Operation of Company’s Business. During the Interim Period: (a) except as expressly required by this Agreement or as required by applicable Law, or with the prior written consent of Buyer, the Company shall (and shall cause each of the other Company Entities to) to conduct its business in the Ordinary Course of Business; (b) except as expressly required by this Agreement, as required by applicable Law, or with the prior written consent of Buyer, the Company shall not (and shall ensure that each other Company Entity shall not), without the prior written consent of Buyer: (i) hire any employees, consultants, or independent contractors, except replacements in the Ordinary Course of Business, in accordance with the Company’s business plans previously disclosed to Buyer, or as otherwise set forth on Schedule 5.1(b)(i), (ii) increase the compensation (including any wages, salaries, bonuses, or other remuneration) or other payment to any director, officer, or employee of any Company Entity, whether now or hereafter payable or granted (other than increases or variations in base compensation in the Ordinary Course of Business consistent in timing and amount with past practices), in each case except as provided on Schedule 5.1(b)(ii), (iii) dispose or lapse any rights in, to, or for the use of any Intellectual Property Right of any Company Entity or otherwise in any way materially impair any Intellectual Property Right of any Company Entity, (iv) acquire, sell, assign, license, or otherwise transfer out of any Company Entity or into any Company Entity any Intellectual Property Rights, (v) enter into, materially amend, terminate, or breach any Material Contract (other than entering into customer and vendor contracts and purchase orders in the Ordinary Course of Business and non-renewals in the Ordinary Course of Business), (vi) allow any asset of any Company Entity to become subject to any lien (other than a Permitted Lien or a lien that will be released in full as of the Closing), (vii) incur any Debt (excluding any interest on existing Debt), (viii) except as set forth on Schedule 5.1(b)(viii), make any individual (or series of) capital expenditure(s), capital lease(s), or capital commitment(s) in excess of $100,000, (ix) pay, discharge, or satisfy any Liability (whether accrued, absolute, contingent or otherwise) in excess of $100,000 other than the payment, discharge, or satisfaction of accounts payable or accrued expenses incurred in the Ordinary Course of Business and consistent in amount and kind with past practice, (x) cancel or waive any claims or rights of value, or conduct any sale, transfer, distribution, or other disposal of any assets, except for sales of non-material assets in the Ordinary Course of Business consistent in amount and kind with past practice, or dispose of any assets for any amount to Affiliates of any Company Entity or of Seller, (xi) cause any damage, destruction or loss of any asset which individually or in the aggregate exceeds $25,000 and which is not otherwise fully covered by property insurance, (xii) cause any event which would require in accordance with GAAP an increase in the reserve for bad debts in the aggregate in excess of $25,000, (xiii) make any change in any method of accounting or of keeping books of account or in accounting practices of the Company or any other Company Entity except as required by changes in GAAP, (xiv) acquire any business by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of related transactions, or enter into any contract, letter of intent, or similar arrangement (whether or not enforceable) with respect to such an acquisition, (xv) prepare any Tax Returns of any Company Entity in a manner which is materially inconsistent with the past practice of the applicable Company Entity, adopt or change any material method of Tax accounting, change any annual Tax accounting period, make or change any material Tax election, file any material amended Tax Return, settle or compromise any material Tax liability, agree to an extension or waiver of the statute of limitations with respect to any material Taxes or Tax Returns (other than pursuant to customary extensions of the due date for filing Tax Returns obtained in the ordinary course of business of no more than seven months), enter into any Tax indemnity, Tax allocation or Tax sharing agreement, (xvi) enter into a settlement, voluntary Tax disclosure, or a closing agreement with a taxing authority with respect to any Company Entity, (xvii) change, amend, or restate the organizational documents of any Company Entity except in connection with the Reorganization, (xviii) issue, sell, pledge, dispose, deliver, encumber, or authorize the issuance, sale, pledge, disposition, delivery, or encumbrance of, (A) any capital stock or other equity or voting interest (collectively, “Equity Interest”) in any Company Entity or (B) any securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire an Equity Interest in any Company Entity, (xix) except as contemplated in Sections 5.7 and 5.8, undertake any split, combination, redemption, reclassification, purchase, or other acquisition, directly or indirectly, of any Equity Interest in any Company Entity, or any other change in the capital structure of any Company Entity, (xx) except as contemplated in Section 5.9, declare, set aside, make, or pay any dividends or other distributions or payments with respect to any Equity Interest in the Company3, or (xxi) take any action, or fail to take any action, that would cause any of the representations and warranties of the Company or the Seller contained herein to become untrue or inaccurate in any material respect. (c) To the extent permissible under the HSR Act and any other applicable Competition Law, the Company shall confer on a regular basis with one or more designated representatives of the Buyer to report material operational matters and to report the general status of ongoing operations; ______________________________ 3 NTD: Company Entities may need to pay dividends and repatriate funds from D.R. prior to closing and may need to pay a tax distribution in December for owner’s estimated taxes if transaction has not closed. (d) The Company shall keep in full force and effect all insurance policies maintained with respect to the Company Entities and their assets and properties, or suitable replacements or renewals, and shall notify Buyer immediately if any such policies terminate or are not renewed; and (e) Nothing contained herein shall give to Buyer, directly or indirectly, rights to control or direct the operations of any Company Entity prior to the Closing Date, including, without limitation, for purposes of the HSR Act or any other applicable Competition Law. Nor is anything in this Section 5.1 intended to result in Buyer obtaining any indicia of beneficial ownership, control, or influence over the Seller, the Company, or any of the other Company Entities, or of the Seller, the Company, or any of the other Company Entities transferring or ceding beneficial ownership, control, or influence to Buyer of any of the Company Entities’ basic ordinary course of business and commercial decisions prior to the Closing Date. Prior to the Closing Date, each of the Company Entities shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its operations. Notwithstanding anything to the contrary contained herein, no consent of Buyer shall be required with respect to any matter set forth in this Section 5.1 or elsewhere in the Agreement if the Company has a good faith belief that seeking such consent would violate any applicable Law.
Appears in 1 contract
Samples: Securities Purchase Agreement (Ufp Technologies Inc)
Operation of Company’s Business. During the Interim Period:
(a) except Except as expressly required by this Agreement contemplated or as required by applicable Law, or with the prior written consent of Buyer, the Company shall (and shall cause each of the other Company Entities to) to conduct its business in the Ordinary Course of Business;
(b) except as expressly required permitted by this Agreement, as required by applicable LawLaw or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period, the Company shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to conduct its business and operations in the ordinary course of business and consistent with past practice and in material compliance with the applicable Law and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 6.2(b) of the Company Disclosure Letter, (iii) as required by applicable Law or (iv) with the prior written consent of Buyer, Parent (which consent (A) may be requested from and granted by email to the individuals set forth in Section 6.2(b) of the Company Disclosure Letter at the addresses set forth therein or otherwise designated in writing by such individuals and (B) shall not (and shall ensure that each other Company Entity be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, Parent shall not), without nor shall it cause or permit any of its Subsidiaries to, do any of the prior written consent of Buyerfollowing:
(i) hire declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock or repurchase, redeem or otherwise reacquire any shares of its capital stock or other securities (except for shares of Company Common Stock from terminated employees, consultants, directors or independent contractors, except replacements in consultants of the Ordinary Course of Business, Company in accordance with agreements in effect on the Company’s business plans previously disclosed date of this Agreement providing for the repurchase of shares at no more than the purchase price thereof in connection with any termination of services to Buyer, the Company or as otherwise set forth on Schedule 5.1(b)(iany of its Subsidiaries),;
(ii) increase the compensation (including any wagessell, salariesissue, bonusesgrant, or other remuneration) or other payment to any director, officer, or employee of any Company Entity, whether now or hereafter payable or granted (other than increases or variations in base compensation in the Ordinary Course of Business consistent in timing and amount with past practices), in each case except as provided on Schedule 5.1(b)(ii),
(iii) dispose or lapse any rights in, to, or for the use of any Intellectual Property Right of any Company Entity pledge or otherwise in any way materially impair any Intellectual Property Right of any Company Entity,
(iv) acquire, sell, assign, license, or otherwise transfer out of any Company Entity or into any Company Entity any Intellectual Property Rights,
(v) enter into, materially amend, terminate, or breach any Material Contract (other than entering into customer and vendor contracts and purchase orders in the Ordinary Course of Business and non-renewals in the Ordinary Course of Business),
(vi) allow any asset of any Company Entity to become subject to any lien (other than a Permitted Lien or a lien that will be released in full as of the Closing),
(vii) incur any Debt (excluding any interest on existing Debt),
(viii) except as set forth on Schedule 5.1(b)(viii), make any individual (or series of) capital expenditure(s), capital lease(s), or capital commitment(s) in excess of $100,000,
(ix) pay, discharge, or satisfy any Liability (whether accrued, absolute, contingent or otherwise) in excess of $100,000 other than the payment, discharge, or satisfaction of accounts payable or accrued expenses incurred in the Ordinary Course of Business and consistent in amount and kind with past practice,
(x) cancel or waive any claims or rights of value, or conduct any sale, transfer, distribution, or other disposal of any assets, except for sales of non-material assets in the Ordinary Course of Business consistent in amount and kind with past practice, or dispose of any assets for any amount to Affiliates of any Company Entity or of Seller,
(xi) cause any damage, destruction or loss of any asset which individually or in the aggregate exceeds $25,000 and which is not otherwise fully covered by property insurance,
(xii) cause any event which would require in accordance with GAAP an increase in the reserve for bad debts in the aggregate in excess of $25,000,
(xiii) make any change in any method of accounting or of keeping books of account or in accounting practices of the Company or any other Company Entity except as required by changes in GAAP,
(xiv) acquire any business by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of related transactions, or enter into any contract, letter of intent, or similar arrangement (whether or not enforceable) with respect to such an acquisition,
(xv) prepare any Tax Returns of any Company Entity in a manner which is materially inconsistent with the past practice of the applicable Company Entity, adopt or change any material method of Tax accounting, change any annual Tax accounting period, make or change any material Tax election, file any material amended Tax Return, settle or compromise any material Tax liability, agree to an extension or waiver of the statute of limitations with respect to any material Taxes or Tax Returns (other than pursuant to customary extensions of the due date for filing Tax Returns obtained in the ordinary course of business of no more than seven months), enter into any Tax indemnity, Tax allocation or Tax sharing agreement,
(xvi) enter into a settlement, voluntary Tax disclosure, or a closing agreement with a taxing authority with respect to any Company Entity,
(xvii) change, amend, or restate the organizational documents of any Company Entity except in connection with the Reorganization,
(xviii) issue, sell, pledge, dispose, deliver, encumber, encumber or authorize the issuance, sale, pledge, disposition, delivery, or encumbrance issuance of, : (A) any capital stock or other security (except for Company Common Stock issued upon the valid exercise or settlement of outstanding Company Options and any capital stock issued upon the conversion of the Company’s then-outstanding securities), (B) any option, warrant or right to acquire any capital stock or any other security or (C) any instrument convertible into or exchangeable for any capital stock or other security (other than the Additional Permitted Bridge Financing and any Final Permitted Bridge Financing);
(iii) except as required to give effect to anything in contemplation of the Closing, amend any of its organizational documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the transactions contemplated hereby;
(iv) form any Subsidiary or acquire any equity interest or voting other interest (collectively, “Equity Interest”) in any other entity or enter into a joint venture with any other entity;
(v) (A) lend money to any Person, (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities or others or (D) make any capital expenditure or commitment;
(vi) other than in the ordinary course or as required by applicable Law or the terms of any Company Entity Plan in effect as of the date of this Agreement: (A) adopt, establish or enter into any Company Plan, including, for the avoidance of doubt, any equity award plans, (B) cause or permit any Company Plan to be amended other than as required by Law or in order to make amendments for the purposes of Section 409A of the Code, (C) pay any bonus or make any profit-sharing or similar payment to (except with respect to obligations in place on the date of this Agreement pursuant to any Company Plan), or (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants (other than in connection with the Closing and based upon market-based benchmarking);
(vii) acquire any material asset or sell, lease, license or otherwise irrevocably dispose of any of its assets or properties, or grant any Lien with respect to such assets or properties outside the ordinary course of business and consistent with past practice;
(viii) make (other than consistent with past practice), change or revoke any material Tax election; file any material amendment to any Tax Return; settle or compromise any material Tax claim; waive or extend any statute of limitations in respect of a period within which an assessment or reassessment of material Taxes may be issued (other than any extension pursuant to an extension to file any Tax Return); enter into any “closing agreement” as described in Section 7121 of the Code (or any similar Law) with any Governmental Entity; or adopt or change any material accounting method in respect of Taxes;
(ix) waive, settle or compromise any pending or threatened Action against the Company or any of its Subsidiaries;
(x) delay or fail to repay when due any material obligation, including accounts payable and accrued expenses, other than in the ordinary course of business and consistent with past practice;
(xi) forgive any loans to any Person, including its employees, officers, directors or Affiliates;
(xii) sell, assign, transfer, license, sublicense or otherwise dispose of any material Intellectual Property of the Company (other than in the ordinary course of business and consistent with past practice);
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) enter into any agreement to purchase or sell any interest in real property, grant any security interest in any real property, enter into any lease, sublease, license or other occupancy agreement with respect to any real property or alter, amend, modify, exercise any extension or expansion right under or violate or terminate any of the terms of any real property leases of the Company;
(xv) (A) materially change pricing or royalties or other payments set or charged by the Company or any of Subsidiaries to its customers or licensees or (B) agree to materially change pricing or royalties or other payments set or charged by Persons who have licensed Intellectual Property to the Company or any securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire an Equity Interest in any Company Entity,of its Subsidiaries; or
(xixxvi) except as contemplated agree, resolve or commit to do any of the foregoing. Nothing contained in Sections 5.7 and 5.8, undertake any split, combination, redemption, reclassification, purchase, or other acquisitionthis Agreement shall give Parent, directly or indirectly, of any Equity Interest in any Company Entity, or any other change in the capital structure of any Company Entity,
(xx) except as contemplated in Section 5.9, declare, set aside, make, or pay any dividends or other distributions or payments with respect to any Equity Interest in the Company3, or
(xxi) take any action, or fail to take any action, that would cause any of the representations and warranties of the Company or the Seller contained herein to become untrue or inaccurate in any material respect.
