosed to Parent prior to the date of this Agreement or entered into after the date of this Agreement in compliance with this Agreement;
(d) issue, sell, grant, pledge, charge, dispose of, transfer or otherwise encumber, or authorize the issuance, sale, grant, pledge, disposition, transfer transfer, lease, license, guarantee or encumbrance of, any shares of its share capital stockor of any shares of capital stock of its Subsidiaries, or other securities (including any options, warrants or any similar security exercisable for, or convertible into, such share capital, capital stock or similar security), except for the issuance of (i) shares of Company Common Stock Shares upon the settlement of Company Equity Awards, in each case that are outstanding on the date of this Agreement or issued after the date of this Agreement in compliance with this Agreement or (ii) any securities of a direct or indirect wholly-owned Subsidiary of the Company to the Company or any other wholly-owned Subsidiary of the Company;
(e) make any material loans, advances or capital contributions to or investments in any PersonPerson in excess of $100,000, in the aggregate, (other than (i) loans loans, advances or advances in the Ordinary Course or (ii) capital contributions to between or investments in among the Company and any of the Company’s its direct or indirect wholly-owned Subsidiaries);
(f) declare, set aside, make or pay any dividend dividend, capitalization or other distribution (whether in cash, stockshares, property or otherwise) in respect of any of its capital stockshares, except for dividends dividends, capitalizations or distributions by any direct or indirect wholly-owned Subsidiary of the Company to the Company or to any other direct or indirect wholly-owned Subsidiary of the Company that are made in compliance with the Credit Agreement and the other contractual obligations of the Company and its Subsidiaries;
(g) split, combine, subdivide or reclassify its issued and outstanding shares of capital stock (except for any such transaction by a direct or indirect wholly-owned Subsidiary of the Company which remains a direct or indirect wholly-owned Subsidiary of the Company after consummation of such transaction);
(h) purchase, repurchase, redeem, exchange or otherwise acquire any shares of the capital stock of the Company or any of its Subsidiaries, or any other equity interests or any rights, warrants or options to acquire any such shares or interests (other than (i) pursuant to the cashless exercise of Company Stock Share Options or the forfeiture of, or withholding of Taxes with respect to, Company Equity Awards Share Options or Company RSUs in connection with any Taxable event related to such Company Equity Awardsawards, in each case in accordance with past practice and with the terms of the applicable Company Stock Share Plan and award agreement as in effect on the date of this Agreement (or as modified or entered into after the date of this Agreement in accordance with the terms of this Agreement) or (ii) purchases, repurchases, redemptions, exchanges or other acquisitions of securities of any direct or indirect wholly-owned Subsidiary of the Company by the Company or any other wholly-owned Subsidiary of the Company);
(i) create, incur, guarantee or assume any material indebtedness for borrowed moneyIndebtedness in excess of $500,000, or issue or sell any debt securities or warrants or other rights to acquire any debt security of in the Company or any of its Subsidiariesaggregate, except for (A) transactions among the Company and its direct or indirect wholly-owned Subsidiaries or among the Company’s direct or indirect wholly-owned Subsidiaries, Subsidiaries or (B) borrowings under the Credit Agreement that are incurred in the Ordinary Course, or (C) indebtedness Indebtedness for borrowed money incurred to replace, renew, extend, refinance or refund any existing indebtedness Indebtedness and in amounts not materially in excess of such existing indebtednessIndebtedness, provided that such amounts are prepayable at any time without penalty or premium;
(j) make or authorize any capital expenditures or series of capital expenditures except for capital expenditures in excess of $3,500,000 50,000, in the aggregate, in any fiscal quarter;
(k) other than in the Ordinary Course, (i) enter into any Contract that would have been a obligate the Company Material Contract pursuant or any Subsidiary to clause (i) (Item 601(b)(10)), (iv) (Joint Venture Agreements), (vii) (Restrictive Covenants), (viii) (“Most Favored Nation” Status), (ix) (Sales to Health Plans), (xi) (Standstill Agreements), (xii) (Put and Call Rights), (xiii) (Related Party Agreements) or (xiv) (Governmental Contracts) pay more than $50,000 during the term of the definition thereof had it been entered into prior to this Agreement or, with respect to any other category of Company Material Contracts, outside of the Ordinary Coursesuch Contract, or (ii) except in the Ordinary Course (A) amend or terminate any Company Material Contract Contract, or (B) cancel, modify or waive any material debts, rights or claims thereunder;
(l) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of, or grant or permit any Lien (other than Permitted Liens) on, any of its material properties, licenses, operations, assets, product lines or businesses, including any equity interests of any of the Company’s Subsidiaries, except (other than with respect to equity interests of any Subsidiary of the Company) (i) pursuant to Contracts in effect prior to the execution of this Agreement or entered into after the date of this Agreement in compliance with this Agreement, (ii) sales, leases or licenses of inventory, equipment and other assets in the Ordinary Course, (iii) inventory, equipment and other assets in the Ordinary Course, (iv) sales, leases, licenses or other dispositions to the Company or any of its Subsidiaries, or (v) the abandonment, lapse, expiration or other disposition of Intellectual Property in the Ordinary Course or for the purpose of disposing of obsolete or worthless assets (as determined in the Company’s reasonable business judgment);
(m) except as required by Contracts in effect prior to the date of this Agreement, Company Benefit Plans as in effect on the date of this Agreement or applicable Law, (i) increase the compensation or other benefits payable or provided to the Company’s or its Subsidiaries’ officers, directors, individual independent contractors or employees (except for increases in base salary or wages made in the Ordinary Course consistent with past practices during the Company’s annual review process for employees who are not officers)employees; (ii) enter into any employment, change of control, severance or retention agreement with any employee, director or officer of the Company, other than (x) agreements providing for severance or termination pay in the Ordinary Course for terminated employees other than executive officers or any employee with a target annual compensation opportunity in excess of $150,000, in each case, in return for a general release of claims against the Company, and (y) other than offer letters (and related compensation arrangements set forth in such offer letters) entered into in the Ordinary Course with any newly hired employees or individual independent contractors of the Company or any of its Subsidiaries who are not executive officers or that do not provide such individual with a target annual compensation opportunity in excess of $150,000; (iii) establish, adopt, enter into or amend any Company Benefit Plan; (iv) change in any material respect any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by applicable Law; (v) forgive any loans to directors or executive officers of the Company or any of its Subsidiaries; or (vi) except to the extent accrued in the net working capital schedule set forth on Section 3.25 of the Company Disclosure Letter, pay any bonus or performance based compensation to any employee, consultant, director or officer of the Company or any of its Subsidiaries in excess of $100,000, in the aggregate; or (vii) hire or terminate without cause any executive officer or any employee with a target annual compensation opportunity in excess outside of $150,000the parameters set forth on Section 5.2(m) of the Company Disclosure Letter;
(n) other than in respect of claims, liabilities or obligations in connection with any stockholder shareholder litigation against the Company and/or its officers, directors, employees and Representatives relating to this Agreement, the Merger and/or the transactions contemplated by this Agreement, which are subject to Section Section 6.10, (i) waive, release, settle or compromise any claim for an amount materially in excess of the amount of the corresponding reserve established on the consolidated balance sheet of the Company as reflected in the most recent applicable Company SEC Document, except (A) for any settlements or compromises involving total aggregate payments not in excess of $150,000 individually or $500,000 in the aggregate (net of amounts covered by insurance or indemnification agreements with third parties), so long as such settlements or compromises do not materially restrict the operations of the business of the Company and its Subsidiaries, taken as a whole, whole or (B) waivers of rights with respect to suppliers or customers in the Ordinary Course, or (ii) enter into any consent decree, injunction or similar restraint or form of equitable relief in settlement of any claim or audit that would materially restrict the operations of the business of the Company or its Subsidiaries after the Effective Time, except as would not be material to the Company and its Subsidiaries, taken as a whole;
(o) alter or amend any existing material accounting methods, principles or practices, except as may be required by changes in GAAP or applicable Law (including Regulation S-X of the Exchange Act) and agreed to by the Company’s independent public accountantsLaw;
(p) (i) make, change or rescind any Tax election that, individually or in the aggregate, would reasonably be expected to materially and adversely affect the Tax liability of the Company or any Subsidiary of the Company, (ii) adopt or change any material Tax accounting method in respect of a material amount of Taxesmethod, (iii) adopt or change any Tax accounting period that, individually or in the aggregate, would reasonably be expected to materially and adversely affect the Tax liability of the Company or any Subsidiary of the Company, (iv) amend except with respect to any material Tax Returnliability, (v) claim or assessment referenced in Section 3.12 of the Company Disclosure Letter, settle, compromise, concede or abandon any Tax liability, claim or assessment or enter into any closing agreement with respect to a material amount of Taxes, in each case that exceeds $50,000 individually or $250,000 in the aggregate (vitogether with (A) all other settlements, compromises, concessions, or abandonments with respect to any Tax liability, claim or assessment or (B) closing agreements entered into, made or taken with respect to Taxes, in each case of clauses (A) and (B), on or after the date of this Agreement), (v) surrender any right to claim a refund of a material amount of Taxes, or (viivi) waive or extend any statute of limitations with respect to a material amount of Taxes, or (viii) seek or obtain any ruling from a Taxing Authority with respect to Taxes;
(q) effectuate a “plant closing” or “mass layoff” as those terms are defined in WARNWARN or any similar applicable Law; or
(r) enter into any Contract, or otherwise obligate itself in a legally binding manner, to take any of the foregoing actions.
