Common use of Operation of Parent’s Business Clause in Contracts

Operation of Parent’s Business. (a) During the Pre-Closing Period: (i) Parent shall ensure that each of the Parent Corporations conducts its business and operations (A) in the ordinary course and in accordance with past practices or the operating plan previously provided by Parent to the Company and (B) in compliance with all applicable Legal Requirements and the requirements of all Parent Corporation Contracts that constitute Material Contracts; (ii) Parent shall use all reasonable efforts to ensure that each of the Parent Corporations preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Parent Corporations; and (iii) Parent shall keep in full force all insurance policies referred to in Section 3.18 or replace such policies with comparable or superior policies; and (iv) Parent shall 46. 52 provide all notices, assurances and support required by any Parent Corporation Contract relating to any Proprietary Asset in order to ensure that no condition under such Parent Corporation Contract occurs which could result in, or could increase the likelihood of, any transfer or public disclosure by any Parent Corporation of any Proprietary Asset. (b) During the Pre-Closing Period, Parent shall not (without the prior written consent of the Company), and shall not permit any of the other Parent Corporations to: (i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock, or repurchase, redeem or otherwise reacquire any shares of capital stock or other securities, except for repurchases at less than fair market value pursuant to employment or consulting agreements in effect prior to the date hereof; (ii) hire an aggregate of more than forty new employees, excluding those persons hired to replace employees who terminate their employment with a Parent Corporation during the Pre-Closing Period; (iii) sell, issue, grant or authorize the issuance or grant of (A) any capital stock or other security (except Parent Common Stock upon the valid exercise of Parent Options or Parent warrants outstanding on the date of this Agreement or the Exercise of Rights under the Parent ESPP or pursuant to equipment lease financings and similar transactions or otherwise in the ordinary course of business), (B) any option, call, warrant or right to acquire any capital stock or other security (other than options, warrants or rights to purchase an aggregate of up to 300,000 shares of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants of Parent, or (ii) otherwise in the ordinary course of business), (C) any instrument convertible into or exchangeable for any capital stock or other security; (iv) except as contemplated by this Agreement, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 shares of Parent Common Stock); (v) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documents, or effect or become a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (vi) except as previously disclosed to the Company, form any Subsidiary or acquire any equity interest or other interest in any other Entity; (vii) make any capital expenditure, except capital expenditures in an aggregate amount of no more than $2,000,000; (viii) establish, adopt or amend any employee benefit plan not generally available to the Company's employees and the Company's 1998 management incentive program, or pay any bonus or make any profit sharing or similar payment to (except pursuant to the management incentive program and any employment contract or understanding as in effect on the date hereof), or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees in an amount in excess of the higher of 20% of the amount previously paid to such Person or $20,000; (ix) change any of its methods of accounting or accounting practices in any respect; (x) make any Material Tax election; (xi) commence or settle any Legal Proceeding except in the ordinary course of business; (xii) materially amend or otherwise modify any of the terms of its engagement of the financial advisor references in Section 3.27 above; (xiii) enter into any material transaction or take any other material action in each case either inconsistent with the operating plan previously provided by Parent to the Company, or outside the ordinary course of business; or (xiv) Except as previously disclosed to the Company, sell or otherwise dispose of, or grant an exclusive license or any other exclusive right to utilize Parent Proprietary Assets which individually or in the aggregate constitute core technology material to the business of Parent, other than pursuant to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such party. (xv) agree or commit to take any of the actions described in clause "(i)" through "(xiv)" of this Section 4.3(b). (c) During the Pre-Closing Period, Parent shall promptly notify the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance that

Appears in 4 contracts

Samples: Agreement and Plan of Merger and Reorganization (Arris Pharmaceutical Corp/De/), Merger Agreement (Sequana Therapeutics Inc), Agreement and Plan of Merger and Reorganization (Arris Pharmaceutical Corp/De/)

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Operation of Parent’s Business. (a) During Except as contemplated by this Agreement, during the Pre-period from the date of this Agreement to the Closing Period: (i) Date, the Parent shall ensure that (and shall cause each of the Parent Corporations conducts its business and Subsidiaries to) conduct its operations (A) in the ordinary course Ordinary Course of Business and in accordance with past practices or the operating plan previously provided by Parent to the Company and (B) in material compliance with all Laws applicable Legal Requirements and to the requirements Parent, any DSH Subsidiary or any of all Parent Corporation Contracts that constitute Material Contracts; (ii) Parent shall their properties or assets and, to the extent consistent therewith, use all reasonable efforts its Reasonable Best Efforts to ensure that each of the Parent Corporations preserves preserve intact its current business organization, keeps keep its physical assets in good working condition, keep available the services of its current officers and employees and maintains preserve its relations and goodwill relationships with all suppliers, customers, landlords, creditors, licensors, licensees, employees suppliers and other Persons others having business relationships dealings with it to the respective Parent Corporations; end that its goodwill and (iii) Parent ongoing business shall keep not be impaired in full force all insurance policies referred to in Section 3.18 or replace such policies with comparable or superior policies; and (iv) Parent shall 46any material respect. 52 provide all noticesWithout limiting the generality of the foregoing, assurances and support except as required by any Parent Corporation Contract relating to any Proprietary Asset in order to ensure that no condition under such obtain and consummate the Required Financing, the Parent Corporation Contract occurs which could result inshall not prior to the Closing Date, without the written consent of the Stockholders: (a) issue or sell, or could increase the likelihood ofredeem or repurchase, any transfer stock or public disclosure by other securities of the Parent or any Parent Corporation of rights, warrants or options to acquire any Proprietary Asset.such stock or other securities; (b) During the Pre-Closing Periodsplit, Parent shall not (without the prior written consent combine or reclassify any shares of the Company), and shall not permit any of the other Parent Corporations to: (i) its capital stock; declare, accrue, set aside or pay any dividend or make any other distribution (whether in cash, stock or property or any combination thereof) in respect of any shares of its capital stock, or repurchase, redeem or otherwise reacquire any shares of capital stock or other securities, except for repurchases at less than fair market value pursuant to employment or consulting agreements in effect prior to the date hereof; (iic) hire an aggregate create, incur or assume any indebtedness (including obligations in respect of more than forty new employeescapital leases); assume, excluding those persons hired to replace employees who terminate their employment with a Parent Corporation during guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the Pre-Closing Periodobligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity; (iiid) sell, issue, grant or authorize the issuance or grant of (A) any capital stock or other security (except Parent Common Stock upon the valid exercise of Parent Options or Parent warrants outstanding on the date of this Agreement or the Exercise of Rights under the Parent ESPP or pursuant to equipment lease financings and similar transactions or otherwise in the ordinary course of business), (B) any option, call, warrant or right to acquire any capital stock or other security (other than options, warrants or rights to purchase an aggregate of up to 300,000 shares of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants of Parent, or (ii) otherwise in the ordinary course of business), (C) any instrument convertible into or exchangeable for any capital stock or other security; (iv) except as contemplated by this Agreement, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 shares of Parent Common Stock); (v) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documents, or effect or become a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (vi) except as previously disclosed to the Company, form any Subsidiary or acquire any equity interest or other interest in any other Entity; (vii) make any capital expenditure, except capital expenditures in an aggregate amount of no more than $2,000,000; (viii) establishenter into, adopt or amend any employee benefit plan not Parent Benefit Plan or any employment or severance agreement or arrangement or increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally available to the Company's employees and the Company's 1998 management incentive programor individually, or pay any bonus or make any profit sharing or similar payment other benefit to (except pursuant to the management incentive program and any employment contract or understanding as in effect on the date hereof), or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees in an amount in excess employees, except the adoption of the higher of 20% of the amount previously paid to such Person or $20,000Parent Equity Plan (as defined below); (ixe) change 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 of the Parent or any corporation, partnership, association or other business organization or division thereof); (f) mortgage or pledge any of its methods of accounting property or accounting practices in assets or subject any respectsuch property or assets to any Security Interest; (xg) make discharge or satisfy any Material Tax electionSecurity Interest or pay any obligation or liability other than in the Ordinary Course of Business; (xih) commence amend its charter, by-laws or other organizational documents (except as contemplated hereby); (i) change in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP; (j) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any contract or agreement; (k) institute or settle any material Legal Proceeding except in the ordinary course of businessProceeding; (xiil) materially amend take any action or otherwise modify fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the terms of its engagement representations and warranties of the financial advisor references Parent and/or any DSH Subsidiary set forth in Section 3.27 above; (xiii) enter into this Agreement becoming untrue in any material transaction respect or take (ii) any other material action in each case either inconsistent with of the operating plan previously provided by Parent conditions to the Company, or outside the ordinary course of businessClosing set forth in Article V not being satisfied; or (xivm) Except as previously disclosed to the Company, sell agree in writing or otherwise dispose of, or grant an exclusive license or any other exclusive right to utilize Parent Proprietary Assets which individually or in the aggregate constitute core technology material to the business of Parent, other than pursuant to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such party. (xv) agree or commit to take any of the actions described in clause "(i)" through "(xiv)" of this Section 4.3(b)foregoing actions. (c) During the Pre-Closing Period, Parent shall promptly notify the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance that

Appears in 4 contracts

Samples: Asset Purchase Agreement, Asset Purchase Agreement, Asset Purchase Agreement (Ds Healthcare Group, Inc.)

Operation of Parent’s Business. (a) During the Pre-Closing PeriodPeriod Parent shall: (i) Parent shall ensure that each of the Parent Corporations it conducts its business and operations (A) in the ordinary course and substantially in accordance with past practices or the operating plan previously provided by Parent to the Company practices, and (B) in material compliance with all applicable Legal Requirements and the requirements of all Parent Corporation Contracts that constitute Material Contracts; (ii) Parent shall to the extent consistent with its business use all its reasonable best efforts to ensure that each of the Parent Corporations it preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, distributors, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Parent Corporationsit; and (iii) Parent shall keep in full force all insurance policies referred to in Section 3.18 or replace such policies with comparable or superior policies; and (iv) Parent shall 46. 52 provide all notices, assurances and support required by any Parent Corporation Contract relating to any Proprietary Asset in order to ensure that no condition under such Parent Corporation Contract occurs which could result in, or could increase the likelihood of, of any transfer or public disclosure by any Parent Corporation it of any source code materials or other Proprietary AssetAsset and (iv) keep in full force and effect (with the same scope and limits of coverage) all insurance policies in effect as of the date of this Agreement covering all material assets of Parent and its Subsidiaries. (b) During the Pre-Closing Period, except as set forth in Section 4.3(b) of the Parent Disclosure Schedules, Parent shall not (without the prior written consent of the CompanyCompany which consent shall not be unreasonably withheld or delayed), and shall not permit any of the other Parent Corporations its Significant Subsidiaries to: (i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock, stock or repurchase, redeem or otherwise reacquire any shares of capital stock or other securities, except for repurchases at less than fair market value pursuant to employment or consulting agreements in effect prior to the date hereof; (ii) hire an aggregate of more than forty new employees, excluding those persons hired to replace employees who terminate their employment with a Parent Corporation during the Pre-Closing Period; (iii) sell, issue, grant or authorize the issuance or grant of (A) any capital stock or other security or (B) any Parent Stock Right except that Parent may issue Parent Common Stock upon the valid exercise of Parent Options or Parent warrants outstanding on as of the date of this Agreement or and may grant options to any employee hired during the Exercise of Rights under the Parent ESPP or pursuant to equipment lease financings and similar transactions or otherwise Pre-Closing Period consistent with past practice, which options represent in the ordinary course of business), (B) any option, call, warrant or aggregate the right to acquire any capital stock or other security no more than 250,000 shares (other than options, warrants or rights to purchase an aggregate net of up to 300,000 shares cancellation) of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants of Parent, or (ii) otherwise in the ordinary course of business), (C) any instrument convertible into or exchangeable for any capital stock or other securityStock; (iviii) except as contemplated by this Agreement, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of the Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant warrant, or other security or any related Contract (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 shares of Parent Common Stock)Contract; (viv) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documentsthe Parent Organization Documents, except as contemplated in this Agreement, or effect or become a party to any merger, consolidation, share exchange, business combinationParent Acquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (viv) except as previously disclosed to the Company, form any Subsidiary or acquire any equity interest or other interest in any other Entity; (viivi) make any capital expenditureexpenditure except in the ordinary course of business not to exceed $1,500,000 in the aggregate; (vii) enter into or become bound by, except capital expenditures in an aggregate amount or permit any of no more than $2,000,000the assets owned or used by it to become bound by, any Parent Material Contract, or amend or terminate, or waive or exercise any material right or remedy under, any Parent Material Contract; (viii) acquire, lease or license any right or other asset from any other Person or sell or otherwise dispose of, or lease or license, any right or other asset to any other Person (except in each case for immaterial assets acquired, leased, licensed or disposed of by Parent in the ordinary course of business and consistent with past practices, and except for the licensing of intellectual property in the sale or licensing of Parent's products in the ordinary course of business and consistent with past practices), or waive or relinquish any material right; (ix) lend money to any Person, or incur or guarantee any indebtedness (except that Parent may make routine borrowings in the ordinary course of business and in accordance with past practices under Parent's credit facilities outstanding as of the date hereof (without any amendment or modification thereto); (x) except as required by applicable Legal Requirements, establish, adopt or amend any employee benefit plan not generally available to the Company's employees and the Company's 1998 management incentive programParent Employee Plan or collective bargaining agreement, or pay any bonus or make any profit profit-sharing or similar payment to (except pursuant to the management incentive program and any employment contract or understanding as in effect on the date hereof)to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees in excess of $100,000 in the aggregate, except that Parent may implement normally scheduled salary increases for employees other than officers of Parent; (xi) hire any new employee having an amount annual salary in excess of the higher of 20% of the amount previously paid to such Person or $20,000100,000; (ixxii) change any of its methods of accounting or accounting practices in any respect, except as required by GAAP; (xxiii) make any Material material Tax election; (xixiv) commence or settle any material Legal Proceeding except in the ordinary course of businessProceeding; (xii) materially amend or otherwise modify any of the terms of its engagement of the financial advisor references in Section 3.27 above; (xiiixv) enter into any material transaction or take any other material action in each case either inconsistent with the operating plan previously provided by Parent to the Company, or outside the ordinary course of businessbusiness or inconsistent with past practices; (xvi) take, or permit the taking of, any action which could reasonably be expected to cause the vesting of any Parent Options to be accelerated in accordance with the terms of any of the Parent Stock Option Plans; (xvii) take, agree to take or intentionally omit to take any action which would (A) make any of the representations and warranties of Parent contained in this Agreement untrue or incorrect, (B) prevent Parent from performing or cause Parent not to perform its covenants hereunder; or (C) cause any of the conditions set forth in Section 6 or Section 7 not to be able to be satisfied prior to the Termination Date; or (xiv) Except as previously disclosed to the Company, sell or otherwise dispose of, or grant an exclusive license or any other exclusive right to utilize Parent Proprietary Assets which individually or in the aggregate constitute core technology material to the business of Parent, other than pursuant to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such party. (xvxviii) agree or commit to take any of the actions described in clause clauses "(i)" through "(xivxvii)" of this Section 4.3(b). (c) . During the Pre-Closing Period, Parent shall promptly notify the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance thatthat occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by Parent in this Agreement; (ii) 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 any representation or warranty made by Parent in this Agreement if (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance, or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of Parent; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any condition set forth in Section 6 or Section 7 impossible or unlikely or that has had or would reasonably be expected to have a Material Adverse Effect on Parent. No notification given to the Company pursuant to this Section 4.3(c) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of Parent contained in this Agreement.

Appears in 3 contracts

Samples: Merger Agreement (Cuseeme Networks Inc), Merger Agreement (First Virtual Communications Inc), Merger Agreement (Cuseeme Networks Inc)

Operation of Parent’s Business. (aExcept as set forth in ss.5(e) During of the Pre-Closing Period: Parent Disclosure Letter or as otherwise contemplated by this Agreement (i) none of Parent shall ensure and its Subsidiaries will authorize or effect any change in its charter or by-laws or comparable organizational document except for such amendments to its charter, by-laws or other comparable charter or organizational documents that each do not have an adverse affect on the Merger and the other transactions contemplated hereby; (ii) without Prior Consultation, none of the Parent Corporations conducts and its business and operations Subsidiaries will grant any Stock Rights or issue, sell, authorize or otherwise dispose of any of its capital stock (except (A) employee stock option grants made in the ordinary course and in accordance consistent with past practices or the operating plan previously provided by Parent to the Company and practice, (B) in compliance with all applicable Legal Requirements Stock Rights and capital stock issued as consideration for acquisitions permitted by ss.5(e) and (C) upon the requirements conversion or exercise of all Parent Corporation Contracts that constitute Material Contracts; (ii) Parent shall use all reasonable efforts to ensure that each Stock Rights outstanding as of the Parent Corporations preserves intact its current business organization, keeps available date of this Agreement or issued pursuant to the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Parent Corporations; and preceding clauses (A) or (B)); (iii) none of Parent shall keep and its Subsidiaries will sell or otherwise dispose of, or otherwise agree to sell or otherwise dispose of, in full force all insurance policies referred to in Section 3.18 any individual transaction or replace such policies with comparable series of related transactions (other than a capacity or superior policies; and fiber (either lit or dark) sale) any of its assets having a fair market value greater than $100,000,000; (iv) none of Parent shall 46. 52 provide all notices, assurances and support required by any Parent Corporation Contract relating to any Proprietary Asset in order to ensure that no condition under such Parent Corporation Contract occurs which could result in, or could increase the likelihood of, any transfer or public disclosure by any Parent Corporation of any Proprietary Asset. its Subsidiaries (bother than wholly owned Subsidiaries) During the Pre-Closing Period, Parent shall not (without the prior written consent of the Company), and shall not permit any of the other Parent Corporations to: (i) will declare, accrue, set aside or pay any dividend or make distribution with respect to its capital stock (whether in cash or in kind); (v) none of Parent and its Subsidiaries will split, combine or reclassify any other distribution in respect of any shares of capital stock, or repurchase, redeem or otherwise reacquire any shares of its capital stock or redeem, repurchase or otherwise acquire any of its capital stock; (vi) without Prior Consultation, none of Parent or its Subsidiaries will incur or commit to any capital expenditures other securitiesthan capital expenditures incurred or committed to in the ordinary course of business consistent with past practice; (vii) none of Parent and its Subsidiaries will acquire or agree to acquire by merger or consolidation with, except or by purchasing a substantial equity interest in or a substantial portion of the assets of, 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 series of related transactions either outside the telecommunications services industry or in a geographic region other than North America and Europe; (viii) without Prior Consultation, none of Parent and its Subsidiaries will acquire or agree to acquire by merger or consolidation with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any business of any Person or division thereof or otherwise acquire or agree to acquire any assets in a single transaction or series of related transactions for repurchases at less than consideration having a fair market value pursuant to employment or consulting agreements in effect prior to the date hereofexcess of $50,000,000; (iiix) hire an aggregate of more than forty new employeeswithout Prior Consultation, excluding those persons hired to replace employees who terminate their employment with a Parent Corporation during the Pre-Closing Period; (iii) sell, issue, grant or authorize the issuance or grant of (A) any capital stock or other security (except Parent Common Stock upon the valid exercise none of Parent Options or its Subsidiaries will (x) other than in connection with actions permitted by ss.5(e)(vii), make any loans, advances or capital contributions to, or investments in, any other Person, other than by Parent warrants outstanding or a Subsidiary of Parent to or in Parent or any Subsidiary of Parent, (y) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) in excess of $25,000,000 in each instance, other than loans, advances, capital contributions, investments, payments, discharges or satisfactions incurred or committed to in the ordinary course of business consistent with past practice or (z) other than in connection with actions permitted byss.5(e)(vii), create, incur, assume or suffer to exist any indebtedness, issuances of debt securities, guarantees, Security Interests, loans or 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 or the Exercise of Rights under the Parent ESPP or pursuant to equipment lease financings and similar transactions or otherwise incurred in the ordinary course of business)business consistent with past practice, (B) and any optionother indebtedness existing on the date of this Agreement, callin each case as such credit facilities, warrant or right to acquire any capital stock or indentures, other security (arrangements and other than options, warrants or rights to purchase an aggregate of up to 300,000 shares of Parent Common Stock which existing indebtedness may be granted 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 Parent and its Subsidiaries than those in existence as of the date of this Agreement; (x) without Prior Consultation, Parent will not change its methods of accounting in effect at June 30, 1999 in a manner materially affecting the consolidated assets, liabilities or operating results of Parent, except as required by changes in GAAP as concurred in by Parent's independent auditors, and Parent will not (i) officers, directors, employees or consultants of Parent, change its fiscal year or (ii) otherwise make any material tax election, other than in the ordinary course of business), (C) any instrument convertible into or exchangeable for any capital stock or other security; (iv) except as contemplated by this Agreement, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 shares of Parent Common Stock); (v) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documents, or effect or become a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (vi) except as previously disclosed to the Company, form any Subsidiary or acquire any equity interest or other interest in any other Entity; (vii) make any capital expenditure, except capital expenditures in an aggregate amount of no more than $2,000,000; (viii) establish, adopt or amend any employee benefit plan not generally available to the Company's employees and the Company's 1998 management incentive program, or pay any bonus or make any profit sharing or similar payment to (except pursuant to the management incentive program and any employment contract or understanding as in effect on the date hereof), or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees in an amount in excess of the higher of 20% of the amount previously paid to such Person or $20,000; (ix) change any of its methods of accounting or accounting practices in any respect; (x) make any Material Tax election;consistent with past practice; and (xi) commence none of Parent and its Subsidiaries will resolve or settle any Legal Proceeding except in the ordinary course of business; (xii) materially amend or otherwise modify commit to any of the terms of its engagement of the financial advisor references in Section 3.27 above; foregoing (xiiiA) enter into any material transaction or take any other material action in each case either inconsistent with the operating plan previously provided by Parent to which requires the Company, 's consent unless it has obtained such consent or outside (B) which requires Prior Consultation unless it has afforded Prior Consultation. In the ordinary course of business; or (xiv) Except as previously disclosed to the Company, sell or otherwise dispose of, or grant an exclusive license or any other exclusive right to utilize Parent Proprietary Assets which individually or in the aggregate constitute core technology material to the business of Parent, other than pursuant to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such party. (xv) agree or commit to take any of the actions described in clause "(i)" through "(xiv)" of this Section 4.3(b). (c) During the Pre-Closing Period, event Parent shall promptly notify request the Company to consent in writing of: to an action otherwise prohibited by this ss. 5(e), the Company shall use reasonable efforts to respond in a prompt and timely fashion (ibut in no event later than ten (10) the discovery by Parent of any eventbusiness days following such request), condition, fact but may otherwise respond affirmatively or circumstance thatnegatively in its sole discretion.