(c) To the extent permissible under the HSR Act and any other applicable Competition Law, the Company shall confer on a regular basis with one or more designated representatives of the Buyer to report material operational matters and to report the general status of ongoing operations; ______________________________ 3 NTD: Company Entities may need to pay dividends and repatriate funds from D.R. prior to closing and may need to pay a tax distribution in December for owner’s estimated taxes if transaction has not closed.
(d) The Company shall keep in full force and effect all insurance policies maintained with respect to the Company Entities and their assets and properties, or suitable replacements or renewals, and shall notify Buyer immediately if any such policies terminate or are not renewed; and
(e) Nothing contained herein shall give to Buyer, directly or indirectly, rights right to control or direct the operations of any the Company Entity prior to the Closing Date, including, without limitation, for purposes of the HSR Act or any other applicable Competition Law. Nor is anything in this Section 5.1 intended to result in Buyer obtaining any indicia of beneficial ownership, control, or influence over the Seller, the Company, or any of the other Company Entities, or of the Seller, the Company, or any of the other Company Entities transferring or ceding beneficial ownership, control, or influence to Buyer of any of the Company Entities’ basic ordinary course of business and commercial decisions prior to the Closing DateEffective Time. Prior to the Closing DateEffective Time, each of the Company Entities shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations.
(c) Notwithstanding any provision herein to the contrary (including the foregoing provisions of this Section 6.2) and provided that the Company’s cash and cash equivalents shall be greater than $1,000,000 at all times during the Pre-Closing Period (provided that the Company shall have fifteen (15) days to cure any failure to maintain such minimum cash requirement), the Company may, subject to the terms and conditions set forth on Section 6.2(c) of the Company Disclosure Letter, execute the Additional Permitted Bridge Financing Agreements. The Company (i) shall permit Parent and its operationscounsel to review and comment on the Additional Permitted Bridge Financing Agreements and any Final Permitted Bridge Financing Agreements; (ii) shall consider any comments received by Parent in good faith and shall accept all reasonable additions, deletions or changes suggested by Parent and its counsel in connection therewith; and (iii) shall not sign any agreements, contracts or other definitive documents (not including term sheets or letters of intent) related to the Additional Permitted Bridge Financing or any Final Permitted Bridge Financing without first providing Parent and its counsel the opportunity to exercise their rights under clauses (i) and (ii) above. Notwithstanding anything to the contrary contained herein, no unless Parent shall otherwise consent of Buyer in writing (which consent shall not be required with respect unreasonably withheld, delayed or conditioned), the Company shall not enter into any Final Permitted Bridge Financing Agreements or agree, resolve or commit to any matter set forth in this Section 5.1 or elsewhere in the Agreement if the Company has a good faith belief that seeking such consent would violate any applicable LawFinal Permitted Bridge Financing.
Appears in 1 contract
Samples: Merger Agreement (Allovir, Inc.)
Operation of Company’s Business. During the Interim period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing (the “Pre-Closing Period”), the Company agrees, except to the extent that Parent consents in writing and except to the extent as necessary to effect the Share Contribution and other Transactions, to carry on its business in accordance with good commercial practice and to carry on in the Ordinary Course of Business, to pay or perform all material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organization, keep available the services of its present officers and Key Employees and preserve its relationships with key partners, suppliers, licensors, licensees, and others with which it has business dealings. In addition, without limiting the foregoing, other than as expressly contemplated by this Agreement, without obtaining the written consent of Parent (which consent will not be unreasonably withheld, conditioned or delayed), or as required by Applicable Law, the Company shall not, and shall not cause or permit each Subsidiary to, do any of the following:
(a) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of Company Capital Stock; or repurchase, redeem or otherwise reacquire any shares of Company Capital Stock or other securities (except for shares of Company Capital Stock from terminated employees of the Company);
(b) amend the Company Organizational Documents, effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction;
(c) sell, issue or grant, or authorize the issuance of, or make any commitments to do any of the foregoing, other than as expressly required contemplated by this Agreement the Share Contribution and the other Transactions: (i) any Company Capital Stock or other security (except for shares of Company Common Stock issued upon (x) the valid exercise of Company Options outstanding as of the date hereof or (y) the conversion of any convertible securities outstanding as of the date hereof); (ii) any option, warrant or right to acquire any Company Capital Stock or any other security; or (iii) any instrument convertible into or exchangeable for any Company Capital Stock or other security, except, in the case of each of the foregoing clauses (ii) and (iii), in connection with a Permitted Bridge Financing;
(d) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(i) lend money to any Person; (ii) except for a Permitted Bridge Financing, incur or guarantee any indebtedness for borrowed money; (iii) issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities; (iv) guarantee any debt securities of others; or (v) make any capital expenditure or commitment in excess of $100,000 (or its equivalent in EUR);
(f) establish, adopt, enter into or amend any Benefit Plan, pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation (including equity-based compensation, whether payable in stock, cash or other property) or remuneration payable to, any of its directors or any of its officers, other than in the Ordinary Course of Business, as required by applicable LawApplicable Law or by written agreements in effect on or prior to the date of this Agreement with such person;
(g) acquire any material asset nor sell, lease or otherwise dispose of any of its assets or properties, or grant any Encumbrance with the prior written consent of Buyerrespect to such assets or properties, the Company shall (and shall cause in each of the case, other Company Entities to) to conduct its business than in the Ordinary Course of Business;
(bh) except as expressly required by this Agreemententer into, as required by applicable Law, amend or with the prior written consent of Buyer, the terminate any Company shall not (and shall ensure that each other Company Entity shall not), without the prior written consent of Buyer:Material Contract;
(i) hire any employees, consultants, or independent contractors, except replacements in the Ordinary Course of Business, in accordance with the Company’s business plans previously disclosed to Buyer, or as otherwise set forth on Schedule 5.1(b)(i),
(ii) increase the compensation (including any wages, salaries, bonuses, or other remuneration) or other payment to any director, officer, or employee of any Company Entity, whether now or hereafter payable or granted (other than increases or variations in base compensation in the Ordinary Course of Business consistent in timing and amount with past practices), in each case except as provided on Schedule 5.1(b)(ii),
(iii) dispose or lapse any rights in, to, or for the use of any Intellectual Property Right of any Company Entity or otherwise in any way materially impair any Intellectual Property Right of any Company Entity,
(iv) acquire, sell, assign, transfer, license, sublicense or otherwise transfer out dispose of any Company Entity or into any Company Entity any Intellectual Property Rights,
(v) enter into, materially amend, terminate, or breach any Material Contract (other than entering into customer and vendor contracts and purchase orders in the Ordinary Course of Business and non-renewals exclusive licenses in the Ordinary Course of Business),;
(vij) allow increase rights to indemnification for any asset of Person to which the Company is obligated to indemnify;
(k) initiate any Company Entity litigation, action, suit, proceeding, claim or arbitration or settle or agree to become subject settle any litigation, action, suit, proceeding, claim or arbitration (except in connection with this Agreement);
(l) make, change or revoke any Tax election; file any amendment to any lien (other than a Permitted Lien or a lien that will be released in full as of the Closing),
(vii) incur Tax Return; file any Debt (excluding any interest on existing Debt),
(viii) except as set forth on Schedule 5.1(b)(viii), make any individual (or series of) capital expenditure(s), capital lease(s), or capital commitment(s) in excess of $100,000,
(ix) pay, discharge, or satisfy any Liability (whether accrued, absolute, contingent or otherwise) in excess of $100,000 other than the payment, discharge, or satisfaction of accounts payable or accrued expenses incurred in the Ordinary Course of Business and consistent in amount and kind with past practice,
(x) cancel or waive any claims or rights of value, or conduct any sale, transfer, distribution, or other disposal of any assets, except for sales of non-material assets in the Ordinary Course of Business consistent in amount and kind with past practice, or dispose of any assets for any amount to Affiliates of any Company Entity or of Seller,
(xi) cause any damage, destruction or loss of any asset which individually or in the aggregate exceeds $25,000 and which is not otherwise fully covered by property insurance,
(xii) cause any event which would require in accordance with GAAP an increase in the reserve for bad debts in the aggregate in excess of $25,000,
(xiii) make any change in any method of accounting or of keeping books of account or in accounting practices of the Company income Tax Return or any other Company Entity except as required by changes in GAAP,
(xiv) acquire any business by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of related transactions, or enter into any contract, letter of intent, or similar arrangement (whether or not enforceable) with respect to such an acquisition,
(xv) prepare any material Tax Returns of any Company Entity in a manner which is materially inconsistent with the past practice of the applicable Company Entity, Return; adopt or change any material accounting method in respect of Tax accounting, Taxes; change any annual Tax accounting period; enter into any Tax allocation agreement, make or change Tax sharing agreement, Tax indemnity agreement; enter into any material Tax election, file closing agreement with respect to any material amended Tax Return, Tax; settle or compromise any material claim, notice, audit report or assessment in respect of Taxes; apply for or enter into any ruling from any Tax liability, agree authority with respect to an Taxes; surrender any right to claim a Tax refund; assume any Liability for the Taxes of any other Person (whether by Contract or otherwise); enter into intercompany transactions giving rise to deferred gain or loss of any kind; consent to any extension or waiver of the statute of limitations with respect period applicable to any material Taxes Tax claim or Tax Returns (assessment; or take any other than pursuant similar action relating to customary extensions the filing of the due date for filing Tax Returns obtained in the ordinary course of business of no more than seven months), enter into any Tax indemnity, Tax allocation Return or Tax sharing agreement,
(xvi) enter into a settlement, voluntary Tax disclosure, or a closing agreement with a taxing authority with respect to any Company Entity,
(xvii) change, amend, or restate the organizational documents payment of any Company Entity except in connection with Tax if such action would have the Reorganization,
(xviii) issue, sell, pledge, dispose, deliver, encumber, or authorize effect of increasing the issuance, sale, pledge, disposition, delivery, or encumbrance of, (A) any capital stock or other equity or voting interest (collectively, “Equity Interest”) in any Company Entity or (B) any securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire an Equity Interest in any Company Entity,
(xix) except as contemplated in Sections 5.7 and 5.8, undertake any split, combination, redemption, reclassification, purchase, or other acquisition, directly or indirectly, Tax liability of any Equity Interest in any Company Entity, or any other change in the capital structure of any Company Entity,
(xx) except as contemplated in Section 5.9, declare, set aside, make, or pay any dividends or other distributions or payments with respect to any Equity Interest in the Company3, or
(xxi) take any action, or fail to take any action, that would cause any of the representations and warranties of the Company or the Seller contained herein to become untrue or inaccurate in any material respect.