Appears in 1 contract
Negative Obligations of the Company. Without limiting the generality of the foregoing, from the date of this Agreement until the earlier of the Effective Time and the date, if any, on which this Agreement is terminated in accordance with Section 8.1, except Except (ai) as prohibited or required by applicable Law or by any Governmental Entity, (b) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, or (c) as otherwise required contemplated or permitted by this Agreement, unless (ii) as set forth in Section 5.2 of the Company Disclosure Letter or (iii) as approved in advance by Parent shall otherwise consent in writing (which consent shall such approval not to be unreasonably withheld, conditioned or delayeddelayed with respect to the matters described in clauses “(i),” “(j),” “(p),” “(r),” “(s),” “(t)” and “(u)” of this Section 5.2), at all times during the Pre-Closing Period, the Company and its Subsidiaries shall not, not do any of the following and shall not permit its Subsidiaries to do any of its Subsidiaries tothe following:
(a) amend, modify, waive, rescind or otherwise propose any change in its certificate of incorporation, bylaws or similar organizational documents, or the terms of any security of the Company or any Subsidiary, other than in immaterial respects in relation to any Subsidiary of the Company;
(b) (i) merge declare, set aside or consolidate itself pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its Subsidiaries with any other Person, or (ii) adopt any plan to restructure, reorganize or completely or partially liquidate;
(c) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, securities or assets (i) constituting a business or (ii) otherwise outside of the Ordinary Course with a value or purchase price in excess of $250,000, other than, with respect to clause (ii), acquisitions pursuant to Contracts in effect as of the date of this Agreement that have been disclosed to Parent prior to the date of this Agreement or entered into after the date of this Agreement in compliance with this Agreement;
(d) issue, sell, grant, pledge, dispose of, transfer or otherwise encumber, or authorize the issuance, sale, grant, pledge, disposition, transfer or encumbrance of, any shares of its capital stock, or other securities (including any options, warrants or any similar security exercisable for, or convertible into, such capital stock or similar security)other equity interests, except for the issuance of (i) shares of Company Common Stock upon the settlement of Company Equity Awards, in each case that are outstanding on the date of this Agreement or issued after the date of this Agreement in compliance with this Agreement or (ii) any securities of dividends by a direct or indirect wholly-wholly owned Subsidiary of the Company to the Company or any other wholly-owned Subsidiary of the Company;
(e) make any material loans, advances or capital contributions to or investments in any Person, other than (i) loans or advances in the Ordinary Course or (ii) capital contributions to or investments except in any connection with the exercise of the Company’s direct or indirect wholly-owned Subsidiaries;
(f) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock, property or otherwise) in respect of any of its capital stock, except for dividends or distributions by any direct or indirect wholly-owned Subsidiary of the Company Options outstanding prior to the Company Agreement Date, purchase, redeem or to any other direct or indirect wholly-owned Subsidiary of the Company that are made in compliance with the Credit Agreement and the other contractual obligations of the Company and its Subsidiaries;
(g) split, combine, subdivide or reclassify its outstanding otherwise acquire shares of capital stock (except for any such transaction by a direct or indirect wholly-owned Subsidiary of the Company which remains a direct or indirect wholly-owned Subsidiary of the Company after consummation of such transaction);
(h) purchase, repurchase, redeem, exchange or otherwise acquire any shares of the capital stock other equity interests of the Company or its Subsidiaries or any of its Subsidiariesoptions, warrants, or any other equity interests or any rights, warrants or options rights to acquire any such shares or interests other equity interests, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other than equity interests;
(b) 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 Shares or any securities of any Subsidiary, except for the issuance of Company Shares pursuant to Company Options outstanding prior to the date hereof;
(c) adopt, amend, authorize or propose to amend its articles of incorporation or bylaws (or similar organizational documents), except for amendments as required by Law in connection with the exercise of any outstanding Company Options;
(d) create or form any Subsidiary;
(e) directly or indirectly acquire or agree to acquire (i) pursuant to by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the cashless exercise of Company Stock Options or the forfeiture assets of, making an investment in or withholding 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 Taxes with respect to$1,000,000 individually, Company Equity Awards in connection with any Taxable event related to or $2,500,000 for all such Company Equity Awards, in each case in accordance with the terms of transactions by the Company Stock Plan and award agreement as its Subsidiaries in effect on the date of this Agreement (aggregate, and except for loans, advances, contributions or as modified investments between or entered into after among the date of this Agreement in accordance with the terms of this Agreement) Company and any direct or indirect wholly owned Subsidiaries, or (ii) purchases, repurchases, redemptions, exchanges or other acquisitions of securities of any direct or indirect wholly-owned Subsidiary of assets that are otherwise material to the Company by and its Subsidiaries, other than in the Company or any other wholly-owned Subsidiary ordinary course of the Company)business consistent with past practice;
(f) directly or indirectly sell, lease, license, sell and leaseback, abandon, mortgage 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 (i) createthe abandonment or non-exclusive licenses under Intellectual Property Rights in the ordinary course of business consistent with past practice, incur(ii) sales of inventory of API and Products in the ordinary course of business consistent with past practice, guarantee and (iii) disposition of equipment and property no longer used in the operation of business;
(g) propose or assume any material indebtedness for borrowed moneyadopt a plan of complete or partial liquidation, or issue or sell any debt securities or warrants dissolution, merger, consolidation, restructuring, recapitalization or other rights to acquire any debt security reorganization of the Company or any of its Subsidiaries, except for (A) the transactions among the Company and its direct or indirect wholly-owned Subsidiaries or among the Company’s direct or indirect wholly-owned Subsidiaries, (B) borrowings under the Credit Agreement that are incurred in the Ordinary Course, or (C) indebtedness for borrowed money incurred to replace, renew, extend, refinance or refund any existing indebtedness and in amounts not materially in excess of such existing indebtedness, provided that such amounts are prepayable at any time without penalty or premiumcontemplated by this Agreement;
(j) make or authorize any capital expenditures or series of capital expenditures except for capital expenditures in excess of $3,500,000 in any fiscal quarter;
(kh) (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 Company or any of its Subsidiaries, guarantee any debt securities of any other Person, enter into any Contract that would have been a Company Material Contract pursuant “keepwell” or other agreement to clause (i) 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 (Item 601(b)(10)collectively, “Indebtedness”), (ivor amend, modify or refinance any Indebtedness, (ii) (Joint Venture Agreements)make any loans, (vii) (Restrictive Covenants)advances or capital contributions to, (viii) (“Most Favored Nation” Status)or investments in, (ix) (Sales to Health Plans)any other Person, (xi) (Standstill Agreements), (xii) (Put and Call Rights), (xiii) (Related Party Agreements) other than the Company or (xiv) (Governmental Contracts) any direct or indirect wholly owned Subsidiary of the definition thereof had it been entered into prior to this Agreement orCompany, other than in the ordinary course of business consistent with respect to any other category of Company Material Contracts, outside of the Ordinary Coursepast practice, or (iiiii) except syndicate or issue, attempt to syndicate or issue or announce the syndication or issuance of any debt facility or debt security that competes with Parent’s financing activities in connection with the Ordinary Course Offer (A) amend or terminate any Company Material Contract or (B) cancel, modify or waive any material debts, rights or claims thereunder;
(l) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of, or grant or permit any Lien (other than Permitted Liens) on, any of its material properties, licenses, operations, assets, product lines or businesses, including any equity interests renewal or refinancing of any of the Company’s Subsidiariesexisting debt facilities or securities);
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto in excess of $500,000 individually or $1,000,000 in the aggregate, except those provided for in the capital expenditure budget previously Made Available to Parent;
(other than with respect to equity interests of any Subsidiary of the Companyj) (i) pursuant to Contracts pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), in effect prior to an excess of $500,00 individually or $1,000,000 in the execution aggregate, other than the payment, discharge or satisfaction of this Agreement claims, liabilities or entered into after 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 consistent with past practice or incurred in connection with this Agreement in compliance with this Agreementand the transactions contemplated hereby (including legal and financial advisors fees and expenses), (ii) salescancel any material Indebtedness or (iii) waive, leases release, grant or licenses transfer any right of inventorymaterial value;
(k) compromise, equipment and settle or agree to settle any Action (including any Action relating to this Agreement or the transactions contemplated hereby) other assets than compromises, settlements or agreements that involve only the payment of money damages in an amount not greater than $500,000 individually or $1,000,000 in the Ordinary Courseaggregate, 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, compromise or enter into any closing agreement with respect to any liability for Taxes, amend any material Tax Return, enter into any material Contract with or request any material ruling from any Governmental Entity relating to Taxes, make, change or revoke any 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, extend or waive any statute of limitations with respect to Taxes, 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;
(n) change its fiscal year;
(o) except as may be required by applicable Law or the terms of any applicable Contract or Employee Benefit Plan as in effect on the Agreement Date, and except in the context of new hires whose base salary is less than $50,000, in each case in the ordinary course of business consistent with past practice, (i) grant any new, current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries any material increase in compensation, bonus or other benefits, or grant any type of material compensation, bonus or benefits to any new, current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries not previously receiving or entitled to receive such type of compensation, bonus or benefit, or pay any material bonus to any new, current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries, (ii) grant or pay to any new, current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries or Affiliates any severance, change in control or termination pay, or modifications thereto or increases therein, (iii) inventorypay any benefit or grant or amend any award (including in respect of stock options, equipment and restricted stock units, restricted stock or other assets stock-based or stock-related awards or the removal or modification of any restrictions in any Company Equity Plan or awards made thereunder) except the Ordinary Courseissuance of Company Shares upon the exercise of Company Options outstanding on the Agreement Date, (iv) sales, leases, licenses adopt or enter into any collective bargaining agreement or other dispositions similar labor union contract except as required by Law, (v) take any action to accelerate the vesting or payment of any compensation or benefit under any Company Equity Plan or other Employee Benefit Plan or other Contract except as required pursuant to Section 6.7 or Section 6.8(f) hereof, (vi) adopt any new employee benefit plan (that would be an Employee Benefit Plan upon adoption) or arrangement or amend, modify or terminate any existing Company Equity Plan or other Employee Benefit Plan (except pursuant to Section 6.7 or Section 6.8(f) hereof), in each case, for the benefit of any new, current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries, or (vvii) the abandonment, lapse, expiration contribute to any trust or other disposition of Intellectual Property in arrangement funding any Employee Benefit Plan, except to the Ordinary Course or for the purpose of disposing of obsolete or worthless assets (as determined in the Company’s reasonable business judgment);
(m) except as extent required by Contracts in effect prior to the date existing terms of this Agreementsuch Employee Benefit Plan, Company Benefit Plans trust or other funding arrangement as in effect on the date Agreement Date, by any collective bargaining agreement or other labor union contract, or by any written Employment Agreement as in effect as of the Agreement Date (or which may be entered into pursuant to the terms of this Agreement or applicable LawAgreement); provided, (i) increase the compensation or other benefits payable or provided however, that notwithstanding anything to the Company’s contrary herein, the Company may pay out bonuses under the terms of any Employee Benefit Plan or Contract as in effect on the Agreement Date for any completed fiscal year (or any portion thereof completed prior to the Acceptance Time) to its Subsidiaries’ officersemployees based on the achievement of performance targets adopted prior to the Agreement Date;
(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, directors, individual independent contractors operations and activities of the Company and its Subsidiaries as currently in effect;
(q) renew or employees (except for increases in base salary or wages made in the Ordinary Course consistent with past practices during the Company’s annual review process for employees who are not officers); (ii) enter into any employmentnon-compete, change of control, severance exclusivity or retention similar agreement with any employee, director that would restrict or officer of the Company, other than (x) agreements providing for severance or termination pay in the Ordinary Course for terminated employees other than executive officers or any employee with a target annual compensation opportunity in excess of $150,000limit, in each caseany material respect, in return for a general release of claims against the Company, and (y) other than offer letters (and related compensation arrangements set forth in such offer letters) entered into in the Ordinary Course with any newly hired employees or individual independent contractors of the Company or any of its Subsidiaries who are not executive officers from engaging or that do not provide such individual with a target annual compensation opportunity competing in excess any line of $150,000; business or geographic area;
(iiir) establish, adopt, enter into any new material lease of real property or materially amend the terms of any Company Benefit Plan; existing material lease of real property, other than in the ordinary course of business;
(iv) change in any material respect any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by applicable Law; (vs) forgive any loans to any employees, officers or directors or executive officers of the Company or any of its Subsidiaries; or (vi) hire or terminate without cause any executive officer or any employee with a target annual compensation opportunity in excess of $150,000;
(n) other than in respect of claims, liabilities or obligations in connection with any stockholder litigation against the Company and/or its officers, directors, employees and Representatives relating to this Agreement, the Merger and/or the transactions contemplated by this Agreement, which are subject to Section 6.10, (i) waive, release, settle or compromise any claim for an amount materially in excess of the amount of the corresponding reserve established on the consolidated balance sheet of the Company as reflected in the most recent applicable Company SEC Document, except (A) for any settlements or compromises involving total aggregate payments not in excess of $150,000 individually or $500,000 in the aggregate (net of amounts covered by insurance or indemnification agreements with third parties), so long as such settlements or compromises do not materially restrict the operations of the business of the Company and its Subsidiaries, taken as a wholeor any of their respective Affiliates or Associates;
(t) enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any Material Contract, or seek to amend, 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 pursuant to which the Company or any of its Subsidiaries grants or has granted to any Person an exclusive license to practice or exploit the Material Company IP Rights;
(Bu) waivers other than in the ordinary course of business consistent with past practices or as required by GAAP, write off as uncollectible, or establish any extraordinary reserve with respect to, any receivable or other indebtedness;
(v) take any actions with the intention or for the purpose of undermining the (i) continued validity of the manufacturing and marketing authorizations and orphan designation held by the Company or its Subsidiaries; or (ii) the Company’s ability to transfer any authorization for the manufacturing or marketing of medicinal products or any orphan designations to Parent or Purchaser after the Acceptance Time;
(w) enter into or become bound by any distribution agreement or commercial tendering contract;
(x) other than an agreement substantially in the form identified in Section 5.2 of the Company Disclosure Letter, enter into or become bound by or seek to amend, terminate or waive any Contract with Patheon UK Limited or any of its Affiliates regarding the manufacture of any Product;
(y) grant any exclusive rights with respect to suppliers any Owned Company IP or customers divest any Owned Company IP, other than in the Ordinary Courseordinary course of business consistent with past practices; or
(z) authorize any of, or commit, resolve or agree to take any of, the foregoing actions unless approved in advance by Parent in writing (ii) enter into any consent decreesuch approval not to be unreasonably withheld, injunction conditioned or similar restraint delayed with respect to the matters described in clauses “(i),” “(j),” “(p),” “(r),” “(s),” “(t)” and “(u)” of this Section 5.2). Notwithstanding the foregoing, nothing contained in this Agreement shall give Parent or form of equitable relief in settlement of any claim Purchaser, directly or audit that would materially restrict indirectly, the right to control or direct the operations of the business of the Company or its Subsidiaries after prior to the Effective Acceptance Time. Prior to the Acceptance Time, except as would not be material to the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective businesses, taken as a whole;
(o) alter or amend any existing material accounting methods, principles or practices, except as may be required by changes in GAAP or applicable Law (including Regulation S-X of the Exchange Act) assets and agreed to by the Company’s independent public accountants;
(p) (i) make, change or rescind any Tax election that, individually or in the aggregate, would materially and adversely affect the Tax liability of the Company or any Subsidiary of the Company, (ii) adopt or change any Tax accounting method in respect of a material amount of Taxes, (iii) adopt or change any Tax accounting period that, individually or in the aggregate, would materially and adversely affect the Tax liability of the Company or any Subsidiary of the Company, (iv) amend any material Tax Return, (v) settle, compromise, concede or abandon any Tax liability, claim or assessment or enter into any closing agreement with respect to a material amount of Taxes, (vi) surrender any right to claim a refund of material Taxes, (vii) waive or extend any statute of limitations with respect to a material amount of Taxes, or (viii) seek or obtain any ruling from a Taxing Authority with respect to Taxes;
(q) effectuate a “plant closing” or “mass layoff” as those terms are defined in WARN; or
(r) enter into any Contract, or otherwise obligate itself in a legally binding manner, to take any of the foregoing actionsoperations.