Appears in 2 contracts

Samples: Merger Agreement (Destia Communications Inc), Merger Agreement (Viatel Inc)

Operation of Parent’s Business. (a) During the Pre-Closing Period: (i) Parent shall ensure that Parent and each of the Parent Corporations Subsidiary conducts its business and operations (A) in the ordinary course and in accordance with past practices or the operating plan previously provided by Parent to the Company and (B) in compliance with all applicable Legal Requirements and the requirements of all Parent Corporation Contracts that constitute Material Parent Contracts; (ii) Parent shall use all reasonable efforts to ensure that Parent and each of the Parent Corporations Subsidiary preserves intact its current business organization, keeps available the services of its current officers and other employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees employees, consultants and other Persons having business relationships with the respective Parent Corporationsor a Parent Subsidiary; and (iii) Parent shall keep in full force all insurance policies referred to in Section 3.18 or replace such policies with comparable or superior policies3.13; and (iv) Parent shall 46. 52 provide all notices, assurances (to the extent requested by the Company) cause its officers and support required by any the officers of each Parent Corporation Contract relating Subsidiary to any Proprietary Asset in order report regularly to ensure that no condition under such the Company concerning the status of Parent's and each Parent's and each Parent Corporation Contract occurs which could result in, or could increase the likelihood of, any transfer or public disclosure by any Parent Corporation of any Proprietary AssetSubsidiary's business. (b) During the Pre-Closing Period, Parent shall not not, except as set forth in Schedule 4.5(b) (without the prior written consent of the Company), and shall not permit any of the other Parent Corporations Subsidiary to: (i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock, or repurchase, redeem or otherwise reacquire any shares of capital stock or other securities, except for repurchases at less than fair market value pursuant to employment or consulting agreements in effect prior to the date hereof; (ii) hire an aggregate of more than forty new employees, excluding those persons hired to replace employees who terminate their employment with a Parent Corporation during the Pre-Closing Period; (iii) sell, issue, grant or authorize the issuance or grant of (A) any capital stock or other security (except Parent Common Stock upon the valid exercise of Parent Options or Parent warrants outstanding on the date of this Agreement or the Exercise of Rights under the Parent ESPP or pursuant to equipment lease financings and similar transactions or otherwise in the ordinary course of business)security, (B) any option, call, warrant or right to acquire any capital stock or other security (other than options, warrants or rights to purchase an aggregate of up to 300,000 shares of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants of Parentsecurity, or (ii) otherwise in the ordinary course of business), (C) any instrument convertible into or exchangeable for any capital stock or other securitysecurity (except that Parent may issue shares and grant options to purchase shares of Parent Common Stock under stock option plans approved by its board of directors and shareholders totaling up to 100,000 and issue shares of Parent Common Stock (x) upon the valid exercise of Parent Options outstanding as of the date of this Agreement or such additional options, and (y) upon the exercise of Parent Warrants outstanding as of the date of this Agreement), and except that Parent may amend its stock option plan(s) to authorize additional shares of Parent Common Stock for issuance thereunder in connection with the conversion of the Company Options at the Effective Time ("Parent Option Plan Amendments"); (iviii) except as contemplated by this Agreement, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, other than pursuant to agreements in existence on the date hereof, copies of which have been provided to the other parties hereto, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 shares of Parent Common Stock)Contract; (viv) amend or permit the adoption of any amendment to its certificate articles of incorporation (other than the Amended Articles) or bylaws or other charter or organizational documents, adopt any shareholder rights plan ("poison pill") or effect or become a party to any merger, consolidation, amalgamation, share exchange, business combination, recapitalization, reclassification of shares, stock split, division or subdivision of shares, reverse stock split split, consolidation of shares or similar transaction; (viv) except as previously disclosed to the Company, form any Subsidiary or acquire any equity interest or other interest in any other EntityEntity or any other business; (vi) make any capital expenditure in excess of $100,000; (vii) make enter into or become bound by, or permit any capital expenditureof the assets owned or used by it to become bound by, except capital expenditures any Parent Collaboration Agreement or any Material Parent Contract, or amend or terminate, or waive or exercise any material right or remedy under, any Parent Collaboration Agreement or any Material Parent Contract, other than in an aggregate amount the ordinary course of no more than $2,000,000business consistent with past practices; (viii) acquire, lease or license any right or other asset from any other Person or sell or otherwise dispose of, or lease or license, any right or other asset to any other Person (except in each case for immaterial assets (other than Parent Proprietary Assets) acquired, leased, licensed or disposed of by Parent in the ordinary course of business and consistent with past practices), or waive or relinquish any material right; (ix) lend money to any Person, or incur or guarantee any indebtedness; (x) establish, adopt or amend any employee benefit plan not generally available to the Company's employees and the Company's 1998 management incentive programplan, or pay any bonus or make any profit profit-sharing or similar payment to (except pursuant to the management incentive program and any employment contract or understanding as in effect on the date hereof)to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees in an amount in excess of the higher of 20% of the amount previously paid to such Person or $20,000employees; (ixxi) change prepay any of its methods of accounting material claim, Liability or accounting practices in obligation, or pay, discharge or satisfy any respectmaterial unliquidated or contingent Liability; (xxii) enter into or amend any employment agreement, severance agreement, special pay arrangement with respect to termination of employment or other similar arrangement or agreement with any director, officer or employee of Parent, (xiii) make or fail to make any material election concerning the term, scope or termination of any real property lease, or waive any material provision of any such lease or enter into any new real property lease; (xiv) engage in any transaction with any shareholder, director, officer or employee other than in the ordinary course of business consistent with past practice; (xv) make any Material Tax election; (xixvi) commence or settle any Legal Proceeding except in the ordinary course of businessProceeding; (xii) materially amend or otherwise modify any of the terms of its engagement of the financial advisor references in Section 3.27 above; (xiiixvii) enter into any material transaction or take any other material action in each case either inconsistent with the operating plan previously provided by Parent to the Company, or outside the ordinary course of businessbusiness or inconsistent with past practices; or (xiv) Except as previously disclosed to the Company, sell or otherwise dispose of, or grant an exclusive license or any other exclusive right to utilize Parent Proprietary Assets which individually or in the aggregate constitute core technology material to the business of Parent, other than pursuant to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such party. (xvxviii) agree or commit to take any of the actions described in clause clauses "(i)" through "(xivxviii)" of this Section 4.3(b4.5(b). (c) During the Pre-Closing Period, Parent shall promptly notify the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance thatthat occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by Parent in this Agreement; (ii) 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 any representation or warranty made by Parent in this Agreement if (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance, or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of Parent; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Section 6 or Section 7 impossible or unlikely or that has had or could reasonably be expected to have a Material Adverse Effect on Parent or any Parent Subsidiary. Without limiting the generality of the foregoing, Parent shall promptly advise the Company in writing of any Legal Proceeding or other claim threatened, commenced or asserted against or with respect to Parent or any Parent Subsidiary. No notification given to the Company pursuant to this Section 4.5(c) shall limit, modify, amend or otherwise affect any of the representations, warranties, covenants or obligations of Parent contained in this Agreement.

Appears in 2 contracts

Samples: Merger Agreement (Cypros Pharmaceutical Corp), Merger Agreement (Cypros Pharmaceutical Corp)

Operation of Parent’s Business. (a) During the Pre-Closing Period: , except as may be required pursuant to the One Stop Agreement or as may otherwise be specifically contemplated by this Agreement: (ia) Parent shall ensure that each of the Parent Corporations conducts conduct its business and operations (A) in the ordinary course and in accordance with past practices or substantially the operating plan previously provided by Parent same manner as such business and operations have been conducted prior to the Company and (B) in compliance with all applicable Legal Requirements and the requirements date of all Parent Corporation Contracts that constitute Material Contracts; (ii) Parent this Agreement, but shall use all its reasonable efforts to ensure that each of complete the Parent Corporations preserves intact Disposition and to sell or shut down its current remaining business organization, keeps available operations as soon as practicable after the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Parent Corporations; and date hereof; (iiib) Parent (i) shall keep in full force all insurance policies referred identified in Part 3.16 of the Parent Disclosure Schedule, except to in Section 3.18 or replace the extent such policies with comparable expire or superior policies; are no longer needed as a result of the Disposition and/or any sale or shut-down of Parent’s remaining business operations, (ii) shall use its reasonable best efforts to obtain director’s and officer’s insurance coverage for directors and officers of Parent after giving effect to the Merger substantially similar to Parent’s current coverage and (iviii) shall obtain tail (“D&O Tail”) on its current director’s and officer’s insurance policy for at least three years following Closing; (c) Parent shall 46. 52 provide all notices, assurances and support required by any Parent Corporation Contract relating cause its officers to any Proprietary Asset report regularly (but in order no event less frequently than monthly) to ensure that no condition under such Parent Corporation Contract occurs which could result in, or could increase the likelihood of, any transfer or public disclosure by any Parent Corporation Company concerning the status of any Proprietary Asset.Parent’s business; (bd) During Except to the Pre-Closing Periodextent Parent’s Adjusted Net Worth reflected in the Net Worth Certificate would otherwise exceed $5,000,000, Parent shall not (without the prior written consent of the Company), and shall not permit any of the other Parent Corporations to: (i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock, or and shall not repurchase, redeem or otherwise reacquire any shares of capital stock or other securities, securities (except for repurchases at less than fair market value that Parent may repurchase Parent Common Stock from former employees pursuant to employment or consulting agreements in effect prior to the date hereofterms of existing restricted stock purchase agreements); (iie) hire an aggregate of more than forty new employeesExcept as set forth in Section 5.14, excluding those persons hired to replace employees who terminate their employment with a Parent Corporation during the Pre-Closing Period; (iii) shall not sell, issue, grant issue or authorize the issuance or grant of (Ai) any capital stock or other security (except Parent Common Stock upon the valid exercise of Parent Options or Parent warrants outstanding on the date of this Agreement or the Exercise of Rights under the Parent ESPP or pursuant to equipment lease financings and similar transactions or otherwise in the ordinary course of business)security, (Bii) any option, call, warrant option or right to acquire any capital stock or other security (other than options, warrants or rights to purchase an aggregate of up to 300,000 shares of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants of Parentsecurity, or (ii) otherwise in the ordinary course of business), (Ciii) any instrument convertible into or exchangeable for any capital stock or other securitysecurity (except that Parent shall be permitted to issue Parent Common Stock upon the exercise of outstanding Parent Options or outstanding warrants to purchase Parent Common Stock); (ivf) except as contemplated by this Agreement, Parent shall not amend or waive any of its rights under, or accelerate the vesting under, under (i) any provision of any of Parent's stock option plansthe Parent Option Plans, (ii) any provision of any agreement evidencing any outstanding stock option Parent Option, or (iii) any provision of any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 shares of Parent Common Stock); (vg) Parent shall not amend or permit the adoption of any amendment to its Parent’s certificate of incorporation or bylaws or other charter or organizational documentsbylaws, or effect or permit Parent to become a party to any merger, consolidation, share exchange, business combinationAcquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction, except that Parent shall be permitted to effect one or more reverse stock splits as it may determine necessary or appropriate to maintain listing of the Parent Common Stock on the Nasdaq Capital Market; (vih) except as previously disclosed to the Company, Parent shall not form any Subsidiary subsidiary or acquire any equity interest or other interest in any other Entity; (viii) Parent shall not make any capital expenditure, expenditure except capital expenditures in an aggregate amount the ordinary course of no more than $2,000,000its business in a manner that is not inconsistent with its plan to complete the Disposition and to sell or shut down its remaining business operations as soon as practicable after the date hereof; (viiij) Parent shall not (i) acquire, lease or license any right or other asset (other than cash or cash equivalents) from any other person, or (ii) waive or relinquish any right except in the ordinary course of its business in a manner that is not inconsistent with its plan to complete the Disposition and to sell or shut down its remaining business operations as soon as practicable after the date hereof; (k) Parent shall not (i) lend money to any Person (except that Parent may make routine travel advances to employees in the ordinary course of business), or (ii) incur or guarantee any indebtedness for borrowed money; (l) Parent shall not (i) establish, adopt or (except as set forth in Section 5.14) amend any employee benefit plan not generally available to the Company's employees and the Company's 1998 management incentive programParent Employee Plan, or (ii) pay any bonus or make any profit sharing payment, cash incentive payment or similar payment to (except pursuant to the management incentive program and any employment contract or understanding as in effect on the date hereof)to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directorsKey Employees; provided, however, that Parent in its discretion may make severance payments to departing executive officers or employees if (i) such officers execute binding general releases of claims in an amount favor of Parent prior to receiving such payments and (ii) such payments are reflected in excess of the higher of 20% of the amount previously paid to such Person or $20,000Net Worth Certificate; (ixm) Parent shall not change any of its methods of accounting or accounting practices in any material respect; (xn) Parent shall not make any Material Tax election; (xio) Parent shall not commence or settle any material Legal Proceeding except in the ordinary course of business;Proceeding; and (xiip) materially amend or otherwise modify any of the terms of its engagement of the financial advisor references in Section 3.27 above; (xiii) enter into any material transaction or take any other material action in each case either inconsistent with the operating plan previously provided by Parent to the Company, or outside the ordinary course of business; or (xiv) Except as previously disclosed to the Company, sell or otherwise dispose of, or grant an exclusive license or any other exclusive right to utilize Parent Proprietary Assets which individually or in the aggregate constitute core technology material to the business of Parent, other than pursuant to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such party. (xv) shall not agree or commit to take any of the actions described in clause "clauses “(id)" through "(xivn)" ” above. Notwithstanding the foregoing, Parent may take any action described in clauses “(d)” through “(o)” above if the Company gives its prior written consent to the taking of this Section 4.3(bsuch action by Parent, which consent will not be unreasonably withheld (it being understood that the Company’s withholding of consent to any action will not be deemed unreasonable if the Company determines in good faith that the taking of such action would not be in the best interests of the Company or would not be in the best interests of Parent). (c) During the Pre-Closing Period, Parent shall promptly notify the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance that

Appears in 1 contract

Samples: Merger Agreement (Sbe Inc)

Operation of Parent’s Business. (a) During the Pre-Closing Period: : (ia) Parent shall ensure that (and shall cause each of the Parent Corporations conducts its business Subsidiaries to) conduct their respective businesses and operations (A) in the ordinary course and in accordance with past practices or substantially the operating plan previously provided by Parent same manner as such businesses and operations have been conducted prior to the Company and date of this Agreement (B) in compliance with all applicable Legal Requirements and it being understood, however, that Parent may continue preparations for the requirements initial public offering of all Parent Corporation Contracts that constitute Material Contracts; Common Stock); (iib) Parent shall (and shall cause each of its respective Subsidiaries to) use all reasonable efforts to ensure that each of the Parent Corporations preserves preserve intact its their respective current business organizationorganizations, keeps keep available the services of its their respective current officers and employees and maintains its maintain their respective relations and goodwill good will with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective any of Parent Corporations; and and/or any of its Subsidiaries; (iiic) Parent shall keep in full force all insurance policies referred use commercially reasonable efforts to in Section 3.18 or replace such policies with comparable or superior policies; file the Amended and Restated Certificate as soon as possible; (ivd) Parent shall 46. 52 provide all notices, assurances and support required by any Parent Corporation Contract relating to any Proprietary Asset in order use commercially reasonable efforts to ensure that no condition under such Parent Corporation Contract occurs which could result inthat, or could increase as of immediately after the likelihood ofClosing, any transfer or public disclosure by any Parent Corporation PPD will be permitted to appoint one member of any Proprietary Assetthe board of directors of Parent. (be) During the Pre-Closing Period, Parent shall not (without the prior written consent of the Company), and shall not permit any of the other Parent Corporations to: (i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of Parent's capital stock, or and shall not repurchase, redeem or otherwise reacquire any shares of Parent's capital stock or other securities, except for repurchases at less than fair market value pursuant to employment or consulting agreements in effect prior to the date hereof; (ii) hire an aggregate of more than forty new employees, excluding those persons hired to replace employees who terminate their employment with a Parent Corporation during the Pre-Closing Period; (iii) sell, issue, grant or authorize the issuance or grant of (A) any capital stock or other security securities (except that Parent may repurchase Parent Common Stock upon the valid exercise of Parent Options or Parent warrants outstanding on the date of this Agreement or the Exercise of Rights under the Parent ESPP or from former employees pursuant to equipment lease financings and similar transactions or otherwise in the ordinary course terms of business), (B) any option, call, warrant or right to acquire any capital stock or other security (other than options, warrants or rights to purchase an aggregate of up to 300,000 shares of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants of Parent, or (ii) otherwise in the ordinary course of business), (C) any instrument convertible into or exchangeable for any capital stock or other security; (iv) except as contemplated by this Agreement, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option or any existing restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 shares of Parent Common Stockagreements); (vf) Parent shall not amend or permit the adoption of any amendment to its certificate the Restated Certificate or Parent's Bylaws that would have the effect of incorporation diminishing the rights, preferences or bylaws or other charter or organizational documents, or effect or become a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (vi) except as previously disclosed to the Company, form any Subsidiary or acquire any equity interest or other interest in any other Entity; (vii) make any capital expenditure, except capital expenditures in an aggregate amount of no more than $2,000,000; (viii) establish, adopt or amend any employee benefit plan not generally available to the Company's employees and the Company's 1998 management incentive program, or pay any bonus or make any profit sharing or similar payment to (except pursuant to the management incentive program and any employment contract or understanding as in effect on the date hereof), or increase the amount privileges of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees in an amount in excess of the higher of 20% of the amount previously paid to such Person or $20,000; (ix) change any of its methods of accounting or accounting practices in any respect; (x) make any Material Tax election; (xi) commence or settle any Legal Proceeding except Parent Series D Preferred Stock as set forth in the ordinary course of business; (xii) materially amend or otherwise modify any of the terms of its engagement of the financial advisor references in Section 3.27 above; (xiii) enter into any material transaction or take any other material action in each case either inconsistent with the operating plan previously provided by Parent to the Company, or outside the ordinary course of business; or (xiv) Except as previously disclosed to the Company, sell or otherwise dispose of, or grant an exclusive license or any other exclusive right to utilize Parent Proprietary Assets which individually or in the aggregate constitute core technology material to the business of Parent, other than pursuant to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such partyRestated Certificate. (xv) agree or commit to take any of the actions described in clause "(i)" through "(xiv)" of this Section 4.3(b). (c) During the Pre-Closing Period, Parent shall promptly notify the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance that

Appears in 1 contract

Samples: Merger Agreement (Pharmaceutical Product Development Inc)

Operation of Parent’s Business. (a) During Except as contemplated by this Agreement, during the Pre-Closing Period: (i) period from the date of this Agreement to the Effective Time, the Parent shall ensure that (and shall cause each of the Parent Corporations conducts Subsidiary to) conduct its business and operations (A) in the ordinary course Ordinary Course of Business and in accordance with past practices or the operating plan previously provided by Parent to the Company and (B) in compliance with all applicable Legal Requirements laws and regulations and, to the requirements of all Parent Corporation Contracts that constitute Material Contracts; (ii) Parent shall extent consistent therewith, use all reasonable efforts its Reasonable Best Efforts to ensure that each of the Parent Corporations preserves preserve intact its current business organization, keeps keep its physical assets in good working condition, keep available the services of its current officers and employees and maintains preserve its relations and goodwill relationships with all suppliers, customers, landlords, creditors, licensors, licensees, employees suppliers and other Persons others having business relationships dealings with it to the respective Parent Corporations; end that its goodwill and (iii) Parent ongoing business shall keep not be impaired in full force all insurance policies referred any material respect. Without limiting the generality of the foregoing, prior to in Section 3.18 or replace such policies with comparable or superior policies; and (iv) Parent shall 46. 52 provide all noticesthe Effective Time, assurances and support required by any Parent Corporation Contract relating to any Proprietary Asset in order to ensure that no condition under such Parent Corporation Contract occurs which could result in, or could increase the likelihood of, any transfer or public disclosure by any Parent Corporation of any Proprietary Asset. (b) During the Pre-Closing Period, Parent shall not (and shall cause each Subsidiary not to), without the prior written consent of the Company), and shall not permit any of the other Parent Corporations to: (ia) issue or sell, or redeem or repurchase, any stock or other securities of the Parent or any rights, warrants or options to acquire any such stock or other securities, except as contemplated by, and in connection with, the Private Placement Offering and the Merger; (b) split, combine or reclassify any shares of its capital stock; declare, accrue, set aside or pay any dividend or make any other distribution (whether in cash, stock or property or any combination thereof) in respect of any shares of its capital stock, except as contemplated by, and in connection with, any stock split or repurchasestock dividend effected prior to the Effective Time that causes the capitalization of Parent to be as described in Section 3.2; (c) create, redeem incur or assume any indebtedness (including obligations in respect of capital leases); assume, guarantee, endorse or otherwise reacquire become liable or responsible (whether directly, contingently or otherwise) for the obligations of any shares 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 capital stock 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 securitiesbenefit to its directors, officers or employees, except for repurchases at less than fair market value pursuant to employment or consulting agreements the adoption of the Parent Option Plan covering an aggregate of 1,105,000 shares of Parent Common Stock in effect prior to connection with the date hereofMerger; (iie) hire an aggregate acquire, sell, lease, license or dispose of more any assets or property (including without limitation any shares or other equity interests in or securities of any Parent Subsidiary or any corporation, partnership, association or other business organization or division thereof), other than forty new employeespurchases and sales of assets in the Ordinary Course of Business, excluding those persons hired to replace employees who terminate their employment with a Parent Corporation during except as contemplated by, and in connection with, the PreSplit-Closing PeriodOff; (iiif) sellmortgage or pledge any of its property or assets or subject any such property or assets to any Security Interest; (g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business; (h) amend its charter, issueby-laws or other organizational documents; (i) change in any material respect its accounting methods, grant principles or authorize practices, except insofar as may be required by a generally applicable change in GAAP; (j) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any material contract or agreement; (k) institute or settle any Legal Proceeding; (l) take any action or fail to take any action permitted by this Agreement with the issuance knowledge that such action or grant of failure to take action would result in (Ai) any capital stock or other security (except of the representations and warranties of the Parent Common Stock upon and/or the valid exercise of Parent Options or Parent warrants outstanding on the date of Acquisition Corp. set forth in this Agreement becoming untrue or (ii) any of the Exercise conditions to the Merger set forth in Article V not being satisfied; (m) make or change any Tax election, change any annual tax accounting period, adopt or change any tax accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to the Company, surrender any right to claim refund of Rights under Taxes, consent to any extension or waiver of the Parent ESPP limitation period applicable to any Tax claim or pursuant assessment relating to equipment lease financings and similar transactions or otherwise the Company, or, other than in the ordinary course of business), (B) any option, call, warrant or right to acquire any capital stock or other security (other than options, warrants or rights to purchase an aggregate of up to 300,000 shares of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants of Parent, or (ii) otherwise in the ordinary course of business), (C) any instrument convertible into or exchangeable for any capital stock or other security; (iv) except as contemplated by this Agreement, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 shares of Parent Common Stock); (v) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documents, or effect or become a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (vi) except as previously disclosed to the Company, form any Subsidiary or acquire any equity interest or other interest in any other Entity; (vii) make any capital expenditure, except capital expenditures in an aggregate amount of no more than $2,000,000; (viii) establish, adopt or amend any employee benefit plan not generally available to the Company's employees and the Company's 1998 management incentive program, or pay any bonus or make any profit sharing or similar payment to (except pursuant to the management incentive program and any employment contract or understanding as in effect on the date hereof), or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees in an amount in excess of the higher of 20% of the amount previously paid to such Person or $20,000; (ix) change any of its methods of accounting or accounting practices in any respect; (x) make any Material Tax election; (xi) commence or settle any Legal Proceeding except in the ordinary course of business; (xii) materially amend or otherwise modify any of the terms of its engagement of the financial advisor references in Section 3.27 above; (xiii) enter into any material transaction or take any other material action in each case either inconsistent with or omit to take any action that would have the operating plan previously provided by Parent to effect of increasing the Company, or outside Tax liability of the ordinary course of businessParent; or (xivn) Except as previously disclosed to the Company, sell agree in writing or otherwise dispose of, or grant an exclusive license or any other exclusive right to utilize Parent Proprietary Assets which individually or in the aggregate constitute core technology material to the business of Parent, other than pursuant to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such party. (xv) agree or commit to take any of the actions described in clause "(i)" through "(xiv)" of this Section 4.3(b)foregoing actions. (c) During the Pre-Closing Period, Parent shall promptly notify the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance that

Appears in 1 contract

Samples: Merger Agreement (Confederate Motors, Inc.)