(c) To the extent permissible under the HSR Act and any other applicable Competition Law, the Company shall confer on a regular basis with one or more designated representatives of the Buyer to report material operational matters and to report the general status of ongoing operations; ______________________________ 3 NTD: Company Entities may need to pay dividends and repatriate funds from D.R. prior to closing and may need to pay a tax distribution in December for owner’s estimated taxes if transaction has not closed.
(d) The Company shall keep in full force and effect all insurance policies maintained with respect to the Company Entities and their assets and properties, or suitable replacements or renewals, and shall notify Buyer immediately if any such policies terminate or are not renewed; and
(e) Nothing contained herein shall give to Buyer, directly or indirectly, rights to control or direct the operations of any Company Entity prior to the Closing Date, including, without limitation, for purposes of the HSR Act or any other applicable Competition Law. Nor is anything in this Section 5.1 intended to result in Buyer obtaining any indicia of beneficial ownership, control, or influence over the SellerParent, the Company, the Company’s Subsidiaries or the Contributors for any period ending after the Closing Date or decreasing any Tax attribute of the other Company Entities, or of the SellerParent, the Company, the Company’s Subsidiaries or the Contributors existing on the Closing Date; or (m) agree, resolve or commit to do any of the other Company Entities transferring or ceding beneficial ownership, control, or influence to Buyer of any of the Company Entities’ basic ordinary course of business and commercial decisions prior to the Closing Date. Prior to the Closing Date, each of the Company Entities shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its operations. Notwithstanding anything to the contrary contained herein, no consent of Buyer shall be required with respect to any matter set forth in this Section 5.1 or elsewhere in the Agreement if the Company has a good faith belief that seeking such consent would violate any applicable Lawforegoing.
Appears in 1 contract
Samples: Acquisition Agreement (Avalanche Biotechnologies, Inc.)
Operation of Company’s Business. During the Interim Period:
(a) except Except as expressly required contemplated by this Agreement, during the period from the date of this Agreement or as required by applicable Law, or with to the prior written consent of BuyerEffective Time, the Company shall (and shall cause each Subsidiary to) conduct its operations in the Ordinary Course of Business and in compliance with all applicable laws and regulations and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Effective Time, the Company shall not (and shall cause each Subsidiary not to), without the written consent of the Parent:
(a) issue or sell, or redeem or repurchase, any stock or other securities of the Company Entities or any Warrants, Options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of convertible securities or Options or Warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or Options or Warrants;
(b) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) create, incur or assume any indebtedness (including obligations in respect of capital leases); assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to conduct its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of any Subsidiary or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of assets in the Ordinary Course of Business;
(bf) except as expressly required by this Agreement, as required by applicable Law, mortgage or with the prior written consent pledge any of Buyer, the Company shall not its property or assets or subject any such property or assets to any Security Interest; (and shall ensure that each g) discharge or satisfy any Security Interest or pay any obligation or liability other Company Entity shall not), without the prior written consent of Buyer:
(i) hire any employees, consultants, or independent contractors, except replacements than in the Ordinary Course of Business, in accordance with the Company’s business plans previously disclosed to Buyer, or as otherwise set forth on Schedule 5.1(b)(i),
(ii) increase the compensation (including any wages, salaries, bonuses, or other remuneration) or other payment to any director, officer, or employee of any Company Entity, whether now or hereafter payable or granted (other than increases or variations in base compensation in the Ordinary Course of Business consistent in timing and amount with past practices), in each case except as provided on Schedule 5.1(b)(ii),
(iii) dispose or lapse any rights in, to, or for the use of any Intellectual Property Right of any Company Entity or otherwise in any way materially impair any Intellectual Property Right of any Company Entity,
(iv) acquire, sell, assign, license, or otherwise transfer out of any Company Entity or into any Company Entity any Intellectual Property Rights,
(v) enter into, materially amend, terminate, or breach any Material Contract (other than entering into customer and vendor contracts and purchase orders in the Ordinary Course of Business and non-renewals in the Ordinary Course of Business),
(vi) allow any asset of any Company Entity to become subject to any lien (other than a Permitted Lien or a lien that will be released in full as of the Closing),
(vii) incur any Debt (excluding any interest on existing Debt),
(viii) except as set forth on Schedule 5.1(b)(viii), make any individual (or series of) capital expenditure(s), capital lease(s), or capital commitment(s) in excess of $100,000,
(ix) pay, discharge, or satisfy any Liability (whether accrued, absolute, contingent or otherwise) in excess of $100,000 other than the payment, discharge, or satisfaction of accounts payable or accrued expenses incurred in the Ordinary Course of Business and consistent in amount and kind with past practice,
(x) cancel or waive any claims or rights of value, or conduct any sale, transfer, distribution, or other disposal of any assets, except for sales of non-material assets in the Ordinary Course of Business consistent in amount and kind with past practice, or dispose of any assets for any amount to Affiliates of any Company Entity or of Seller,
(xi) cause any damage, destruction or loss of any asset which individually or in the aggregate exceeds $25,000 and which is not otherwise fully covered by property insurance,
(xii) cause any event which would require in accordance with GAAP an increase in the reserve for bad debts in the aggregate in excess of $25,000,
(xiii) make any change in any method of accounting or of keeping books of account or in accounting practices of the Company or any other Company Entity except as required by changes in GAAP,
(xiv) acquire any business by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of related transactions, or enter into any contract, letter of intent, or similar arrangement (whether or not enforceable) with respect to such an acquisition,
(xv) prepare any Tax Returns of any Company Entity in a manner which is materially inconsistent with the past practice of the applicable Company Entity, adopt or change any material method of Tax accounting, change any annual Tax accounting period, make or change any material Tax election, file any material amended Tax Return, settle or compromise any material Tax liability, agree to an extension or waiver of the statute of limitations with respect to any material Taxes or Tax Returns (other than pursuant to customary extensions of the due date for filing Tax Returns obtained in the ordinary course of business of no more than seven months), enter into any Tax indemnity, Tax allocation or Tax sharing agreement,
(xvi) enter into a settlement, voluntary Tax disclosure, or a closing agreement with a taxing authority with respect to any Company Entity,
(xvii) change, amend, or restate the organizational documents of any Company Entity except in connection with the Reorganization,
(xviii) issue, sell, pledge, dispose, deliver, encumber, or authorize the issuance, sale, pledge, disposition, delivery, or encumbrance of, (A) any capital stock or other equity or voting interest (collectively, “Equity Interest”) in any Company Entity or (B) any securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire an Equity Interest in any Company Entity,
(xix) except as contemplated in Sections 5.7 and 5.8, undertake any split, combination, redemption, reclassification, purchase, or other acquisition, directly or indirectly, of any Equity Interest in any Company Entity, or any other change in the capital structure of any Company Entity,
(xx) except as contemplated in Section 5.9, declare, set aside, make, or pay any dividends or other distributions or payments with respect to any Equity Interest in the Company3, or
(xxi) take any action, or fail to take any action, that would cause any of the representations and warranties of the Company or the Seller contained herein to become untrue or inaccurate in any material respect.
(c) To the extent permissible under the HSR Act and any other applicable Competition Law, the Company shall confer on a regular basis with one or more designated representatives of the Buyer to report material operational matters and to report the general status of ongoing operations; ______________________________ 3 NTD: Company Entities may need to pay dividends and repatriate funds from D.R. prior to closing and may need to pay a tax distribution in December for owner’s estimated taxes if transaction has not closed.
(d) The Company shall keep in full force and effect all insurance policies maintained with respect to the Company Entities and their assets and properties, or suitable replacements or renewals, and shall notify Buyer immediately if any such policies terminate or are not renewed; and
(e) Nothing contained herein shall give to Buyer, directly or indirectly, rights to control or direct the operations of any Company Entity prior to the Closing Date, including, without limitation, for purposes of the HSR Act or any other applicable Competition Law. Nor is anything in this Section 5.1 intended to result in Buyer obtaining any indicia of beneficial ownership, control, or influence over the Seller, the Company, or any of the other Company Entities, or of the Seller, the Company, or any of the other Company Entities transferring or ceding beneficial ownership, control, or influence to Buyer of any of the Company Entities’ basic ordinary course of business and commercial decisions prior to the Closing Date. Prior to the Closing Date, each of the Company Entities shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its operations. Notwithstanding anything to the contrary contained herein, no consent of Buyer shall be required with respect to any matter set forth in this Section 5.1 or elsewhere in the Agreement if the Company has a good faith belief that seeking such consent would violate any applicable Law.;
Appears in 1 contract
Operation of Company’s Business. During the Interim Period:
(a) except Except (i) as expressly contemplated or permitted by this Agreement or the Securities Purchase Agreement (including actions in connection with the Concurrent Investment), (ii) as set forth in Section 6.2(a) of the Company Disclosure Letter, (iii) with respect to the issuance of any Company Notes, which is expressly permitted, (iv) as expressly required by applicable Law or (v) unless Parent shall otherwise consent in writing (email being sufficient), during the Pre-Closing Period, the Company shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to conduct its business and operations in the Ordinary Course and in material compliance with the applicable Law and the requirements of all Contracts that constitute Material Contracts.