Appears in 1 contract
Samples: Tender Offer Agreement
Negative Obligations of the Company. Without limiting the generality of the foregoing, from the date of this Agreement until the earlier of the Effective Time and the date, if any, on which this Agreement is terminated in accordance with Section 8.1, except Except (a) as prohibited or required by applicable Law or by any Governmental Entity, (b) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, or (c) as otherwise required expressly contemplated or permitted by this Agreement, unless (b) as otherwise required by applicable Law, (c) as consented to in writing by Parent shall otherwise consent (which consent shall not be unreasonably withheld, conditioned delayed or delayedconditioned), or (d) as set forth in Section 5.2 of the Company Disclosure Schedule, during the Interim Period, the Company shall not, and shall not permit any of its Subsidiaries to:
(a) amend, modify, waive, rescind or otherwise propose any change in its certificate of incorporation, bylaws or similar organizational documents, or the terms of any security of the Company or any Subsidiary, other than in immaterial respects in relation to any Subsidiary of the Company;
(bi) (i) merge or consolidate itself or any of its Subsidiaries with any other Person, or (ii) adopt any plan to restructure, reorganize or completely or partially liquidate;
(c) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, securities or assets (i) constituting a business or (ii) otherwise outside of the Ordinary Course with a value or purchase price in excess of $250,000, other than, with respect to clause (ii), acquisitions pursuant to Contracts in effect as of the date of this Agreement that have been disclosed to Parent prior to the date of this Agreement or entered into after the date of this Agreement in compliance with this Agreement;
(d) issue, sell, grant, pledge, dispose of, transfer or otherwise encumber, or authorize the issuance, sale, grant, pledge, disposition, transfer or encumbrance of, any shares of its capital stock, or other securities (including any options, warrants or any similar security exercisable for, or convertible into, such capital stock or similar security), except for the issuance of (i) shares of Company Common Stock upon the settlement of Company Equity Awards, in each case that are outstanding on the date of this Agreement or issued after the date of this Agreement in compliance with this Agreement or (ii) any securities of a direct or indirect wholly-owned Subsidiary of the Company to the Company or any other wholly-owned Subsidiary of the Company;
(e) make any material loans, advances or capital contributions to or investments in any Person, other than (i) loans or advances in the Ordinary Course or (ii) capital contributions to or investments in any of the Company’s direct or indirect wholly-owned Subsidiaries;
(fA) declare, set aside, make aside or pay any dividend dividends on, or make any other distribution distributions (whether in cash, stock, property securities or otherwiseother property) in respect of of, any of its capital stock, except for stock (other than dividends or and distributions by any direct or indirect wholly-owned a Subsidiary of the Company to the Company or to any other direct or indirect wholly-owned Subsidiary of the Company that are made in compliance with the Credit Agreement and the other contractual obligations of the Company and its Subsidiaries;
Company), (gB) split, combine, subdivide combine or reclassify any of its outstanding capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or any of its other securities (except for any such transaction by a direct or indirect wholly-owned Subsidiary other than the issuance of Common Stock upon the conversion of the Series F Shares (into Common Stock) or the exercise, settlement, or conversion of Company which remains a direct Options or indirect whollyother equity-owned Subsidiary of based awards outstanding under the Company after consummation of such transactionStock Plans outstanding on the date hereof in accordance with their present terms);
, or (hC) purchase, repurchase, redeem, exchange redeem or otherwise acquire any shares of the its capital stock of the Company or any of its Subsidiaries, or any other equity interests of its securities or any rights, warrants or options to acquire any such shares or interests other securities (other than the withholding of Common Shares to satisfy the exercise price or Tax withholding upon the exercise of Company Options, vesting of restricted shares or settlement of stock units, in each case that are outstanding as of the date hereof in accordance with their present terms);
(ii) except as permitted by clause (xiii) of this Section 5.2, issue, deliver, sell, grant, pledge or otherwise dispose of or encumber any shares of its capital stock, any other voting securities or any securities convertible into or exercisable or exchangeable for, or any rights, warrants or options to acquire, any such shares, voting securities or convertible, exercisable or exchangeable securities (other than (iA) pursuant to the cashless exercise issuance of Common Shares upon the conversion of the Series F Shares or (B) the exercise, settlement, or conversion of Company Stock Options or other equity-based awards outstanding under the forfeiture Company Stock Plans outstanding on the date hereof in accordance with their terms);
(iii) amend its Organizational Documents;
(iv) acquire (A) by merging or consolidating with, or by purchasing all or a substantial portion of the assets or any stock of, or withholding by any other manner, any business or Person or (B) any assets that are material, in the aggregate, to the Acquired Companies, taken as a whole, except purchases of Taxes inventory, components, property, plant or equipment in the ordinary course of business, consistent with respect topast practice;
(v) sell, lease, sublease, license, sublicense, pledge, mortgage, or otherwise dispose of or subject to any Encumbrance, other than Permitted Encumbrances, any Company Equity Awards in connection with any Taxable event related to such Company Equity AwardsReal Property or material assets of the Acquired Companies (excluding, for the avoidance of doubt, sales of inventory, in each case in accordance the ordinary course of business consistent with the terms of the Company Stock Plan and award agreement as in effect on the date of this Agreement (or as modified or entered into after the date of this Agreement in accordance with the terms of this Agreement) or (ii) purchases, repurchases, redemptions, exchanges or other acquisitions of securities of any direct or indirect wholly-owned Subsidiary of the Company by the Company or any other wholly-owned Subsidiary of the Companypast practice);
(ivi) create, incur, guarantee alter or assume amend the Company Rights Agreement or the Company Rights other than as contemplated herein;
(vii) (A) incur or suffer to exist any material indebtedness for borrowed moneymoney other than such indebtedness which existed as of July 31, 2009 (and any interest or issue fees and expenses that have accrued thereon) as reflected on the Company Balance Sheet or guarantee any indebtedness of another Person, (B) issue, sell or amend any debt securities or warrants or other rights to acquire any debt security securities of the Company or any of its Subsidiaries, except for (A) transactions among enter into any “keep well” or other agreement to maintain the Company and its direct financial condition of another Person or indirect wholly-owned Subsidiaries or among the Company’s direct or indirect wholly-owned Subsidiaries, (B) borrowings under the Credit Agreement that are incurred in the Ordinary Course, or (C) indebtedness for borrowed money incurred to replace, renew, extend, refinance or refund any existing indebtedness and in amounts not materially in excess of such existing indebtedness, provided that such amounts are prepayable at any time without penalty or premium;
(j) make or authorize any capital expenditures or series of capital expenditures except for capital expenditures in excess of $3,500,000 in any fiscal quarter;
(k) (i) enter into any Contract that would have been a Company Material Contract pursuant to clause (i) (Item 601(b)(10)), (iv) (Joint Venture Agreements), (vii) (Restrictive Covenants), (viii) (“Most Favored Nation” Status), (ix) (Sales to Health Plans), (xi) (Standstill Agreements), (xii) (Put and Call Rights), (xiii) (Related Party Agreements) or (xiv) (Governmental Contracts) of arrangement having the definition thereof had it been entered into prior to this Agreement or, with respect to any other category of Company Material Contracts, outside of the Ordinary Course, or (ii) except in the Ordinary Course (A) amend or terminate any Company Material Contract or (B) cancel, modify or waive any material debts, rights or claims thereunder;
(l) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of, or grant or permit any Lien (other than Permitted Liens) on, any of its material properties, licenses, operations, assets, product lines or businesses, including any equity interests economic effect of any of the Company’s Subsidiariesforegoing, except (C) make any loans, advances (other than with respect routine advances to equity interests of any Subsidiary directors, officers or employees of the Company) (i) pursuant to Contracts in effect prior to the execution of this Agreement or entered into after the date of this Agreement in compliance with this Agreement, (ii) sales, leases or licenses of inventory, equipment and other assets Acquired Companies in the Ordinary Courseordinary course of business consistent with past practice) or capital contributions to, (iii) inventoryor investment in, equipment and any other assets in the Ordinary CoursePerson, (iv) sales, leases, licenses or other dispositions to than the Company or any of its Subsidiaries, or (vD) the abandonment, lapse, expiration or other disposition of Intellectual Property than in the Ordinary Course or for the purpose ordinary course of disposing of obsolete or worthless assets (as determined in the Company’s reasonable business judgment);
(m) except as required by Contracts in effect prior to the date of this Agreement, Company Benefit Plans as in effect on the date of this Agreement or applicable Law, (i) increase the compensation or other benefits payable or provided to the Company’s or its Subsidiaries’ officers, directors, individual independent contractors or employees (except for increases in base salary or wages made in the Ordinary Course consistent with past practices during the Company’s annual review process for employees who are not officers); (ii) practice, enter into any employmenthedging agreement or other financial agreement or arrangement, change of control, severance or retention agreement with intended to protect any employee, director or officer of the CompanyAcquired Companies against fluctuations in commodities prices or exchange rates, other than except, in the case of clauses (A) and (B), for (x) agreements providing for severance borrowings under existing credit facilities (or termination pay in renewals, extensions or replacements thereof that do not increase the Ordinary Course for terminated employees other than executive officers or any employee with a target annual compensation opportunity in excess of $150,000, in each case, in return for a general release of claims against the Company, aggregate amount available thereunder and (y) other than offer letters (and related compensation arrangements set forth in such offer letters) entered into in the Ordinary Course with any newly hired employees or individual independent contractors of the Company or any of its Subsidiaries who are not executive officers or that do not provide for any termination fees or penalties, prohibit pre-payments or provide for any pre-payment penalties, or contain any like provisions limiting or otherwise affecting the ability of such individual with a target annual compensation opportunity party or its applicable Subsidiaries or successors from terminating or pre-paying such facilities, or contain financial terms less favorable, in excess of $150,000; the aggregate, than existing credit facilities, and as they may be so renewed, extended or replaced), (iiiy) establish, adopt, enter into or amend any Company Benefit Plan; (iv) change in any material respect any actuarial borrowings or other assumptions used lines of credit in additional amounts not to calculate funding obligations exceed $1,000,000, or (z) indebtedness owed by any Acquired Company to any other Acquired Company;
(viii) make any capital expenditures or other expenditures with respect to any Company Benefit Plan property, plant or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by applicable Law; (v) forgive any loans to directors or executive officers equipment outside of the Company or any ordinary course of its Subsidiaries; or (vi) hire or terminate without cause any executive officer or any employee business consistent with a target annual compensation opportunity in excess of $150,000;
(n) other than in respect of claims, liabilities or obligations in connection with any stockholder litigation against past practice for the Company and/or its officers, directors, employees and Representatives relating to this Agreement, the Merger and/or the transactions contemplated by this Agreement, which are subject to Section 6.10, (i) waive, release, settle or compromise any claim for an amount materially in excess of the amount of the corresponding reserve established on the consolidated balance sheet of the Company as reflected in the most recent applicable Company SEC Document, except (A) for any settlements or compromises involving total aggregate payments not in excess of $150,000 individually or $500,000 in the aggregate (net of amounts covered by insurance or indemnification agreements with third parties), so long as such settlements or compromises do not materially restrict the operations of the business of the Company and its SubsidiariesAcquired Companies, taken as a whole, in excess of the greater of (A) $200,000 per month or (B) waivers of rights with respect to suppliers or customers the amount permitted for such expenditures in the Ordinary CourseCompany’s budget for fiscal 2010, or (ii) enter into any consent decree, injunction or similar restraint or form a complete copy of equitable relief in settlement of any claim or audit that would materially restrict the operations of the business of the Company or its Subsidiaries after the Effective Time, except as would not be material which has previously been delivered to the Company and its Subsidiaries, taken as a wholeParent;