Operation of Parent’s Business. (a) During the Pre-Closing Period: (i) Parent shall ensure that each Except as set forth in Part 4.4 of the Parent Corporations conducts its business and operations (A) in the ordinary course and in accordance with past practices or the operating plan previously provided by Parent to the Company and (B) in compliance with all applicable Legal Requirements and the requirements of all Parent Corporation Contracts that constitute Material Contracts; (ii) Parent shall use all reasonable efforts to ensure that each of the Parent Corporations preserves intact its current business organizationDisclosure Schedule, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Parent Corporations; and (iii) Parent shall keep in full force all insurance policies referred to in Section 3.18 or replace such policies with comparable or superior policies; and (iv) Parent shall 46. 52 provide all notices, assurances and support required by any Parent Corporation Contract relating to any Proprietary Asset in order to ensure that no condition under such Parent Corporation Contract occurs which could result in, or could increase the likelihood of, any transfer or public disclosure by any Parent Corporation of any Proprietary Asset. (b) During during the Pre-Closing Period, Parent shall will not (without the prior written consent of the Company), and shall not permit any of the other Parent Corporations to:): (ia) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock, or repurchasepurchase, redeem or otherwise reacquire reacquire, directly or indirectly, any shares of capital stock or other securities, securities (except for repurchases of Parent Common Stock from former employees or consultants pursuant to contractual rights to do so); (b) issue any capital stock at less than fair market value (other than (i) pursuant to employment any Parent employee stock option plans, (ii) upon conversion or consulting agreements in exercise of presently-outstanding securities convertible into or exercisable for capital stock or (iii) pursuant to presently-outstanding contractual rights to acquire such capital stock) or permit any of its Subsidiaries to effect prior to the date hereofsuch an issuance, or effect any split of its capital stock; (c) issue any capital stock (other than (i) pursuant to any Parent employee stock option plans, (ii) hire an aggregate upon conversion or exercise of more than forty new employees, excluding those persons hired to replace employees who terminate their employment with a Parent Corporation during the Prepresently-Closing Period; outstanding securities convertible into or exercisable for capital stock or (iii) sell, issue, grant or authorize pursuant to presently-outstanding rights to acquire such capital stock) if the effect of such issuance or grant of (A) any capital stock or other security (except Parent Common Stock upon would be that the valid exercise of Parent Options or Parent warrants outstanding on Persons that have executed and delivered to the date of this Agreement or the Exercise of Rights under Company the Parent ESPP or pursuant to equipment lease financings and similar transactions or otherwise in the ordinary course of business), (B) any option, call, warrant or right to acquire any capital stock or other security (other than options, warrants or rights to purchase an aggregate of up to 300,000 Stockholder Voting Agreements would not hold sufficient shares of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants approve the Merger and the issuance of Parent, or (ii) otherwise Parent Common Stock in the ordinary course of business), (C) any instrument convertible into or exchangeable for any capital stock or other securityMerger; (iv) except as contemplated by this Agreement, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 shares of Parent Common Stock); (vd) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documentsbylaws, or effect or become a party to, or permit any of its Subsidiaries to effect or become a party to, any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transactionAcquisition Transaction; (vie) except as previously disclosed take any action that would or would reasonably be expected to the Company, form any Subsidiary or acquire any equity interest or other interest result in any other Entity; (viii) make any capital expenditure, except capital expenditures in an aggregate amount of no more than $2,000,000; (viii) establish, adopt or amend any employee benefit plan not generally available to the Company's employees and the Company's 1998 management incentive program, or pay any bonus or make any profit sharing or similar payment to (except pursuant to the management incentive program and any employment contract or understanding as in effect on the date hereof), or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees in an amount in excess of the higher of 20% of the amount previously paid to such Person or $20,000; (ix) change any of its methods of accounting or accounting practices in any respect; (x) make any Material Tax election; (xi) commence or settle any Legal Proceeding except in the ordinary course of business; (xii) materially amend or otherwise modify any of the terms of its engagement of conditions to the financial advisor references Merger set forth in Section 3.27 above; 7 not being satisfied or (xiiiii) enter into any a material transaction or take any other material action in each case either inconsistent with the operating plan previously provided by Parent to the Company, or outside the ordinary course of business; or (xiv) Except as previously disclosed to the Company, sell or otherwise dispose of, or grant an exclusive license or any other exclusive right to utilize Parent Proprietary Assets which individually or delay in the aggregate constitute core technology material to the business satisfaction of Parent, other than pursuant to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such partyconditions. (xvf) agree or commit to take any of the actions described in clause clauses "(ia)" through "(xivd)" of this Section 4.3(b)4.4. (c) During the Pre-Closing Period, Parent shall promptly notify the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance that

Appears in 1 contract

Samples: Merger Agreement (Quokka Sports Inc)

Operation of Parent’s Business. (a) During the Pre-Closing Period: , except (iw) as may be required by Applicable Laws, including COVID-19 Measures, (x) with the prior written consent of the Company which shall not be unreasonably withheld, conditioned or delayed; (y) as expressly required by this Agreement or (z) as set forth in Part 4.3 of the Parent Disclosure Schedule, Parent shall conduct, and shall ensure that each of the Parent Corporations conducts its Subsidiaries conducts, its business and operations (A) in the ordinary course and in accordance with past practices or the operating plan previously provided by Parent to the Company and (B) in compliance with all applicable Legal Requirements and the requirements of all Parent Corporation Contracts that constitute Material Contracts; (ii) Parent shall use all reasonable best efforts to ensure that each of the Parent Corporations its Subsidiaries preserves intact its current business organization, keeps available the services of its current officers and other employees and other key service providers and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licenseesdistributors, employees and other Persons having material business relationships with the respective Parent Corporations; such Subsidiary and (iii) Parent shall keep in full force all insurance policies referred to in Section 3.18 or replace such policies with comparable or superior policies; maintain its material rights and (iv) Parent shall 46. 52 provide all notices, assurances and support required by any Parent Corporation Contract relating to any Proprietary Asset in order to ensure that no condition under such Parent Corporation Contract occurs which could result in, or could increase the likelihood of, any transfer or public disclosure by any Parent Corporation of any Proprietary Assetmaterial Permits. (b) During the Pre-Closing Period, Parent shall not except (without w) as may be required by Applicable Laws, including COVID-19 Measures, (x) with the prior written consent of the Company)Company which shall not be unreasonably withheld, conditioned or delayed; (y) as expressly required by this Agreement or (z) as set forth in Part 4.3 of the Parent Disclosure Schedule, Parent shall not, and Parent shall not permit any of the other Parent Corporations toensure that its Subsidiaries do not: (i) repurchase, redeem or otherwise reacquire any shares of capital stock or other equity or voting securities or any other securities of Parent convertible into or exchangeable or exercisable for capital stock or other equity or voting interests or any options, restricted shares, warrants, calls or rights to acquire any such shares or other securities (including any Parent Equity Awards, except pursuant to the forfeiture conditions of such Parent Equity Awards or the cashless exercise or Tax withholding provisions of or authorizations related to such Parent Equity Awards as in effect as of the date of this Agreement); (ii) sell, issue, deliver, grant, pledge or subject to any Encumbrance or authorize the sale, issuance, delivery, grant, pledge or subjection to a Encumbrance of: (A) any capital stock or other security; (B) any option, stock appreciation right, restricted stock unit, deferred stock unit, market stock unit, performance stock unit, restricted stock award or other equity-based compensation award (whether payable in cash, stock or otherwise), call, warrant or right to acquire any capital stock or other security; or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that Parent may issue shares of Parent Common Stock upon the valid exercise of, or the vesting or scheduled delivery of shares pursuant to, Parent Equity Awards in accordance with their terms, in each case, outstanding as of the date of this Agreement); (iii) amend or waive any of its rights under, or accelerate the vesting, payment or exercisability under, any provision of any of the Parent Equity Plans or any provision of any Contract evidencing any Parent Equity Award, or otherwise modify any of the terms of any outstanding Parent Equity Award, warrant or other security or any related Contract; (iv) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws, or effect, approve or become a party to any liquidation, dissolution, merger, consolidation, conversion, share exchange, business combination, plan or scheme of arrangement, amalgamation, restructuring, recapitalization, reclassification of shares, stock split, reverse stock split, division or subdivision of shares, consolidation of shares or similar transaction; (v) declare, accrue, set aside or pay any dividend or make any other distribution (whether in cash, stock, property or otherwise) in respect of any shares of capital stockstock or other equity or voting interests, other than dividends by a direct or indirect wholly owned Subsidiary of Parent to its parent. (vi) acquire or agree to acquire, in a single transaction or a series of related transactions, (A) by merging or consolidating with, or repurchaseby purchasing all or a substantial portion of the assets of, redeem or by purchasing all or a substantial portion of the equity or voting interest in, or by any other manner, any business or Person or division thereof if the amount of consideration paid or transferred by Parent and its Subsidiaries would exceed $1,000,000 in the aggregate and (B) any other assets other than in the ordinary course of business; (vii) sell, lease, license, sell and lease back, mortgage or subject to any Encumbrance or otherwise reacquire dispose of any of its material properties or any portion thereof (including Parent Owned Real Property) or any material assets (including any shares of capital stock stock, equity or voting interests or other rights, instruments or securities), except for repurchases at less than (A) sales of inventory or used equipment in the ordinary course of business, (B) Permitted Encumbrances, (C) single transactions or series of related transactions involving assets or properties (excluding Parent Owned Real Property or shares of capital stock, equity or voting interests or other rights, instruments or securities) where the fair market value pursuant of such assets and the consideration due to employment the Acquired Companies is less than $1,000,000, and (D) as set forth in clause (ii) above with respect to shares of capital stock, equity or consulting agreements voting interests or other rights, instruments or securities; (viii) make any capital expenditures or incur any obligations or Liabilities in effect respect thereof in excess of $1,000,000 in the aggregate; (ix) other than in the ordinary course of business, (A) enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any Contract that would be a Parent Material Contract if it had been entered into immediately prior to the date hereofof this Agreement; (B) renew, extend, amend, or waive or exercise any material right or remedy under, any Parent Material Contract, which renewal, extension, amendment, waiver or exercise would not have a material and adverse impact on Parent and its Subsidiaries taken as a whole, or (C) accelerate, cancel or terminate any Parent Material Contract, except for allowing any such Parent Material Contract to expire in accordance with its terms; (iix) hire an aggregate enter into any material lease or sublease of more real property (whether as a lessor, sublessor, lessee or sublessee), or modify or amend in any material respect, or exercise any right to renew, any material Lease or acquire any material interest in real property, in each case, other than forty new employees, excluding those persons hired to replace employees who terminate their employment with a Parent Corporation during in the Pre-Closing Periodordinary course of business; (iiixi) sellmake any pledge of any of its material assets or permit any of its material assets to become subject to any Encumbrance, issueexcept in the ordinary course of business and for Permitted Encumbrances and for Encumbrances that do not, grant individually or authorize in the issuance aggregate, materially and adversely affect the value or grant use of such property for its current and anticipated purposes; (xii) (A) lend, advance money or make capital contributions to or investments in any capital stock Person other than any Subsidiary of Parent or (B) incur, assume, modify in any material respect, prepay, repurchase, redeem, defease or assume any amount of Indebtedness, enter into any “keep well” or other security Contract to maintain any financial statement or similar condition of another person or enter into any arrangement having the economic effect of any of the foregoing, other than (except 1) the incurrence of Indebtedness under the Parent Common Stock upon the valid exercise of Parent Options or Parent warrants outstanding Floorplan Agreement as then in effect on the date of this Agreement or the Exercise of Rights under the Parent ESPP or pursuant to equipment lease financings and similar transactions or otherwise in the ordinary course of business, (2) the incurrence of Indebtedness under any refinancing, amendment or amendment and restatement of the Parent Floorplan Agreement, and (3) in the case of each of clauses (A) and (B), (B) any option, call, warrant or right to acquire any capital stock or other security (other than options, warrants or rights to purchase an aggregate extensions of up to 300,000 shares of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants of Parent, or (ii) otherwise trade credit in the ordinary course of business; (xiii) (A) adopt any method or make any Tax election (or allow any Tax election previously made to expire) that is inconsistent with any of the positions taken, elections made or methods used in preparing or filing Tax Returns with respect to periods ending prior to the Closing (including positions, elections or methods that would have the effect of deferring income to periods ending after the Closing Date or accelerating deductions to periods ending on or before the Closing Date), ; (B) prepare or file any Tax Return or amended Tax Return inconsistent with past practices; (C) settle or otherwise compromise any instrument convertible into claim, dispute, notice, audit report or exchangeable assessment relating to Taxes, or enter into, cancel or modify any closing agreement or similar agreement relating to Taxes; (D) request any ruling, closing agreement or similar guidance with respect to Taxes; (E) incur any Liability for Taxes other than in the ordinary course of business; (F) extend or waive the period of assessment or collection for any capital stock material Taxes; (G) enter into any material agreement or other securityarrangement the primary purpose of which relates to Taxes; or (H) fail to deduct or withhold from any payment or deemed payment any material Taxes required to be deducted or withheld, or fail to timely pay any such deducted or withheld amounts to the proper Governmental Authority; (iv) except as contemplated by this Agreement, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 shares of Parent Common Stock); (v) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documents, or effect or become a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (vi) except as previously disclosed to the Company, form any Subsidiary or acquire any equity interest or other interest in any other Entity; (vii) make any capital expenditure, except capital expenditures in an aggregate amount of no more than $2,000,000; (viii) establish, adopt or amend any employee benefit plan not generally available to the Company's employees and the Company's 1998 management incentive program, or pay any bonus or make any profit sharing or similar payment to (except pursuant to the management incentive program and any employment contract or understanding as in effect on the date hereof), or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees in an amount in excess of the higher of 20% of the amount previously paid to such Person or $20,000; (ix) change any of its methods of accounting or accounting practices in any respect; (x) make any Material Tax election; (xixiv) commence or settle any Legal Proceeding Proceeding, except in the ordinary course of business; (xii) materially amend or otherwise modify any of the terms of its engagement of the financial advisor references in Section 3.27 above; (xiiixv) enter into any material transaction new line of business outside of the businesses of Parent and its Subsidiaries as of the date of this Agreement; (xvi) approve or take adopt any other material action in each case either inconsistent with the operating stockholder rights plan previously provided by Parent or “poison pill” arrangement; (xvii) cancel or terminate or allow to the Companylapse without a commercially reasonable substitute policy therefor, or outside amend in any material respect or enter into, any material insurance policy, other than the renewal of existing insurance policies or entering into comparable substitute policies therefor or entering into insurance policies in the ordinary course of business; (xviii) notwithstanding anything to the contrary contained in the governing documents of the Parent, consent to the selection of any forum other than the Court of Chancery of the State of Delaware or take any other actions to waive the exclusive forum of the Court of Chancery of the State of Delaware, in each case, with respect to all matters related to this Agreement, the Merger and the other Contemplated Transactions; (xix) abandon or permit to lapse any material Intellectual Property of Parent or its Subsidiaries, except in the ordinary course of business; (xx) enter into, become bound by, renew, extend or amend any agreements under which any fees, commissions or other amounts have been paid or may become payable and all indemnification and other agreements related to the engagement of Centerview Partners; or (xivxxi) Except as previously disclosed to the Companyauthorize, sell approve, agree, commit or otherwise dispose of, or grant an exclusive license or any other exclusive right to utilize Parent Proprietary Assets which individually or in the aggregate constitute core technology material to the business of Parent, other than pursuant to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such party. (xv) agree or commit offer to take any of the actions described in clause "clauses (i)" ) through "(xiv)" xx) of this Section 4.3(b). (c) During the Pre-Closing Period, Parent Nothing set forth in Section 4.2 or this Section 4.3 of this Agreement shall promptly notify the Company in writing of: give (i) Parent or Merger Sub, directly or indirectly, the discovery by right to control or direct the operations of the Acquired Companies prior to the Closing, or (ii) the Company, directly or indirectly, the right to control or direct the operations of Parent of any event, condition, fact or circumstance thatits Subsidiaries prior to the Closing.

Appears in 1 contract

Samples: Merger Agreement (CarLotz, Inc.)

Operation of Parent’s Business. (a) During Except as set forth on Section 4.1(a) of the Parent Disclosure Schedule, as expressly permitted by this Agreement, as required by applicable Law or unless the Company shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), during the period commencing on the date of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Section 9 and the Effective Time (the “Pre-Closing Period: (i) Parent shall ensure that ”), each of the Parent Corporations conducts and its Subsidiaries shall conduct its business and operations (A) in the ordinary course Ordinary Course of Business and in accordance with past practices or the operating plan previously provided by Parent to the Company and (B) compliance in compliance all material respects with all applicable Legal Requirements Laws and the requirements of all Parent Corporation Contracts that constitute Parent Material Contracts; (ii) Parent shall use all reasonable efforts to ensure that each of the Parent Corporations preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Parent Corporations; and (iii) Parent shall keep in full force all insurance policies referred to in Section 3.18 or replace such policies with comparable or superior policies; and (iv) Parent shall 46. 52 provide all notices, assurances and support required by any Parent Corporation Contract relating to any Proprietary Asset in order to ensure that no condition under such Parent Corporation Contract occurs which could result in, or could increase the likelihood of, any transfer or public disclosure by any Parent Corporation of any Proprietary Asset. (b) During Except as expressly permitted by this Agreement, as set forth in Section 4.1(b) of the Parent Disclosure Schedule, as required by applicable Law or with the prior written consent of the Company (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, Parent shall not (without the prior written consent of the Company)not, and nor shall not it cause or permit any of its Subsidiaries to, do any of the other Parent Corporations tofollowing: (i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock, stock or repurchase, redeem or otherwise reacquire any shares of its capital stock or other securitiessecurities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, except for repurchases at less than fair market value pursuant to employment settlement or consulting agreements in effect prior to vesting of any award granted under the date hereofParent Stock Plans); (ii) hire an aggregate except as set forth in Section 4.1(b)(ii) of more than forty new employeesthe Parent Disclosure Schedule, excluding those persons hired to replace employees who terminate their employment with a Parent Corporation during the Pre-Closing Period; (iii) sell, issue, grant grant, pledge or otherwise dispose of or encumber or authorize any of the issuance or grant of foregoing with respect to: (A) any capital stock or other security of Parent or any of its Subsidiaries (except for Parent Common Stock issued upon the valid exercise of outstanding Parent Options or Parent warrants Warrants or conversion of outstanding on the date of this Agreement or the Exercise of Rights under the Parent ESPP or pursuant to equipment lease financings and similar transactions or otherwise in the ordinary course of businessConvertible Notes), ; (B) any option, call, warrant or right to acquire any capital stock or any other security (security, other than options, warrants or rights option grants to purchase an aggregate of up to 300,000 shares of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants of Parent, or (ii) otherwise and service providers in the ordinary course Ordinary Course of business), Business; or (C) any instrument convertible into or exchangeable for any capital stock or other securitysecurity of Parent or any of its Subsidiaries; (iviii) except as contemplated by this Agreementrequired to give effect to anything in contemplation of the Closing, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 shares of Parent Common Stock); (v) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documentsSubsidiaries’ Organizational Documents, or effect or become be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transactiontransaction except, for the avoidance of doubt, the Contemplated Transactions; (viiv) except as previously disclosed to the Company, 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; (viiv) make (A) lend money to any capital expenditurePerson (except for the advance of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) except capital expenditures as set forth in an aggregate amount Section 4.1(b)(v) of no more than $2,000,000the Parent Disclosure Schedule, incur or guarantee any indebtedness for borrowed money, or (C) guarantee any debt securities of others; (viiivi) establishother than as required by applicable Law or the terms of any Parent Benefit Plan as in effect on the date of this Agreement: (A) adopt, adopt terminate, establish or amend enter into any employee benefit plan not generally available Parent Benefit Plan; (B) cause or permit any Parent Benefit Plan to the Company's employees and the Company's 1998 management incentive program, or be amended in any material respect; (C) pay any bonus or make any profit profit-sharing or similar payment to (except pursuant to the management incentive program and any employment contract or understanding as in effect on the date hereof)to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees employees, other than increases in an amount base salary and annual cash bonus opportunities and payments made in excess the Ordinary Course of Business consistent with past practice; or (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (vii) recognize any labor union, labor organization, or similar Person; (viii) except as set forth in Section 4.1(b)(viii) of the higher Parent Disclosure Schedule, acquire any material asset or sell, lease or otherwise irrevocably dispose of 20% any of the amount previously paid its assets or properties, or grant any Encumbrance with respect to such Person assets or $20,000properties, except in the Ordinary Course of Business; (ix) change sell, assign, transfer, license, sublicense or otherwise dispose of any material Parent IP (other than pursuant to non-exclusive licenses in the Ordinary Course of its methods of accounting or accounting practices in any respectBusiness); (x) make make, change or revoke any Material material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax Liability, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial Contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than in connection with any extension of time to file any Tax Return), or adopt or change any material accounting method in respect of Taxes; (xi) commence except as set forth in Section 4.1(b)(xi) of the Parent Disclosure Schedule, enter into, materially amend or settle terminate any Legal Proceeding except in the ordinary course of businessParent Material Contract; (xii) materially amend other than as required by Law or otherwise modify GAAP, take any of the terms of its engagement of the financial advisor references in Section 3.27 aboveaction to change Parent’s accounting policies or procedures; (xiii) enter into except as set forth in Section 4.1(b)(xiii) of the Parent Disclosure Schedule, initiate or settle any material transaction or take any other material action in each case either inconsistent with the operating plan previously provided by Parent to the Company, or outside the ordinary course of businessLegal Proceeding; or (xiv) Except as previously disclosed agree, resolve or commit to do any of the foregoing. Nothing contained in this Agreement shall give the Company, sell directly or otherwise dispose ofindirectly, or grant an exclusive license or any other exclusive the right to utilize control or direct the operations of Parent Proprietary Assets which individually or in the aggregate constitute core technology material prior to the business of Parent, other than pursuant Effective Time. Prior to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such party. (xv) agree or commit to take any of the actions described in clause "(i)" through "(xiv)" of this Section 4.3(b). (c) During the Pre-Closing PeriodEffective Time, Parent shall promptly notify exercise, consistent with the Company in writing of: (i) the discovery by Parent terms and conditions of any eventthis Agreement, condition, fact or circumstance thatcomplete unilateral control and supervision over its business operations.

Appears in 1 contract

Samples: Agreement and Plan of Merger (Terra Tech Corp.)