(b) Except (i) as expressly contemplated or permitted by this Agreement or Agreement, including the Securities Purchase Agreement, (ii) as set forth in Section 6.2(b) of the Company Disclosure Letter, (iii) with respect to the issuance of any Company Notes, which is expressly permitted, (iv) as expressly required by applicable Law, Law or (v) with the prior written consent of BuyerParent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall (and not, nor shall it cause each or permit any of its Subsidiaries to, do any of the other Company Entities to) to conduct its business in the Ordinary Course of Business;
(b) except as expressly required by this Agreement, as required by applicable Law, or with the prior written consent of Buyer, the Company shall not (and shall ensure that each other Company Entity shall not), without the prior written consent of Buyerfollowing:
(i) hire declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock or repurchase, redeem or otherwise reacquire any shares of its capital stock or other securities (except for shares of Company Common Stock from terminated employees, consultants, directors or independent contractors, except replacements consultants of the Company);
(ii) other than in the Ordinary Course of Business, in accordance with the Company’s business plans previously disclosed to Buyer, or as otherwise set forth on Schedule 5.1(b)(i),
(ii) increase the compensation (including any wages, salaries, bonuses, or other remuneration) or other payment to any director, officer, or employee grants of any Company Entity, whether now or hereafter payable or granted (other than increases or variations in base compensation in Options under the Ordinary Course of Business consistent in timing and amount with past practicesCompany Equity Plan), in each case except as provided on Schedule 5.1(b)(ii),
(iii) dispose or lapse any rights in, to, or for the use of any Intellectual Property Right of any Company Entity or otherwise in any way materially impair any Intellectual Property Right of any Company Entity,
(iv) acquire, sell, assignissue, licensegrant, pledge or otherwise transfer out dispose of or encumber or authorize the issuance of any of the foregoing actions with respect to more than 25% of the shares of Company Entity or into any Company Entity any Intellectual Property Rights,
(v) enter into, materially amend, terminate, or breach any Material Contract (other than entering into customer and vendor contracts and purchase orders in the Ordinary Course of Business and non-renewals in the Ordinary Course of Business),
(vi) allow any asset of any Company Entity to become subject to any lien (other than a Permitted Lien or a lien that will be released in full Capital Stock outstanding as of the Closing),
(vii) incur any Debt (excluding any interest on existing Debt),
(viii) except as set forth on Schedule 5.1(b)(viii), make any individual (or series of) capital expenditure(s), capital lease(s), or capital commitment(s) in excess date of $100,000,
(ix) pay, discharge, or satisfy any Liability (whether accrued, absolute, contingent or otherwise) in excess of $100,000 other than the payment, discharge, or satisfaction of accounts payable or accrued expenses incurred in the Ordinary Course of Business and consistent in amount and kind with past practice,
(x) cancel or waive any claims or rights of value, or conduct any sale, transfer, distribution, or other disposal of any assets, except for sales of non-material assets in the Ordinary Course of Business consistent in amount and kind with past practice, or dispose of any assets for any amount to Affiliates of any Company Entity or of Seller,
(xi) cause any damage, destruction or loss of any asset which individually or in the aggregate exceeds $25,000 and which is not otherwise fully covered by property insurance,
(xii) cause any event which would require in accordance with GAAP an increase in the reserve for bad debts in the aggregate in excess of $25,000,
(xiii) make any change in any method of accounting or of keeping books of account or in accounting practices of the Company or any other Company Entity except as required by changes in GAAP,
(xiv) acquire any business by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of related transactions, or enter into any contract, letter of intent, or similar arrangement (whether or not enforceable) with respect to such an acquisition,
(xv) prepare any Tax Returns of any Company Entity in a manner which is materially inconsistent with the past practice of the applicable Company Entity, adopt or change any material method of Tax accounting, change any annual Tax accounting period, make or change any material Tax election, file any material amended Tax Return, settle or compromise any material Tax liability, agree to an extension or waiver of the statute of limitations with respect to any material Taxes or Tax Returns (other than pursuant to customary extensions of the due date for filing Tax Returns obtained in the ordinary course of business of no more than seven months), enter into any Tax indemnity, Tax allocation or Tax sharing agreement,
(xvi) enter into a settlement, voluntary Tax disclosure, or a closing agreement with a taxing authority with respect to any Company Entity,
(xvii) change, amend, or restate the organizational documents of any Company Entity except in connection with the Reorganization,
(xviii) issue, sell, pledge, dispose, deliver, encumber, or authorize the issuance, sale, pledge, disposition, delivery, or encumbrance of, this Agreement: (A) any capital stock or other equity security (except for Company Common Stock issued upon the valid exercise or voting interest (collectivelysettlement of outstanding Company Options), “Equity Interest”) in any Company Entity or (B) any securities convertible intooption, exchangeable for, warrant or evidencing the right to subscribe acquire any capital stock or any other security or (C) any instrument convertible into or exchangeable for any capital stock or acquire an Equity Interest in any Company Entity,other security;
(xixiii) except as contemplated required to give effect to anything in Sections 5.7 and 5.8contemplation of the Closing, undertake amend any of its organizational documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, combinationreverse stock split or similar transaction except, redemptionfor the avoidance of doubt, reclassificationthe Contemplated Transactions;
(iv) other than in the Ordinary Course, purchaseform any Subsidiary or acquire any equity interest or other interest in any other entity or enter into a joint venture with any other entity;
(v) (A) lend money to any Person, (B) incur or guarantee any indebtedness for borrowed money, or (C) guarantee any debt securities;
(vi) sell, lease, license or otherwise irrevocably dispose of any of its assets or properties, or grant any Lien with respect to such assets or properties, except in the Ordinary Course;
(vii) waive, settle or compromise any pending or threatened Action against the Company or any of its Subsidiaries, other acquisitionthan waivers, settlements or agreements (A) for an amount not in excess of $100,000 in the aggregate (excluding amounts to be paid under existing insurance policies or renewals thereof) and (B) that do not impose any material restrictions on the operations or businesses of the Company or its Subsidiaries, taken as a whole, or any equitable relief on, or the admission of wrongdoing by the Company or any of its Subsidiaries;
(viii) delay or fail to repay when due any material obligation, including accounts payable and accrued expenses, other than in the Ordinary Course;
(ix) sell, assign, transfer, license, sublicense or otherwise dispose of any material Intellectual Property of the Company (other than in the Ordinary Couse); or
(x) agree, resolve or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, of any Equity Interest in any Company Entity, or any other change in the capital structure of any Company Entity,
(xx) except as contemplated in Section 5.9, declare, set aside, make, or pay any dividends or other distributions or payments with respect to any Equity Interest in the Company3, or
(xxi) take any action, or fail to take any action, that would cause any of the representations and warranties of the Company or the Seller contained herein to become untrue or inaccurate in any material respect.
(c) To the extent permissible under the HSR Act and any other applicable Competition Law, the Company shall confer on a regular basis with one or more designated representatives of the Buyer to report material operational matters and to report the general status of ongoing operations; ______________________________ 3 NTD: Company Entities may need to pay dividends and repatriate funds from D.R. prior to closing and may need to pay a tax distribution in December for owner’s estimated taxes if transaction has not closed.
(d) The Company shall keep in full force and effect all insurance policies maintained with respect to the Company Entities and their assets and properties, or suitable replacements or renewals, and shall notify Buyer immediately if any such policies terminate or are not renewed; and
(e) Nothing contained herein shall give to Buyer, directly or indirectly, rights right to control or direct the operations of any the Company Entity prior to the Closing Date, including, without limitation, for purposes of the HSR Act or any other applicable Competition Law. Nor is anything in this Section 5.1 intended to result in Buyer obtaining any indicia of beneficial ownership, control, or influence over the Seller, the Company, or any of the other Company Entities, or of the Seller, the Company, or any of the other Company Entities transferring or ceding beneficial ownership, control, or influence to Buyer of any of the Company Entities’ basic ordinary course of business and commercial decisions prior to the Closing DateFirst Effective Time. Prior to the Closing DateFirst Effective Time, each of the Company Entities shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision of over its business operations. Notwithstanding anything to the contrary contained herein, no consent of Buyer shall be required with respect to any matter set forth in this Section 5.1 or elsewhere in the Agreement if the Company has a good faith belief that seeking such consent would violate any applicable Law.
Appears in 1 contract
Operation of Company’s Business. During the Interim Period:
(a) except Except as expressly required contemplated by this Agreement, during the period from the date of this Agreement or as required by applicable Law, or with to the prior written consent of BuyerEffective Time, the Company shall (and shall cause each Subsidiary to) conduct its operations in the Ordinary Course of Business and in compliance with all applicable laws and regulations and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, the Company shall not (and shall cause each Subsidiary not to), without the written consent of the Parent:
(a) issue or sell, or redeem or repurchase, any stock or other securities of the Company Entities or any Options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of convertible securities or Options outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or Options;
(b) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) create, incur or assume any indebtedness (including obligations in respect of capital leases); assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to conduct its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of any Subsidiary or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of assets in the Ordinary Course of Business;
(bf) except as expressly required by this Agreement, as required by applicable Law, mortgage or with the prior written consent pledge any of Buyer, the Company shall not (and shall ensure that each other Company Entity shall not), without the prior written consent of Buyer:its property or assets or subject any such property or assets to any Security Interest;
(ig) hire discharge or satisfy any employees, consultants, Security Interest or independent contractors, except replacements pay any obligation or liability other than in the Ordinary Course of Business, in accordance with the Company’s business plans previously disclosed to Buyer, or as otherwise set forth on Schedule 5.1(b)(i),;
(iih) increase the compensation (including any wagesamend its charter, salaries, bonuses, by-laws or other remuneration) or other payment to any director, officer, or employee of any Company Entity, whether now or hereafter payable or granted (other than increases or variations in base compensation in the Ordinary Course of Business consistent in timing and amount with past practices), in each case except as provided on Schedule 5.1(b)(ii),organizational documents;
(iiii) dispose or lapse any rights in, to, or for the use of any Intellectual Property Right of any Company Entity or otherwise change in any way materially impair any Intellectual Property Right of any Company Entity,material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;
(iv) acquire, sell, assign, license, or otherwise transfer out of any Company Entity or into any Company Entity any Intellectual Property Rights,
(vj) enter into, materially amend, terminate, take or breach omit to take any Material Contract (other than entering into customer and vendor contracts and purchase orders in the Ordinary Course action that would constitute a violation of Business and non-renewals in the Ordinary Course of Business),
(vi) allow any asset of any Company Entity to become subject to any lien (other than a Permitted Lien or a lien that will be released in full as of the Closing),
(vii) incur any Debt (excluding any interest on existing Debt),
(viii) except as set forth on Schedule 5.1(b)(viii)default under, make any individual (or series of) capital expenditure(s), capital lease(s), or capital commitment(s) in excess of $100,000,
(ix) pay, discharge, or satisfy any Liability (whether accrued, absolute, contingent or otherwise) in excess of $100,000 other than the payment, discharge, or satisfaction of accounts payable or accrued expenses incurred in the Ordinary Course of Business and consistent in amount and kind with past practice,
(x) cancel or waive any claims rights under, any material contract or rights of value, or conduct any sale, transfer, distribution, or other disposal of any assets, except for sales of non-material assets in the Ordinary Course of Business consistent in amount and kind with past practice, or dispose of any assets for any amount to Affiliates of any Company Entity or of Seller,agreement;
(xik) cause institute or settle any damage, destruction or loss of any asset which individually or in the aggregate exceeds $25,000 and which is not otherwise fully covered by property insurance,Legal Proceeding;
(xii) cause any event which would require in accordance with GAAP an increase in the reserve for bad debts in the aggregate in excess of $25,000,
(xiii) make any change in any method of accounting or of keeping books of account or in accounting practices of the Company or any other Company Entity except as required by changes in GAAP,
(xiv) acquire any business by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of related transactions, or enter into any contract, letter of intent, or similar arrangement (whether or not enforceable) with respect to such an acquisition,
(xv) prepare any Tax Returns of any Company Entity in a manner which is materially inconsistent with the past practice of the applicable Company Entity, adopt or change any material method of Tax accounting, change any annual Tax accounting period, make or change any material Tax election, file any material amended Tax Return, settle or compromise any material Tax liability, agree to an extension or waiver of the statute of limitations with respect to any material Taxes or Tax Returns (other than pursuant to customary extensions of the due date for filing Tax Returns obtained in the ordinary course of business of no more than seven months), enter into any Tax indemnity, Tax allocation or Tax sharing agreement,
(xvi) enter into a settlement, voluntary Tax disclosure, or a closing agreement with a taxing authority with respect to any Company Entity,
(xvii) change, amend, or restate the organizational documents of any Company Entity except in connection with the Reorganization,
(xviii) issue, sell, pledge, dispose, deliver, encumber, or authorize the issuance, sale, pledge, disposition, delivery, or encumbrance of, (A) any capital stock or other equity or voting interest (collectively, “Equity Interest”) in any Company Entity or (B) any securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire an Equity Interest in any Company Entity,
(xix) except as contemplated in Sections 5.7 and 5.8, undertake any split, combination, redemption, reclassification, purchase, or other acquisition, directly or indirectly, of any Equity Interest in any Company Entity, or any other change in the capital structure of any Company Entity,
(xx) except as contemplated in Section 5.9, declare, set aside, make, or pay any dividends or other distributions or payments with respect to any Equity Interest in the Company3, or
(xxil) take any action, action or fail to take any action, action permitted by this Agreement with the knowledge that such action or failure to take action would cause result in (i) any of the representations and warranties of the Company or the Seller contained herein to become untrue or inaccurate in any material respect.
(c) To the extent permissible under the HSR Act and any other applicable Competition Law, the Company shall confer on a regular basis with one or more designated representatives of the Buyer to report material operational matters and to report the general status of ongoing operations; ______________________________ 3 NTD: Company Entities may need to pay dividends and repatriate funds from D.R. prior to closing and may need to pay a tax distribution in December for owner’s estimated taxes if transaction has not closed.
(d) The Company shall keep in full force and effect all insurance policies maintained with respect to the Company Entities and their assets and properties, or suitable replacements or renewals, and shall notify Buyer immediately if any such policies terminate or are not renewed; and
(e) Nothing contained herein shall give to Buyer, directly or indirectly, rights to control or direct the operations of any Company Entity prior to the Closing Date, including, without limitation, for purposes of the HSR Act or any other applicable Competition Law. Nor is anything in this Section 5.1 intended to result in Buyer obtaining any indicia of beneficial ownership, control, or influence over the Seller, the Company, or any of the other Company Entities, or of the Seller, the Company, or any of the other Company Entities transferring or ceding beneficial ownership, control, or influence to Buyer of any of the Company Entities’ basic ordinary course of business and commercial decisions prior to the Closing Date. Prior to the Closing Date, each of the Company Entities shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its operations. Notwithstanding anything to the contrary contained herein, no consent of Buyer shall be required with respect to any matter set forth in this Section 5.1 Agreement becoming untrue or elsewhere (ii) any of the conditions to the Merger set forth in Article V not being satisfied; or
(m) agree in writing or otherwise to take any of the Agreement if the Company has a good faith belief that seeking such consent would violate any applicable Lawforegoing actions.