(oix) alter or amend make any existing material changes in accounting methods, principles or practices, except insofar as may be have been required by changes a change in GAAP or applicable Law (including Regulation S-X of the Exchange Act) and agreed to by the Company’s independent public accountantsGAAP;
(px) except in the ordinary course of business consistent with past practice or as expressly permitted by any other provision of this Section 5.2, waive, release or assign any material rights or claims under, or renew, materially modify or terminate any Material Contract;
(ixi) makeexcept in the ordinary course of business consistent with past practice, change (A) enter into any Contract that, if in effect on the date hereof, would be a Material Contract (other than renewals of existing Material Contracts in the ordinary course of business), or (B) license any material Intellectual Property Rights owned by any of the Acquired Companies to any Third Party;
(xii) enter into any Contract containing any restriction on the ability of any of the Acquired Companies to conduct their business as it is presently being conducted or is currently contemplated to be conducted;
(xiii) except as required pursuant to the terms of any Company Benefit Plan or other Contract in effect on the date hereof or as required by Law or in the ordinary course of business consistent with past practice, (A) adopt, enter into, terminate or amend any Collective Bargaining Agreement or any employment, severance, retirement, retention, incentive or similar agreement, arrangement or benefit plan for the benefit or welfare of any current or former director, officer, employee or consultant (provided, however, that the Company may hire employees or independent contractors with an annual base salary and incentive compensation opportunity not to exceed $150,000 for each such Person), (B) increase in any material respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, (C) amend or accelerate the payment, right to payment or vesting of any compensation or benefits, except as contemplated by this Agreement or other equity-based plans, (D) pay any material benefit not provided for as of the date hereof under any Company Benefit Plan, (E) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Company Benefit Plan, including the grant of stock options, stock appreciation rights, stock-based or stock-related awards, performance units or restricted stock, or the removal of existing restrictions in any Company Benefit Plans or agreements or awards made thereunder, or (F) take any action to secure the payment of compensation or benefits under any employee plan, Contract or arrangement or Company Benefit Plan;
(xiv) make or rescind any material Tax election thatelection, individually settle or in the aggregate, would materially and adversely affect the Tax liability of the Company or any Subsidiary of the Company, (ii) adopt or change any Tax accounting method in respect of a material amount of Taxes, (iii) adopt or change any Tax accounting period that, individually or in the aggregate, would materially and adversely affect the Tax liability of the Company or any Subsidiary of the Company, (iv) amend compromise any material Tax Return, (v) settle, compromise, concede or abandon any Tax liability, claim or assessment or enter into agree to any closing agreement with respect to extension of a material amount of Taxes, (vi) surrender any right to claim a refund of material Taxes, (vii) waive or extend any statute of limitations with respect to a material amount of Taxes, Taxes or (viii) seek or obtain amend any ruling from a Taxing Authority with respect to Taxesmaterial Tax Return;
(qxv) effectuate a “plant closing” initiate, compromise or “mass layoff” settle any material Legal Proceeding;
(xvi) fail to maintain, with its current insurance companies or other financially responsible insurance companies, insurance at levels substantially comparable to levels existing as those terms are defined of the date hereof;
(xvii) engage in WARNany workforce reduction of any size or nature without complying with the Workers Adjustment and Retraining Notification Act of 1988, as amended, and any comparable state or local Law that may be applicable;
(xviii) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute or contingent, matured or unmatured, known or unknown) in excess of $200,000 in the aggregate other than the payment, discharge or satisfaction of claims, liabilities or obligations in the ordinary course of business consistent with past practices;
(xix) other than modifications or amendments associated with renewals of existing Leases in the ordinary course of business consistent with past practice, modify, amend or terminate any material right relating to any Company Real Property; or
(rxx) enter into authorize any Contractof, or otherwise obligate itself commit or agree, in a legally binding mannerwriting or otherwise, to take any of of, the foregoing actions.
Appears in 1 contract
Negative Obligations of the Company. Without limiting the generality of the foregoing, from the date of this Agreement until the earlier of the Effective Time and the date, if any, on which this Agreement is terminated in accordance with Section 8.1, except Except (ai) as prohibited or required by applicable Law or by any Governmental Entity, (b) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, or (c) as otherwise required contemplated or permitted by this Agreement, unless (ii) as set forth in Section 6.2 of the Company Disclosure Letter or (iii) as approved in advance by Parent shall otherwise in writing (such consent (which consent shall not to be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the Agreement Date and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX and the Appointment Time, the Company shall not, not do any of the following and shall not permit its Subsidiaries to do any of its Subsidiaries tothe following:
(a) amend, modify, waive, rescind or otherwise propose any change in its certificate of incorporation, bylaws or similar organizational documents, or the terms of any security of the Company or any Subsidiary, other than in immaterial respects in relation to any Subsidiary of the Company;
(b) (i) merge declare, set aside, establish a record date for, make or consolidate itself pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its Subsidiaries with any other Person, or (ii) adopt any plan to restructure, reorganize or completely or partially liquidate;
(c) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, securities or assets (i) constituting a business or (ii) otherwise outside of the Ordinary Course with a value or purchase price in excess of $250,000, other than, with respect to clause (ii), acquisitions pursuant to Contracts in effect as of the date of this Agreement that have been disclosed to Parent prior to the date of this Agreement or entered into after the date of this Agreement in compliance with this Agreement;
(d) issue, sell, grant, pledge, dispose of, transfer or otherwise encumber, or authorize the issuance, sale, grant, pledge, disposition, transfer or encumbrance of, any shares of its capital stock, or other securities (including any options, warrants or any similar security exercisable for, or convertible into, such capital stock or similar security)other equity interests, except for the issuance of (i) shares of Company Common Stock upon the settlement of Company Equity Awards, in each case that are outstanding on the date of this Agreement or issued after the date of this Agreement in compliance with this Agreement or (ii) any securities of dividends by a direct or indirect wholly-wholly owned Subsidiary of the Company to the Company, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of the Company or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, including under the Rights Plan, or (iii) split, combine, reclassify or otherwise amend the terms of any of 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 pursuant to Contracts as in effect on the Agreement Date (other than (i) the issuance of Company Shares upon the exercise of Company Options in accordance with their terms, (ii) the settlement of Company RSUs in accordance with their terms, (iii) grants to newly hired employees issued in the ordinary course of business and consistent with past practice, (iv) the issuance of Company Shares upon conversion of any Convertible Notes, and (v) the issuance of Company Shares upon exercise of any Company Warrants);
(c) amend, authorize or propose to amend its articles of incorporation or bylaws (or similar organizational documents);
(d) 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 wholly-manner, any corporation, partnership, association or other business organization or division thereof, except for loans, advances, contributions or investments between or among the Company and any direct or indirect wholly owned Subsidiary Subsidiaries or (ii) any assets that are otherwise material to the Company and its Subsidiaries, other than in the ordinary course of the Companybusiness consistent with past practice;
(e) make directly or indirectly sell, lease, license, sell and leaseback, abandon, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material loansproperties, advances assets or capital contributions to rights or investments in any Personinterest therein, other than except (i) loans or advances the non-exclusive licenses under Intellectual Property Rights in the Ordinary Course or ordinary course of business, (ii) capital contributions to or investments sales of inventory of Company Products in any the ordinary course of business, and (iii) disposition of equipment and property no longer used in the Company’s direct or indirect wholly-owned Subsidiariesoperation of business;
(f) declareadopt or enter into a plan of complete or partial liquidation, set asidedissolution, make or pay any dividend restructuring, recapitalization or other distribution (whether in cash, stock, property or otherwise) in respect of any of its capital stock, except for dividends or distributions by any direct or indirect wholly-owned Subsidiary of the Company to the Company or to any other direct or indirect wholly-owned Subsidiary of the Company that are made in compliance with the Credit Agreement and the other contractual obligations of the Company and its Subsidiariesreorganization;
(g) split(i) incur, combinecreate, subdivide assume or reclassify its outstanding shares of 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 stock (except for lease obligations or any guarantee or any such transaction by a direct indebtedness of any other Person, issue or indirect wholly-owned Subsidiary of the Company which remains a direct sell any debt securities, options, warrants, calls or indirect wholly-owned Subsidiary of the Company after consummation of such transaction);
(h) purchase, repurchase, redeem, exchange or otherwise other rights to acquire any shares of the capital stock 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, other than to a wholly owned (either directly or indirectly) Subsidiary of the Company 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, cancel, prepay or refinance any Indebtedness or (ii) 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 other equity interests direct or indirect wholly owned Subsidiary of the Company;
(h) incur or commit to incur any rightscapital expenditure or authorization or commitment with respect thereto in excess of $2,000,000, warrants or options in the aggregate, except those provided for in the capital expenditure budget previously made available to acquire any such shares or interests (other than Parent;
(i) pursuant to the cashless exercise of Company Stock Options (i) pay, discharge, release, waive, settle or the forfeiture ofsatisfy any claims, liabilities or withholding of Taxes with respect toobligations (whether absolute, Company Equity Awards in connection with any Taxable event related to such Company Equity Awardsaccrued, asserted or unasserted, contingent or otherwise), in each case an excess of $1,000,000, in accordance with the aggregate, other than the payment, discharge or satisfaction in the ordinary course of business or as required by their terms of the Company Stock Plan and award agreement as in effect on the date of this Agreement (or as modified or entered into after the date of this Agreement in accordance with the terms of this Agreement) or (ii) purchases, repurchases, redemptions, exchanges or other acquisitions of securities of any direct or indirect wholly-owned Subsidiary of the Company by the Company or any other wholly-owned Subsidiary of the Company);
(i) create, incur, guarantee or assume any material indebtedness for borrowed money, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) transactions among the Company and its direct or indirect wholly-owned Subsidiaries or among the Company’s direct or indirect wholly-owned Subsidiaries, (B) borrowings under the Credit Agreement that are incurred in the Ordinary Course, or (C) indebtedness for borrowed money incurred to replace, renew, extend, refinance or refund any existing indebtedness and in amounts not materially in excess of such existing indebtedness, provided that such amounts are prepayable at any time without penalty or premium;
(j) make or authorize any capital expenditures or series of capital expenditures except for capital expenditures in excess of $3,500,000 in any fiscal quarter;