Operation of Parent’s Business. (a) During the Pre-Closing Period: (i) Parent shall ensure that each of the Parent Corporations conducts conduct its business and operations (A) in the ordinary course and in accordance with past current practices or the operating plan previously provided by Parent to the Company and (B) in compliance with all applicable Legal Requirements and the requirements of all Parent Corporation Contracts that constitute Material material Contracts; (ii) Parent shall use all reasonable efforts to ensure that each of the Parent Corporations it preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Parent CorporationsParent; and (iii) Parent shall keep promptly notify the Company of (A) any notice or other communication from any Person alleging that the Consent of such Person is or may be required in full force all insurance policies referred to in Section 3.18 or replace such policies connection with comparable or superior policies; any of the transactions contemplated by this Agreement, and (ivB) Parent shall 46. 52 provide all noticesany Legal Proceeding commenced or, assurances and support required by any Parent Corporation Contract to the best of its knowledge threatened against, relating to any Proprietary Asset in order or involving or otherwise affecting Parent that relates to ensure that no condition under such Parent Corporation Contract occurs which could result in, or could increase the likelihood of, any transfer or public disclosure consummation of the transactions contemplated by any Parent Corporation of any Proprietary Assetthis Agreement. (b) During the Pre-Closing Period, Parent shall not (without the prior written consent of the Company), and shall not permit any of the other Parent Corporations to:): (i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock, or repurchase, redeem or otherwise reacquire any shares of capital stock or other securities, except for repurchases at less than fair market value pursuant to employment or consulting agreements in effect prior to the date hereof; (ii) hire an aggregate of more than forty new employees, excluding those persons hired to replace employees who terminate their employment with a Parent Corporation during the Pre-Closing Period; (iii) sell, issue, grant or authorize the issuance or grant of (A) any capital stock or other security (except Parent Common Stock upon the valid exercise of Parent Options or Parent warrants outstanding on the date of this Agreement or the Exercise of Rights under the Parent ESPP or pursuant to equipment lease financings and similar transactions or otherwise in the ordinary course of business), (B) any option, call, warrant or right to acquire any capital stock or other security (other than options, warrants or rights to purchase an aggregate of up to 300,000 shares of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants of Parent, or (ii) otherwise in the ordinary course of business), (C) any instrument convertible into or exchangeable for any capital stock or other security; (iv) except as contemplated by this Agreement, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 shares of Parent Common Stock); (v) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documents, or effect or become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, division or subdivision of shares, consolidation of shares or similar transaction; (vi) except as previously disclosed to the Company, form any Subsidiary or acquire any equity interest or other interest in any other Entity; (vii) make any capital expenditure, except capital expenditures in an aggregate amount of no more than $2,000,000; (viii) establish, adopt or amend any employee benefit plan not generally available to the Company's employees and the Company's 1998 management incentive program, or pay any bonus or make any profit sharing or similar payment to (except pursuant to the management incentive program and any employment contract or understanding as in effect on the date hereof), or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees in an amount in excess of the higher of 20% of the amount previously paid to such Person or $20,000; (ix) change any of its methods of accounting or accounting practices in any respect; (x) make any Material Tax election; (xi) commence or settle any Legal Proceeding except in the ordinary course of business; (xii) materially amend or otherwise modify any of the terms of its engagement of the financial advisor references in Section 3.27 above; (xiii) enter into any material transaction or take any other material action in each case either inconsistent with the operating plan previously provided by Parent to the Company, or outside the ordinary course of business; or (xiv) Except as previously disclosed to the Company, sell or otherwise dispose of, or grant an exclusive license or any other exclusive right to utilize Parent Proprietary Assets which individually or in the aggregate constitute core technology material to the business of Parent, other than pursuant to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such party. (xviii) agree or commit to take any of the actions described in clause "clauses (i)" ) through "(xiv)" ii) of this Section 4.3(b5.3(b). (c) During the Pre-Closing Period, Parent shall promptly notify the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance thatthat occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by Parent in this Agreement; (ii) 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 any representation or warranty made by Parent in this Agreement if (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance, or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of Parent; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Section 7 or Annex I impossible or unlikely or that has had or could reasonably be expected to have a Material Adverse Effect on Parent. Without limiting the generality of the foregoing, Parent shall promptly advise the Company in writing of any Legal Proceeding or material claim threatened, commenced or asserted against or with respect to Parent. No notification given to the Company pursuant to this Section 5.3 shall limit or otherwise affect any of the representations, warranties, covenants or obligations of Parent contained in this Agreement.

Appears in 1 contract

Samples: Merger Agreement (Exelixis Inc)

Operation of Parent’s Business. (a) During the Pre-Closing Period: , except (iw) as may be required by Applicable Laws, including COVID-19 Measures, (x) with the prior written consent of the Company which shall not be unreasonably withheld, conditioned or delayed; (y) as expressly required by this Agreement or (z) as set forth in Part 4.3 of the Parent Disclosure Schedule, Parent shall conduct, and shall ensure that each of the Parent Corporations conducts its Subsidiaries conducts, its business and operations (A) in the ordinary course and in accordance with past practices or the operating plan previously provided by Parent to the Company and (B) in compliance with all applicable Legal Requirements and the requirements of all Parent Corporation Contracts that constitute Material Contracts; (ii) Parent shall use all reasonable best efforts to ensure that each of the Parent Corporations its Subsidiaries preserves intact its current business organization, keeps available the services of its current officers and other employees and other key service providers and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licenseesdistributors, employees and other Persons having material business relationships with the respective Parent Corporations; such Subsidiary and (iii) Parent shall keep in full force all insurance policies referred to in Section 3.18 or replace such policies with comparable or superior policies; maintain its material rights and (iv) Parent shall 46. 52 provide all notices, assurances and support required by any Parent Corporation Contract relating to any Proprietary Asset in order to ensure that no condition under such Parent Corporation Contract occurs which could result in, or could increase the likelihood of, any transfer or public disclosure by any Parent Corporation of any Proprietary Assetmaterial Permits. (b) During the Pre-Closing Period, Parent shall not except (without w) as may be required by Applicable Laws, including COVID-19 Measures, (x) with the prior written consent of the Company)Company which shall not be unreasonably withheld, conditioned or delayed; (y) as expressly required by this Agreement or (z) as set forth in Part 4.3 of the Parent Disclosure Schedule, Parent shall not, and Parent shall not permit any of the other Parent Corporations toensure that its Subsidiaries do not: (i) repurchase, redeem or otherwise reacquire any shares of capital stock or other equity or voting securities or any other securities of Parent convertible into or exchangeable or exercisable for capital stock or other equity or voting interests or any options, restricted shares, warrants, calls or rights to acquire any such shares or other securities (including any Parent Equity Awards, except pursuant to the forfeiture conditions of such Parent Equity Awards or the cashless exercise or Tax withholding provisions of or authorizations related to such Parent Equity Awards as in effect as of the date of this Agreement); (ii) sell, issue, deliver, grant, pledge or subject to any Encumbrance or authorize the sale, issuance, delivery, grant, pledge or subjection to a Encumbrance of: (A) any capital stock or other security; (B) any option, stock appreciation right, restricted stock unit, deferred stock unit, market stock unit, performance stock unit, restricted stock award or other equity-based compensation award (whether payable in cash, stock or otherwise), call, warrant or right to acquire any capital stock or other security; or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that Parent may issue shares of Parent Common Stock upon the valid exercise of, or the vesting or scheduled delivery of shares pursuant to, Parent Equity Awards in accordance with their terms, in each case, outstanding as of the date of this Agreement); (iii) amend or waive any of its rights under, or accelerate the vesting, payment or exercisability under, any provision of any of the Parent Equity Plans or any provision of any Contract evidencing any Parent Equity Award, or otherwise modify any of the terms of any outstanding Parent Equity Award, warrant or other security or any related Contract; (iv) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws, or effect, approve or become a party to any liquidation, dissolution, merger, consolidation, conversion, share exchange, business combination, plan or scheme of arrangement, amalgamation, restructuring, recapitalization, reclassification of shares, stock split, reverse stock split, division or subdivision of shares, consolidation of shares or similar transaction; (v) declare, accrue, set aside or pay any dividend or make any other distribution (whether in cash, stock, property or otherwise) in respect of any shares of capital stockUS-LEGAL-11446530/6 174293-0017 3089529.v7 stock or other equity or voting interests, other than dividends by a direct or indirect wholly owned Subsidiary of Parent to its parent. (vi) acquire or agree to acquire, in a single transaction or a series of related transactions, (A) by merging or consolidating with, or repurchaseby purchasing all or a substantial portion of the assets of, redeem or by purchasing all or a substantial portion of the equity or voting interest in, or by any other manner, any business or Person or division thereof if the amount of consideration paid or transferred by Parent and its Subsidiaries would exceed $1,000,000 in the aggregate and (B) any other assets other than in the ordinary course of business; (vii) sell, lease, license, sell and lease back, mortgage or subject to any Encumbrance or otherwise reacquire dispose of any of its material properties or any portion thereof (including Parent Owned Real Property) or any material assets (including any shares of capital stock stock, equity or voting interests or other rights, instruments or securities), except for repurchases at less than (A) sales of inventory or used equipment in the ordinary course of business, (B) Permitted Encumbrances, (C) single transactions or series of related transactions involving assets or properties (excluding Parent Owned Real Property or shares of capital stock, equity or voting interests or other rights, instruments or securities) where the fair market value pursuant of such assets and the consideration due to employment the Acquired Companies is less than $1,000,000, and (D) as set forth in clause (ii) above with respect to shares of capital stock, equity or consulting agreements voting interests or other rights, instruments or securities; (viii) make any capital expenditures or incur any obligations or Liabilities in effect respect thereof in excess of $1,000,000 in the aggregate; (ix) other than in the ordinary course of business, (A) enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any Contract that would be a Parent Material Contract if it had been entered into immediately prior to the date hereofof this Agreement; (B) renew, extend, amend, or waive or exercise any material right or remedy under, any Parent Material Contract, which renewal, extension, amendment, waiver or exercise would not have a material and adverse impact on Parent and its Subsidiaries taken as a whole, or (C) accelerate, cancel or terminate any Parent Material Contract, except for allowing any such Parent Material Contract to expire in accordance with its terms; (iix) hire an aggregate enter into any material lease or sublease of more real property (whether as a lessor, sublessor, lessee or sublessee), or modify or amend in any material respect, or exercise any right to renew, any material Lease or acquire any material interest in real property, in each case, other than forty new employees, excluding those persons hired to replace employees who terminate their employment with a Parent Corporation during in the Pre-Closing Periodordinary course of business; (iiixi) sellmake any pledge of any of its material assets or permit any of its material assets to become subject to any Encumbrance, issueexcept in the ordinary course of business and for Permitted Encumbrances and for Encumbrances that do not, grant individually or authorize in the issuance aggregate, materially and adversely affect the value or grant use of such property for its current and anticipated purposes; (xii) (A) lend, advance money or make capital contributions to or investments in any capital stock Person other than any Subsidiary of Parent or (B) incur, assume, modify in any material respect, prepay, repurchase, redeem, defease or assume any amount of Indebtedness, enter into any “keep well” or other security Contract to maintain any financial statement or similar condition of another person or enter into any arrangement having the economic effect of any of the foregoing, other than (except 1) the incurrence of Indebtedness under the Parent Common Stock upon the valid exercise of Parent Options or Parent warrants outstanding Floorplan Agreement as then in effect on the date of this Agreement or the Exercise of Rights under the Parent ESPP or pursuant to equipment lease financings and similar transactions or otherwise in the ordinary course of business, (2) the incurrence of Indebtedness under any refinancing, amendment or amendment and restatement US-LEGAL-11446530/6 174293-0017 3089529.v7 of the Parent Floorplan Agreement, and (3) in the case of each of clauses (A) and (B), (B) any option, call, warrant or right to acquire any capital stock or other security (other than options, warrants or rights to purchase an aggregate extensions of up to 300,000 shares of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants of Parent, or (ii) otherwise trade credit in the ordinary course of business; (xiii) (A) adopt any method or make any Tax election (or allow any Tax election previously made to expire) that is inconsistent with any of the positions taken, elections made or methods used in preparing or filing Tax Returns with respect to periods ending prior to the Closing (including positions, elections or methods that would have the effect of deferring income to periods ending after the Closing Date or accelerating deductions to periods ending on or before the Closing Date), ; (B) prepare or file any Tax Return or amended Tax Return inconsistent with past practices; (C) settle or otherwise compromise any instrument convertible into claim, dispute, notice, audit report or exchangeable assessment relating to Taxes, or enter into, cancel or modify any closing agreement or similar agreement relating to Taxes; (D) request any ruling, closing agreement or similar guidance with respect to Taxes; (E) incur any Liability for Taxes other than in the ordinary course of business; (F) extend or waive the period of assessment or collection for any capital stock material Taxes; (G) enter into any material agreement or other securityarrangement the primary purpose of which relates to Taxes; or (H) fail to deduct or withhold from any payment or deemed payment any material Taxes required to be deducted or withheld, or fail to timely pay any such deducted or withheld amounts to the proper Governmental Authority; (iv) except as contemplated by this Agreement, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 shares of Parent Common Stock); (v) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documents, or effect or become a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (vi) except as previously disclosed to the Company, form any Subsidiary or acquire any equity interest or other interest in any other Entity; (vii) make any capital expenditure, except capital expenditures in an aggregate amount of no more than $2,000,000; (viii) establish, adopt or amend any employee benefit plan not generally available to the Company's employees and the Company's 1998 management incentive program, or pay any bonus or make any profit sharing or similar payment to (except pursuant to the management incentive program and any employment contract or understanding as in effect on the date hereof), or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees in an amount in excess of the higher of 20% of the amount previously paid to such Person or $20,000; (ix) change any of its methods of accounting or accounting practices in any respect; (x) make any Material Tax election; (xixiv) commence or settle any Legal Proceeding Proceeding, except in the ordinary course of business; (xii) materially amend or otherwise modify any of the terms of its engagement of the financial advisor references in Section 3.27 above; (xiiixv) enter into any material transaction new line of business outside of the businesses of Parent and its Subsidiaries as of the date of this Agreement; (xvi) approve or take adopt any other material action in each case either inconsistent with the operating stockholder rights plan previously provided by Parent or “poison pill” arrangement; (xvii) cancel or terminate or allow to the Companylapse without a commercially reasonable substitute policy therefor, or outside amend in any material respect or enter into, any material insurance policy, other than the renewal of existing insurance policies or entering into comparable substitute policies therefor or entering into insurance policies in the ordinary course of business; (xviii) notwithstanding anything to the contrary contained in the governing documents of the Parent, consent to the selection of any forum other than the Court of Chancery of the State of Delaware or take any other actions to waive the exclusive forum of the Court of Chancery of the State of Delaware, in each case, with respect to all matters related to this Agreement, the Merger and the other Contemplated Transactions; (xix) abandon or permit to lapse any material Intellectual Property of Parent or its Subsidiaries, except in the ordinary course of business; (xx) enter into, become bound by, renew, extend or amend any agreements under which any fees, commissions or other amounts have been paid or may become payable and all indemnification and other agreements related to the engagement of Centerview Partners; or (xivxxi) Except as previously disclosed to the Companyauthorize, sell approve, agree, commit or otherwise dispose of, or grant an exclusive license or any other exclusive right to utilize Parent Proprietary Assets which individually or in the aggregate constitute core technology material to the business of Parent, other than pursuant to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such party. (xv) agree or commit offer to take any of the actions described in clause "clauses (i)" ) through "(xiv)" xx) of this Section 4.3(b). (c) During the Pre-Closing Period, Parent shall promptly notify the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance that

Appears in 1 contract

Samples: Merger Agreement (Shift Technologies, Inc.)

Operation of Parent’s Business. (a) During the Pre-Closing Period: (i) Parent shall ensure that each of the Parent Corporations conducts conduct its business and operations (A) in the ordinary course and in accordance with past practices or the operating plan previously provided by Parent to the Company and (B) in material compliance with all applicable Legal Requirements and the requirements of all the Parent Corporation Contracts that constitute Material Contracts; and (ii) Parent shall use all reasonable efforts to ensure that each of the Parent Corporations preserves preserve intact its current business organization, keeps keep available the services of its current officers and employees and maintains maintain its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Parent Corporations; and (iii) Parent shall keep in full force all insurance policies referred to in Section 3.18 or replace such policies with comparable or superior policies; and (iv) Parent shall 46. 52 provide all notices, assurances and support required by any Parent Corporation Contract relating to any Proprietary Asset in order to ensure that no condition under such Parent Corporation Contract occurs which could result in, or could increase the likelihood of, any transfer or public disclosure by any Parent Corporation of any Proprietary AssetParent. (b) During the Pre-Closing Period, except as set forth in Part 4.3(b) of the Parent Disclosure Schedule, Parent shall not (without the prior written consent of the Company), and which consent shall not permit any of be unreasonably withheld or delayed by the other Parent Corporations to:Company): (i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock, or repurchase, redeem or otherwise reacquire any shares of capital stock or other securities, except for repurchases at less than fair market value pursuant to employment or consulting restricted stock repurchase agreements in effect prior to existing on the date hereof; (ii) hire an aggregate of more than forty new employees, excluding those persons hired to replace employees who terminate their employment with a Parent Corporation during the Pre-Closing Period; (iii) sell, issue, grant or authorize the issuance or grant of (A) any capital stock or other security (except Parent Common Stock upon the valid exercise of Parent Options or Parent warrants outstanding on the date of this Agreement or the Exercise of Rights under the Parent ESPP or pursuant to equipment lease financings and similar transactions or otherwise in the ordinary course of business)security, (B) any option, call, warrant or right to acquire acquire, or relating to, any capital stock or other security (other than options, warrants or rights to purchase an aggregate of up to 300,000 shares of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants of Parentsecurity, or (ii) otherwise in the ordinary course of business), (C) any instrument convertible into or exchangeable for any Parent capital stock or other Parent security; , except that Parent may issue (ivW) except as contemplated by this AgreementParent Common Stock upon the valid exercise of Parent stock options outstanding on the date hereof, amend or waive any (X) Parent may issue in the ordinary course of its rights under, or accelerate the vesting under, any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract (other business options exercisable for not more than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 1,400,000 shares of Parent Common StockStock to current or future employees or consultants, (Y) Parent may sell Parent Common Stock in the ordinary course of business pursuant to its 401(k) purchase plan and employee stock purchase plan, and (Z) Parent may issue Parent Common Stock in connection with Contracts disclosed on Part 3.8(c) of the Parent Disclosure Schedule and in connection with acquisitions as contemplated by Section 4.3(b)(v); (viii) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or (other charter or organizational documentsthan in connection with the Amendment), or effect or become a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction, other than (W) the Merger, (X) as contemplated by Section 4.3(b)(v), (Y) in connection with a Parent Acquisition Transaction that Parent's Board of Directors, in the exercise of its fiduciary duties, believes is in the best interest of Parent's stockholders or (Z) in connection with a sale of Parent's software business or drug discovery business after consultation with the Company; (vi) except as previously disclosed to the Company, form any Subsidiary or acquire any equity interest or other interest in any other Entity; (vii) make any capital expenditure, except capital expenditures in an aggregate amount of no more than $2,000,000; (viii) establish, adopt or amend any employee benefit plan not generally available to the Company's employees and the Company's 1998 management incentive program, or pay any bonus or make any profit sharing or similar payment to (except pursuant to the management incentive program and any employment contract or understanding as in effect on the date hereof), or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees in an amount in excess of the higher of 20% of the amount previously paid to such Person or $20,000; (ixiv) change any of its methods of accounting or accounting practices in any material respect, except as required by GAAP; (xv) acquire any equity interest in or a substantial portion of the assets of another Entity (except that Parent may make one or more such acquisitions so long as the aggregate consideration paid by Parent does not exceed an aggregate of $50,000,000 worth of cash and Parent Common Stock (which Parent Common Stock will be valued for purposes of this Section 4.3(b)(v) (A) in the same manner that it is valued in such acquisition, or (B) if such acquisition requires Parent to pay a fixed number of shares of Parent Common Stock without reference to the value thereof, then using the closing price of Parent Common Stock on the closing date of such acquisition), provided that the amount of cash paid by Parent for such acquisitions shall not exceed $25,000,000 in the aggregate), or otherwise acquire any Material Tax election; securities or other assets outside the ordinary course of business (xi) commence or settle any Legal Proceeding except it being understood that Parent may invest its cash in the ordinary course of businessbusiness consistent with past practice); (xiivi) materially amend sell, lease, license, waive, release, transfer or otherwise modify encumber any of the terms of its engagement of the financial advisor references in Section 3.27 above; (xiii) enter into any material transaction or take any other material action in each case either inconsistent with the operating plan previously provided by Parent to the Company, or assets outside the ordinary course of business, other than, (X) as contemplated by Section 4.3(b)(v), (Y) in connection with a Parent Acquisition Transaction that Parent's Board of Directors, in the exercise of its fiduciary duties, believes is in the best interest of Parent's stockholders or (Z) in connection with a sale of Parent's software business or drug discovery business after consultation with the Company; (vii) except as permitted by Section 5.2, take any action that will likely result in the representations and warranties set forth in Article III becoming false or inaccurate in any material respect; or (xiv) Except as previously disclosed to the Company, sell or otherwise dispose of, or grant an exclusive license or any other exclusive right to utilize Parent Proprietary Assets which individually or in the aggregate constitute core technology material to the business of Parent, other than pursuant to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such party. (xvviii) agree or commit to take any of the actions described in clause clauses "(i)" through "(xivvii)" of this Section 4.3(b). (c) During the Pre-Closing Period, Parent shall promptly notify the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance thatthat occurred or existed on or prior to the date of this Agreement and that causes or constitutes a material (without regard to any materiality qualifiers set forth in the individual representations and warranties) inaccuracy in any representation or warranty made by Parent in this Agreement; (ii) 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 (without regard to any materiality qualifiers set forth in the individual representations and warranties) inaccuracy in any representation or warranty made by Parent in this Agreement if (A) such representation or warranty (other than representations and warranties which are expressly made as of a particular date) had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance, or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any event, condition, fact or circumstance hereafter arising which, if existing or occurring at the date of this Agreement, would have been required to be set forth or described in the Parent Disclosure Schedule; (iv) any material breach of any covenant or obligation of Parent hereunder; (v) any tax notice, claim, legal proceeding, examination, audit or tax lien; and (vi) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Section 6 or Section 7 impossible or unlikely or that has had or would reasonably be expected to have a Material Adverse Effect on Parent. No notification given to the Company pursuant to this Section 4.3 shall limit or otherwise affect any representations, warranties, covenants or obligations of Parent contained in this Agreement.