Appears in 1 contract
Operation of Company’s Business. (a) During the period after the execution of this Agreement but prior to the Second Closing (the “Interim Period”) the Company shall (i) conduct its business and operations: (A) in the ordinary course of business and in accordance with past practices, (other than taking such actions as may be necessary or advisable in connection with the consummation of the transactions set forth in this Agreement); and (B) in compliance with all applicable federal, state, local and foreign laws and regulations and the requirements of all contracts; (ii) use its best efforts to preserve intact its current business organization, keep available the services of its current senior managers and other employees and maintain its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the Company; and (iii) notify the Purchaser promptly of: (A) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with any of the transactions contemplated in the Transaction Documents (the “Transactions”); and (B) any legal proceeding against, relating to, involving or otherwise affecting the Company that is commenced, or, to the knowledge of the Company, threatened against, the Company.
(b) Except as may be necessary or advisable in connection with the consummation of the Transactions, during the Interim Period:
(a) except as expressly required by this Agreement or as required by applicable Law, or with the prior written consent of Buyer, the Company shall (and shall cause each of the other Company Entities to) to conduct its business in the Ordinary Course of Business;
(b) except as expressly required by this Agreement, as required by applicable Law, or with the prior written consent of Buyer, the Company shall not (and shall ensure that each other Company Entity shall not), without the prior written consent of BuyerPurchaser:
(i) hire declare, accrue, set aside or pay any employees, consultantsdividend or make any other distribution in respect of any shares of capital stock or other security, or independent contractorsrepurchase, except replacements in the Ordinary Course of Businessredeem or otherwise reacquire any share capital, in accordance with the Company’s business plans previously disclosed to Buyer, interests or as otherwise set forth on Schedule 5.1(b)(i),other securities;
(ii) increase sell, issue, grant or authorize the compensation sale, issuance or grant of: (including A) any wagesshare capital or other security; (B) any option, salariescall, bonuseswarrant or right to acquire any share capital or other security; or (C) any instrument convertible into or exchangeable for any share capital or other security;
(iii) amend or waive any of its rights under, or permit the acceleration of vesting under any provision of: (A) any restricted stock purchase agreement; or (B) any other remunerationcontract evidencing or relating to any equity award (whether payable in cash or stock);
(iv) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws, or effect or become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split, division or subdivision of shares, consolidation of shares or similar transaction or otherwise acquire or agree to acquire any assets that are material, individually or in the aggregate, to the business of the Company (except in the ordinary course of business);
(v) form any subsidiary or acquire any equity interest or other payment interest in any other Person or enter into any material partnership arrangements, joint development agreements or strategic alliances;
(vi) make any material capital expenditure;
(vii) acquire, lease or license any right or other asset from any other Person or sell encumber, convey, assign, or otherwise dispose of or transfer of, or lease or license or sublicense, any right or other asset or interest therein to any director, officer, other Person (except in each case for assets (that are not material individually or employee of any Company Entity, whether now or hereafter payable or granted (other than increases or variations in base compensation in the Ordinary Course aggregate) acquired, leased, licensed or disposed of Business by the Company in the ordinary course of business and consistent in timing and amount with past practices), in each case except as provided on Schedule 5.1(b)(ii),or waive or relinquish any material right;
(iiiviii) dispose or lapse any rights inother than in the ordinary course of business consistent with past practice, towrite-off as uncollectible, or for the use establish any extraordinary reserve with respect to any material receivable or other indebtedness;
(ix) make any pledge of any Intellectual Property Right of its assets or permit any Company Entity or otherwise in any way materially impair any Intellectual Property Right of any Company Entity,
(iv) acquire, sell, assign, license, or otherwise transfer out of any Company Entity or into any Company Entity any Intellectual Property Rights,
(v) enter into, materially amend, terminate, or breach any Material Contract (other than entering into customer and vendor contracts and purchase orders in the Ordinary Course of Business and non-renewals in the Ordinary Course of Business),
(vi) allow any asset of any Company Entity its assets to become subject to any lien (other than a Permitted Lien encumbrances, except for pledges of or a lien that will be released in full as of the Closing),
(vii) incur any Debt (excluding any interest on existing Debt),
(viii) except as set forth on Schedule 5.1(b)(viii), make any individual (or series of) capital expenditure(s), capital lease(s), or capital commitment(s) in excess of $100,000,
(ix) pay, discharge, or satisfy any Liability (whether accrued, absolute, contingent or otherwise) in excess of $100,000 other than the payment, discharge, or satisfaction of accounts payable or accrued expenses incurred encumbrances with respect to immaterial assets made in the Ordinary Course ordinary course of Business and business consistent in amount and kind with past practice,practices;
(x) cancel or waive lend money to any claims or rights of valuePerson, or conduct incur or guarantee any saleindebtedness or issue or sell any debt securities or options, transferwarrants, distribution, calls or other disposal rights to acquire any debt securities of any assets, except for sales of non-material assets in the Ordinary Course of Business consistent in amount and kind with past practice, or dispose of any assets for any amount to Affiliates of any Company Entity or of Seller,Company;
(xi) cause any damage, destruction or loss of any asset which individually or other than in the aggregate exceeds $25,000 and which is not otherwise fully covered ordinary course of business consistent with past practices, establish, adopt, enter into or amend any stock option or bonus plan, pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation (including equity-based compensation, whether payable in stock, cash or other property) or remuneration payable to any of its directors or any of its officers or other employees except as required by property insurance,law;
(xii) cause make any event which would require in accordance with GAAP an increase in the reserve for bad debts in the aggregate in excess grant of $25,000,exclusive rights to any third party;
(xiii) make any material tax election or adopt or change in any method of accounting methods, principles or of keeping books of account or in accounting practices of the Company or any other Company Entity except as required by changes in GAAP,practices;
(xiv) acquire commence or settle any business by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of related transactions, or enter into any contract, letter of intent, or similar arrangement (whether or not enforceable) with respect to such an acquisition,material legal proceeding;
(xv) prepare enter into any Tax Returns material transaction or take any other material action outside the ordinary course of any Company Entity in a manner which is materially business or inconsistent with the past practice of the applicable Company Entitypractices;
(xvi) commence or settle any legal proceeding, adopt or change any material method of Tax accounting, change any annual Tax accounting period, make or change any material Tax election, file any material amended Tax Return, settle or compromise any material Tax liability, agree to an extension or waiver of the statute of limitations with respect to any material Taxes or Tax Returns (other than pursuant to customary extensions of the due date for filing Tax Returns obtained in the ordinary course of business of no more than seven months), enter into any Tax indemnity, Tax allocation or Tax sharing agreement,
(xvi) enter into a settlement, voluntary Tax disclosure, or a closing agreement consistent with a taxing authority with respect to any Company Entity,past practices;
(xvii) change, amend, make any individual expenditure in excess of $1,000 or restate the organizational documents of any Company Entity except in connection with the Reorganization,expenditures that aggregate to more than $5,000 without notice to GPA and without GPA’s prior written approval;
(xviii) issue, sell, pledge, dispose, deliver, encumber, agree or authorize the issuance, sale, pledge, disposition, delivery, or encumbrance of, (A) any capital stock or other equity or voting interest (collectively, “Equity Interest”) in any Company Entity or (B) any securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire an Equity Interest in any Company Entity,
(xix) except as contemplated in Sections 5.7 and 5.8, undertake any split, combination, redemption, reclassification, purchase, or other acquisition, directly or indirectly, of any Equity Interest in any Company Entity, or any other change in the capital structure of any Company Entity,
(xx) except as contemplated in Section 5.9, declare, set aside, make, or pay any dividends or other distributions or payments with respect to any Equity Interest in the Company3, or
(xxi) take any action, or fail commit to take any action, that would cause any of the representations and warranties actions described in clauses ”(i)” through “(xvii)” of the Company or the Seller contained herein to become untrue or inaccurate in any material respectthis Section 3.15.
(c) To During the extent permissible under the HSR Act and any other applicable Competition LawInterim Period, the Company shall confer promptly notify Purchaser in writing, by delivery of an updated Disclosure Schedule, of: (i) the discovery by the Company of any event, condition, fact or circumstance that occurred or existed on a regular basis with one or more designated representatives of the Buyer to report material operational matters and to report the general status of ongoing operations; ______________________________ 3 NTD: Company Entities may need to pay dividends and repatriate funds from D.R. prior to closing the date of this Agreement and may need to pay that caused or constitutes a tax distribution material inaccuracy in December for owner’s estimated taxes if transaction has not closed.
any representation or warranty made regarding the Company in this Agreement or an inaccuracy or warranty regarding the Company in this Agreement that would have a Material Adverse Effect; (dii) The Company shall keep any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in full force and effect all insurance policies maintained any representation or warranty made with respect to the Company Entities and their assets and propertiesin this Agreement if: (A) such representation or warranty had been made as of the time of the occurrence, existence or suitable replacements discovery of such event, condition, fact or renewalscircumstance; or (B) such event, and shall notify Buyer immediately if any such policies terminate condition, fact or are not renewed; and
(e) Nothing contained herein shall give to Buyercircumstance had occurred, directly arisen or indirectly, rights to control existed on or direct the operations of any Company Entity prior to the Closing Date, including, without limitation, for purposes date of this Agreement; (iii) any material breach of any covenant or obligation of the HSR Act Company; and (iv) any event, condition, fact or any other applicable Competition Law. Nor is anything in this Section 5.1 intended circumstance that could reasonably be expected to result in Buyer obtaining any indicia of beneficial ownership, control, or influence over make the Seller, the Company, or any of the other Company Entities, or of the Seller, the Company, or any of the other Company Entities transferring or ceding beneficial ownership, control, or influence to Buyer timely satisfaction of any of the conditions set forth in Sections 4.1 impossible or materially less likely or that has resulted in or would reasonably be expected to result in an Material Adverse Effect. Without limiting the generality of the foregoing, the Company Entities’ basic ordinary course shall promptly advise Purchaser in writing of business and commercial decisions prior any legal proceeding or claim threatened, commenced or asserted against or with respect to, or otherwise affecting, the Company or, to the Closing Dateknowledge of the Company, any director or officer of the Company. Prior No notification given to Purchaser pursuant to this Section 3.15 shall limit or otherwise affect any of the Closing Daterepresentations, each warranties, covenants or obligations of the Company Entities shall exercise, consistent with the terms and conditions of contained in this Agreement, complete control and supervision of its operations. Notwithstanding anything to the contrary contained herein, no consent of Buyer shall be required with respect to any matter set forth in this Section 5.1 or elsewhere in the Agreement if the Company has a good faith belief that seeking such consent would violate any applicable Law.