(k) (i) enter into any Contract that would have been a Company Material Contract pursuant to clause (i) (Item 601(b)(10)), (iv) (Joint Venture Agreements), (vii) (Restrictive Covenants), (viii) (“Most Favored Nation” Status), (ix) (Sales to Health Plans), (xi) (Standstill Agreements), (xii) (Put and Call Rights), (xiii) (Related Party Agreements) or (xiv) (Governmental Contracts) of the definition thereof had it been entered into prior to this Agreement or, with respect to any other category of Company Material Contracts, outside of the Ordinary Course, or (ii) except in the Ordinary Course (A) amend or terminate any Company Material Contract or (B) cancel, modify or waive any material debts, rights or claims thereunder;
(l) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of, or grant or permit any Lien (other than Permitted Liens) on, any of its material properties, licenses, operations, assets, product lines or businesses, including any equity interests of any of the Company’s Subsidiaries, except (other than with respect to equity interests of any Subsidiary of the Company) (i) pursuant to Contracts in effect prior to the execution of this Agreement or entered into after the date of this Agreement in compliance with this Agreement, (ii) sales, leases or licenses of inventory, equipment and other assets in the Ordinary Course, (iii) inventory, equipment and other assets in the Ordinary Course, (iv) sales, leases, licenses or other dispositions to the Company or any of its Subsidiaries, or (v) the abandonment, lapse, expiration or other disposition of Intellectual Property in the Ordinary Course or for the purpose of disposing of obsolete or worthless assets (as determined in the Company’s reasonable business judgment);
(m) except as required by Contracts in effect prior to the date of this Agreement, Company Benefit Plans as in effect on the date of this Agreement or applicable Law, (i) increase the compensation or other benefits payable or provided to the Company’s or its Subsidiaries’ officers, directors, individual independent contractors or employees (except for increases in base salary or wages made in the Ordinary Course consistent with past practices during the Company’s annual review process for employees who are not officers); (ii) enter into any employment, change of control, severance or retention agreement with any employee, director or officer of the Company, other than (x) agreements providing for severance or termination pay in the Ordinary Course for terminated employees other than executive officers or any employee with a target annual compensation opportunity in excess of $150,000, in each case, in return for a general release of claims against the Company, and (y) other than offer letters (and related compensation arrangements set forth in such offer letters) entered into in the Ordinary Course with any newly hired employees or individual independent contractors of the Company or any of its Subsidiaries who are not executive officers or that do not provide such individual with a target annual compensation opportunity in excess of $150,000; (iii) establish, adopt, enter into or amend any Company Benefit Plan; (iv) change in any material respect any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by applicable Law; (v) forgive any loans to directors or executive officers of the Company or any of its Subsidiaries; or (vi) hire or terminate without cause any executive officer or any employee with a target annual compensation opportunity in excess of $150,000;
(n) other than in respect Date of claims, liabilities or obligations reflected or reserved against in connection with any stockholder litigation against the most recent financial statements (or the notes thereto) of the Company and/or its officers, directors, employees and Representatives relating to this Agreement, included in the Merger and/or Company SEC Documents (for amounts not in excess of such reserves) or incurred since the transactions contemplated by this Agreement, which are subject to Section 6.10date of such financial statements in the ordinary course of business, (iii) cancel any material Indebtedness or (iii) waive, release, grant or transfer any right of material value;
(j) compromise, settle or compromise agree to settle any claim for Action (including any Action relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements that involve only the payment of money damages in an amount materially in excess of the amount of the corresponding reserve established on the consolidated balance sheet of the Company as reflected not, individually or in the most recent applicable Company SEC Documentaggregate, except (A) for any settlements or compromises involving total aggregate payments not in excess of $150,000 individually or $500,000 in the aggregate (net of amounts covered by insurance or indemnification agreements with third parties), so long as such settlements or compromises do not materially restrict the operations of the business of the Company and its Subsidiaries, taken as a whole, or (B) waivers of rights with respect to suppliers or customers in the Ordinary Course, or (ii) enter into any consent decree, injunction or similar restraint or form of equitable relief in settlement of any claim or audit that would materially restrict the operations of the business of the Company or its Subsidiaries after the Effective Time, except as would not be 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;
(ok) alter change its financial or amend any existing material tax accounting methods, principles or practices, except insofar as may be have been required by changes a change in GAAP or applicable Law (including GAAP, Regulation S-X of promulgated under the Exchange Act) and agreed to by the Company’s independent public accountantsAct or applicable Law;
(pl) (i) make, change settle or rescind compromise any Tax election that, individually or in the aggregate, would materially and adversely affect the Tax material liability of the Company or any Subsidiary of the Company, (ii) adopt or change any Tax accounting method in respect of a material amount of for Taxes, (iii) adopt or change any Tax accounting period that, individually or in the aggregate, would materially and adversely affect the Tax liability of the Company or any Subsidiary of the Company, (iv) amend any material Tax Return, (v) settle, compromise, concede or abandon any Tax liability, claim or assessment or enter into any closing agreement material Contract with respect or request any material ruling from any Governmental Entity relating to a material amount of Taxes, (vi) surrender make, change or revoke any right material Tax election other than elections made on a Tax Return that is required to claim be filed under applicable legal requirements irrespective of such election and that are not inconsistent with a refund position taken on a Tax Return previously filed, change any method of accounting for Tax purposes, take any material Taxesposition on a Tax Return inconsistent with a position taken on a Tax Return previously filed, (vii) extend or waive or extend any statute of limitations with respect to Taxes, or surrender any claim for a material amount refund of Taxes;
(m) change its fiscal year;
(i) grant any current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries any material increase in compensation, bonus or other benefits, or any such grant of any type of material compensation or benefits to any such 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 material bonus to any such current or former director, officer, employee or independent contractor, other than any increases of base salary, annual bonus targets and other bonuses, hourly wage rates and benefits of employees and independent contractors (other than directors and officers) in the ordinary course of business and consistent with past practice or as required by the terms of a Contract in effect on the date of this Agreement, (ii) except as may be required by applicable Law or the terms of any applicable Employee Benefit Plan as in effect on the date hereof, grant or pay to any current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries any severance, change in control, termination or similar bonus or pay or deferred compensation, or amend or modify the terms of any Employee Benefit Plan that provides for such payments, (iii) pay any benefit or grant any award under a Company Equity Plan or amend or modify any such benefit or award of any current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries (including in respect of stock options, restricted stock units, restricted stock or other equity-based or equity-related awards or the removal or modification of any restrictions in any Company Equity Plan or awards made thereunder) except (1) as required to comply with any applicable Law or any Company Equity Plan in effect as of the Agreement Date, (2) the issuance of Company Shares upon the exercise of Company Options outstanding on the Agreement Date in accordance with their terms as in effect on such date, (3) the settlement of Company RSUs outstanding on the Agreement Date in accordance with their terms as in effect on such date and (4) grants to newly hired employees issued in the ordinary course of business consistent with past practice, (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 or otherwise secure the funding of any compensation or benefit under any Employee Benefit Plan (including any Company Equity Plan) except as required by any Company Equity Plan as in effect on the Agreement Date or pursuant to Section 7.9 hereof, (vi) establish or adopt any new Employee Benefit Plan or amend, modify, terminate or waive any requirements under any existing Employee Benefit Plan (including any Company Equity Plan), other than in each case as required by ERISA, the Code, applicable Law or by any Company Equity Plan as in effect on the Agreement Date, (vii) hire any officers or promote any employee into an officer position, or (viii) seek commence an Offering Period (as defined in the ESPP);
(o) fail to use commercially reasonable efforts to keep in force insurance policies or obtain any ruling from a Taxing Authority replacement or revised provisions regarding insurance coverage with respect to Taxesmaterial assets, operations and activities of the Company and its Subsidiaries as currently in effect;
(p) 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, other than for Contracts with the Company’s or its Subsidiaries’ distributors or sales agents that are renewed or entered into in the ordinary course of business and consistent with past practice;
(q) effectuate 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;
(r) sell, lease, license, encumber or otherwise dispose of, in whole or in part, any material properties, material 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 inventory of Company Products in the ordinary course of business and (iii) disposition of equipment and property no longer used in the operation of business;
(s) grant any exclusive rights with respect to any Owned Company IP or divest any material Owned Company IP;
(t) (i) waive any material term of or material obligation owing to the Company or any Subsidiary under any Material Contract or (ii) enter into any Contract which contains a “plant closing” change of control or “mass layoff” as those terms are defined other similar provision in WARNfavor of the other party or parties thereto or that would otherwise require a payment or give rise to any rights to such other party or parties in connection with the transactions contemplated by this Agreement; or
(ru) enter into authorize any Contractof, or otherwise obligate itself in a legally binding mannercommit, resolve or agree to take any of 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 1 contract
Samples: Merger Agreement (Sonosite Inc)
Negative Obligations of the Company. Without limiting Except (x) as expressly required under the generality of the foregoing, from the date terms of this Agreement until the earlier of the Effective Time and the date, if any, on which this Agreement is terminated in accordance with Section 8.1, except (a) or as prohibited or required by applicable Law or by any Governmental EntityLaw, (by) as set forth in Section 5.1 or Section 5.2 Section 5.3 of the Company Disclosure Letter, Schedule or (cz) as otherwise required or permitted approved in advance by this AgreementParent in writing (provided that, unless Parent shall otherwise consent solely with respect to Sections 5.3 (which consent j), (q), (t) and (v), such approval shall not be unreasonably withheld, conditioned or delayed and, with respect to the remaining provisions of Section 5.3, such approval shall not be unreasonably delayed), at all times during the Pre-Closing Period, the Company shall not, not (and shall not permit any cause each of its Subsidiaries not to) do any of the following:
(a) amend(i) establish a record date for, modifydeclare, waiveset aside or pay any dividends on, rescind or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, (ii) except in connection with the exercise of Company Options, Company RSUs or Company Warrants outstanding prior to the Agreement Date, purchase, redeem or otherwise propose acquire shares of capital stock or other equity interests of the Acquired Corporations or any change in its certificate of incorporationoptions, bylaws or similar organizational documentswarrants, or rights to acquire any such shares or other equity interests, or (iii) split, combine, reclassify or otherwise amend the terms of any security of its capital stock or other equity interests or authorize the Company issuance of any other securities in respect of, in lieu of or in substitution for equity, or repurchase or otherwise acquire, directly or indirectly, any Subsidiary, other than in immaterial respects in relation to any Subsidiary of the Companyequity;
(b) other than the issuance by the Company to its employees of Company RSUs representing no more than 50,000 shares of Company Common Stock in the aggregate (iwhich Company RSUs shall be distributed as set forth in Section 5.3(b) merge or consolidate itself or any of its Subsidiaries with any other Person, or the Company Disclosure Schedule) (ii) adopt any plan to restructure, reorganize or completely or partially liquidate;