Appears in 1 contract

Samples: Agreement and Plan of Merger and Reorganization (Pharmacopeia Inc)

Operation of Parent’s Business. (a) During Except as set forth on Section 4.2(a) of the Parent Disclosure Schedule, as expressly required, contemplated or permitted by this Agreement, in connection with the Parent Pre-Closing Financing, or as required by applicable Legal Requirements, during the Pre-Closing Period, Parent shall: (i) Parent shall ensure that each of the Parent Corporations conducts continue to pay outstanding accounts payable and other current Liabilities (including payroll) when due and payable; and (ii) conduct its business and operations (A) in the ordinary course Ordinary Course of Business and in accordance with past practices or the operating plan previously provided by Parent to the Company and (B) in material compliance with all applicable Legal Requirements and the requirements of all Parent Corporation Contracts that constitute Parent Material Contracts; (ii) Parent shall use all reasonable efforts to ensure that each of the Parent Corporations preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Parent Corporations; and (iii) Parent shall keep in full force all insurance policies referred to in Section 3.18 or replace such policies with comparable or superior policies; and (iv) Parent shall 46. 52 provide all notices, assurances and support required by any Parent Corporation Contract relating to any Proprietary Asset in order to ensure that no condition under such Parent Corporation Contract occurs which could result in, or could increase the likelihood of, any transfer or public disclosure by any Parent Corporation of any Proprietary Asset. (b) During Without limiting the generality of the foregoing, during the Pre-Closing Period, except as set forth on Section 4.2(b) of the Parent Disclosure Schedule, as expressly required, contemplated or permitted by this Agreement, in connection with the Parent Pre-Closing Financing, or as required by applicable Legal Requirements, Parent shall not (not, without the prior written consent of the Company), and Company (which consent shall not permit any of the other Parent Corporations to:be unreasonably withheld, conditioned or delayed): (i) (A) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock, Parent Capital Stock or (B) repurchase, redeem or otherwise reacquire any shares of its capital stock or other securities, except for repurchases at less than fair market value pursuant to employment or consulting agreements in effect prior to the date hereof; (ii) hire an aggregate of more than forty new employees, excluding those persons hired to replace employees who terminate their employment with a Parent Corporation during the Pre-Closing Period; (iii) sell, issueissue or grant, grant or authorize the issuance or grant of of: (A) any capital stock or other security (except Parent Common Stock upon the valid exercise of Parent Options or Parent warrants outstanding on the date of this Agreement or the Exercise of Rights under the Parent ESPP or pursuant to equipment lease financings and similar transactions or otherwise in the ordinary course of business)security, (B) any option, call, warrant or right to acquire any capital stock or any other security (other than options, warrants or rights to purchase an aggregate of up to 300,000 shares of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants of Parent, or (ii) otherwise in the ordinary course of business)security, (C) any equity-based award or instrument convertible into or exchangeable for any capital stock or other security; (iv) except as contemplated by this Agreement, amend or waive any of its rights under, or accelerate the vesting under, (D) any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option debt securities or any restricted stock purchase agreementrights to acquire any debt securities, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract in each case except (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 1) for shares of Parent Common Stock)Stock issued upon the valid exercise of Parent Options or warrants outstanding as of the date of this Agreement, (2) in connection with any Parent Pre-Closing Financing, (3) in connection with the issuance of the Parent Compensatory Warrant and (4) in connection with the dividend, distribution or issuance of the Rights or the Warrants; (viii) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws incorporation, certificate of formation, bylaws, operating agreement or other charter or organizational documentsdocuments of Parent or Merger Sub, or effect or become be a party to any merger, consolidation, share or unit exchange, business combination, recapitalization, reclassification of sharesshares or units, stock split, reverse stock split (other than the Nasdaq Reverse Split) or similar transaction; (viiv) except as previously disclosed to the Company, form any Subsidiary or acquire any equity interest or other interest in any other Entity; (viiA) lend money to any Person, (B) incur or guarantee any indebtedness for borrowed money, other than in the Ordinary Course of Business, (C) guarantee any debt securities of others, or (D) make any capital expenditure, except expenditure or capital expenditures in an aggregate amount of no more than $2,000,000commitment; (viiivi) establish(A) adopt, adopt establish or enter into any Parent Employee Plan, (B) cause or permit any Parent Employee Plan to be amended other than as required by law, including in order to make amendments for the purposes of Section 409A of the Code, subject to prior review and approval (with such approval not to be unreasonably withheld, conditioned or delayed) by Company, (C) hire any additional employees or independent contractors or enter into or amend the term of any employment or consulting agreement with any employee benefit plan not generally available to or independent contractor other than as reasonably necessary for the Company's employees and completion of the Company's 1998 management incentive programContemplated Transactions, (D) enter into any Contract with a labor union or collective bargaining agreement, (E) except as provided in the Parent Disclosure Schedule, pay any bonus or make any profit profit-sharing or similar payment to (except pursuant to other than in the management incentive program and any employment contract or understanding as in effect on the date hereofOrdinary Course of Business), or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directorsdirectors or employees, officers (F) except as provided in the Parent Disclosure Schedule, accelerate the vesting of or employees entitlement to any payment, award, compensation or benefit with respect to any Parent Associate, (G) except as provided in an amount the Parent Disclosure Schedule, pay or increase the severance or change of control benefits offered to any Parent Associate, or (H) provide or make any Tax-related gross-up payment, provided, that Parent may pay those Terminated Parent Associate Payments set forth in excess Section 5.6(a) of the higher Parent Disclosure Schedule to the Terminated Parent Associates in connection with their termination of 20% of the amount previously paid to such Person employment or $20,000service; (ix) change any of its methods of accounting or accounting practices in any respect; (x) make any Material Tax election; (xi) commence or settle any Legal Proceeding except in the ordinary course of business; (xii) materially amend or otherwise modify any of the terms of its engagement of the financial advisor references in Section 3.27 above; (xiiivii) enter into any material transaction outside the Ordinary Course of Business, other than the license, sale, divestiture and/or winding down of the Legacy Assets in accordance with this Agreement; (viii) acquire any material asset nor sell, lease, or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, in each case, other than in the Ordinary Course of Business; (ix) (A) make, change or revoke any material Tax election, (B) file any material amendment to any Tax Return, (C) adopt or change any accounting method in respect of Taxes, (D) change any annual Tax accounting period, (E) enter into any Tax allocation agreement, Tax sharing agreement or Tax indemnity agreement, other than commercial contracts entered into in the Ordinary Course of Business with vendors, customers or landlords, (F) enter into any closing agreement with respect to any Tax, (G) settle or compromise any claim, notice, audit report or assessment in respect of material Taxes, (H) apply for or enter into any ruling from any Tax authority with respect to Taxes, (I) surrender any right to claim a material Tax refund, or (J) consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment; (x) enter into, amend or terminate any Parent Contract that, if effective as of the date hereof, would constitute a Parent Material Contract; (xi) initiate or settle any Legal Proceeding; (xii) after the Net Cash Calculation is finalized pursuant to Section 1.6, incur any Liabilities or otherwise take any other material action actions, in each case either inconsistent other than in the Ordinary Course of Business or as reasonably necessary in connection with the operating transactions contemplated by this Agreement, so as to cause the final Net Cash Calculation to differ materially from actual Parent Net Cash as of the Closing; (xiii) adopt any stockholder rights plan previously provided by Parent to or similar arrangement; (xiv) use, amend or terminate its current at-the-market facility or enter into any similar program or facility; (xv) renew, extend or modify the Company, or outside the ordinary course of businesscurrent sublease for Parent’s principal executive office space; or (xivxvi) Except as previously disclosed to the Companyagree, sell or otherwise dispose of, or grant an exclusive license or any other exclusive right to utilize Parent Proprietary Assets which individually or in the aggregate constitute core technology material to the business of Parent, other than pursuant to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such party. (xv) agree resolve or commit to take do any of the actions described in clause "(i)" through "(xiv)" of this Section 4.3(b)foregoing. (c) During the Pre-Closing Period, Parent shall promptly notify the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance that

Appears in 1 contract

Samples: Merger Agreement

Operation of Parent’s Business. (a) During the Pre-Closing Period: (i) Parent shall ensure that each Except as expressly contemplated by this Agreement, as set forth on Section 5.2 of the Parent Corporations conducts its business and operations (A) in the ordinary course and in accordance with past practices Disclosure Schedule or the operating plan previously provided by Parent to the Company and (B) in compliance with all applicable Legal Requirements and the requirements of all Parent Corporation Contracts that constitute Material Contracts; (ii) Parent shall use all reasonable efforts to ensure that each of the Parent Corporations preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Parent Corporations; and (iii) Parent shall keep in full force all insurance policies referred to in Section 3.18 or replace such policies with comparable or superior policies; and (iv) Parent shall 46. 52 provide all notices, assurances and support as required by any Parent Corporation Contract relating to any Proprietary Asset in order to ensure that no condition under such Parent Corporation Contract occurs which could result inapplicable Law, or could increase the likelihood of, any transfer or public disclosure by any Parent Corporation of any Proprietary Asset. (b) During during the Pre-Closing Period, without the written consent of the Company (which consent shall not be unreasonably withheld, conditioned or delayed), Parent shall not (use commercially reasonable efforts to, and shall cause each Subsidiary to use commercially reasonable efforts to, conduct its operations only in the Ordinary Course of Business and in compliance with all applicable Laws in all material respects. Without limiting the generality of the foregoing, during the Pre-Closing Period, and except as set forth on Section 5.2 of the Parent Disclosure Schedule, Parent shall not, without the prior written consent of the CompanyCompany (such consent shall not be unreasonably withheld, conditioned or delayed): (a) issue or sell any stock or other securities of Parent or any options, warrants or rights to acquire any such stock or other securities (except for shares of Parent Common Stock issued upon settlement of employee awards existing on the date of this Agreement), and shall not permit or amend any of the other Parent Corporations to: (i) terms of any stock options or restricted stock agreements, declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock, or repurchase, repurchase or redeem or otherwise reacquire any shares of capital stock or other securitiessecurities of Parent (except from former employees, except for repurchases at less than fair market value pursuant to employment directors or consulting consultants in accordance with agreements in effect prior to the date hereof; (ii) hire an aggregate of more than forty new employees, excluding those persons hired to replace employees who terminate their employment with a Parent Corporation during the Pre-Closing Period; (iii) sell, issue, grant or authorize the issuance or grant of (A) any capital stock or other security (except Parent Common Stock upon the valid exercise of Parent Options or Parent warrants outstanding place on the date of this Agreement and providing for the repurchase of shares at their original issuance price in connection with any termination of employment with or the Exercise of Rights under the Parent ESPP or pursuant services to equipment lease financings and similar transactions or otherwise in the ordinary course of business), (B) any option, call, warrant or right to acquire any capital stock or other security (other than options, warrants or rights to purchase an aggregate of up to 300,000 shares of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants of Parent, or (ii) otherwise in the ordinary course of business), (C) any instrument convertible into or exchangeable for any capital stock or other security; (iv) except as contemplated by this Agreement, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 shares of Parent Common Stock); (vb) amend split, combine or permit the adoption reclassify any shares of its capital stock; or declare, set aside or pay any amendment to its certificate of incorporation or bylaws dividend or other charter or organizational documents, or effect or become a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of sharesdistribution (whether in cash, stock split, reverse stock split or similar transactionproperty or any combination thereof) in respect of its capital stock; (vic) except (i) create, incur or assume any Indebtedness (other than interest incurred with respect to Indebtedness outstanding as previously disclosed of the date hereof in accordance with its terms); (ii) assume, guarantee, endorse or otherwise agree to be liable (whether directly, contingently or otherwise) for the Company, form any Subsidiary or acquire any equity interest or other interest in obligations of any other EntityPerson; or (iii) make any loans, advances or capital contributions to, or investments in, any other Person (other than investments of cash in cash equivalents in the Ordinary Course of Business); (viid) hire any new officers or, except in the Ordinary Course of Business, any new employees; (e) enter into a joint venture; (f) amend its Organizational Documents; (g) make or change any Tax election, change an annual accounting period, file any amended income or other material Tax Return, enter into any closing agreement, waive or extend any statute of limitations with respect to Taxes, settle or compromise any liability, claim or assessment in respect of material Taxes or surrender any right to claim a material refund of Taxes; (h) make or commit to make any capital expenditure, except capital expenditures in an aggregate amount of no more than $2,000,000; (viii) establish, adopt or amend any employee benefit plan not generally available to the Company's employees and the Company's 1998 management incentive program, or pay any bonus or make any profit sharing or similar payment to (except pursuant to the management incentive program and any employment contract or understanding as in effect on the date hereof), or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees in an amount expenditure in excess of the higher of 20% of the amount previously paid to such Person $75,000 per item or $20,000; (ix) change any of its methods of accounting or accounting practices in any respect; (x) make any Material Tax election; (xi) commence or settle any Legal Proceeding except 250,000 in the ordinary course of business; (xii) materially amend or otherwise modify any of the terms of its engagement of the financial advisor references in Section 3.27 above; (xiii) enter into any material transaction or take any other material action in each case either inconsistent with the operating plan previously provided by Parent to the Company, or outside the ordinary course of businessaggregate; or (xivi) Except as previously disclosed to the Company, sell agree in writing or otherwise dispose of, or grant an exclusive license or any other exclusive right to utilize Parent Proprietary Assets which individually or in the aggregate constitute core technology material to the business of Parent, other than pursuant to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such party. (xv) agree or commit to take any of the actions described in clause "(i)" through "(xiv)" of this Section 4.3(b). (c) During the Pre-Closing Period, Parent shall promptly notify the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance thatforegoing actions

Appears in 1 contract

Samples: Agreement and Plan of Merger and Reorganization (Eliem Therapeutics, Inc.)

Operation of Parent’s Business. (a) During the Pre-Closing Period: (i) Parent shall ensure that each of the Parent Corporations conducts conduct its business and operations (A) in the ordinary course and in accordance with past practices or the operating plan previously provided by Parent to the Company and (B) in compliance with all applicable Legal Requirements and the requirements of all Parent Corporation Contracts that constitute Parent Material Contracts; (ii) Parent shall use all reasonable efforts to ensure that each of the Parent Corporations preserves preserve intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Parent CorporationsParent; and (iii) Parent shall keep in full force all insurance policies referred to in Section 3.18 or replace such policies with comparable or superior policies3.18; and (iv) Parent shall 46. 52 provide all notices, assurances and support required by any Parent Corporation Contract relating to any Proprietary Asset in order to ensure that no condition under such Parent Corporation Contract occurs which could result in, or could increase the likelihood of, any transfer transfer, disclosure or public disclosure release by any Parent Corporation of any Proprietary Asset; and (v) Parent shall (to the extent requested by the Company) cause its officers to report regularly to the Company concerning the status of Parent's business. (b) During the Pre-Closing Period, Parent shall not (without the prior written consent of the Company), and shall not permit any of the other Parent Corporations to:): (i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock, or repurchase, redeem or otherwise reacquire any shares of capital stock or other securities, except for repurchases at less than fair market value pursuant to employment or consulting agreements in effect prior to the date hereof; (ii) hire an aggregate of more than forty new employees, excluding those persons hired to replace employees who terminate their employment except in connection with a Parent Corporation during the Pre-Closing Period; (iii) Preferred Sale, sell, issue, grant or authorize the issuance or grant of (A) any capital stock or other security (except Parent Common Stock upon the valid exercise of Parent Options or Parent warrants outstanding on the date of this Agreement or the Exercise of Rights under the Parent ESPP or pursuant to equipment lease financings and similar transactions or otherwise in the ordinary course of business)security, (B) any option, call, warrant or right to acquire any capital stock or other security (other than options, warrants or rights to purchase an aggregate of up to 300,000 shares of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants of Parentsecurity, or (ii) otherwise in the ordinary course of business), (C) any instrument convertible into or exchangeable for any capital stock or other securitysecurity (except that Parent may issue Parent Common Stock upon the valid exercise of Parent Options outstanding as of the date of this Agreement and except that Parent may reprice outstanding stock options or grant stock awards in exchange for cancellation of existing stock options, if any awards so granted correspond in number of shares to the stock options so cancelled and if the aggregate number of shares so repriced or granted, when combined with the number of shares subject to options that are not repriced or cancelled, does not exceed 1,039,764); (iviii) except for the full vesting of Parent stock options that may occur on the Effective Date as contemplated by this Agreementa result of the Merger or any repricing of stock options, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 shares of Parent Common Stock)Contract; (viv) other than as contemplated by this Agreement and except in connection with a Preferred Sale, amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documents, or effect or become a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (viv) except as previously disclosed to the Company, form any Subsidiary subsidiary or acquire any equity interest or other interest in any other Entity; (viivi) make any capital expenditure, expenditure (except that Parent may make capital expenditures that, when added to all other capital expenditures made on behalf of Parent during the Pre-Closing Period, do not exceed $50,000 in an aggregate amount the aggregate); (vii) enter into or become bound by, or permit any of no more the assets owned or used by it to become bound by, any Parent Contract that constitutes or would constitute a Parent Material Contract other than $2,000,000in the ordinary course of business, or amend or terminate, or waive or exercise any material right or remedy (including any right to repurchase shares of Parent Common Stock) under, any Parent Contract that constitutes a Parent Material Contract; (viii) acquire, lease or license any right or other asset from any other Person or sell or otherwise dispose of, or lease or license, any right or other asset to any other Person (except in each case for assets acquired, leased, licensed or disposed of by Parent in the ordinary course of business and consistent with past practices), or waive or relinquish any material right; (ix) write off as uncollectable, or establish any extraordinary reserve with respect to, any accounts receivable or other indebtedness, other than in the ordinary course of business; (x) make any pledge of any of its assets or otherwise permit any of its assets to become subject to any encumbrance, except for pledges of immaterial assets made in the ordinary course of business and consistent with past practices; (xi) except pursuant to lines of credit and subject to credit limits in effect prior to the date of this Agreement and except for up to an additional $1,000,000 in indebtedness for borrowed money which may be incurred by Parent, lend money to any Person or incur or guarantee any indebtedness; (xii) except for severance and fully vested deferred compensation that is payable upon termination of employment from Parent without cause on or after the Effective Date, establish, adopt or amend any employee benefit plan not generally available to the Company's employees and the Company's 1998 management incentive programplan, or pay any bonus or make any profit profit-sharing or similar payment to (except pursuant to the management incentive program and any employment contract or understanding as in effect on the date hereof)to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees in an amount in excess of the higher of 20% of the amount previously paid to such Person or $20,000employees; (ixxiii) hire any new employee or engage any consultant or independent contractor; (xiv) change any of its methods of accounting or accounting practices in any respect; (xxv) make any Material Tax election; (xixvi) commence or settle any Legal Proceeding Proceeding, except in the ordinary course of businessto enforce its rights under this Agreement; (xii) materially amend or otherwise modify any of the terms of its engagement of the financial advisor references in Section 3.27 above; (xiiixvii) enter into any material transaction or take any other material action in each case either inconsistent with the operating plan previously provided by Parent to the Company, or outside the ordinary course of businessbusiness or inconsistent with past practices; (xviii) enter into any material transaction or take any other material action that could reasonably be expected to have a Material Adverse Effect on Parent; or (xiv) Except as previously disclosed to the Company, sell or otherwise dispose of, or grant an exclusive license or any other exclusive right to utilize Parent Proprietary Assets which individually or in the aggregate constitute core technology material to the business of Parent, other than pursuant to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such party. (xvxix) agree or commit to take any of the actions described in clause clauses "(i)" through "(xivxviii)" of this Section 4.3(b5.2(b). (c) During the Pre-Closing Period, Parent shall promptly notify the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance thatthat occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by Parent in this Agreement; (ii) 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 any representation or warranty made by Parent in this Agreement if (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance, or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of Parent; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Sections 7 or 8 impossible or unlikely or that has had or could reasonably 46. be expected to have a Material Adverse Effect on Parent. No notification given to the Company pursuant to this Section 5.2(c) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of Parent contained in this Agreement.

Appears in 1 contract

Samples: Merger Agreement (Paradigm Technology Inc /De/)

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Operation of Parent’s Business. (a) During Except as expressly permitted by this Agreement (including any Pre-Closing Capital Raise, the Parent Preferred Stock Conversion and any Reverse Split), as required by applicable Law or unless the Company shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), during the period commencing on the date of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Section 9 and the Effective Time (the “Pre-Closing Period: (i) Parent shall ensure that each of the Parent Corporations conducts and Merger Sub shall conduct its business and operations (A) in the ordinary course Ordinary Course of Business and in accordance with past practices or the operating plan previously provided by Parent to the Company and (B) compliance in compliance all material respects with all applicable Legal Requirements Laws and the requirements of all Parent Corporation Contracts that constitute Parent Material Contracts; (ii) Parent shall use all reasonable efforts to ensure that each of the Parent Corporations preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Parent Corporations; and (iii) Parent shall keep in full force all insurance policies referred to in Section 3.18 or replace such policies with comparable or superior policies; and (iv) Parent shall 46. 52 provide all notices, assurances and support required by any Parent Corporation Contract relating to any Proprietary Asset in order to ensure that no condition under such Parent Corporation Contract occurs which could result in, or could increase the likelihood of, any transfer or public disclosure by any Parent Corporation of any Proprietary Asset. (b) During Except (i) as expressly permitted by this Agreement (including any Pre-Closing Capital Raise, the Parent Preferred Stock Conversion or Reverse Split), (ii) as required by applicable Law or (iii) with the prior written consent of the Company (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, Parent shall not (without the prior written consent of the Company)not, and nor shall not it cause or permit Merger Sub to, do any of the other Parent Corporations tofollowing: (i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock, stock or repurchase, redeem or otherwise reacquire any shares of its capital stock or other securitiessecurities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, except for repurchases at less than fair market value pursuant to employment settlement or consulting agreements vesting of any award granted under the Parent Stock Plan in accordance with the terms of such award in effect prior to on the date hereofof this Agreement); (ii) hire an aggregate of more than forty new employees, excluding those persons hired to replace employees who terminate their employment with a Parent Corporation during the Pre-Closing Period; (iii) sell, issue, grant grant, pledge, accelerate the vesting of (as applicable), or otherwise dispose of or encumber or authorize any of the issuance or grant of foregoing with respect to: (A) any capital stock or other security of Parent (except for Parent Common Stock issued upon the valid exercise of outstanding Parent Options Options, Parent Warrants or Parent warrants outstanding on the date of this Agreement or the Exercise of Rights under the Parent ESPP or pursuant to equipment lease financings and similar transactions or otherwise in the ordinary course of businessRSUs), ; (B) any option, call, warrant or right to acquire any capital stock or any other security of Parent (other than options, warrants or rights to purchase an aggregate of up to 300,000 shares grants of Parent Common Stock which may be granted Options to (i) officers, directors, employees or consultants of Parent, or (ii) otherwise and service providers in the ordinary course Ordinary Course of businessBusiness), ; or (C) any instrument convertible into or exchangeable for any capital stock or other securitysecurity of Parent, except the issuance of the Parent Executive Incentive Options; (iviii) except as contemplated by this Agreementrequired to give effect to anything in contemplation of the Closing, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 shares of Parent Common Stock); (v) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documentsOrganizational Documents, or effect or become be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split split, liquidation, dissolution or similar transactiontransaction except, for the avoidance of doubt, the Contemplated Transactions; (viiv) except as previously disclosed to the Company, form any Subsidiary or acquire any equity interest interest, business or other interest in any other Entity, or enter into a joint venture with any other Entity or enter into a new line of business; (viiA) make lend or advance money to any capital expenditurePerson (except for the advancement of expenses to employees, except capital expenditures directors and consultants in an aggregate amount the Ordinary Course of no more than $2,000,000Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) forgive or discharge in whole or in part any outstanding loans or advances, or prepay any indebtedness for borrowed money; (viiivi) establish, adopt other than as required by applicable Law or amend the terms of any employee benefit plan not generally available to the Company's employees and the Company's 1998 management incentive program, or pay any bonus or make any profit sharing or similar payment to (except pursuant to the management incentive program and any employment contract or understanding Parent Benefit Plan as in effect on the date hereof)of this Agreement: (A) adopt, terminate, establish or enter into any Parent Benefit Plan or increase costs under existing Parent Benefit Plans; (B) cause or permit any Parent Benefit Plan to be amended in any material respect; (C) issue, deliver, grant or sell or authorize or propose the issuance, delivery, grant or sale of any equity interests; (D) pay any bonus (including any transaction-related bonus or other similar success fee) or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees in an amount in excess employees; (E) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (F) hire, terminate or give notice of termination to any (x) officer or (y) employee, other than a termination for cause; or (G) accelerate the higher vesting or extend the exercise period for outstanding equity awards; (vii) recognize any labor union, labor organization, work council or similar Person except as otherwise required by law and after using reasonable efforts to provide advance notice to the Company; (viii) acquire any material asset or business or sell, lease or otherwise irrevocably dispose of 20% any of the amount previously paid its material assets or properties, or grant any Encumbrance with respect to such Person assets or $20,000properties if doing so would endanger the listing of Parent Common Stock on Nasdaq; (ix) change sell, assign, transfer, license, sublicense, abandon or otherwise dispose of any of its methods of accounting Parent IP or accounting practices in any respectIntellectual Property Rights exclusively licensed to Parent if doing so would endanger Parent’s Nasdaq listing; (x) make make, change or revoke any Material material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than six months), or adopt or change any material accounting method in respect of Taxes; (xi) commence enter into, materially amend or settle terminate any Legal Proceeding except in the ordinary course of businessParent Material Contract; (xii) materially amend other than as required by Law or otherwise modify GAAP, take any of the terms of its engagement of the financial advisor references in Section 3.27 aboveaction to change accounting policies or procedures; (xiii) enter into initiate or settle any material transaction or take any other material action in each case either inconsistent with the operating plan previously provided by Parent to the Company, or outside the ordinary course of businessLegal Proceeding; or (xiv) Except as previously disclosed agree, resolve, offer or commit to do any of the foregoing. Nothing contained in this Agreement shall give the Company, sell directly or otherwise dispose ofindirectly, or grant an exclusive license or any other exclusive the right to utilize control or direct the operations of Parent Proprietary Assets which individually or in the aggregate constitute core technology material prior to the business of Parent, other than pursuant Effective Time. Prior to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such party. (xv) agree or commit to take any of the actions described in clause "(i)" through "(xiv)" of this Section 4.3(b). (c) During the Pre-Closing PeriodEffective Time, Parent shall promptly notify exercise, consistent with the Company in writing of: (i) the discovery by Parent terms and conditions of any eventthis Agreement, condition, fact or circumstance thatcomplete unilateral control and supervision over its business operations.