Appears in 1 contract
Samples: Securities Purchase Agreement (Global Payment Technologies Inc)
Operation of Company’s Business. During the Interim Period:
(a) except Except as expressly required by this Agreement contemplated or as required by applicable Law, or with the prior written consent of Buyer, the Company shall (and shall cause each of the other Company Entities to) to conduct its business in the Ordinary Course of Business;
(b) except as expressly required permitted by this Agreement, as required by applicable LawLaw or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period, the Company shall use commercially reasonable efforts to conduct its business and operations in the ordinary course of business and consistent with past practice and in material compliance with the applicable Law and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly contemplated or permitted by this Agreement, including the Subscription Agreement or a Permitted Stock Purchase Agreement, (ii) as set forth in Section 6.2(b) of the Company Disclosure Letter, (iii) as required by applicable Law or (iv) with the prior written consent of BuyerParent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall not (and shall ensure that each other Company Entity shall not), without do any of the prior written consent of Buyerfollowing:
(i) hire declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock or repurchase, redeem or otherwise reacquire any shares of its capital stock or other securities (except for shares of Company Capital Stock from terminated employees, consultants, directors or independent contractors, except replacements in consultants of the Ordinary Course of Business, Company in accordance with agreements in effect on the date of this Agreement providing for the repurchase of shares at no more than the purchase price thereof in connection with any termination of services to the Company’s business plans previously disclosed to Buyer, or as otherwise set forth on Schedule 5.1(b)(i),;
(ii) increase the compensation (including any wagessell, salariesissue, bonusesgrant, or other remuneration) or other payment to any director, officer, or employee of any Company Entity, whether now or hereafter payable or granted (other than increases or variations in base compensation in the Ordinary Course of Business consistent in timing and amount with past practices), in each case except as provided on Schedule 5.1(b)(ii),
(iii) dispose or lapse any rights in, to, or for the use of any Intellectual Property Right of any Company Entity pledge or otherwise in any way materially impair any Intellectual Property Right of any Company Entity,
(iv) acquire, sell, assign, license, or otherwise transfer out of any Company Entity or into any Company Entity any Intellectual Property Rights,
(v) enter into, materially amend, terminate, or breach any Material Contract (other than entering into customer and vendor contracts and purchase orders in the Ordinary Course of Business and non-renewals in the Ordinary Course of Business),
(vi) allow any asset of any Company Entity to become subject to any lien (other than a Permitted Lien or a lien that will be released in full as of the Closing),
(vii) incur any Debt (excluding any interest on existing Debt),
(viii) except as set forth on Schedule 5.1(b)(viii), make any individual (or series of) capital expenditure(s), capital lease(s), or capital commitment(s) in excess of $100,000,
(ix) pay, discharge, or satisfy any Liability (whether accrued, absolute, contingent or otherwise) in excess of $100,000 other than the payment, discharge, or satisfaction of accounts payable or accrued expenses incurred in the Ordinary Course of Business and consistent in amount and kind with past practice,
(x) cancel or waive any claims or rights of value, or conduct any sale, transfer, distribution, or other disposal of any assets, except for sales of non-material assets in the Ordinary Course of Business consistent in amount and kind with past practice, or dispose of any assets for any amount to Affiliates of any Company Entity or of Seller,
(xi) cause any damage, destruction or loss of any asset which individually or in the aggregate exceeds $25,000 and which is not otherwise fully covered by property insurance,
(xii) cause any event which would require in accordance with GAAP an increase in the reserve for bad debts in the aggregate in excess of $25,000,
(xiii) make any change in any method of accounting or of keeping books of account or in accounting practices of the Company or any other Company Entity except as required by changes in GAAP,
(xiv) acquire any business by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of related transactions, or enter into any contract, letter of intent, or similar arrangement (whether or not enforceable) with respect to such an acquisition,
(xv) prepare any Tax Returns of any Company Entity in a manner which is materially inconsistent with the past practice of the applicable Company Entity, adopt or change any material method of Tax accounting, change any annual Tax accounting period, make or change any material Tax election, file any material amended Tax Return, settle or compromise any material Tax liability, agree to an extension or waiver of the statute of limitations with respect to any material Taxes or Tax Returns (other than pursuant to customary extensions of the due date for filing Tax Returns obtained in the ordinary course of business of no more than seven months), enter into any Tax indemnity, Tax allocation or Tax sharing agreement,
(xvi) enter into a settlement, voluntary Tax disclosure, or a closing agreement with a taxing authority with respect to any Company Entity,
(xvii) change, amend, or restate the organizational documents of any Company Entity except in connection with the Reorganization,
(xviii) issue, sell, pledge, dispose, deliver, encumber, encumber or authorize the issuance, sale, pledge, disposition, delivery, or encumbrance issuance of, : (A) any capital stock or other equity security (except for Company Capital Stock issued upon the valid exercise or voting interest (collectivelysettlement of outstanding Company Options), “Equity Interest”) in any Company Entity or (B) any securities convertible intooption, exchangeable for, warrant or evidencing the right to subscribe for or acquire an Equity Interest in any Company Entity,
(xix) except as contemplated in Sections 5.7 and 5.8, undertake any split, combination, redemption, reclassification, purchase, or other acquisition, directly or indirectly, of any Equity Interest in any Company Entity, capital stock or any other change security or (C) any instrument convertible into or exchangeable for any capital stock or other security (other than the grant of Company Options under the Company Equity Plan in the capital structure of any Company Entity,
(xx) except as contemplated in Section 5.9, declare, set aside, make, or pay any dividends or other distributions or payments with respect to any Equity Interest in the Company3, or
(xxi) take any action, or fail to take any action, that would cause any of the representations and warranties of the Company or the Seller contained herein to become untrue or inaccurate in any material respect.
(c) To the extent permissible under the HSR Act and any other applicable Competition Law, the Company shall confer on a regular basis with one or more designated representatives of the Buyer to report material operational matters and to report the general status of ongoing operations; ______________________________ 3 NTD: Company Entities may need to pay dividends and repatriate funds from D.R. prior to closing and may need to pay a tax distribution in December for owner’s estimated taxes if transaction has not closed.
(d) The Company shall keep in full force and effect all insurance policies maintained with respect to the Company Entities and their assets and properties, or suitable replacements or renewals, and shall notify Buyer immediately if any such policies terminate or are not renewed; and
(e) Nothing contained herein shall give to Buyer, directly or indirectly, rights to control or direct the operations of any Company Entity prior to the Closing Date, including, without limitation, for purposes of the HSR Act or any other applicable Competition Law. Nor is anything in this Section 5.1 intended to result in Buyer obtaining any indicia of beneficial ownership, control, or influence over the Seller, the Company, or any of the other Company Entities, or of the Seller, the Company, or any of the other Company Entities transferring or ceding beneficial ownership, control, or influence to Buyer of any of the Company Entities’ basic ordinary course of business and commercial decisions prior consistent with past practice);
(iii) except as required to give effect to anything in contemplation of the Closing Date. Prior Closing, amend any of its organizational documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the Closing Dateavoidance of doubt, each the transactions contemplated hereby;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other entity or enter into a joint venture with any other entity;
(v) (A) lend money to any Person (other than routine advances to employees of the Company Entities shall exercise, in the ordinary course of business and consistent with past practice, pursuant to Company Plans), (B) incur or guarantee any material indebtedness for borrowed money, (C) guarantee any debt securities of others or (D) make any material capital expenditure or commitment;
(vi) enter into any material transaction for more than $1,500,000 in excess of the terms and conditions amount provided for the Company’s forecasted operating budget, which budget is set forth on Section 6.2(b)(vi) of this Agreementthe Company Disclosure Letter (the “Company Budget” );
(vii) other than in the ordinary course of business or as contemplated by the Company Budget, complete control and supervision acquire any material asset or sell, lease, license or otherwise irrevocably dispose of any of its operations. Notwithstanding anything to the contrary contained hereinmaterial assets or properties, no consent of Buyer shall be required or grant any Lien with respect to such assets or properties;
(viii) make (other than consistent with past practice), change or revoke any matter set forth material Tax election; file any material amendment to any Tax Return; settle or compromise any material Tax claim; waive or extend any statute of limitations in this respect of a period within which an assessment or reassessment of material Taxes may be issued (other than any extension pursuant to an extension to file any Tax Return); enter into any “closing agreement” as described in Section 5.1 7121 of the Code (or elsewhere any similar Law) with any Governmental Entity; or adopt or change any material accounting method in respect of Taxes;
(ix) waive, settle or compromise any pending or threatened Action against the Company, other than waivers, settlements or agreements (A) for an amount not in excess of $500,000 in the Agreement if aggregate (excluding amounts to be paid under existing insurance policies or renewals thereof) and (B) that do not impose any material restrictions on the Company has operations or businesses of the Company, taken as a good faith belief that seeking such consent would violate whole, or any applicable Law.equitable relief on, or the admission of wrongdoing by the Company;
Appears in 1 contract
Operation of Company’s Business. During Except as set forth in § 5(e) of the Interim Period:
(a) except as expressly required by this Agreement Company Disclosure Letter or as required by applicable Law, or with the prior written consent of Buyer, the Company shall (and shall cause each of the other Company Entities to) to conduct its business in the Ordinary Course of Business;
(b) except as expressly required otherwise contemplated by this Agreement, as required by applicable Law, or with the prior written consent of Buyer, the Company shall will not (and shall ensure that each other Company Entity shall notwill not cause or permit any of its Subsidiaries to), without the prior written consent of BuyerAcquiror, take any action or enter into any transaction other than in the ordinary course of business consistent with past practice or according to a forecast previously delivered to Acquiror and agreed to by Acquiror (the "Company Forecast"). Without limiting the generality of the foregoing, except as expressly provided in this Agreement or § 5(e) of the Company Disclosure Letter, without the written consent of Acquiror :
(i) hire none of Company and its Subsidiaries will authorize or effect any employeeschange in its charter or by-laws or comparable organizational document;
(ii) none of Company and its Subsidiaries will grant any Stock Rights or issue, consultantssell, authorize or independent contractorsotherwise dispose of any of its capital stock, (x) except replacements upon the conversion or exercise of Stock Rights outstanding as of the date of this Agreement and (y) except for stock options issued to employees of Company and its Subsidiaries in a manner consistent with past practice which (I) do not provide for the Ordinary Course issuance of Businessmore than 150,000 Company Shares in any calendar quarter, (II) are issued only to new employees and employees promoted after the date hereof, (III) are issued at not less than the market price of the Company Shares on the date of grant as determined in accordance with the Company’s business plans previously disclosed plan pursuant to Buyerwhich such options are issued, or as otherwise set forth on Schedule 5.1(b)(i),
(iiIV) increase the compensation (including any wages, salaries, bonuses, or other remuneration) or other payment are not issued to any director, officer, executive officer or employee director of any Company Entity, whether now or hereafter payable or granted and (other than increases or variations in base compensation in V) do not provide for accelerated vesting as a result of the Ordinary Course of Business consistent in timing and amount with past practices), in each case except as provided on Schedule 5.1(b)(ii),Merger;
(iii) none of Company and its Subsidiaries will sell, lease, encumber or otherwise dispose or lapse any rights in, toof, or for the use of any Intellectual Property Right of any Company Entity otherwise agree to sell or otherwise dispose of, any of its assets which are material, individually or in the aggregate, to Company and its Subsidiaries taken as a whole except in the ordinary course of business consistent with past practice or according to the Company Forecast; provided, that, notwithstanding anything to the contrary contained in this Agreement, any way materially impair any Intellectual Property Right of any Shares constituting Company Entity,Outstanding Shares not issued on the date hereof may be issued by Company prior to the Effective Time;
(iv) acquirenone of Company and its Subsidiaries (other than wholly owned Subsidiaries) will declare, sell, assign, license, set aside or otherwise transfer out of pay any Company Entity dividend or into any Company Entity any Intellectual Property Rights,distribution with respect to its capital stock (whether in cash or in kind);
(v) enter intonone of Company and its Subsidiaries will split, materially amendcombine or reclassify any of its capital stock or redeem, terminate, repurchase or breach otherwise acquire any Material Contract (other than entering into customer and vendor contracts and purchase orders in the Ordinary Course of Business and non-renewals in the Ordinary Course of Business),its capital stock;
(vi) allow any asset none of any Company Entity and its Subsidiaries will acquire or agree to become subject to any lien (other than a Permitted Lien or a lien that will be released in full as of the Closing),
(vii) incur any Debt (excluding any interest on existing Debt),
(viii) except as set forth on Schedule 5.1(b)(viii), make any individual (or series of) capital expenditure(s), capital lease(s), or capital commitment(s) in excess of $100,000,
(ix) pay, discharge, or satisfy any Liability (whether accrued, absolute, contingent or otherwise) in excess of $100,000 other than the payment, discharge, or satisfaction of accounts payable or accrued expenses incurred in the Ordinary Course of Business and consistent in amount and kind with past practice,
(x) cancel or waive any claims or rights of value, or conduct any sale, transfer, distribution, or other disposal of any assets, except for sales of non-material assets in the Ordinary Course of Business consistent in amount and kind with past practice, or dispose of any assets for any amount to Affiliates of any Company Entity or of Seller,
(xi) cause any damage, destruction or loss of any asset which individually or in the aggregate exceeds $25,000 and which is not otherwise fully covered by property insurance,
(xii) cause any event which would require in accordance with GAAP an increase in the reserve for bad debts in the aggregate in excess of $25,000,
(xiii) make any change in any method of accounting or of keeping books of account or in accounting practices of the Company or any other Company Entity except as required by changes in GAAP,
(xiv) acquire any business by merger or consolidationconsolidation with, purchase or by purchasing a substantial equity interest in or a substantial portion of substantial the assets or equity interestsof, or by any other manner, any business of any Person or division thereof or otherwise acquire or agree to acquire any substantial assets in a single transaction or a series of related transactions, or enter into any contract, letter of intent, or similar arrangement (whether or not enforceable) with respect to such an acquisition,;