(c) acquire (by merger, consolidation, acquisition of stock or assets or otherwisethe “Permitted Company RSU Issuance”), directly or indirectly, securities or assets (i) constituting a business or (ii) otherwise outside of the Ordinary Course with a value or purchase price in excess of $250,000, other than, with respect to clause (ii), acquisitions pursuant to Contracts in effect as of the date of this Agreement that have been disclosed to Parent prior to the date of this Agreement or entered into after the date of this Agreement in compliance with this Agreement;
(d) issue, sell, deliver, grant, pledge, dispose oftransfer, transfer encumber or otherwise encumberagree or commit to issue, or authorize the issuancesell, saledeliver, deliver, grant, pledge, disposition, transfer or encumbrance ofencumber (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Shares, any shares securities of its any Subsidiary or any instrument convertible into or exchangeable for any capital stock, equity interest or other securities (including any options, warrants or any similar security exercisable for, or convertible into, such capital stock or similar security)of the Acquired Corporations, except for the issuance of Shares pursuant to the exercise of the Company Options, Company Warrants or vesting of Company RSUs outstanding prior to the Agreement 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) directly or indirectly acquire or agree to acquire (i) shares by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of Company Common Stock upon the settlement of Company Equity Awardsassets of, making an investment in each case 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 outstanding on for cash consideration not in excess of $50,000 individually, or $200,000 for all such transactions by the date of this Agreement Acquired Corporations in the aggregate, and except for loans, advances, contributions or issued after investments between or among the date of this Agreement in compliance with this Agreement Company and any direct or indirect wholly owned Subsidiaries, or (ii) any securities assets that are otherwise material to the 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 or otherwise dispose in whole or in part of any of its material properties, assets or rights or any interest therein, except (i) sales of Products in the ordinary course of business, (ii) non-exclusive licenses to service providers in the ordinary course of business, and (iii) disposition of immaterial equipment and property no longer used in the operation of business;
(g) propose or adopt a direct plan of complete or indirect wholly-owned Subsidiary partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Acquired Corporations, except for the Transactions;
(h) (i) except as set forth in Section 5.3(h) of the Company to the Company Disclosure Schedule, incur, create, assume or otherwise become liable for, any other wholly-owned Subsidiary of the Company;
Indebtedness, or amend, modify or refinance any Indebtedness, or (eii) make any material loans, advances or capital contributions to to, or investments in in, any other Person, other than (i) loans the Company or advances in the Ordinary Course or (ii) capital contributions to or investments in any of the Company’s direct or indirect wholly-owned Subsidiaries;
(f) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock, property or otherwise) in respect of any of its capital stock, except for dividends or distributions by any direct or indirect wholly-wholly owned Subsidiary of the Company in the ordinary course of business;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto (except that the Acquired Corporations may make any capital expenditure that: (A) is provided for in the Acquired Corporations’ capital expense budget delivered to Parent prior to the Company or Agreement Date and which is deemed to any other direct or indirect wholly-owned Subsidiary include such information as set forth in Section 5.3(i) of the Company that are made in compliance with the Credit Agreement and the other contractual obligations of the Company and its Subsidiaries;
(g) splitDisclosure Schedule, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a direct or indirect wholly-owned Subsidiary of the Company which remains a direct or indirect wholly-owned Subsidiary of the Company after consummation of such transaction);
(h) purchase, repurchase, redeem, exchange or otherwise acquire any shares of the capital stock of the Company or any of its Subsidiaries, or any other equity interests or any rights, warrants or options to acquire any such shares or interests (other than (i) pursuant to the cashless exercise of Company Stock Options or the forfeiture of, or withholding of Taxes with respect to, Company Equity Awards in connection with any Taxable event related to such Company Equity Awards, in each case expenditures shall be in accordance with the terms categories set forth in such budget; or (B) when added to all other capital expenditures made on behalf of the Company Stock Plan Acquired Corporations since the Agreement Date but not provided for in the Acquired Corporations’ capital expense budget delivered to Parent prior to the Agreement Date, does not exceed $50,000 individually and award agreement as $250,000 in effect on the date of this Agreement (or as modified or entered into after the date of this Agreement in accordance with the terms of this Agreement) or (ii) purchases, repurchases, redemptions, exchanges or other acquisitions of securities of aggregate during any direct or indirect wholly-owned Subsidiary of the Company by the Company or any other wholly-owned Subsidiary of the Companyfiscal quarter);
(i) createpay, incurdischarge, guarantee settle or assume satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), in an excess of $100,000 individually or $250,000 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 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 or incurred in connection with this Agreement and the Transactions (including legal and financial advisors fees and expenses), (ii) cancel any material indebtedness for borrowed moneyIndebtedness, (iii) waive, release, grant or transfer any right of material value, or (iv) commence any Action, except in connection with a breach of this Agreement or any other agreements contemplated hereby;
(k) compromise, settle, release or agree to compromise, settle or release any Action or threatened Action (including any Action relating to this Agreement or the Transactions) other than compromises, settlements or agreements that involve only the payment of money damages in an amount not greater than $100,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, the Acquired Corporations;
(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 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 changes in GAAP.
(n) (i) settle, compromise or enter into any closing agreement with respect to any liability for Taxes, (ii) amend any Tax Return, (iii) enter into any Contract with or request any 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 or file a Tax Return in any jurisdiction in which the Acquired Corporations have not previously filed a Tax Return1, (vii) extend or waive any statute of limitations with respect to 1 NTD: This relates to the Taiwan issue Taxes, (viii) surrender any claim for a material refund of Taxes or sell fail to timely file correct and complete Tax Returns as required by applicable Tax Law (ix) make or file any debt securities or warrants or Tax election (other rights to acquire any debt security of than a Tax election that is consistent with a Tax election made in a previous period and would not materially increase the Taxes payable by the Company or any 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 Subsidiariesfiscal year;
(p) except as may be required by the terms of any Employee Benefit Plan set forth in Section 3.12(a) of the Company Disclosure Schedule and, solely with respect to clauses “(i)” through “(iii)” below, except for the Permitted Company RSU Issuance, (i) grant any Company Associate (A) transactions among the Company and its direct any equity or indirect whollyequity-owned Subsidiaries or among the Company’s direct or indirect wholly-owned Subsidiariesbased compensation, (B) borrowings under the Credit Agreement that are incurred any increase in the Ordinary Coursecompensation, bonus or other benefits, or (C) indebtedness for borrowed money incurred any type of compensation, bonus or benefits not previously receiving or entitled to replacereceive such type of compensation, renew, extend, refinance bonus or refund any existing indebtedness and in amounts not materially in excess of such existing indebtedness, provided that such amounts are prepayable at any time without penalty or premium;
(j) make or authorize any capital expenditures or series of capital expenditures except for capital expenditures in excess of $3,500,000 in any fiscal quarter;
(k) (i) enter into any Contract that would have been a Company Material Contract pursuant to clause (i) (Item 601(b)(10)), (iv) (Joint Venture Agreements), (vii) (Restrictive Covenants), (viii) (“Most Favored Nation” Status), (ix) (Sales to Health Plans), (xi) (Standstill Agreements), (xii) (Put and Call Rights), (xiii) (Related Party Agreements) or (xiv) (Governmental Contracts) of the definition thereof had it been entered into prior to this Agreement or, with respect to any other category of Company Material Contracts, outside of the Ordinary Course, or (ii) except in the Ordinary Course (A) amend or terminate any Company Material Contract or (B) cancel, modify or waive any material debts, rights or claims thereunder;
(l) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of, or grant or permit any Lien (other than Permitted Liens) on, any of its material properties, licenses, operations, assets, product lines or businesses, including any equity interests of any of the Company’s Subsidiaries, except (other than with respect to equity interests of any Subsidiary of the Company) (i) pursuant to Contracts in effect prior to the execution of this Agreement or entered into after the date of this Agreement in compliance with this Agreementbenefit, (ii) salesgrant or pay to any Company Associate any severance, leases retention, retirement, change in control or licenses of inventorytermination pay, equipment and other assets in the Ordinary Courseor modifications thereto or increases therein, (iii) inventorypay any benefit or grant or amend any award (including in respect of stock options, equipment and restricted stock units, restricted stock or other assets stock-based or stock-related awards or the removal or modification of any restrictions in any Company Equity Plan or awards made thereunder) except the Ordinary Courseissuance of Shares pursuant to the exercise of Company Options or vesting of Company RSUs outstanding on the Agreement Date, (iv) sales, leases, licenses adopt or enter into any collective bargaining agreement or other dispositions to the Company or any of its Subsidiariessimilar labor union contract, or (v) take any action to voluntarily accelerate the abandonment, lapse, expiration vesting or payment of any compensation or benefit under any Company Equity Plan or other disposition of Intellectual Property Employee Benefit Plan or other Contract or remove any existing restrictions in the Ordinary Course or for the purpose of disposing of obsolete or worthless assets (as determined in the Company’s reasonable business judgment);
(m) any Employee Benefit Plans except as required by Contracts in effect prior pursuant to the date of this Agreement, Company Benefit Plans as in effect on the date of this Agreement or applicable LawSection 6.3 hereof, (i) increase the compensation or other benefits payable or provided to the Company’s or its Subsidiaries’ officers, directors, individual independent contractors or employees (except for increases in base salary or wages made in the Ordinary Course consistent with past practices during the Company’s annual review process for employees who are not officers); (ii) enter into any employment, change of control, severance or retention agreement with any employee, director or officer of the Company, other than (x) agreements providing for severance or termination pay in the Ordinary Course for terminated employees other than executive officers or any employee with a target annual compensation opportunity in excess of $150,000, in each case, in return for a general release of claims against the Company, and (y) other than offer letters (and related compensation arrangements set forth in such offer letters) entered into in the Ordinary Course with any newly hired employees or individual independent contractors of the Company or any of its Subsidiaries who are not executive officers or that do not provide such individual with a target annual compensation opportunity in excess of $150,000; (iii) establish, adopt, enter into or amend any Company Benefit Plan; (ivvi) change in any material respect any actuarial or other assumptions used to calculate funding obligations with respect to any Company Employee Benefit Plan that is required by applicable Law to be funded or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or applicable Law, (vii) establish or adopt any new Employee Benefit Plan (or any plan, program, arrangement, practice or agreement that would be an Employee Benefit Plan if it were in existence on the Agreement Date) or amend, modify or terminate any existing Company Equity Plan or other Employee Benefit Plan (except pursuant to Section 6.3 or Section 6.5 hereof), (viii) contribute to any trust or other arrangement funding any Employee Benefit Plan (including the Company’s 401(k) plan), except to the extent required by the existing terms of such Employee Benefit Plan, trust or other funding arrangement as in effect on the Agreement Date or make any contribution to the Company’s 401(k) plan in Shares;