Appears in 1 contract

Samples: Merger Agreement (Ritter Pharmaceuticals Inc)

Operation of Parent’s Business. (a) During the Pre-Closing Period: (i) Parent shall ensure that use reasonable effort to cause Parent and each of the Parent Corporations conducts its subsidiaries to conduct its business and operations (A) in the ordinary course and in accordance with past practices or the operating plan previously provided by Parent to the Company and (B) in material compliance with all applicable Legal Requirements and the requirements of all the Parent Corporation Contracts that constitute Material Contracts; and (ii) Parent shall use all reasonable efforts to ensure that cause Parent and each of the Parent Corporations preserves its subsidiaries to preserve intact its current business organization, keeps to keep available the services of its current officers and employees and maintains to maintain its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Parent Corporations; and (iii) Parent shall keep in full force all insurance policies referred to in Section 3.18 or replace such policies with comparable or superior policies; and (iv) Parent shall 46. 52 provide all notices, assurances and support required by any Parent Corporation Contract relating to any Proprietary Asset in order to ensure that no condition under such Parent Corporation Contract occurs which could result in, or could increase the likelihood of, any transfer or public disclosure by any Parent Corporation of any Proprietary Assetits subsidiaries. (b) During the Pre-Closing Period, Parent shall not (without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed by the Company), and shall not permit any of the other Parent Corporations its subsidiaries to: (i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock, or repurchase, redeem or otherwise reacquire any shares of capital stock or other securities, except for repurchases at less than fair market value pursuant to employment or consulting agreements in effect prior to the date hereofsecurities (excluding transactions among Parent and its subsidiaries); (ii) hire an aggregate sell, issue or grant shares of more than forty new Parent Common Stock or securities or rights exercisable for or convertible into shares of Parent Common Stock (except stock options to employees, excluding those persons hired to replace employees who terminate their employment consultants or directors) that, when aggregated with a all such issuances since the date of this Agreement (assuming conversion into, or exercise for, shares of Parent Corporation during the Pre-Closing PeriodCommon Stock of any such securities) exceed 2,500,000 shares of Parent Common Stock (as appropriately adjusted for any stock split, stock dividend, reverse stock split, reclassification, recapitalization or other similar transaction); (iii) sell, issue, grant or authorize the issuance or grant of (A) any capital stock or other security (except Parent Common Stock upon the valid exercise of Parent Options or Parent warrants outstanding on the date of this Agreement or the Exercise of Rights under the Parent ESPP or pursuant to equipment lease financings and similar transactions or otherwise in the ordinary course of business), (B) any option, call, warrant or right to acquire any capital stock or other security (other than options, warrants or rights to purchase an aggregate of up to 300,000 shares of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants of Parent, or (ii) otherwise in the ordinary course of business), (C) any instrument convertible into or exchangeable for any capital stock or other security; (iv) except as contemplated by this Agreement, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 shares of Parent Common Stock); (v) materially amend or permit the adoption of any material amendment to its certificate of incorporation or bylaws or other charter or organizational documents, or effect or become a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transactionbylaws; (vi) except as previously disclosed to the Company, form any Subsidiary or acquire any equity interest or other interest in any other Entity; (vii) make any capital expenditure, except capital expenditures in an aggregate amount of no more than $2,000,000; (viii) establish, adopt or amend any employee benefit plan not generally available to the Company's employees and the Company's 1998 management incentive program, or pay any bonus or make any profit sharing or similar payment to (except pursuant to the management incentive program and any employment contract or understanding as in effect on the date hereof), or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees in an amount in excess of the higher of 20% of the amount previously paid to such Person or $20,000; (ixiv) change any of its methods of accounting or accounting practices in any respect; (xv) make expend more than $15,000,000 of funds in a single transaction, or more than an aggregate of $25,000,000 of funds in a series of transactions, in connection with any Material Tax electioncapital contribution to, investment in, or acquisition of all or any portion of the equity securities or assets of any Entity; (xivi) commence approve or settle propose any Legal Proceeding except in Stockholder Rights Plan that would affect the ordinary course of business; (xii) materially amend or otherwise modify any consummation of the terms of its engagement of the financial advisor references in Section 3.27 above; (xiii) enter into any material transaction or take any other material action in each case either inconsistent with the operating plan previously provided by Parent to the Company, or outside the ordinary course of businesstransactions contemplated hereby; or (xiv) Except as previously disclosed to the Company, sell or otherwise dispose of, or grant an exclusive license or any other exclusive right to utilize Parent Proprietary Assets which individually or in the aggregate constitute core technology material to the business of Parent, other than pursuant to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such party. (xvvii) agree or commit to take any of the actions described in clause clauses "(i)" through "(xivvi)" of this Section 4.3(b). (c) During Notwithstanding anything to the Pre-Closing Periodcontrary contained in this Section 4.3, Parent shall promptly notify not be required under this Section 4.3 to take any action, or refrain from acting in a manner, that would cause Parent to violate the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance thatHSR Act.

Appears in 1 contract

Samples: Merger Agreement (Pharmacopeia Inc)

Operation of Parent’s Business. Except as expressly contemplated by this Agreement, as set forth on Section 5.2 of the Parent Disclosure Schedule or as required by applicable Law (a) During including any COVID-19 Measures), during the Pre-Closing Period: , without the written consent of the Company (i) which consent shall not be unreasonably withheld, conditioned or delayed), Parent shall ensure that use commercially reasonable efforts to, and shall cause each of the Parent Corporations conducts Subsidiary to use commercially reasonable efforts to, conduct its business and operations (A) only in the ordinary course Ordinary Course of Business and in accordance with past practices or the operating plan previously provided by Parent to the Company and (B) in compliance with all applicable Legal Requirements and Laws in all material respects and, to the requirements of all Parent Corporation Contracts that constitute Material Contracts; (ii) Parent shall extent consistent therewith, use all its commercially reasonable efforts to ensure that each of the Parent Corporations preserves preserve intact its current business organization, keeps keep its physical assets in good working condition, keep available the services of its current officers and employees and maintains preserve its relations and goodwill relationships with all suppliers, customers, landlords, creditors, licensors, licensees, employees suppliers and other Persons others having business relationships dealings with it and to continue the respective Parent Corporations; and (iii) Parent shall keep in full force all insurance policies referred timely payment of its accounts payable that are not subject to in Section 3.18 or replace such policies with comparable or superior policies; and (iv) Parent shall 46good faith dispute. 52 provide all noticesWithout limiting the generality of the foregoing, assurances and support required by any Parent Corporation Contract relating to any Proprietary Asset in order to ensure that no condition under such Parent Corporation Contract occurs which could result in, or could increase the likelihood of, any transfer or public disclosure by any Parent Corporation of any Proprietary Asset. (b) During during the Pre-Closing PeriodPeriod and except as set forth on Section 5.2 of the Parent Disclosure Schedule, Parent shall not, and shall cause each Subsidiary not (to, without the prior written consent of the CompanyCompany (such consent shall not be unreasonably withheld, conditioned or delayed): (a) issue or sell any stock or other securities of Parent or any Subsidiary or any options, warrants or rights to acquire any such stock or other securities (except for shares of Parent Common Stock issued upon settlement of employee awards existing on the date of this Agreement), and shall not permit or amend any of the other Parent Corporations to: (i) terms of any stock options or restricted stock agreements, declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock, or repurchase, repurchase or redeem or otherwise reacquire any shares of capital stock or other securitiessecurities of Parent or any Subsidiary (except from former employees, except for repurchases at less than fair market value pursuant to employment directors or consulting consultants in accordance with agreements in effect prior to the date hereof; (ii) hire an aggregate of more than forty new employees, excluding those persons hired to replace employees who terminate their employment with a Parent Corporation during the Pre-Closing Period; (iii) sell, issue, grant or authorize the issuance or grant of (A) any capital stock or other security (except Parent Common Stock upon the valid exercise of Parent Options or Parent warrants outstanding place on the date of this Agreement and providing for the repurchase of shares at their original issuance price in connection with any termination of employment with or the Exercise of Rights under the services to Parent ESPP or pursuant to equipment lease financings and similar transactions or otherwise in the ordinary course of business), (B) any option, call, warrant or right to acquire any capital stock or other security (other than options, warrants or rights to purchase an aggregate of up to 300,000 shares of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants of Parent, or (ii) otherwise in the ordinary course of business), (C) any instrument convertible into or exchangeable for any capital stock or other security; (iv) except as contemplated by this Agreement, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 shares of Parent Common StockSubsidiary); (vb) amend split, combine or permit the adoption reclassify any shares of its capital stock; or declare, set aside or pay any amendment to its certificate of incorporation or bylaws dividend or other charter or organizational documents, or effect or become a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of sharesdistribution (whether in cash, stock split, reverse stock split or similar transactionproperty or any combination thereof) in respect of its capital stock; (vic) (i) create, incur or assume any Indebtedness (other than interest incurred with respect to Indebtedness outstanding as of the date hereof in accordance with its terms); (ii) assume, guarantee, endorse or otherwise agree to be liable (whether directly, contingently or otherwise) for the obligations of any other Person; or (iii) make any loans, advances or capital contributions to, or investments in, any other Person (other than investments of cash in cash equivalents in the Ordinary Course of Business); (d) hire any new officers or, except in the Ordinary Course of Business, any new employees; (e) except as previously required to comply with applicable Law or pursuant to agreements, plans or arrangements existing on the date hereof and disclosed to the Companyin Section 5.2(e) of Parent Disclosure Schedule, form any Subsidiary or acquire any equity interest or other interest in any other Entity; (viii) make any capital expenditureadopt, except capital expenditures in an aggregate amount of no more than $2,000,000; (viii) establishenter into, adopt terminate or amend any employee benefit plan not generally available to employment or severance plan, agreement or arrangement, any Parent Plan or any collective bargaining agreement, (ii) increase the Company's employees and the Company's 1998 management incentive programcompensation or fringe benefits of, or pay any bonus to, any director, officer, employee or make consultant, (iii) amend or accelerate the payment, right to payment or vesting of any profit sharing compensation or similar payment to benefits, including any outstanding Parent Equity Awards, or (except pursuant to the management incentive program and iv) pay any employment contract or understanding benefit not provided for as in effect on of the date hereof)of this Agreement under any Parent Plan, or increase the amount of the wagesgrant any awards under any bonus, salaryincentive, commissions, fringe benefits performance or other compensation plan or remuneration payable toarrangement or benefit plan, including the grant of equity or equity-based compensation, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder; (f) acquire, sell, lease, license or dispose of any Intellectual Property or any other material assets or property, other than in the Ordinary Course of Business; (g) enter into a joint venture; (h) amend its Organizational Documents; (i) change the nature or scope of its business being carried on as of the date of this Agreement in any material respect or commence any new business not being ancillary or incidental to such business or take any action to alter its general organizational or management structure; (j) change its accounting methods, principles or practices in any material respect, except insofar as may be required by a generally applicable change in GAAP or applicable Law; (k) except as required by applicable Law, make, or amend, any filings with the FDA, EMA or any other Regulatory Authority; (l) except as required by applicable Law, make or change any material Tax election, change an annual accounting period, enter into any closing agreement, waive or extend any statute of its directorslimitations with respect to Taxes, officers settle or employees in an amount compromise any Tax liability, claim or assessment, or surrender any right to claim a material refund of Taxes; (m) make or commit to make any capital expenditure in excess of the higher of 20% of the amount previously paid to such Person $75,000 per item or $20,000250,000 in the aggregate; (ixn) change any of its methods of accounting or accounting practices in any respect; (x) make any Material Tax election; (xi) commence institute or settle any Legal Proceeding except in the ordinary course of business; (xii) materially amend or otherwise modify any of other than to enforce the terms of its engagement of this Agreement or the financial advisor references in Section 3.27 above; (xiii) enter into any material other agreements relating to the transaction or take any other material action otherwise in each case either inconsistent accordance with the operating plan previously provided by Parent to the Company, or outside the ordinary course of businessSection 8.9); or (xivo) Except as previously disclosed to the Company, sell agree in writing or otherwise dispose of, or grant an exclusive license or any other exclusive right to utilize Parent Proprietary Assets which individually or in the aggregate constitute core technology material to the business of Parent, other than pursuant to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such party. (xv) agree or commit to take any of the actions described in clause "(i)" through "(xiv)" of this Section 4.3(b)foregoing actions. (c) During the Pre-Closing Period, Parent shall promptly notify the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance that

Appears in 1 contract

Samples: Merger Agreement (Solid Biosciences Inc.)

Operation of Parent’s Business. (a) During Until the Pre-Closing Period: (iClosing, except as set forth on Section 5.2(a) Parent shall ensure that each of the Parent Corporations conducts its business and operations (A) in the ordinary course and in accordance with past practices Disclosure Schedule, as explicitly permitted or the operating plan previously provided required by Parent to the Company and (B) in compliance with all this Agreement, as required by applicable Legal Requirements and the requirements of all Parent Corporation Contracts that constitute Material Contracts; (ii) Parent shall use all reasonable efforts to ensure that each of the Parent Corporations preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill or with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Parent Corporations; and (iii) Parent shall keep in full force all insurance policies referred to in Section 3.18 or replace such policies with comparable or superior policies; and (iv) Parent shall 46. 52 provide all notices, assurances and support required by any Parent Corporation Contract relating to any Proprietary Asset in order to ensure that no condition under such Parent Corporation Contract occurs which could result in, or could increase the likelihood of, any transfer or public disclosure by any Parent Corporation of any Proprietary Asset. (b) During the Pre-Closing Period, Parent shall not (without the prior written consent of the Company (which consent will not be unreasonably withheld, delayed or conditioned by the Company), Parent shall, and shall cause each of its Subsidiaries to, use commercially reasonable efforts to conduct its business in the ordinary course of business consistent with past practice, including by using commercially reasonable efforts to preserve substantially intact its current business organizations, retain its key officers and key employees, and maintain its relations and goodwill with key suppliers and customers. (b) Until the Closing, except as set forth on Section 5.2(b) of the Parent Disclosure Schedule, as explicitly permitted or required by this Agreement, as required by applicable Legal Requirements or with the prior written consent of the Company (which consent will not be unreasonably withheld, delayed or conditioned by the Company), Parent shall not, and shall not permit any of the other Parent Corporations its Subsidiaries to: (i) (A) declare, accrueset aside, set aside or pay any dividend dividends on, or make any other distribution distributions (whether in respect of any shares of capital cash, stock, or repurchaseproperty) in respect of, redeem or otherwise reacquire any shares of its capital stock or other securitiesequity or voting interests, except (1) for repurchases at less than fair market value pursuant dividends or distributions expressly required by the Organizational Documents of Parent or any of its Subsidiaries and set forth on Section 5.2(b)(i) of the Parent Disclosure Schedule, (2) by (x) a direct or indirect wholly owned Subsidiary of Parent to employment Parent or consulting agreements a direct or indirect wholly owned Subsidiary of Parent or (y) a direct or indirect wholly owned Subsidiary of Parent Holdco to Parent Holdco or a direct or indirect wholly owned Subsidiary of Parent Holdco, (3) as may be required under any registration rights agreement in effect prior to the date hereof; (ii) hire an aggregate of more than forty new employees, excluding those persons hired to replace employees who terminate their employment with a Parent Corporation during the Pre-Closing Period; (iii) sell, issue, grant or authorize the issuance or grant of (A) any capital stock or other security (except Parent Common Stock upon the valid exercise of Parent Options or Parent warrants outstanding on the date of this Agreement or the Exercise of Rights and (4) tax distributions under the Parent ESPP Holdco LLC Agreement or (B) split, combine, or reclassify any of its capital stock or other equity or voting interests; (ii) offer, issue, deliver, grant, sell, pledge, or otherwise encumber any shares of its capital stock, any other equity or voting interests or any securities convertible into, or exchangeable for, or any options, warrants, calls, or rights to acquire or receive, any such shares, interests, or securities or any stock appreciation rights, phantom stock awards, or other rights that are linked in any way to the price of the Parent Common Stock or any equity awards of Parent or the value of Parent or any part thereof, other than (A) the issuance of shares of Parent Common Stock upon the vesting of any equity awards of Parent, in each case that are outstanding as of the date of this Agreement and in accordance with their present terms and (B) the issuance of shares of Parent Common Stock in connection with any acquisition of any assets or securities of all or a portion of the business or property of another Person, or any merger, consolidation or other business transaction permitted by this Agreement or (C) Permitted Liens; (iii) amend its Organizational Documents (including by merger, consolidation or otherwise); (iv) consummate or adopt a plan of complete or partial liquidation, dissolution, recapitalization or other reorganization, or merger, consolidate, combine or amalgamate with any other Person (except, solely with respect to Parent’s Subsidiaries (other than Parent Holdco), as otherwise permitted pursuant to equipment Section 5.2(b)(v) and Section 5.2(b)(vii)); (v) acquire by merger or otherwise, or lease financings any assets or securities or all or any portion of the business or property of any entity or merge, consolidate or enter into any other business combination transaction with any Person, in each case other than (A) pursuant to an agreement of Parent or any of its Subsidiaries in effect on the date of this Agreement and similar transactions set forth on Section 5.2(b)(v) of the Parent Disclosure Schedule, or (B) acquisitions for which the purchase price is $7,500,000 individually and $15,000,000 in the aggregate; (vi) make capital expenditures that are, with respect to any fiscal quarter, in the aggregate greater than 110% of the aggregate amount of capital expenditures scheduled to be made in Parent’s capital expenditure budget for such fiscal quarter as set forth on Section 5.2(b)(vi) of the Parent Disclosure Schedule, except for capital expenditures to repair damage resulting from insured casualty events where there is a reasonable basis for a claim of insurance or made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages or otherwise; (vii) sell, lease, exchange or otherwise dispose of any portion of its assets or properties, other than, (A) pursuant to an agreement of Parent or any of its Subsidiaries in effect on the date of this Agreement and set forth on Section 5.2(b)(vii) of the Parent Disclosure Schedule, (B) sales, leases or dispositions of inventory and the granting of nonexclusive licenses in the ordinary course of business consistent with past practice (which, for avoidance of doubt, shall be deemed to exclude, without limitation, the sale, exchange or other disposition of any equity interests in any of Parent’s Subsidiaries) and that would not exceed $250,000 individually or $1,000,000 in the aggregate during any fiscal quarter, (C) any disposition of obsolete or worn-out equipment or other assets that are no longer used, in each case in the ordinary course of business consistent with past practice or (D) transactions solely among Parent, Parent Holdco and their respective wholly owned Subsidiaries; (viii) other than in the ordinary course of business consistent with past practice, incur, create or assume any Indebtedness or guarantee any such Indebtedness of another Person (other than Indebtedness among Parent, Parent Holdco and their respective wholly owned Subsidiaries) or create any material Encumbrances on any property or assets of Parent or any of its Subsidiaries in connection with any Indebtedness thereof, other than Permitted Liens; provided, however, that the foregoing shall not restrict the incurrence of Indebtedness (A) under existing credit facilities or (B) in connection with (1) the repayment of any Indebtedness of Parent and its Subsidiaries, (2) any financing in connection with the consummation of the Transactions or (3) in connection with any acquisition by Parent or any of its Subsidiaries permitted by Section 5.2(b)(v); (ix) make any (A) loans, advances, extension of credit other than trade credit to customers in the ordinary course of business consistent with past practice or (B) capital contributions to, or investments in, any other Person, other than any direct or indirect wholly owned Subsidiary of Parent or any direct or indirect wholly owned Subsidiary of Parent Holdco; (x) (A) settle any Legal Proceeding against Parent or any of its Subsidiaries (including claims of stockholders and any stockholder litigation relating to this Agreement, the Transactions or otherwise) in excess of $1,000,000 individually and $3,000,000 in the aggregate, in each case net of insurance proceeds; provided, however, that neither Parent nor any of its Subsidiaries shall settle or compromise any Legal Proceeding if such settlement or compromise (1) involves a material conduct remedy or material injunctive or similar relief, (2) involves an admission of criminal wrongdoing by Parent or any of its Subsidiaries or (3) has a restrictive impact on the business of Parent and its Subsidiaries, taken as a whole, in any material respect, or (B) waive or release any material claim or Legal Proceeding brought by Parent or any of its Subsidiaries against another Person, other than in the ordinary course of business consistent with past practice; (xi) except in the ordinary course of business consistent with past practice, (A) enter into any Contract that would be a Parent Material Contract or (B) modify, amend, terminate or assign, or waive or assign any material rights under, any Parent Material Contract; provided, however, that any Contract entered into in compliance with the foregoing shall not, as a result of the consummation of the Transactions, give rise to a right of, or result in, termination, cancellation, or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any Encumbrance in or upon any of the properties or assets of Parent or any of its Subsidiaries or Parent or any of its Subsidiaries under, or give rise to any increased, additional, accelerated, or guaranteed rights or entitlements under, any provision of such Contract; (xii) adopt or enter into any collective bargaining agreement or other Contract with a labor union or representative of employees that is applicable to the employees of Parent or any of its Subsidiaries; (xiii) (A) grant any increases in the compensation (including incentive, severance, change-in-control or retention compensation) or benefits paid, payable, provided or to become payable or provided to, or grant any cash- or equity-based awards to, any current or former directors, officers, employees or other individual service providers of Parent or its Subsidiaries, except (1) as required by a Parent Benefit Plan in accordance with its terms as in effect as of the date of this Agreement or (2) for increases to employees and non-executive officers in the ordinary course of business (including promotions in the ordinary course of business), ; (B) grant or provide any optionchange-in-control, callseverance or retention payments or benefits to any current or former directors, warrant or right to acquire any capital stock or other security (other than options, warrants or rights to purchase an aggregate of up to 300,000 shares of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants other individual service providers of Parent, Parent or (ii) otherwise in the ordinary course any of business), its Subsidiaries; (C) any instrument convertible into or exchangeable for any capital stock or other security; (iv) except as contemplated by this Agreementestablish, adopt, enter into, amend or waive terminate any of its rights under, or accelerate the vesting under, any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option Parent Benefit Plan or any restricted stock purchase agreementother plan, or otherwise modify any of the terms of any outstanding optionpolicy, warrant or other security or any related Contract (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 shares of Parent Common Stock); (v) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documents, or effect or become a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (vi) except as previously disclosed to the Company, form any Subsidiary or acquire any equity interest or other interest in any other Entity; (vii) make any capital expenditure, except capital expenditures in an aggregate amount of no more than $2,000,000; (viii) establish, adopt or amend any employee benefit plan not generally available to the Company's employees and the Company's 1998 management incentive program, agreement or pay any bonus or make any profit sharing or similar payment to (except pursuant to the management incentive program and any employment contract or understanding as arrangement that would be a Parent Benefit Plan if in effect on the date hereof); (D) enter into, amend or increase terminate any collective bargaining agreement or similar agreement; (E) hire, promote or terminate the amount employment or service (other than for cause) of the wages, salary, commissions, fringe benefits any employee or other compensation individual service provider of Parent or remuneration payable to, any of its directors, officers or employees in an amount Subsidiaries with a total annual compensation opportunity in excess of $250,000; or (F) take any action to accelerate the higher vesting or payment, or fund or in any way secure the payment, of 20% of the amount previously paid to such Person compensation or $20,000benefits under any Parent Benefit Plan; (ixxiv) change any of its methods of accounting or accounting practices in any respect; (x) make any Material Tax election; (xi) commence or settle any Legal Proceeding except other than in the ordinary course of businessbusiness consistent with past practice, (A) change, make or rescind any material election relating to Taxes (including any election for any joint venture, partnership, limited liability company or other investment where Parent or one of its Subsidiaries has the authority to make such binding election in its discretion, but excluding any election that must be made periodically and is made consistent with past practice), (B) settle or compromise any material Legal Proceeding relating to Taxes, or (C) change any material method of Tax accounting; (xiixv) materially amend except as required by GAAP, change its fiscal year or otherwise modify make any of the terms of its engagement of the material changes in financial advisor references in Section 3.27 aboveaccounting methods, principles, or practices; (xiiixvi) enter into any material transaction or take any other material action fail to keep in each case either inconsistent with the operating plan previously provided by Parent to the Companyfull force, or outside the ordinary course of businessfind a substantially comparable replacement for, any Parent Insurance Policy; or (xivxvii) Except as previously disclosed to the Company, sell or otherwise dispose authorize any of, or grant an exclusive license or any other exclusive right to utilize Parent Proprietary Assets which individually or in the aggregate constitute core technology material to the business of Parentcommit, other than pursuant to a corporate collaboration similar in structure to those previously entered into by Parentresolve, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such party. (xv) agree or commit to take any of of, the actions described in clause "(i)" through "(xiv)" of this Section 4.3(b)foregoing actions. (c) During the Pre-Closing Period, Parent shall promptly notify the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance that

Appears in 1 contract

Samples: Merger Agreement (Select Energy Services, Inc.)

