Operation of the Business of the Company Entities. (a) During the Pre-Closing Period, except as set forth in Part 4.2(a) of the Company Disclosure Schedule, as otherwise contemplated by this Agreement, as required by Legal Requirements or to the extent that Parent shall otherwise consent in writing: (i) the Company shall ensure that each of the Company Entities conducts its business and operations in the ordinary course and in accordance in all material respects with past practices; (ii) the Company shall use commercially reasonable efforts to attempt to ensure that each of the Company Entities preserves intact the material components of its current business organization, keeps available the services of its current officers and key employees and maintains its relations and goodwill with all material suppliers, material customers, material licensors and Governmental Bodies; and (iii) the Company shall promptly notify Parent following its becoming aware of any Legal Proceeding commenced, or, to the Company’s Knowledge, either: (A) with respect to a Governmental Body, overtly threatened; or (B) with respect to any other Person, threatened in writing, in either case of clause “(A)” or “(B)” of this sentence, against, involving or that would reasonably be expected to affect any of the Company Entities and that relates to any of the Contemplated Transactions. (b) Except as set forth in Part 4.2(b) of the Company Disclosure Schedule, as otherwise contemplated by this Agreement (including, without limitation, Section 5.1(a) hereof) or as required by Legal Requirements, during the Pre-Closing Period, the Company shall not (without the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed), and the Company shall ensure that each of the other Company Entities does not (without the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed): (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; (ii) sell, issue, grant or authorize the sale, issuance or grant of: (A) any capital stock or other security; (B) any option, call, warrant or right to acquire any capital stock or other security (or whose value is directly related to shares of Company Common Stock); or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that the Company may issue shares of Company Common Stock upon the valid exercise of Company Warrants outstanding as of the date of this Agreement); (iii) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documents; (iv) (A) acquire any equity interest or other interest in any other Entity; (B) form any Subsidiary; or (C) effect or become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split, division or subdivision of shares, consolidation of shares or similar transaction; (v) agree or commit to take any of the actions described in clauses “(i)” through “(iv)” of this Section 4.2(b). Parent shall be deemed to have consented to any request to take the foregoing actions if Parent is notified in writing of such request and fails to respond to such request within two business days. (c) During the Pre-Closing Period, the Company shall promptly notify Parent in writing of any event, condition, fact or circumstance that would reasonably be expected to make the timely satisfaction of any of the conditions set forth in Article 6 impossible or that has had or would reasonably be expected to have or result in a Company Material Adverse Effect. No notification given to Parent pursuant to this Section 4.2(c) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement.
Appears in 2 contracts
Samples: Agreement and Plan of Merger (Precision Therapeutics Inc.), Merger Agreement (Precision Therapeutics Inc.)
Operation of the Business of the Company Entities. (a) During the Pre-Closing Period, except as set forth in Part 4.2(a) of the Company Disclosure Schedule, as otherwise contemplated by this Agreement, as required by Legal Requirements or to the extent that Parent shall otherwise consent in writing: (i) the Company shall ensure that each of the Company Entities conducts its business and operations in the ordinary course and in accordance in all material respects consistent with past practices; and (ii) the Company shall use commercially reasonable efforts to attempt to ensure that each of the Company Entities preserves intact the material components of its current business organization, keeps available the services of its current officers Executive Officers and key employees holding a Designated Position and maintains its relations and goodwill with all material suppliers, material customers, material licensors and Governmental Bodies; and (iii) the Company shall promptly notify Parent following its becoming aware of any Legal Proceeding commenced, or, to the Company’s Knowledge, either: (A) with respect to a Governmental Body, overtly threatened; or (B) with respect to any other Person, threatened in writing, in either case of clause “(A)” or “(B)” of this sentence, against, involving or that would reasonably be expected to affect any of the Company Entities and that relates to any of the Contemplated Transactions.