(xvvii) prepare any Tax Returns none of any Company Entity in a manner which is materially inconsistent with the past practice of the applicable Company Entity, adopt or change any material method of Tax accounting, change any annual Tax accounting period, make its Subsidiaries will incur or change any material Tax election, file any material amended Tax Return, settle or compromise any material Tax liability, agree to an extension or waiver of the statute of limitations with respect commit to any material Taxes or Tax Returns (capital expenditures other than pursuant capital expenditures incurred or committed to customary extensions of the due date for filing Tax Returns obtained in the ordinary course of business of no more than seven months), enter into any Tax indemnity, Tax allocation consistent with past practice or Tax sharing agreement,in accordance with the Company Forecast;
(xviviii) enter into a settlement, voluntary Tax disclosure, none of Company or a closing agreement with a taxing authority with respect to any Company Entity,
(xvii) change, amend, or restate the organizational documents of any Company Entity except in connection with the Reorganization,
(xviii) issue, sell, pledge, dispose, deliver, encumber, or authorize the issuance, sale, pledge, disposition, delivery, or encumbrance of, its Subsidiaries will (A) make any loans, advances or capital stock contributions to, or investments in, any other equity Person, other than by Company or voting interest (collectively, “Equity Interest”) a Subsidiary of Company to or in Company or any Company Entity or wholly-owned Subsidiary of Company; (B) pay, discharge or satisfy any securities convertible intoclaims, exchangeable forliabilities or obligations (absolute, accrued, asserted or evidencing unasserted, contingent or otherwise), other than loans, advances, capital contributions, investments, payments, discharges or satisfactions incurred or committed to in the right ordinary course of business consistent with past practice or in accordance with the Company Forecast; or (C) create, incur, assume or suffer to subscribe for exist any indebtedness, issuance of debt securities, guarantees, Security Interests, loans or acquire an Equity Interest advances not in existence as of the date of this Agreement except pursuant to the credit facilities, indentures and other arrangements in existence on the date of this Agreement and incurred in the ordinary course of business consistent with past practice or in accordance with the Company Forecast, and any other indebtedness existing on the date of this Agreement, in each case as such credit facilities, indentures, other arrangements and other existing indebtedness may be amended, extended, exchanged, modified, refunded, renewed or refinanced after the date of this Agreement, but only if the aggregate principal amount thereof is not increased thereby, the term thereof is not extended thereby and the other terms and conditions thereof, taken as a whole, are not less advantageous to Company Entity,and its Subsidiaries than those in existence as of the date of this Agreement;
(xixix) none of Company and its Subsidiaries will make any change in employment terms for any of its directors, officers and employees other than (A) customary increases to employees whose total annual cash compensation is less than $150,000 awarded in the ordinary course of business consistent with past practices, and (B) customary employee bonuses (including to employees who are officers) approved by the Company Board and paid in the ordinary course of business consistent with past practices and (C) immaterial changes to Company Benefit Plans;
(x) Company will not change its methods of accounting in effect at December 31, 1999 in a manner materially affecting the consolidated assets, liabilities or operating results of Company, except as contemplated required by changes in Sections 5.7 GAAP as concurred in by Company's independent auditors, and 5.8Company will not (i) change its fiscal year or (ii) make any material tax election, undertake any split, combination, redemption, reclassification, purchase, or other acquisition, directly or indirectly, of any Equity Interest in any Company Entity, or any other change than in the capital structure ordinary course of any Company Entity,business consistent with past practice;
(xxxi) except as contemplated in Section 5.9, declare, set aside, make, none of the Company or pay any dividends or other distributions or payments with respect to any Equity Interest in the Company3, or
(xxi) its Subsidiaries shall take any action, action or fail to take any action, that action which would cause result in any of the representations and warranties of the Company or the Seller contained herein set forth in § 4 hereof failing to become untrue or inaccurate in any material respect.
(c) To the extent permissible under the HSR Act be true and any other applicable Competition Law, the Company shall confer on a regular basis with one or more designated representatives of the Buyer to report material operational matters and to report the general status of ongoing operations; ______________________________ 3 NTD: Company Entities may need to pay dividends and repatriate funds from D.R. prior to closing and may need to pay a tax distribution in December for owner’s estimated taxes if transaction has not closed.
(d) The Company shall keep in full force and effect all insurance policies maintained with respect to the Company Entities and their assets and properties, or suitable replacements or renewals, and shall notify Buyer immediately if any such policies terminate or are not renewedcorrect; and
(exii) Nothing contained herein shall give none of Company and its Subsidiaries will resolve or commit to Buyer, directly or indirectly, rights to control or direct the operations of any Company Entity prior to the Closing Date, including, without limitation, for purposes of the HSR Act or any other applicable Competition Law. Nor is anything in this Section 5.1 intended to result in Buyer obtaining any indicia of beneficial ownership, control, or influence over the Seller, the Company, or any of the other foregoing. In the event Company Entitiesshall request Acquiror to consent in writing to an action otherwise prohibited by this § 5(e), or of the Seller, the Company, or any of the other Company Entities transferring or ceding beneficial ownership, control, or influence Acquiror shall use reasonable efforts to Buyer of any of the Company Entities’ basic ordinary course of respond in a prompt and timely fashion (but in no event later than ten (10) business and commercial decisions prior to the Closing Date. Prior to the Closing Date, each of the Company Entities days following such request); Acquiror's consent shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its operations. Notwithstanding anything to the contrary contained herein, no consent of Buyer shall not unreasonably be required with respect to any matter set forth in this Section 5.1 or elsewhere in the Agreement if the Company has a good faith belief that seeking such consent would violate any applicable Lawwithheld.
Appears in 1 contract
Samples: Merger Agreement (Infonautics Inc)
Operation of Company’s Business. During the Interim Period:
(a) except Except (i) as expressly required contemplated or permitted by this Agreement or Agreement, (ii) as set forth on Section 6.2(a) of the Company Disclosure Letter, (iii) as required by applicable Law, or (iv) unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period, the Company shall use commercially reasonable efforts to conduct its business and operations in the ordinary course of business and consistent with past practice and in material compliance with the applicable Law and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly contemplated or permitted by this Agreement, including the Subscription Agreement, (ii) as set forth in Section 6.2(b) of the Company Disclosure Letter, (iii) as required by applicable Law or (iv) with the prior written consent of BuyerParent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Company shall (and shall cause each of the other Company Entities to) to conduct its business in the Ordinary Course of Business;
(b) except as expressly required by this Agreement, as required by applicable Law, or with the prior written consent of BuyerPre-Closing Period, the Company shall not (and shall ensure that each other Company Entity shall not), without do any of the prior written consent of Buyerfollowing:
(i) hire declare, accrue, set aside or pay any employeesdividend or make any other distribution in respect of any shares of Company Capital Stock or repurchase, consultants, redeem or independent contractors, except replacements otherwise reacquire any shares of Company Capital Stock or other securities (other than with respect to Company Stock Awards in the Ordinary Course connection with a Company service provider’s termination of Business, service in accordance with agreements in effect on the Company’s business plans previously disclosed to Buyer, or as otherwise set forth on Schedule 5.1(b)(idate of this Agreement),;
(ii) increase sell, transfer, issue, grant, pledge or otherwise dispose of or encumber or authorize the compensation issuance of: (including A) any wages, salaries, bonuses, Company Capital Stock or other remunerationsecurity (except for the issuance of Company Capital Stock upon the valid exercise or settlement of Company Stock Awards outstanding on the Company Measurement Date in accordance with their terms, as applicable or granted after the date of this Agreement in the ordinary course of business), (B) any option, warrant or right to acquire any capital stock or any other security or (C) any instrument convertible into or exchangeable for any Company Capital Stock or other payment to any director, officer, or employee of any Company Entity, whether now or hereafter payable or granted security (other than increases or variations in base compensation the grant of Company Options under the Company Equity Plans in the Ordinary Course ordinary course of Business business and consistent in timing and amount with past practicespractice);
(iii) except as required to give effect to anything in contemplation of the Closing, amend any of its organizational documents (other than pursuant to the Company Charter Amendment) or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Person or enter into a joint venture with any other Person;
(v) (A) lend money to any Person (other than routine advances of bona fide business expenses to employees of the Company in the ordinary course of business and consistent with past practice, pursuant to Company Equity Plans), (B) incur or guarantee any material indebtedness for borrowed money in excess of $200,000, (C) guarantee any debt securities of others or (D) make any capital expenditure or commitment other than in accordance with Section 6.2(b)(vi);
(vi) enter into any transaction outside the ordinary course of business for more than $500,000 in excess of the amount provided for the Company’s forecasted operating budget, which budget is set forth on Section 6.2(b)(vi) of the Company Disclosure Letter (the “Company Budget”);
(vii) acquire any material asset (other than as contemplated by the Company Budget), or sell, transfer, lease, exclusively license or otherwise irrevocably dispose of any of its assets or properties, or grant any Lien with respect to such assets or properties, in each case except as provided on Schedule 5.1(b)(iioutside the ordinary course of business (subject to the terms of Section 6.2(b)(vii) of the Company Disclosure Letter),;
(iiiviii) dispose make (other than consistent with past practice), change or lapse revoke any rights inmaterial Tax election; file any material amendment to any Tax Return; settle or compromise any material Tax claim; waive or extend any statute of limitations in respect of a period within which an assessment or reassessment of material Taxes may be issued (other than any extension pursuant to an extension to file any Tax Return); enter into any “closing agreement” as described in Section 7121 of the Code (or any similar Law) with any Governmental Entity; or adopt or change any material accounting method in respect of Taxes or change any annual Tax accounting period;
(ix) waive, tosettle or compromise any pending or threatened Action against the Company, other than waivers, settlements or agreements which (A) do not exceed, in the aggregate, $300,000 more than the amounts covered by insurance policies (B) do not impose any material restrictions on the operations or businesses of the Company (including following the Mergers and/or the Surviving Entity), taken as a whole, (C) do not provide for equitable relief on, or for the use admission of any Intellectual Property Right of any Company Entity wrongdoing by the Company, and (D) do not relate to claims, litigations, investigations or otherwise in any way materially impair any Intellectual Property Right of any Company proceedings brought by a Governmental Entity,;
(ivx) acquiredelay or fail to repay when due any material obligation, including accounts payable and accrued expenses, other than in the ordinary course of business and consistent with past practice;
(xi) forgive any loans to any Person, including its employees, officers, directors or Affiliates;
(xii) sell, assign, transfer, license, sublicense or otherwise transfer out dispose of any Company Entity or into any Company Entity any material Intellectual Property Rights,Rights of the Company (other than in the ordinary course of business and consistent with past practice);
(vxiii) terminate, or fail to exercise renewal rights with respect to, any material insurance policy, in each case, without obtaining commercially reasonable alternatives;
(xiv) enter into, materially amend, terminatematerially modify, assign, transfer or breach any Material Contract (other than entering into customer and vendor contracts and purchase orders in the Ordinary Course of Business and non-renewals in the Ordinary Course of Business),
(vi) allow any asset of any Company Entity to become subject to any lien terminate (other than a Permitted Lien or a lien that will be released in full as termination upon the expiration of the Closingterm thereof) any Contract that would have been a Company Material Contract set forth in Section 4.16(b)(iii)(A) – (C),
(vii) incur any Debt (excluding any interest on existing Debt),
, (viii) except as set forth on Schedule 5.1(b)(viii), make any individual (or series of) capital expenditure(s), capital lease(s), or capital commitment(s) in excess of $100,000,
(ix) pay, discharge, or satisfy any Liability (whether accrued, absolute, contingent or otherwise) in excess of $100,000 other than the payment, discharge, or satisfaction of accounts payable or accrued expenses incurred in the Ordinary Course of Business and consistent in amount and kind with past practice,
(x) cancel or waive any claims or rights of value, or conduct any sale, transfer, distribution, or other disposal of any assets, except for sales of non-material assets in the Ordinary Course of Business consistent in amount and kind with past practice, or dispose of any assets for any amount had it been entered into prior to Affiliates of any Company Entity or of Seller,
(xi) cause any damage, destruction or loss of any asset which individually or in the aggregate exceeds $25,000 and which is not otherwise fully covered by property insurance,
(xii) cause any event which would require in accordance with GAAP an increase in the reserve for bad debts in the aggregate in excess of $25,000,
(xiii) make any change in any method of accounting or of keeping books of account or in accounting practices of the Company or any other Company Entity except as required by changes in GAAP,
(xiv) acquire any business by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of related transactions, or enter into any contract, letter of intent, or similar arrangement (whether or not enforceable) with respect to such an acquisition,this Agreement;
(xv) prepare any Tax Returns of any (A) materially change royalties or other payments set or charged by the Company Entity in a manner which is materially inconsistent with the past practice of the applicable Company Entity, adopt to its customers or change any material method of Tax accounting, change any annual Tax accounting period, make licensees or change any material Tax election, file any material amended Tax Return, settle or compromise any material Tax liability, (B) agree to an extension or waiver of the statute of limitations with respect to any material Taxes increase in royalties or Tax Returns other payments set or charged by Persons who have licensed Intellectual Property Rights to the Company;
(xvi) other than pursuant as required by Law or GAAP, take any action to customary extensions of the due date for filing Tax Returns obtained in change accounting policies or, outside the ordinary course of business of no more than seven months)business, enter into any Tax indemnity, Tax allocation or Tax sharing agreement,
(xvi) enter into a settlement, voluntary Tax disclosure, or a closing agreement with a taxing authority with respect to any Company Entity,accounting procedures; or
(xvii) changesubject to Section 6.4 and Section 7.2, amendagree, resolve or restate commit to do any of the organizational documents of any Company Entity except foregoing. Nothing contained in connection with the Reorganization,
(xviii) issue, sell, pledge, dispose, deliver, encumber, or authorize the issuance, sale, pledge, disposition, delivery, or encumbrance of, (A) any capital stock or other equity or voting interest (collectively, “Equity Interest”) in any Company Entity or (B) any securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire an Equity Interest in any Company Entity,
(xix) except as contemplated in Sections 5.7 and 5.8, undertake any split, combination, redemption, reclassification, purchase, or other acquisitionthis Agreement shall give Parent, directly or indirectly, of any Equity Interest in any Company Entity, or any other change in the capital structure of any Company Entity,
(xx) except as contemplated in Section 5.9, declare, set aside, make, or pay any dividends or other distributions or payments with respect to any Equity Interest in the Company3, or
(xxi) take any action, or fail to take any action, that would cause any of the representations and warranties of the Company or the Seller contained herein to become untrue or inaccurate in any material respect.