(i) hire any employee or engage any independent consultant or contractor (who is natural person), other than up to five (5) non-executive officer employees with an annual base salary of less than $200,000, up to five (5) non-executive officer employees with an annual base salary of less than $150,000 and up to ten (10) independent consultants or contractors (who are natural persons) with an annual base salary of less than $150,000 in the ordinary course of business and which employees, consultants or contractors shall be retained for one of the positions set forth on Section 5.3(q) of the Company Disclosure Schedule, or (ii) hire, promote or terminate (other than for cause) any Company Associate other than any non-executive officer employee with an annual base salary of less of $150,000 in the ordinary course of business; provided, however, that the compensation and benefits granted to any such newly hired employee or newly engaged independent contractor or consultant shall be consistent with, and be no more favorable in the aggregate than, the compensation and benefits (vexcluding equity awards) provided as of the Agreement Date to the Acquired Corporation’s similarly situated employees, or independent contractors or consultants, as applicable;
(r) materially 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 or executive officers of the Company Acquired Corporations, or any of its Subsidiaries; their respective Affiliates or (vi) hire or terminate without cause any executive officer or any employee with a target annual compensation opportunity in excess of $150,000Associates;
(nv) amend, modify, terminate or waive, or exercise any material right or remedy under, any (x) Material Contract or (y) any agreement relating to the license, transfer or other disposition or acquisition of Intellectual Property Rights or rights to market or sell Products, other than non-exclusive licenses to customers or suppliers of the Acquired Corporations that are terminable for any reason by the Acquired Corporations upon no more than thirty (30) days’ notice (an “IP Agreement”) 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 or any IP Agreement;
(w) commence any new offering period, or permit any additional elective deferrals or increase in elective deferral rates in respect of claimsthe current offering period, liabilities under the ESPP;
(x) adopt or obligations in connection with implement any stockholder litigation against the Company and/or its officersrights plan or similar arrangement;
(y) authorize any of, directorsor commit, employees and Representatives relating resolve or agree to this Agreementtake any of, the Merger and/or foregoing actions. Notwithstanding the transactions contemplated by foregoing, nothing contained in this AgreementAgreement shall give Parent or Purchaser, which are subject directly or indirectly, the right to Section 6.10, (i) waive, release, settle control or compromise any claim for an amount materially in excess of the amount of the corresponding reserve established on the consolidated balance sheet of the Company as reflected in the most recent applicable Company SEC Document, except (A) for any settlements or compromises involving total aggregate payments not in excess of $150,000 individually or $500,000 in the aggregate (net of amounts covered by insurance or indemnification agreements with third parties), so long as such settlements or compromises do not materially restrict direct the operations of the business of 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, taken as a whole, or (B) waivers of rights with respect to suppliers or customers in the Ordinary Course, or (ii) enter into any consent decree, injunction or similar restraint or form of equitable relief in settlement of any claim or audit that would materially restrict the operations of the business of the Company or its Subsidiaries after the Effective Time, except as would not be material to the Company assets and its Subsidiaries, taken as a whole;
(o) alter or amend any existing material accounting methods, principles or practices, except as may be required by changes in GAAP or applicable Law (including Regulation S-X of the Exchange Act) and agreed to by the Company’s independent public accountants;
(p) (i) make, change or rescind any Tax election that, individually or in the aggregate, would materially and adversely affect the Tax liability of the Company or any Subsidiary of the Company, (ii) adopt or change any Tax accounting method in respect of a material amount of Taxes, (iii) adopt or change any Tax accounting period that, individually or in the aggregate, would materially and adversely affect the Tax liability of the Company or any Subsidiary of the Company, (iv) amend any material Tax Return, (v) settle, compromise, concede or abandon any Tax liability, claim or assessment or enter into any closing agreement with respect to a material amount of Taxes, (vi) surrender any right to claim a refund of material Taxes, (vii) waive or extend any statute of limitations with respect to a material amount of Taxes, or (viii) seek or obtain any ruling from a Taxing Authority with respect to Taxes;
(q) effectuate a “plant closing” or “mass layoff” as those terms are defined in WARN; or
(r) enter into any Contract, or otherwise obligate itself in a legally binding manner, to take any of the foregoing actionsoperations.
Appears in 1 contract
Negative Obligations of the Company. Without limiting Except (x) as expressly required under the generality of the foregoing, from the date terms of this Agreement until the earlier of the Effective Time and the date, if any, on which this Agreement is terminated in accordance with Section 8.1, except (a) or as prohibited or required by applicable Law or by any Governmental EntityLaw, (by) as set forth in Section 5.1 or Section 5.2 Section 5.3 of the Company Disclosure Letter, Schedule or (cz) as otherwise required or permitted approved in advance by this AgreementParent in writing (provided that, unless Parent shall otherwise consent solely with respect to Sections 5.3 (which consent j), (q), (t) and (v), such approval shall not be unreasonably withheld, conditioned or delayed and, with respect to the remaining provisions of Section 5.3, such approval shall not be unreasonably delayed), at all times during the Pre-Closing Period, the Company shall not, not (and shall not permit any cause each of its Subsidiaries not to) do any of the following:
(a) amend(i) establish a record date for, modifydeclare, waiveset aside or pay any dividends on, rescind or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, (ii) except in connection with the exercise of Company Options, Company RSUs or Company Warrants outstanding prior to the Agreement Date, purchase, redeem or otherwise propose acquire shares of capital stock or other equity interests of the Acquired Corporations or any change in its certificate of incorporationoptions, bylaws or similar organizational documentswarrants, or rights to acquire any such shares or other equity interests, or (iii) split, combine, reclassify or otherwise amend the terms of any security of its capital stock or other equity interests or authorize the Company issuance of any other securities in respect of, in lieu of or in substitution for equity, or repurchase or otherwise acquire, directly or indirectly, any Subsidiary, other than in immaterial respects in relation to any Subsidiary of the Companyequity;
(b) other than the issuance by the Company to its employees of Company RSUs representing no more than 50,000 shares of Company Common Stock in the aggregate (iwhich Company RSUs shall be distributed as set forth in Section 5.3(b) merge or consolidate itself or any of its Subsidiaries with any other Person, or the Company Disclosure Schedule) (ii) adopt any plan to restructure, reorganize or completely or partially liquidate;
(c) acquire (by merger, consolidation, acquisition of stock or assets or otherwisethe “Permitted Company RSU Issuance”), directly or indirectly, securities or assets (i) constituting a business or (ii) otherwise outside of the Ordinary Course with a value or purchase price in excess of $250,000, other than, with respect to clause (ii), acquisitions pursuant to Contracts in effect as of the date of this Agreement that have been disclosed to Parent prior to the date of this Agreement or entered into after the date of this Agreement in compliance with this Agreement;
(d) issue, sell, deliver, grant, pledge, dispose oftransfer, transfer encumber or otherwise encumberagree or commit to issue, or authorize the issuancesell, saledeliver, deliver, grant, pledge, disposition, transfer or encumbrance ofencumber (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Shares, any shares securities of its any Subsidiary or any instrument convertible into or exchangeable for any capital stock, equity interest or other securities (including any options, warrants or any similar security exercisable for, or convertible into, such capital stock or similar security)of the Acquired Corporations, except for the issuance of Shares pursuant to the exercise of the Company Options, Company Warrants or vesting of Company RSUs outstanding prior to the Agreement 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) directly or indirectly acquire or agree to acquire (i) shares by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of Company Common Stock upon the settlement of Company Equity Awardsassets of, making an investment in each case 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 outstanding on for cash consideration not in excess of $50,000 individually, or $200,000 for all such transactions by the date of this Agreement Acquired Corporations in the aggregate, and except for loans, advances, contributions or issued after investments between or among the date of this Agreement in compliance with this Agreement Company and any direct or indirect wholly owned Subsidiaries, or (ii) any securities assets that are otherwise material to the 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 or otherwise dispose in whole or in part of any of its material properties, assets or rights or any interest therein, except (i) sales of Products in the ordinary course of business, (ii) non-exclusive licenses to service providers in the ordinary course of business, and (iii) disposition of immaterial equipment and property no longer used in the operation of business;
(g) propose or adopt a direct plan of complete or indirect wholly-owned Subsidiary partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Acquired Corporations, except for the Transactions;
(h) (i) except as set forth in Section 5.3(h) of the Company to the Company Disclosure Schedule, incur, create, assume or otherwise become liable for, any other wholly-owned Subsidiary of the Company;
Indebtedness, or amend, modify or refinance any Indebtedness, or (eii) make any material loans, advances or capital contributions to to, or investments in in, any other Person, other than (i) loans the Company or advances in the Ordinary Course or (ii) capital contributions to or investments in any of the Company’s direct or indirect wholly-owned Subsidiaries;
(f) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock, property or otherwise) in respect of any of its capital stock, except for dividends or distributions by any direct or indirect wholly-wholly owned Subsidiary of the Company in the ordinary course of business;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto (except that the Acquired Corporations may make any capital expenditure that: (A) is provided for in the Acquired Corporations’ capital expense budget delivered to Parent prior to the Company or Agreement Date and which is deemed to any other direct or indirect wholly-owned Subsidiary include such information as set forth in Section 5.3(i) of the Company that are made in compliance with the Credit Agreement and the other contractual obligations of the Company and its Subsidiaries;
(g) splitDisclosure Schedule, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a direct or indirect wholly-owned Subsidiary of the Company which remains a direct or indirect wholly-owned Subsidiary of the Company after consummation of such transaction);
(h) purchase, repurchase, redeem, exchange or otherwise acquire any shares of the capital stock of the Company or any of its Subsidiaries, or any other equity interests or any rights, warrants or options to acquire any such shares or interests (other than (i) pursuant to the cashless exercise of Company Stock Options or the forfeiture of, or withholding of Taxes with respect to, Company Equity Awards in connection with any Taxable event related to such Company Equity Awards, in each case expenditures shall be in accordance with the terms categories set forth in such budget; or (B) when added to all other capital expenditures made on behalf of the Company Stock Plan Acquired Corporations since the Agreement Date but not provided for in the Acquired Corporations’ capital expense budget delivered to Parent prior to the Agreement Date, does not exceed $50,000 individually and award agreement as $250,000 in effect on the date of this Agreement (or as modified or entered into after the date of this Agreement in accordance with the terms of this Agreement) or (ii) purchases, repurchases, redemptions, exchanges or other acquisitions of securities of aggregate during any direct or indirect wholly-owned Subsidiary of the Company by the Company or any other wholly-owned Subsidiary of the Companyfiscal quarter);
(i) createpay, incurdischarge, guarantee settle or assume satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), in an excess of $100,000 individually or $250,000 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 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 or incurred in connection with this Agreement and the Transactions (including legal and financial advisors fees and expenses), (ii) cancel any material indebtedness for borrowed moneyIndebtedness, (iii) waive, release, grant or transfer any right of material value, or issue (iv) commence any Action, except in connection with a breach of this Agreement or sell any debt securities other agreements contemplated hereby;
(k) compromise, settle, release or warrants agree to compromise, settle or release any Action or threatened Action (including any Action relating to this Agreement or the Transactions) other rights than compromises, settlements or agreements that involve only the payment of money damages in an amount not greater than $100,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, the Acquired Corporations;
(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 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 changes in GAAP.