(b) Except as set forth in Part 4.2(b) of the Company Disclosure Schedule, as otherwise contemplated by this Agreement (including, without limitation, Section 5.1(a) hereof) or as required by Legal Requirements, during the Pre-Closing Period, the Company shall not (without the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed), and the Company shall ensure that each of the other Company Entities does not (without the prior written consent of Parent, which consent shall not 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, or repurchase, redeem or otherwise reacquire any shares of capital stock or other securities, other than: (1) dividends or distributions by a direct or indirect wholly-owned Subsidiary of the Company to the Company or any direct or indirect wholly-owned Subsidiary of the Company to the extent consistent with past practice; (2) dividends or distributions required under the applicable organizational documents of such Company Entity in effect on the date of this Agreement; or (3) redemptions or acquisitions of securities tendered by holders of Company Stock-Based Awards in order to satisfy obligations to pay the exercise price and/or Tax withholding obligations with respect thereto or (B) enter into any stockholder rights plan (or similar plan commonly referred to as a “poison pill”);
(ii) sell, issue, grant or authorize the sale, issuance or grant of: (A) any capital stock or other security; (B) any option, call, warrant or right to acquire any capital stock or other security (or whose value is directly related to shares of Company Common Stock); or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that that: (1) the Company may issue shares of Company Common Stock upon the valid exercise exercise, settlement or conversion, as applicable, of any Company RSUs and Company Warrants outstanding as of the date hereof, in each case in accordance with their existing terms; and (2) the Company may, in the ordinary course of business and consistent with past practices grant Company RSUs (and issue shares of Company Common Stock upon the settlement thereof): (x) to any newly hired employee or service provider of a Company Entity (other than any officers or directors) under a Company Equity Plan commensurate with his or her position with such Company Entity; and (y) to Company Employees (other than any officers or directors) in connection with the Company’s ordinary course equity award grant process as described on Part 4.2(b)(ii) of the Company Disclosure Schedule; provided, however, that: (aa) except as required in any Company Equity Plan or Company Employee Agreement in effect as of the date of this Agreement, no such Company Stock-Based Awards shall contain any “single-trigger,” “double-trigger” or other vesting acceleration provisions or shall otherwise be subject to acceleration (in whole or in part) as a result of the Merger, any of the other Contemplated Transactions or any other similar transaction (whether alone or in combination with any termination of employment or other event); and (bb) subject to the foregoing, such Company Stock-Based Awards shall be granted or issued pursuant to the Company’s applicable standard agreement and shall contain the Company’s standard vesting schedule);
(iii) amend or waive any of its rights under, or accelerate the vesting under, any provision of any Company Equity Plan or any provision of any agreement evidencing any outstanding Company Stock-Based Award, or otherwise modify any of the terms of any outstanding Company Stock-Based Award, warrant or other security or any related Contract, other than any acceleration of vesting that is contemplated in any Company Equity Plan or Company Employee Agreement in effect as of the date hereof;
(iv) amend or waive, or permit the adoption of or waiver of, any amendment to its certificate of incorporation or bylaws or other charter or organizational documents;
(ivv) (A) acquire any equity interest or other interest in any other EntityEntity or Entities other than (I) such acquisition(s) for which consideration paid (including assumption of liabilities), individually or in the aggregate, does not exceed $250,000; (II) capital expenditures permitted by clause (vi) below and (III) transactions between any wholly-owned Company Entities; (B) except in the ordinary course of business and consistent with past practices, form any Subsidiary; or (C) effect or become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split, division or subdivision of shares, consolidation of shares or similar transaction;
(vi) make any capital expenditure, incur regulatory dry dock and related expenses deferred in accordance with the Company’s current accounting policies or make investments other than (A) capital expenditures, deferred dry dock and related expenses and investments provided for in the Company’s 2018 budget Made Available to Parent prior to the date of this Agreement or otherwise not exceeding $5,000,000 in the aggregate for the period from the date of this Agreement through December 31, 2018, (B) capital expenditures, deferred dry dock and related expenses and investments provided for in the Company’s 2019 budget (which will be provided to Parent when approved by the Company Board) not to exceed $3,500,000 in the aggregate, and (C) additional capital expenditures, deferred dry dock and related expenses and investments approved by the Company Board and related to the return to active service of currently stacked or otherwise idle vessels not to exceed $5,000,000 in the aggregate;
(vii) other than in the ordinary course of business and consistent with past practices: (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 if entered into prior to the date hereof would be deemed a Company Material Contract; or (B) materially amend, terminate, or waive any material right or remedy under, any Company Material Contract;