(c) To the extent permissible under the HSR Act and any other applicable Competition Law, the Company shall confer on a regular basis with one or more designated representatives of the Buyer to report material operational matters and to report the general status of ongoing operations; ______________________________ 3 NTD: Company Entities may need to pay dividends and repatriate funds from D.R. prior to closing and may need to pay a tax distribution in December for owner’s estimated taxes if transaction has not closed.
(d) The Company shall keep in full force and effect all insurance policies maintained with respect to the Company Entities and their assets and properties, or suitable replacements or renewals, and shall notify Buyer immediately if any such policies terminate or are not renewed; and
(e) Nothing contained herein shall give to Buyer, directly or indirectly, rights right to control or direct the operations of any the Company Entity prior to the Closing Date, including, without limitation, for purposes of the HSR Act or any other applicable Competition Law. Nor is anything in this Section 5.1 intended to result in Buyer obtaining any indicia of beneficial ownership, control, or influence over the Seller, the Company, or any of the other Company Entities, or of the Seller, the Company, or any of the other Company Entities transferring or ceding beneficial ownership, control, or influence to Buyer of any of the Company Entities’ basic ordinary course of business and commercial decisions prior to the Closing DateFirst Effective Time. Prior to the Closing DateFirst Effective Time, each of the Company Entities shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision of over its business operations. Notwithstanding anything to the contrary contained herein, no consent of Buyer shall be required with respect to any matter set forth in this Section 5.1 or elsewhere in the Agreement if the Company has a good faith belief that seeking such consent would violate any applicable Law.
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Operation of Company’s Business. During the Interim PeriodPre-Closing Period and except as set forth in this Agreement:
(a) except as expressly required by this Agreement or as required by applicable Law, or with the prior written consent of Buyer, the Company shall (and shall cause each of the other Company Entities to) to conduct its business and operations in the Ordinary Course ordinary course and in substantially the same manner as such business and operations have been conducted prior to the date of Businessthis Agreement;
(b) except as expressly required by this AgreementCompany shall use reasonable efforts to preserve intact its current business organization, as required by applicable Lawkeep available the services of its current officers and employees and maintain its relations and good will with all suppliers, or customers, landlords, creditors, employees and other persons having business relationships with the prior written consent of Buyer, the Company;
(c) Company shall not (declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock, and shall ensure not repurchase, redeem or otherwise reacquire any shares of capital stock or other securities. Notwithstanding the foregoing, Company may transfer title to that each other certain 2009 Dodge Ram 1500 truck currently used by the Shareholder in connection with Company’s business to the Shareholder prior to the Closing;
(d) Company Entity shall not)not sell, without issue or authorize the prior written consent issuance of Buyer:
(i) hire any employeescapital stock or other security, consultants, or independent contractors, except replacements in the Ordinary Course of Business, in accordance with the Company’s business plans previously disclosed to Buyer, or as otherwise set forth on Schedule 5.1(b)(i),
(ii) increase the compensation (including any wages, salaries, bonusesoption or right to acquire any capital stock or other security, or other remuneration) or other payment to any director, officer, or employee of any Company Entity, whether now or hereafter payable or granted (other than increases or variations in base compensation in the Ordinary Course of Business consistent in timing and amount with past practices), in each case except as provided on Schedule 5.1(b)(ii),
(iii) dispose any instrument convertible into or lapse exchangeable for any rights in, tocapital stock or other security;
(e) Company shall not amend or permit the adoption of any amendment to Company’s articles of incorporation or bylaws, or for the use effect or permit Company to become a party to any, recapitalization, reclassification of any Intellectual Property Right of any Company Entity shares, stock split, reverse stock split or otherwise in any way materially impair any Intellectual Property Right of any Company Entity,similar transaction;
(ivg) acquire, sell, assign, license, or otherwise transfer out of any Company Entity or into any Company Entity any Intellectual Property Rights,
(v) enter into, materially amend, terminate, or breach any Material Contract (other than entering into customer and vendor contracts and purchase orders in the Ordinary Course of Business and non-renewals in the Ordinary Course of Business),
(vi) allow any asset of any Company Entity to become subject to any lien (other than a Permitted Lien or a lien that will be released in full as of the Closing),
(vii) incur any Debt (excluding any interest on existing Debt),
(viii) except as set forth on Schedule 5.1(b)(viii), shall not make any individual (or series of) capital expenditure(s), capital lease(s), or capital commitment(s) in excess of $100,000,
(ix) pay, discharge, or satisfy any Liability (whether accrued, absolute, contingent or otherwise) in excess of $100,000 other than the payment, discharge, or satisfaction of accounts payable or accrued expenses incurred in the Ordinary Course of Business and consistent in amount and kind with past practice,
(x) cancel or waive any claims or rights of value, or conduct any sale, transfer, distribution, or other disposal of any assetsexpenditure, except for sales capital expenditures that, when added to all other capital expenditures made on behalf of nonCompany during the Pre-material assets in the Ordinary Course of Business consistent in amount and kind with past practiceClosing Period, or dispose of any assets for any amount to Affiliates of any Company Entity or of Seller,do not exceed $5,000 per month;
(xih) cause any damage, destruction or loss of any asset which individually or in the aggregate exceeds $25,000 and which is not otherwise fully covered by property insurance,
(xii) cause any event which would require in accordance with GAAP an increase in the reserve for bad debts in the aggregate in excess of $25,000,
(xiii) make any change in any method of accounting or of keeping books of account or in accounting practices of the Company or any other Company Entity except as required by changes in GAAP,
(xiv) acquire any business by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of related transactions, or enter into any contract, letter of intent, or similar arrangement (whether or not enforceable) with respect to such an acquisition,
(xv) prepare any Tax Returns of any Company Entity in a manner which is materially inconsistent with the past practice of the applicable Company Entity, adopt or change any material method of Tax accounting, change any annual Tax accounting period, make or change any material Tax election, file any material amended Tax Return, settle or compromise any material Tax liability, agree to an extension or waiver of the statute of limitations with respect to any material Taxes or Tax Returns (other than pursuant to customary extensions of the due date for filing Tax Returns obtained Except in the ordinary course of business of no more than seven months), enter into any Tax indemnity, Tax allocation or Tax sharing agreement,
consistent with past practices Company shall not (xvii) enter into a settlement, voluntary Tax disclosureinto, or a closing agreement with a taxing authority with respect to any Company Entity,
(xvii) change, amend, or restate the organizational documents of any Company Entity except in connection with the Reorganization,
(xviii) issue, sell, pledge, dispose, deliver, encumber, or authorize the issuance, sale, pledge, disposition, delivery, or encumbrance of, (A) any capital stock or other equity or voting interest (collectively, “Equity Interest”) in any Company Entity or (B) any securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire an Equity Interest in any Company Entity,
(xix) except as contemplated in Sections 5.7 and 5.8, undertake any split, combination, redemption, reclassification, purchase, or other acquisition, directly or indirectly, of any Equity Interest in any Company Entity, or any other change in the capital structure of any Company Entity,
(xx) except as contemplated in Section 5.9, declare, set aside, make, or pay any dividends or other distributions or payments with respect to any Equity Interest in the Company3, or
(xxi) take any action, or fail to take any action, that would cause permit any of the representations and warranties of the Company assets owned or the Seller contained herein used by it to become untrue bound by, any Contract that is or inaccurate in would constitute a material contract, or (ii) amend or prematurely terminate, or waive any material respect.right or remedy under, any such material contract;
(ci) To the extent permissible under the HSR Act and any other applicable Competition Law, the Company shall confer on a regular basis with one or more designated representatives of not (i) lend money to any person (except that Company may make routine travel and business expense advances to employees in the Buyer to report material operational matters and to report the general status of ongoing operations; ______________________________ 3 NTD: Company Entities may need to pay dividends and repatriate funds from D.R. prior to closing and may need to pay a tax distribution in December for owner’s estimated taxes if transaction has not closed.
(d) The Company shall keep in full force and effect all insurance policies maintained with respect to the Company Entities and their assets and properties, or suitable replacements or renewals, and shall notify Buyer immediately if any such policies terminate or are not renewed; and
(e) Nothing contained herein shall give to Buyer, directly or indirectly, rights to control or direct the operations of any Company Entity prior to the Closing Date, including, without limitation, for purposes of the HSR Act or any other applicable Competition Law. Nor is anything in this Section 5.1 intended to result in Buyer obtaining any indicia of beneficial ownership, control, or influence over the Seller, the Company, or any of the other Company Entities, or of the Seller, the Company, or any of the other Company Entities transferring or ceding beneficial ownership, control, or influence to Buyer of any of the Company Entities’ basic ordinary course of business and commercial decisions prior to the Closing Date. Prior to the Closing Date, each of the Company Entities shall exercisemay, consistent with its past practices), or (ii) incur or guarantee any indebtedness for borrowed money;
(j) Company shall not (i) establish, adopt or amend any employee benefit plan, (ii) pay any bonus or make any profit-sharing payment, cash incentive payment or similar payment to, or increase the terms and conditions amount of this Agreementthe wages, complete control and supervision salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its operationsdirectors, officers or employees, or (iii) hire any new employee;
(k) Company shall not agree or commit to take any of the actions described in clauses (a) through (j) above. Notwithstanding anything the foregoing, Company may take any action described above if Parent gives its prior written consent to the contrary contained hereintaking of such action by Company, no which consent will not be unreasonably withheld (it being understood that Parents withholding of Buyer shall be required with respect consent to any matter set forth action will not be deemed unreasonable if Parent determines in this Section 5.1 or elsewhere good faith that the taking of such action would not be in the Agreement if best interests of Parent or would not be in the Company has a good faith belief that seeking such consent would violate any applicable Lawbest interests of Company).
Appears in 1 contract