(n) (i) settle, compromise or enter into any closing agreement with respect to acquire any debt security liability for Taxes, (ii) amend any Tax Return, (iii) enter into any Contract with or request any 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 or file a Tax Return in any jurisdiction in which the Acquired Corporations have not previously filed a Tax Return, (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 would not materially increase the Taxes payable by the Company or any 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 Subsidiariesfiscal year;
(p) except as may be required by the terms of any Employee Benefit Plan set forth in Section 3.12(a) of the Company Disclosure Schedule and, solely with respect to clauses “(i)” through “(iii)” below, except for the Permitted Company RSU Issuance, (i) grant any Company Associate (A) transactions among the Company and its direct any equity or indirect whollyequity-owned Subsidiaries or among the Company’s direct or indirect wholly-owned Subsidiariesbased compensation, (B) borrowings under the Credit Agreement that are incurred any increase in the Ordinary Coursecompensation, bonus or other benefits, or (C) indebtedness for borrowed money incurred any type of compensation, bonus or benefits not previously receiving or entitled to replacereceive such type of compensation, renew, extend, refinance bonus or refund any existing indebtedness and in amounts not materially in excess of such existing indebtedness, provided that such amounts are prepayable at any time without penalty or premium;
(j) make or authorize any capital expenditures or series of capital expenditures except for capital expenditures in excess of $3,500,000 in any fiscal quarter;
(k) (i) enter into any Contract that would have been a Company Material Contract pursuant to clause (i) (Item 601(b)(10)), (iv) (Joint Venture Agreements), (vii) (Restrictive Covenants), (viii) (“Most Favored Nation” Status), (ix) (Sales to Health Plans), (xi) (Standstill Agreements), (xii) (Put and Call Rights), (xiii) (Related Party Agreements) or (xiv) (Governmental Contracts) of the definition thereof had it been entered into prior to this Agreement or, with respect to any other category of Company Material Contracts, outside of the Ordinary Course, or (ii) except in the Ordinary Course (A) amend or terminate any Company Material Contract or (B) cancel, modify or waive any material debts, rights or claims thereunder;
(l) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of, or grant or permit any Lien (other than Permitted Liens) on, any of its material properties, licenses, operations, assets, product lines or businesses, including any equity interests of any of the Company’s Subsidiaries, except (other than with respect to equity interests of any Subsidiary of the Company) (i) pursuant to Contracts in effect prior to the execution of this Agreement or entered into after the date of this Agreement in compliance with this Agreementbenefit, (ii) salesgrant or pay to any Company Associate any severance, leases retention, retirement, change in control or licenses of inventorytermination pay, equipment and other assets in the Ordinary Courseor modifications thereto or increases therein, (iii) inventorypay any benefit or grant or amend any award (including in respect of stock options, equipment and restricted stock units, restricted stock or other assets stock-based or stock-related awards or the removal or modification of any restrictions in any Company Equity Plan or awards made thereunder) except the Ordinary Courseissuance of Shares pursuant to the exercise of Company Options or vesting of Company RSUs outstanding on the Agreement Date, (iv) sales, leases, licenses adopt or enter into any collective bargaining agreement or other dispositions to the Company or any of its Subsidiariessimilar labor union contract, or (v) take any action to voluntarily accelerate the abandonment, lapse, expiration vesting or payment of any compensation or benefit under any Company Equity Plan or other disposition of Intellectual Property Employee Benefit Plan or other Contract or remove any existing restrictions in the Ordinary Course or for the purpose of disposing of obsolete or worthless assets (as determined in the Company’s reasonable business judgment);
(m) any Employee Benefit Plans except as required by Contracts in effect prior pursuant to the date of this Agreement, Company Benefit Plans as in effect on the date of this Agreement or applicable LawSection 6.3 hereof, (i) increase the compensation or other benefits payable or provided to the Company’s or its Subsidiaries’ officers, directors, individual independent contractors or employees (except for increases in base salary or wages made in the Ordinary Course consistent with past practices during the Company’s annual review process for employees who are not officers); (ii) enter into any employment, change of control, severance or retention agreement with any employee, director or officer of the Company, other than (x) agreements providing for severance or termination pay in the Ordinary Course for terminated employees other than executive officers or any employee with a target annual compensation opportunity in excess of $150,000, in each case, in return for a general release of claims against the Company, and (y) other than offer letters (and related compensation arrangements set forth in such offer letters) entered into in the Ordinary Course with any newly hired employees or individual independent contractors of the Company or any of its Subsidiaries who are not executive officers or that do not provide such individual with a target annual compensation opportunity in excess of $150,000; (iii) establish, adopt, enter into or amend any Company Benefit Plan; (ivvi) change in any material respect any actuarial or other assumptions used to calculate funding obligations with respect to any Company Employee Benefit Plan that is required by applicable Law to be funded or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or applicable Law, (vii) establish or adopt any new Employee Benefit Plan (or any plan, program, arrangement, practice or agreement that would be an Employee Benefit Plan if it were in existence on the Agreement Date) or amend, modify or terminate any existing Company Equity Plan or other Employee Benefit Plan (except pursuant to Section 6.3 or Section 6.5 hereof), (viii) contribute to any trust or other arrangement funding any Employee Benefit Plan (including the Company’s 401(k) plan), except to the extent required by the existing terms of such Employee Benefit Plan, trust or other funding arrangement as in effect on the Agreement Date or make any contribution to the Company’s 401(k) plan in Shares;
(i) hire any employee or engage any independent consultant or contractor (who is natural person), other than up to five (5) non-executive officer employees with an annual base salary of less than $200,000, up to five (5) non-executive officer employees with an annual base salary of less than $150,000 and up to ten (10) independent consultants or contractors (who are natural persons) with an annual base salary of less than $150,000 in the ordinary course of business and which employees, consultants or contractors shall be retained for one of the positions set forth on Section 5.3(q) of the Company Disclosure Schedule, or (ii) hire, promote or terminate (other than for cause) any Company Associate other than any non-executive officer employee with an annual base salary of less of $150,000 in the ordinary course of business; provided, however, that the compensation and benefits granted to any such newly hired employee or newly engaged independent contractor or consultant shall be consistent with, and be no more favorable in the aggregate than, the compensation and benefits (vexcluding equity awards) provided as of the Agreement Date to the Acquired Corporation’s similarly situated employees, or independent contractors or consultants, as applicable;
(r) materially 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 or executive officers of the Company Acquired Corporations, or any of its Subsidiaries; their respective Affiliates or (vi) hire or terminate without cause any executive officer or any employee with a target annual compensation opportunity in excess of $150,000Associates;
(nv) amend, modify, terminate or waive, or exercise any material right or remedy under, any (x) Material Contract or (y) any agreement relating to the license, transfer or other disposition or acquisition of Intellectual Property Rights or rights to market or sell Products, other than non-exclusive licenses to customers or suppliers of the Acquired Corporations that are terminable for any reason by the Acquired Corporations upon no more than thirty (30) days’ notice (an “IP Agreement”) 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 or any IP Agreement;
(w) commence any new offering period, or permit any additional elective deferrals or increase in elective deferral rates in respect of claimsthe current offering period, liabilities under the ESPP;
(x) adopt or obligations in connection with implement any stockholder litigation against the Company and/or its officersrights plan or similar arrangement;
(y) authorize any of, directorsor commit, employees and Representatives relating resolve or agree to this Agreementtake any of, the Merger and/or foregoing actions. Notwithstanding the transactions contemplated by foregoing, nothing contained in this AgreementAgreement shall give Parent or Purchaser, which are subject directly or indirectly, the right to Section 6.10, (i) waive, release, settle control or compromise any claim for an amount materially in excess of the amount of the corresponding reserve established on the consolidated balance sheet of the Company as reflected in the most recent applicable Company SEC Document, except (A) for any settlements or compromises involving total aggregate payments not in excess of $150,000 individually or $500,000 in the aggregate (net of amounts covered by insurance or indemnification agreements with third parties), so long as such settlements or compromises do not materially restrict direct the operations of the business of 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, taken as a whole, or (B) waivers of rights with respect to suppliers or customers in the Ordinary Course, or (ii) enter into any consent decree, injunction or similar restraint or form of equitable relief in settlement of any claim or audit that would materially restrict the operations of the business of the Company or its Subsidiaries after the Effective Time, except as would not be material to the Company assets and its Subsidiaries, taken as a whole;
(o) alter or amend any existing material accounting methods, principles or practices, except as may be required by changes in GAAP or applicable Law (including Regulation S-X of the Exchange Act) and agreed to by the Company’s independent public accountants;
(p) (i) make, change or rescind any Tax election that, individually or in the aggregate, would materially and adversely affect the Tax liability of the Company or any Subsidiary of the Company, (ii) adopt or change any Tax accounting method in respect of a material amount of Taxes, (iii) adopt or change any Tax accounting period that, individually or in the aggregate, would materially and adversely affect the Tax liability of the Company or any Subsidiary of the Company, (iv) amend any material Tax Return, (v) settle, compromise, concede or abandon any Tax liability, claim or assessment or enter into any closing agreement with respect to a material amount of Taxes, (vi) surrender any right to claim a refund of material Taxes, (vii) waive or extend any statute of limitations with respect to a material amount of Taxes, or (viii) seek or obtain any ruling from a Taxing Authority with respect to Taxes;
(q) effectuate a “plant closing” or “mass layoff” as those terms are defined in WARN; or
(r) enter into any Contract, or otherwise obligate itself in a legally binding manner, to take any of the foregoing actionsoperations.
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