Operation of Parent’s Business. (a) During the Pre-Closing Period: (i) Parent shall ensure that Parent and each of the Parent Corporations Subsidiary conducts its business and operations (A) in the ordinary course and in accordance with past practices or the operating plan previously provided by Parent to the Company and (B) in compliance with all applicable Legal Requirements and the requirements of all Parent Corporation Contracts that constitute Material Parent Contracts; (ii) Parent shall use all reasonable efforts to ensure that Parent and each of the Parent Corporations Subsidiary preserves intact its current business organization, keeps available the services of its current officers and other employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees employees, consultants and other Persons having business relationships with the respective Parent Corporationsor a Parent Subsidiary; and (iii) Parent shall keep in full force all insurance policies referred to in Section 3.18 or replace such policies with comparable or superior policies3.13; and (iv) Parent shall 46. 52 provide all notices, assurances (to the extent requested by the Company) cause its officers and support required by any the officers of each Parent Corporation Contract relating Subsidiary to any Proprietary Asset in order report regularly to ensure that no condition under such the Company concerning the status of Parent's and each Parent's and each Parent Corporation Contract occurs which could result in, or could increase the likelihood of, any transfer or public disclosure by any Parent Corporation of any Proprietary AssetSubsidiary's business. (b) During the Pre-Closing Period, Parent shall not not, except as set forth in Schedule 4.5(b) (without the prior written consent of the Company), and shall not permit any of the other Parent Corporations Subsidiary to: (i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock, or repurchase, redeem or otherwise reacquire any shares of capital stock or other securities, except for repurchases at less than fair market value pursuant to employment or consulting agreements in effect prior to the date hereof; (ii) hire an aggregate of more than forty new employees, excluding those persons hired to replace employees who terminate their employment with a Parent Corporation during the Pre-Closing Period; (iii) sell, issue, grant or authorize the issuance or grant of (A) any capital stock or other security (except Parent Common Stock upon the valid exercise of Parent Options or Parent warrants outstanding on the date of this Agreement or the Exercise of Rights under the Parent ESPP or pursuant to equipment lease financings and similar transactions or otherwise in the ordinary course of business)security, (B) any option, call, warrant or right to acquire any capital stock or other security (other than options, warrants or rights to purchase an aggregate of up to 300,000 shares of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants of Parentsecurity, or (ii) otherwise in the ordinary course of business), (C) any instrument convertible into or exchangeable for any capital stock or other security;security (except that Parent may issue shares and grant options to purchase shares of Parent Common Stock under stock option plans approved by its board of directors and shareholders totaling up to 100,000 and issue shares of Parent Common Stock (x) upon the valid exercise of Parent Options outstanding as of the date of this Agreement or such additional options, and (y) upon the exercise of Parent Warrants outstanding as of the date of this Agreement), and except that Parent may amend its stock option plan(s) to authorize additional shares of Parent Common Stock for issuance thereunder in connection with the conversion of the Company Options at the Effective Time ("Parent Option Plan Amendments"); 50 (iviii) except as contemplated by this Agreement, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, other than pursuant to agreements in existence on the date hereof, copies of which have been provided to the other parties hereto, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 shares of Parent Common Stock)Contract; (viv) amend or permit the adoption of any amendment to its certificate articles of incorporation (other than the Amended Articles) or bylaws or other charter or organizational documents, adopt any shareholder rights plan ("poison pill") or effect or become a party to any merger, consolidation, amalgamation, share exchange, business combination, recapitalization, reclassification of shares, stock split, division or subdivision of shares, reverse stock split split, consolidation of shares or similar transaction; (viv) except as previously disclosed to the Company, form any Subsidiary or acquire any equity interest or other interest in any other EntityEntity or any other business; (vi) make any capital expenditure in excess of $100,000; (vii) make enter into or become bound by, or permit any capital expenditureof the assets owned or used by it to become bound by, except capital expenditures in an aggregate amount of no more than $2,000,000; (viii) establishany Parent Collaboration Agreement or any Material Parent Contract, adopt or amend any employee benefit plan not generally available to the Company's employees and the Company's 1998 management incentive programor terminate, or pay waive or exercise any bonus material right or make any profit sharing or similar payment to (except pursuant to the management incentive program and any employment contract or understanding as in effect on the date hereof), or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable toremedy under, any of its directors, officers Parent Collaboration Agreement or employees in an amount in excess of the higher of 20% of the amount previously paid to such Person or $20,000; (ix) change any of its methods of accounting or accounting practices in any respect; (x) make any Material Tax election; (xi) commence or settle any Legal Proceeding except Parent Contract, other than in the ordinary course of businessbusiness consistent with past practices; (xii) materially amend or otherwise modify any of the terms of its engagement of the financial advisor references in Section 3.27 above; (xiii) enter into any material transaction or take any other material action in each case either inconsistent with the operating plan previously provided by Parent to the Company, or outside the ordinary course of business; or (xiv) Except as previously disclosed to the Company, sell or otherwise dispose of, or grant an exclusive license or any other exclusive right to utilize Parent Proprietary Assets which individually or in the aggregate constitute core technology material to the business of Parent, other than pursuant to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such party. (xv) agree or commit to take any of the actions described in clause "(i)" through "(xiv)" of this Section 4.3(b). (c) During the Pre-Closing Period, Parent shall promptly notify the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance that

Appears in 1 contract

Samples: Agreement and Plan of Reorganization (Questcor Pharmaceuticals Inc)

Operation of Parent’s Business. (a) During the Pre-Closing Period: (i) Parent shall ensure that Parent and each of the Parent Corporations Subsidiary conducts its business and operations (Aa) in the ordinary course and in accordance with past practices or the operating plan previously provided by Parent to the Company and (Bb) in compliance with all applicable Legal Requirements and the requirements of all Parent Corporation Contracts that constitute Material Parent Contracts; (ii) Parent shall use all reasonable efforts to ensure that Parent and each of the Parent Corporations Subsidiary preserves intact its current business organization, keeps available the services of its current officers and other employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees employees, consultants and other Persons having business relationships with the respective Parent Corporationsor a Parent Subsidiary; and (iii) Parent shall keep in full force all insurance policies referred to in Section 3.18 or replace such policies with comparable or superior policies3.13; and (iv) Parent shall 46. 52 provide all notices, assurances (to the extent requested by the Company) cause its officers and support required by any the officers of each Parent Corporation Contract relating Subsidiary to any Proprietary Asset in order report regularly to ensure that no condition under such the Company concerning the status of Parent's and each Parent's and each Parent Corporation Contract occurs which could result in, or could increase the likelihood of, any transfer or public disclosure by any Parent Corporation of any Proprietary AssetSubsidiary's business. (b) During the Pre-Closing Period, Parent shall not not, except as set forth in Schedule 4.5(b) (without the prior written consent of the Company), and shall not permit any of the other Parent Corporations Subsidiary to: (i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock, or repurchase, redeem or otherwise reacquire any shares of capital stock or other securities, except for repurchases at less than fair market value pursuant to employment or consulting agreements in effect prior to the date hereof; (ii) hire an aggregate of more than forty new employees, excluding those persons hired to replace employees who terminate their employment with a Parent Corporation during the Pre-Closing Period; (iii) sell, issue, grant or authorize the issuance or grant of (Aa) any capital stock or other security (except Parent Common Stock upon the valid exercise of Parent Options or Parent warrants outstanding on the date of this Agreement or the Exercise of Rights under the Parent ESPP or pursuant to equipment lease financings and similar transactions or otherwise in the ordinary course of business)security, (Bb) any option, call, warrant or right to acquire any capital stock or other security (other than options, warrants or rights to purchase an aggregate of up to 300,000 shares of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants of Parentsecurity, or (ii) otherwise in the ordinary course of business), (Cc) any instrument convertible into or exchangeable for any capital stock or other securitysecurity (except that Parent may issue shares and grant options to purchase shares of Parent Common Stock under stock option plans approved by its board of directors and shareholders totaling up to 100,000 and issue shares of Parent Common Stock (x) upon the valid exercise of Parent Options outstanding as of the date of this Agreement or such additional options, and (y) upon the exercise of Parent Warrants outstanding as of the date of this Agreement), and except that Parent may amend its stock option plan(s) to authorize additional shares of Parent Common Stock for issuance thereunder in connection with the conversion of the Company Options at the Effective Time ("Parent Option Plan Amendments"); (iviii) except as contemplated by this Agreement, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, other than pursuant to agreements in existence on the date hereof, copies of which have been provided to the other parties hereto, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 shares of Parent Common Stock)Contract; (viv) amend or permit the adoption of any amendment to its certificate articles of incorporation (other than the Amended Articles) or bylaws or other charter or organizational documents, adopt any shareholder rights plan ("poison pill") or effect or become a party to any merger, consolidation, amalgamation, share exchange, business combination, recapitalization, reclassification of shares, stock split, division or subdivision of shares, reverse stock split split, consolidation of shares or similar transaction; (viv) except as previously disclosed to the Company, form any Subsidiary or acquire any equity interest or other interest in any other EntityEntity or any other business; (vi) make any capital expenditure in excess of $100,000; (vii) make enter into or become bound by, or permit any capital expenditureof the assets owned or used by it to become bound by, except capital expenditures any Parent Collaboration Agreement or any Material Parent Contract, or amend or terminate, or waive or exercise any material right or remedy under, any Parent Collaboration Agreement or any Material Parent Contract, other than in an aggregate amount the ordinary course of no more than $2,000,000business consistent with past practices; (viii) acquire, lease or license any right or other asset from any other Person or sell or otherwise dispose of, or lease or license, any right or other asset to any other Person (except in each case for immaterial assets (other than Parent Proprietary Assets) acquired, leased, licensed or disposed of by Parent in the ordinary course of business and consistent with past practices), or waive or relinquish any material right; (ix) lend money to any Person, or incur or guarantee any indebtedness; (x) establish, adopt or amend any employee benefit plan not generally available to the Company's employees and the Company's 1998 management incentive programplan, or pay any bonus or make any profit profit-sharing or similar payment to (except pursuant to the management incentive program and any employment contract or understanding as in effect on the date hereof)to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees in an amount in excess of the higher of 20% of the amount previously paid to such Person or $20,000employees; (ixxi) change prepay any of its methods of accounting material claim, Liability or accounting practices in obligation, or pay, discharge or satisfy any respectmaterial unliquidated or contingent Liability; (xxii) enter into or amend any employment agreement, severance agreement, special pay arrangement with respect to termination of employment or other similar arrangement or agreement with any director, officer or employee of Parent, (xiii) make or fail to make any material election concerning the term, scope or termination of any real property lease, or waive any material provision of any such lease or enter into any new real property lease; (xiv) engage in any transaction with any shareholder, director, officer or employee other than in the ordinary course of business consistent with past practice; (xv) make any Material Tax election; (xixvi) commence or settle any Legal Proceeding except in the ordinary course of businessProceeding; (xii) materially amend or otherwise modify any of the terms of its engagement of the financial advisor references in Section 3.27 above; (xiiixvii) enter into any material transaction or take any other material action in each case either inconsistent with the operating plan previously provided by Parent to the Company, or outside the ordinary course of businessbusiness or inconsistent with past practices; or (xiv) Except as previously disclosed to the Company, sell or otherwise dispose of, or grant an exclusive license or any other exclusive right to utilize Parent Proprietary Assets which individually or in the aggregate constitute core technology material to the business of Parent, other than pursuant to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such party. (xvxviii) agree or commit to take any of the actions described in clause clauses "(i)" through "(xivxviii)" of this Section 4.3(b4.5(b). (c) During the Pre-Closing Period, Parent shall promptly notify the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance thatthat occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by Parent in this Agreement; (ii) 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 any representation or warranty made by Parent in this Agreement if (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance, or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of Parent; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Section 6 or Section 7 impossible or unlikely or that has had or could reasonably be expected to have a Material Adverse Effect on Parent or any Parent Subsidiary. Without limiting the generality of the foregoing, Parent shall promptly advise the Company in writing of any Legal Proceeding or other claim threatened, commenced or asserted against or with respect to Parent or any Parent Subsidiary. No notification given to the Company pursuant to this Section 4.5(c) shall limit, modify, amend or otherwise affect any of the representations, warranties, covenants or obligations of Parent contained in this Agreement.

Appears in 1 contract

Samples: Merger Agreement (Ribogene Inc / Ca/)

Operation of Parent’s Business. DURING THE PRE-CLOSING PERIOD: (a) During the Pre-Closing Period: (i) Parent shall ensure that (and shall cause each of the Parent Corporations conducts its business Subsidiaries to) conduct their respective businesses and operations (A) in the ordinary course and in accordance with past practices or substantially the operating plan previously provided by Parent same manner as such businesses and operations have been conducted prior to the Company and date of this Agreement (B) in compliance with all applicable Legal Requirements and it being understood, however, that Parent may continue preparations for the requirements initial public offering of all Parent Corporation Contracts that constitute Material Contracts; Common Stock); (iib) Parent shall (and shall cause each of its respective Subsidiaries to) use all reasonable efforts to ensure that each of the Parent Corporations preserves preserve intact its their respective current business organizationorganizations, keeps keep available the services of its their respective current officers and employees and maintains its maintain their respective relations and goodwill good will with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective any of Parent Corporations; and and/or any of its Subsidiaries; (iiic) Parent shall keep in full force all insurance policies referred use commercially reasonable efforts to in Section 3.18 or replace such policies with comparable or superior policies; file the Amended and Restated Certificate as soon as possible; (ivd) Parent shall 46. 52 provide all notices, assurances and support required by any Parent Corporation Contract relating to any Proprietary Asset in order use commercially reasonable efforts to ensure that no condition under such Parent Corporation Contract occurs which could result inthat, or could increase as of immediately after the likelihood ofClosing, any transfer or public disclosure by any Parent Corporation PPD will be permitted to appoint one member of any Proprietary Assetthe board of directors of Parent. (be) During the Pre-Closing Period, Parent shall not (without the prior written consent of the Company), and shall not permit any of the other Parent Corporations to: (i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of Parent's capital stock, or and shall not repurchase, redeem or otherwise reacquire any shares of Parent's capital stock or other securities, except for repurchases at less than fair market value pursuant to employment or consulting agreements in effect prior to the date hereof; (ii) hire an aggregate of more than forty new employees, excluding those persons hired to replace employees who terminate their employment with a Parent Corporation during the Pre-Closing Period; (iii) sell, issue, grant or authorize the issuance or grant of (A) any capital stock or other security securities (except that Parent may repurchase Parent Common Stock upon the valid exercise of Parent Options or Parent warrants outstanding on the date of this Agreement or the Exercise of Rights under the Parent ESPP or from former employees pursuant to equipment lease financings and similar transactions or otherwise in the ordinary course terms of business), (B) any option, call, warrant or right to acquire any capital stock or other security (other than options, warrants or rights to purchase an aggregate of up to 300,000 shares of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants of Parent, or (ii) otherwise in the ordinary course of business), (C) any instrument convertible into or exchangeable for any capital stock or other security; (iv) except as contemplated by this Agreement, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option or any existing restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 shares of Parent Common Stockagreements); (vf) Parent shall not amend or permit the adoption of any amendment to its certificate the Restated Certificate or Parent's Bylaws that would have the effect of incorporation diminishing the rights, preferences or bylaws or other charter or organizational documents, or effect or become a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (vi) except as previously disclosed to the Company, form any Subsidiary or acquire any equity interest or other interest in any other Entity; (vii) make any capital expenditure, except capital expenditures in an aggregate amount of no more than $2,000,000; (viii) establish, adopt or amend any employee benefit plan not generally available to the Company's employees and the Company's 1998 management incentive program, or pay any bonus or make any profit sharing or similar payment to (except pursuant to the management incentive program and any employment contract or understanding as in effect on the date hereof), or increase the amount privileges of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees in an amount in excess of the higher of 20% of the amount previously paid to such Person or $20,000; (ix) change any of its methods of accounting or accounting practices in any respect; (x) make any Material Tax election; (xi) commence or settle any Legal Proceeding except Parent Series D Preferred Stock as set forth in the ordinary course of business; (xii) materially amend or otherwise modify any of the terms of its engagement of the financial advisor references in Section 3.27 above; (xiii) enter into any material transaction or take any other material action in each case either inconsistent with the operating plan previously provided by Parent to the Company, or outside the ordinary course of business; or (xiv) Except as previously disclosed to the Company, sell or otherwise dispose of, or grant an exclusive license or any other exclusive right to utilize Parent Proprietary Assets which individually or in the aggregate constitute core technology material to the business of Parent, other than pursuant to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such partyRestated Certificate. (xv) agree or commit to take any of the actions described in clause "(i)" through "(xiv)" of this Section 4.3(b). (c) During the Pre-Closing Period, Parent shall promptly notify the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance that

Appears in 1 contract

Samples: Agreement and Plan of Merger and Reorganization (Dna Sciences Inc)

Operation of Parent’s Business. (a) During the Pre-Closing Period: (i) Parent shall ensure that each of the Parent Corporations conducts conduct its business and operations (A) in the ordinary course and in accordance with past practices or the operating plan previously provided by Parent to the Company and (B) in compliance with all applicable Legal Requirements and the requirements of all Parent Corporation Contracts that constitute Parent Material Contracts; (ii) Parent shall use all reasonable efforts to ensure that each of the Parent Corporations preserves preserve intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Parent CorporationsParent; and (iii) Parent shall keep in full force all insurance policies referred to in Section 3.18 or replace such policies with comparable or superior policies3.18; and (iv) Parent shall 46. 52 provide all notices, assurances and support required by any Parent Corporation Contract relating to any Proprietary Asset in order to ensure that no condition under such Parent Corporation Contract occurs which could result in, or could increase the likelihood of, any transfer transfer, disclosure or public disclosure release by any Parent Corporation of any Proprietary Asset; and (v) Parent shall (to the extent requested by the Company) cause its officers to report regularly to the Company concerning the status of Parent's business. (b) During the Pre-Closing Period, Parent shall not (without the prior written consent of the Company), and shall not permit any of the other Parent Corporations to:): (i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock, or repurchase, redeem or otherwise reacquire any shares of capital stock or other securities, except for repurchases at less than fair market value pursuant to employment or consulting agreements in effect prior to the date hereof; (ii) hire an aggregate of more than forty new employees, excluding those persons hired to replace employees who terminate their employment except in connection with a Parent Corporation during the Pre-Closing Period; (iii) Preferred Sale, sell, issue, grant or authorize the issuance or grant of (A) any capital stock or other security (except Parent Common Stock upon the valid exercise of Parent Options or Parent warrants outstanding on the date of this Agreement or the Exercise of Rights under the Parent ESPP or pursuant to equipment lease financings and similar transactions or otherwise in the ordinary course of business)security, (B) any option, call, warrant or right to acquire any capital stock or other security (other than options, warrants or rights to purchase an aggregate of up to 300,000 shares of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants of Parentsecurity, or (ii) otherwise in the ordinary course of business), (C) any instrument convertible into or exchangeable for any capital stock or other securitysecurity (except that Parent may issue Parent Common Stock upon the valid exercise of Parent Options outstanding as of the date of this Agreement and except that Parent may reprice outstanding stock options or grant stock awards in exchange for cancellation of existing stock options, if any awards so granted correspond in number of shares to the stock options so cancelled and if the aggregate number of shares so repriced or granted, when combined with the number of shares subject to options that are not repriced or cancelled, does not exceed 1,039,764); (iviii) except for the full vesting of Parent stock options that may occur on the Effective Date as contemplated by this Agreementa result of the Merger or any repricing of stock options, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 shares of Parent Common Stock)Contract; (viv) other than as contemplated by this Agreement and except in connection with a Preferred Sale, amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documents, or effect or become a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (viv) except as previously disclosed to the Company, form any Subsidiary subsidiary or acquire any equity interest or other interest in any other Entity; (viivi) make any capital expenditure, expenditure (except that Parent may make capital expenditures that, when added to all other capital expenditures made on behalf of Parent during the Pre Closing Period, do not exceed $50,000 in an aggregate amount the aggregate); (vii) enter into or become bound by, or permit any of no more the assets owned or used by it to become bound by, any Parent Contract that constitutes or would constitute a Parent Material Contract other than $2,000,000in the ordinary course of business, or amend or terminate, or waive or exercise any material right or remedy (including any right to repurchase shares of Parent Common Stock) under, any Parent Contract that constitutes a Parent Material Contract; (viii) acquire, lease or license any right or other asset from any other Person or sell or otherwise dispose of, or lease or license, any right or other asset to any other Person (except in each case for assets acquired, leased, licensed or disposed of by Parent in the ordinary course of business and consistent with past practices), or waive or relinquish any material right; (ix) write off as uncollectable, or establish any extraordinary reserve with respect to, any accounts receivable or other indebtedness, other than in the ordinary course of business; (x) make any pledge of any of its assets or otherwise permit any of its assets to become subject to any encumbrance, except for pledges of immaterial assets made in the ordinary course of business and consistent with past practices; (xi) except pursuant to lines of credit and subject to credit limits in effect prior to the date of this Agreement and except for up to an additional $1,000,000 in indebtedness for borrowed money which may be incurred by Parent, lend money to any Person or incur or guarantee any indebtedness; (xii) except for severance and fully vested deferred compensation that is payable upon termination of employment from Parent without cause on or after the Effective Date, establish, adopt or amend any employee benefit plan not generally available to the Company's employees and the Company's 1998 management incentive programplan, or pay any bonus or make any profit sharing or similar payment to (except pursuant to the management incentive program and any employment contract or understanding as in effect on the date hereof)to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees in an amount in excess of the higher of 20% of the amount previously paid to such Person or $20,000employees; (ixxiii) hire any new employee or engage any consultant or independent contractor; (xiv) change any of its methods of accounting or accounting practices in any respect; (xxv) make any Material Tax election; (xixvi) commence or settle any Legal Proceeding Proceeding, except in the ordinary course of businessto enforce its rights under this Agreement; (xii) materially amend or otherwise modify any of the terms of its engagement of the financial advisor references in Section 3.27 above; (xiiixvii) enter into any material transaction or take any other material action in each case either inconsistent with the operating plan previously provided by Parent to the Company, or outside the ordinary course of businessbusiness or inconsistent with past practices; (xviii) enter into any material transaction or take any other material action that could reasonably be expected to have a Material Adverse Effect on Parent; or (xiv) Except as previously disclosed to the Company, sell or otherwise dispose of, or grant an exclusive license or any other exclusive right to utilize Parent Proprietary Assets which individually or in the aggregate constitute core technology material to the business of Parent, other than pursuant to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such party. (xvxix) agree or commit to take any of the actions described in clause clauses "(i)" through "(xivxviii)" of this Section 4.3(b5.2(b). (c) During the Pre-Pre Closing Period, Parent shall promptly notify the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance thatthat occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by Parent in this Agreement; (ii) 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 any representation or warranty made by Parent in this Agreement if (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance, or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of Parent; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Sections 7 or 8 impossible or unlikely or that has had or could reasonably be expected to have a Material Adverse Effect on Parent. No notification given to the Company pursuant to this Section 5.2(c) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of Parent contained in this Agreement.

Appears in 1 contract

Samples: Merger Agreement (Abb Asea Brown Boveri LTD)

Operation of Parent’s Business. (a) During Except as expressly contemplated or permitted by this Agreement, as expressly required by applicable Law or unless the Company shall otherwise consent in writing (email being sufficient), during the period commencing on the date of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX and the First Effective Time (the “Pre-Closing Period: ”), Parent shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to (ix) Parent shall ensure that each of the Parent Corporations conducts conduct its business and operations (A) in the ordinary course Ordinary Course and in accordance with past practices or the operating plan previously provided by Parent to the Company and (B) in material compliance with all the applicable Legal Requirements Law and the requirements of all Parent Corporation Contracts that constitute Parent Material Contracts; Contracts and (iiy) Parent shall use all reasonable efforts continue to ensure that each of the Parent Corporations preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees pay material outstanding accounts payable and other Persons having business relationships with the respective Parent Corporations; material current liabilities (including payroll) when due and (iii) Parent shall keep in full force all insurance policies referred to in Section 3.18 or replace such policies with comparable or superior policies; and (iv) Parent shall 46. 52 provide all notices, assurances and support required by any Parent Corporation Contract relating to any Proprietary Asset in order to ensure that no condition under such Parent Corporation Contract occurs which could result in, or could increase the likelihood of, any transfer or public disclosure by any Parent Corporation of any Proprietary Assetpayable. (b) During Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 6.1(b) of the Parent Disclosure Letter, (iii) as required by applicable Law or (iv) with the prior written consent of the Company (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, Parent shall not (without the prior written consent of the Company)not, and nor shall not it cause or permit any of its Subsidiaries to, do any of the other Parent Corporations tofollowing: (i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock, stock or repurchase, redeem or otherwise reacquire any shares of its capital stock or other securities, securities (except for repurchases at less than fair market value pursuant to employment shares of Parent Common Stock from terminated employees, directors or consulting consultants of Parent in accordance with agreements in effect prior to on the date hereofof this Agreement providing for the repurchase of shares at no more than the purchase price thereof in connection with any termination of services to Parent or any of its Subsidiaries); (ii) hire an aggregate of more than forty new employees, excluding those persons hired to replace employees who terminate their employment with a Parent Corporation during the Pre-Closing Period; (iii) sell, issue, grant grant, pledge or otherwise dispose of or encumber or authorize the issuance or grant of of: (A) any capital stock or other security (except for Parent Common Stock issued upon the valid exercise or settlement of outstanding Parent Options or Parent warrants outstanding on the date of this Agreement or the Exercise of Rights under the Parent ESPP or pursuant to equipment lease financings and similar transactions or otherwise in the ordinary course of businessRestricted Stock Unit Awards as applicable), (B) any option, call, warrant or right to acquire any capital stock or any other security (other than options, warrants or rights to purchase an aggregate of up to 300,000 shares of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants of Parent, or (ii) otherwise in the ordinary course of business), (C) any instrument convertible into or exchangeable for any capital stock or other security; (iviii) except as contemplated by this Agreementrequired to give effect to anything in contemplation of the Closing, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 shares of Parent Common Stock); (v) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documents, or effect or become be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transactiontransaction except, for the avoidance of doubt, the Contemplated Transactions; (viiv) except as previously disclosed to the Company, form any Subsidiary or acquire any equity interest or other interest in any other Entityentity or enter into a joint venture with any other entity; (viiv) (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, except capital expenditures in an aggregate amount of no more than $2,000,000expenditure or commitment; (viiivi) establishother than as expressly required by applicable Law or the terms of any Parent Plan in effect as of the date of this Agreement: (A) adopt, adopt establish or amend enter into any employee benefit plan not generally available Parent Plan, including, for the avoidance of doubt, any equity award plans, (B) cause or permit any Parent Plan to be amended other than as required by Law or in order to make amendments for the Company's employees and purposes of Section 409A of the Company's 1998 management incentive programCode, or (C) pay any bonus or make any profit profit-sharing or similar payment to (except pursuant with respect to the management incentive program and any employment contract or understanding as obligations in effect place on the date hereofof this Agreement pursuant to any Parent Plan), or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directorsemployees, officers directors or employees consultants, (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants, or (E) hire or terminate (other than for cause, or absent such a definition of cause, for conduct that the Parent or such Subsidiary determines in an amount in excess of the higher of 20% of the amount previously paid to such Person good faith constitutes material misconduct) any officer, employee or $20,000consultant; (ix) change any of its methods of accounting or accounting practices in any respect; (x) make any Material Tax election; (xi) commence or settle any Legal Proceeding except in the ordinary course of business; (xii) materially amend or otherwise modify any of the terms of its engagement of the financial advisor references in Section 3.27 above; (xiiivii) enter into any material transaction outside the Ordinary Course ; (viii) 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; (ix) make, change or revoke any material Tax election; file any amended income or other 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; surrender any material claim for refund; or adopt or change any material accounting method in respect of Taxes; (x) waive, settle or compromise any pending or threatened Action against Parent or any of its Subsidiaries, other than 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 Parent or its Subsidiaries, taken as a whole, or any equitable relief on, or the admission of wrongdoing by Parent or any of its Subsidiaries; (xi) delay or fail to repay when due any material obligation, including accounts payable and accrued expenses; (xii) forgive any loans to any Person, including its employees, officers, directors or Affiliate; (xiii) sell, assign, transfer, license, sublicense or otherwise dispose of any Intellectual Property of the Parent (other than in the Ordinary Course); (xiv) terminate or modify in any material respect, or fail to exercise renewal rights with respect to, any material insurance policy; (xv) enter into, amend, terminate, or waive any material option or right under, any Parent Material Contract; (xvi) 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 Parent; (xvii) other than as expressly required by Law or GAAP, take any action to change accounting policies or procedures; (xviii) (A) materially change pricing or royalties or other material action in each case either inconsistent with the operating plan previously provided payments set or charged by Parent or any of Subsidiaries to the Company, its customers or outside the ordinary course licensees or (B) agree to materially change pricing or royalties or other payments set or charged by Persons who have licensed Intellectual Property to Parent or any of businessits Subsidiaries; or (xivxix) Except as previously disclosed agree, resolve or commit to do any of the foregoing. Nothing contained in this Agreement shall give the Company, sell directly or otherwise dispose ofindirectly, or grant an exclusive license or any other exclusive the right to utilize control or direct the operations of Parent Proprietary Assets which individually or in the aggregate constitute core technology material prior to the business of ParentFirst Effective Time. Prior to the First Effective Time, other than pursuant to a corporate collaboration similar in structure to those previously entered into by ParentParent shall exercise, or grant to any third party a right of first refusal, first offer, or first negotiation consistent with regard to material products or such core technology unless developed pursuant to funding supplied by such party. (xv) agree or commit to take any of the actions described in clause "(i)" through "(xiv)" terms and conditions of this Section 4.3(b)Agreement, complete unilateral control and supervision over its business operations. (c) During Notwithstanding any provision herein to the contrary (including the foregoing provisions of this Section 6.1), Parent may engage in the sale, license, transfer, disposition, divestiture or other monetization transaction (i.e., a royalty transaction) and/or winding down of, and/or the sale, license, transfer, disposition, divestiture or other monetization transaction (i.e., a royalty transaction) or other disposition of any Parent Legacy Assets (each, an “Parent Legacy Transaction”); provided, however, that to the extent any Parent Legacy Transaction results in any obligations of or adverse consequences to Parent or its Subsidiaries that could extend beyond Closing, or contemplates that any consideration paid in respect thereof is in anything other than immediately available cash, or otherwise interferes with or delays in any manner the ability of Parent to perform its obligations under this Agreement or timely consummate the transaction contemplated hereby, Parent shall procure prior written consent of the Company prior to entering into any Parent Legacy Transaction and any such post-Closing obligations shall be treated as a reduction to Net Cash hereunder. Notwithstanding anything to the contrary herein, Parent (i) shall permit the Company and its counsel to review and comment on the transaction documents related to the Parent Legacy Transaction; (ii) shall consider any such comments in good faith and shall accept all reasonable additions, deletions or changes suggested by the Company 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 Parent Legacy Transaction without first providing the Company and its counsel the opportunity to exercise their rights under clauses (i) and (ii) above. Any consideration actually received by Parent prior to the Closing in any such sale or license of any Parent Legacy Assets, net of all liability and obligations relating to such transaction, would be added to Net Cash. (d) Notwithstanding any provision herein to the contrary (including the foregoing provisions of this Section 6.1), Parent may declare the Pre-Closing Period, Parent shall promptly notify the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance thatCash Dividend.

Appears in 1 contract

Samples: Merger Agreement (Aerovate Therapeutics, Inc.)

Operation of Parent’s Business. (a) During Except as set forth on Section 4.2(a) of the Parent Disclosure Schedule, as expressly required, contemplated or permitted by this Agreement, in connection with the Parent Pre-Closing Financing, or as required by applicable Legal Requirements, during the Pre-Closing Period, Parent shall: (i) Parent shall ensure that each of the Parent Corporations conducts continue to pay outstanding accounts payable and other current Liabilities (including payroll) when due and payable; and (ii) conduct its business and operations (A) in the ordinary course Ordinary Course of Business and in accordance with past practices or the operating plan previously provided by Parent to the Company and (B) in material compliance with all applicable Legal Requirements and the requirements of all Parent Corporation Contracts that constitute Parent Material Contracts; (ii) Parent shall use all reasonable efforts to ensure that each of the Parent Corporations preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Parent Corporations; and (iii) Parent shall keep in full force all insurance policies referred to in Section 3.18 or replace such policies with comparable or superior policies; and (iv) Parent shall 46. 52 provide all notices, assurances and support required by any Parent Corporation Contract relating to any Proprietary Asset in order to ensure that no condition under such Parent Corporation Contract occurs which could result in, or could increase the likelihood of, any transfer or public disclosure by any Parent Corporation of any Proprietary Asset. (b) During Without limiting the generality of the foregoing, during the Pre-Closing Period, except as set forth on Section 4.2(b) of the Parent Disclosure Schedule, as expressly required, contemplated or permitted by this Agreement, in connection with the Parent Pre-Closing Financing, or as required by applicable Legal Requirements, Parent shall not (not, without the prior written consent of the Company), and Company (which consent shall not permit any of the other Parent Corporations to:be unreasonably withheld, conditioned or delayed): (i) (A) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock, Parent Capital Stock or (B) repurchase, redeem or otherwise reacquire any shares of its capital stock or other securities, except for repurchases at less than fair market value pursuant to employment or consulting agreements in effect prior to the date hereof; (ii) hire an aggregate of more than forty new employees, excluding those persons hired to replace employees who terminate their employment with a Parent Corporation during the Pre-Closing Period; (iii) sell, issueissue or grant, grant or authorize the issuance or grant of of: (A) any capital stock or other security (except Parent Common Stock upon the valid exercise of Parent Options or Parent warrants outstanding on the date of this Agreement or the Exercise of Rights under the Parent ESPP or pursuant to equipment lease financings and similar transactions or otherwise in the ordinary course of business)security, (B) any option, call, warrant or right to acquire any capital stock or any other security (other than options, warrants or rights to purchase an aggregate of up to 300,000 shares of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants of Parent, or (ii) otherwise in the ordinary course of business)security, (C) any equity-based award or instrument convertible into or exchangeable for any capital stock or other security; (iv) except as contemplated by this Agreement, amend or waive any of its rights under, or accelerate the vesting under, (D) any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option debt securities or any restricted stock purchase agreementrights to acquire any debt securities, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract in each case except (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 1) for shares of Parent Common Stock)Stock issued upon the valid exercise of Parent Options or warrants outstanding as of the date of this Agreement, (2) in connection with any Parent Pre-Closing Financing, (3) in connection with the issuance of the Parent Compensatory Warrant and (4) in connection with the dividend, distribution or issuance of the Rights or the Warrants; (viii) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws incorporation, certificate of formation, bylaws, operating agreement or other charter or organizational documentsdocuments of Parent or Merger Sub, or effect or become be a party to any merger, consolidation, share or unit exchange, business combination, recapitalization, reclassification of sharesshares or units, stock split, reverse stock split (other than the Nasdaq Reverse Split) or similar transaction; (viiv) except as previously disclosed to the Company, form any Subsidiary or acquire any equity interest or other interest in any other Entity; (viiv) (A) lend money to any Person, (B) incur or guarantee any indebtedness for borrowed money, other than in the Ordinary Course of Business, (C) guarantee any debt securities of others, or (D) make any capital expenditure, except expenditure or capital expenditures in an aggregate amount of no more than $2,000,000commitment; (viiivi) establish(A) adopt, adopt establish or enter into any Parent Employee Plan, (B) cause or permit any Parent Employee Plan to be amended other than as required by law, including in order to make amendments for the purposes of Section 409A of the Code, subject to prior review and approval (with such approval not to be unreasonably withheld, conditioned or delayed) by Company, (C) hire any additional employees or independent contractors or enter into or amend the term of any employment or consulting agreement with any employee benefit plan not generally available to or independent contractor other than as reasonably necessary for the Company's employees and completion of the Company's 1998 management incentive programContemplated Transactions, (D) enter into any Contract with a labor union or collective bargaining agreement, (E) except as provided in the Parent Disclosure Schedule, pay any bonus or make any profit profit-sharing or similar payment to (except pursuant to other than in the management incentive program and any employment contract or understanding as in effect on the date hereofOrdinary Course of Business), or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directorsdirectors or employees, officers (F) except as provided in the Parent Disclosure Schedule, accelerate the vesting of or employees entitlement to any payment, award, compensation or benefit with respect to any Parent Associate, (G) except as provided in an amount the Parent Disclosure Schedule, pay or increase the severance or change of control benefits offered to any Parent Associate, or (H) provide or make any Tax-related gross-up payment, provided, that Parent may pay those Terminated Parent Associate Payments set forth in excess Section 5.6(a) of the higher Parent Disclosure Schedule to the Terminated Parent Associates in connection with their termination of 20% of the amount previously paid to such Person employment or $20,000service; (ix) change any of its methods of accounting or accounting practices in any respect; (x) make any Material Tax election; (xi) commence or settle any Legal Proceeding except in the ordinary course of business; (xii) materially amend or otherwise modify any of the terms of its engagement of the financial advisor references in Section 3.27 above; (xiiivii) enter into any material transaction outside the Ordinary Course of Business, other than the license, sale, divestiture and/or winding down of the Legacy Assets in accordance with this Agreement; (viii) acquire any material asset nor sell, lease, or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, in each case, other than in the Ordinary Course of Business; (ix) (A) make, change or revoke any material Tax election, (B) file any material amendment to any Tax Return, (C) adopt or change any accounting method in respect of Taxes, (D) change any annual Tax accounting period, (E) enter into any Tax allocation agreement, Tax sharing agreement or Tax indemnity agreement, other than commercial contracts entered into in the Ordinary Course of Business with vendors, customers or landlords, (F) enter into any closing agreement with respect to any Tax, (G) settle or compromise any claim, notice, audit report or assessment in respect of material Taxes, (H) apply for or enter into any ruling from any Tax authority with respect to Taxes, (I) surrender any right to claim a material Tax refund, or (J) consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment; (x) enter into, amend or terminate any Parent Contract that, if effective as of the date hereof, would constitute a Parent Material Contract; (xi) initiate or settle any Legal Proceeding; (xii) after the Net Cash Calculation is finalized pursuant to Section 1.6, incur any Liabilities or otherwise take any other material action actions, in each case either inconsistent other than in the Ordinary Course of Business or as reasonably necessary in connection with the operating transactions contemplated by this Agreement, so as to cause the final Net Cash Calculation to differ materially from actual Parent Net Cash as of the Closing; (xiii) adopt any stockholder rights plan previously provided by Parent to or similar arrangement; (xiv) use, amend or terminate its current at-the-market facility or enter into any similar program or facility; (xv) renew, extend or modify the Company, or outside the ordinary course of businesscurrent sublease for Parent’s principal executive office space; or (xivxvi) Except as previously disclosed to the Companyagree, sell or otherwise dispose of, or grant an exclusive license or any other exclusive right to utilize Parent Proprietary Assets which individually or in the aggregate constitute core technology material to the business of Parent, other than pursuant to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such party. (xv) agree resolve or commit to take do any of the actions described in clause "(i)" through "(xiv)" of this Section 4.3(b)foregoing. (c) During the Pre-Closing Period, Parent shall promptly notify the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance that

Appears in 1 contract

Samples: Merger Agreement (Flex Pharma, Inc.)

Operation of Parent’s Business. (a) During the Parent Pre-Closing Period: (ia) Parent shall ensure that each of the Parent Corporations conducts its business and operations (A) except in the ordinary course and in accordance with past practices or the operating plan previously provided by Parent to the Company and (B) in compliance with all applicable Legal Requirements and the requirements of all Parent Corporation Contracts that constitute Material Contracts; (ii) business, Parent shall use all its commercially reasonable efforts to ensure that each of the Parent Corporations preserves preserve intact its current business organization, keeps available the services of organization and to continue to conduct its current officers principal business and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Parent Corporationslogical extensions thereof; and (iiib) Parent shall keep in full force all insurance policies referred cause its officers to in Section 3.18 or replace such policies discuss with comparable or superior policiesthe Company with commercially reasonable frequency the status of the business of Parent; and (ivc) Parent shall 46. 52 provide all notices, assurances and support required by any Parent Corporation Contract relating to any Proprietary Asset in order to ensure that no condition under such Parent Corporation Contract occurs which could result in, or could increase the likelihood of, any transfer or public disclosure by any Parent Corporation of any Proprietary Asset. (b) During the Pre-Closing Period, Parent shall not (without the prior written consent of the Company), and shall not permit any of the other Parent Corporations to: (i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock, or repurchase, redeem or otherwise reacquire any shares of capital stock or other securitieseffect a recapitalization; neither Parent nor either Merger Sub shall amend, except for repurchases at less than fair market value pursuant to employment or consulting agreements in effect prior to the date hereof; (ii) hire an aggregate of more than forty new employees, excluding those persons hired to replace employees who terminate their employment with a Parent Corporation during the Pre-Closing Period; (iii) sell, issue, grant or authorize the issuance or grant of (A) any capital stock or other security (except Parent Common Stock upon the valid exercise of Parent Options or Parent warrants outstanding on the date of this Agreement or the Exercise of Rights under the Parent ESPP or pursuant to equipment lease financings and similar transactions or otherwise in the ordinary course of business), (B) any option, call, warrant or right to acquire any capital stock or other security (other than options, warrants or rights to purchase an aggregate of up to 300,000 shares of Parent Common Stock which may be granted to (i) officers, directors, employees or consultants of Parent, or (ii) otherwise in the ordinary course of business), (C) any instrument convertible into or exchangeable for any capital stock or other security; (iv) except as contemplated by this Agreement, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of Parent's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract (other than any such changes to options, warrants or other securities to purchase an aggregate of up to 25,000 shares of Parent Common Stock); (v) amend or permit the adoption of any amendment to to, its certificate of incorporation or bylaws or other charter or organizational documents, or effect or become in a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (vi) except as previously disclosed manner adverse to the Company, form any Subsidiary or acquire any equity interest or other interest in any other Entity; (vii) make any capital expenditure, except capital expenditures in an aggregate amount of no more than $2,000,000; (viii) establish, adopt or amend any employee benefit plan not generally available to the Company's employees and the Company's 1998 management incentive program, or pay any bonus or make any profit sharing or similar payment to (except pursuant to the management incentive program and any employment contract or understanding as in effect on the date hereof), or increase the amount interests of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any stockholders of its directors, officers or employees the Company under this Agreement; (d) Parent shall not expend cash in an amount in excess of that would reasonably be expected to impair Parent’s ability to pay the higher of 20% of the amount previously paid to such Person or $20,000; Cash Consideration; and (ixe) change any of its methods of accounting or accounting practices in any respect; (x) make any Material Tax election; (xi) commence or settle any Legal Proceeding except in the ordinary course of business; (xii) materially amend or otherwise modify any of the terms of its engagement of the financial advisor references in Section 3.27 above; (xiii) enter into any material transaction or take any other material action in each case neither Parent nor either inconsistent with the operating plan previously provided by Parent to the Company, or outside the ordinary course of business; or (xiv) Except as previously disclosed to the Company, sell or otherwise dispose of, or grant an exclusive license or any other exclusive right to utilize Parent Proprietary Assets which individually or in the aggregate constitute core technology material to the business of Parent, other than pursuant to a corporate collaboration similar in structure to those previously entered into by Parent, or grant to any third party a right of first refusal, first offer, or first negotiation with regard to material products or such core technology unless developed pursuant to funding supplied by such party. (xv) Merger Sub shall agree or commit to take any of the actions described in clause "clauses “(ic)" ” and “(d)” above. Notwithstanding the foregoing, Parent may take any action described in clauses “(c)” through "(xive)" ” above if the Company gives its prior written consent to the taking of such action by Parent, which consent shall not be unreasonably withheld; provided, that the determination of whether any decision by the Company to withhold its consent to any action is reasonable shall be based on the reasonableness of such decision in light of the probable consummation of the Mergers. The Company agrees that (A) it shall evaluate requests for consent from Parent in good faith and (B) Parent may take any action described in this Section 4.3(b). 5.2 or any other action if required pursuant to a final non-appealable order or award arising out of any Legal Proceeding. 5.3 Notification; Updates to Parent Disclosure Schedule. (ca) During the Parent Pre-Closing Period, Parent shall promptly notify the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance thatthat would make the timely satisfaction of any of the conditions set forth in Section 7 or Section 8 impossible or unlikely.

Appears in 1 contract

Samples: Merger Agreement

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