(viii) except as otherwise permitted by clauses “(v)” and “(vi)”, acquire, lease or license any right or other asset from any other Person, sell or otherwise dispose of, or lease or license, any right or other asset to any other Person (except in each case for assets: (A) acquired, leased, licensed, sold or disposed of by the Company in the ordinary course of business and consistent with past practices; or (B) that are, in the aggregate, immaterial to the business of the Company Entities);
(ix) sell, assign, transfer, license, sublicense, covenant not to xxx or assert with respect to, or otherwise dispose of, any material Intellectual Property or Intellectual Property Rights (other than non-exclusive licenses or non-exclusive sublicenses of Intellectual Property or Intellectual Property Rights granted by any Company Entity to any Person, in each case in the ordinary course of business) or abandon, cancel or permit to lapse or expire any material Intellectual Property Rights (except for any issuances, registrations or applications that the Company Entities have allowed to be abandoned or cancelled, or permitted to lapse or expire, in their reasonable business judgment);
(x) make any pledge of any of its material assets or permit any of its material assets to become subject to any Encumbrances, except for Encumbrances: (A) that are required by or automatically effected by Contracts in place as of the date hereof; (B) that do not materially detract from the value of such assets; or (C) that do not materially impair the operations of any of the Company Entities;
(xi) lend money to any Person (other than extensions of credit to trade creditors, intercompany indebtedness and routine travel and business expense advances made to directors or employees, in each case in the ordinary course of business), forgive any loan to any employee, officer or director of any Company Entity or, except in the ordinary course of business and consistent with past practices, incur or guarantee any indebtedness for borrowed money in an aggregate principal amount exceeding $2,000,000 in the aggregate;
(xii) establish, adopt, enter into or amend to materially increase the value of benefits under any Company Employee Plan or under any Company Employee Agreement with any Executive Officer of the Company, pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation (including equity-based compensation, whether payable in stock, cash or other property) or remuneration payable to, or adopt or agree to any retention arrangements with or for the benefit of, any of its directors or any of its officers or other employees (except that the Company: (A) may provide routine, reasonable wage or salary increases to employees in the ordinary course of business and in accordance with past practices in connection with the Company’s customary employee review process; (B) may make customary bonus payments, commission payments and profit sharing payments consistent in all material respects with past practices and the terms of any bonus, commission and/or profit sharing plans existing on the date of this Agreement; and (C) may enter into offer letters or employment agreements with any newly hired employees in the ordinary course of business and consistent with past practices, other than employment agreements with Executive Officers of the Company);
(xiii) hire any employee at the level of Vice President or above or with an annual base salary in excess of $200,000, promote any employee to the level of Vice President or above (except in order to fill a position vacated after the date of this Agreement), or terminate any employee at the level of Vice President or above without cause;
(xiv) other than in the ordinary course of business and consistent with past practices or as required by concurrent changes in GAAP or SEC rules and regulations, change any of its methods of accounting or accounting practices in effect at December 31, 2017 in any respect;
(xv) make, change or rescind any material Tax election, change any annual Tax accounting period or adopt or change any method of Tax accounting, in each case, relating to a material amount of Tax, settle or compromise any claim relating to a material amount of Taxes, file any material amended Tax Return, surrender any claim for a refund of a material amount of Taxes or file any material Tax Return other than one prepared in accordance with past practice;
(xvi) commence any Legal Proceeding, except with respect to: (A) routine matters in the ordinary course of business and consistent with past practices; (B) in such cases where the Company reasonably determines in good faith that the failure to commence suit would result in a material impairment of a valuable aspect of its business (provided, that the Company consults with Parent and considers the views and comments of Parent with respect to such Legal Proceedings prior to commencement thereof); or (C) in connection with a breach of this Agreement or the other agreements listed in the definition of “Contemplated Transactions;”
(xvii) settle, or offer or propose to settle, any Legal Proceeding involving or against any of the Company Entities: (A) that was commenced by a Governmental Body; or (B) that was commenced by a Person other than a Governmental Body, other than any Legal Proceeding or material claim addressed by Section 5.16, except pursuant to a settlement: (1) that results solely in monetary obligation involving payment by the Company Entities of up to the amount specifically reserved in accordance with GAAP with respect to such Legal Proceedings or claim on the Company Balance Sheet; or (2) in an amount in excess of such reserves, if any, of not more than $150,000 for individual settlements and $500,000 in the aggregate for all settlements during the Pre-Closing Period;
(xviii) enter into any Contract covering any Company Employee, or make any payment to any Company Employee (other than as required by a Contract in effect on the date hereof), that in either case, considered individually or considered collectively with any other such Contracts or payments, will, or would reasonably be expected to, give rise to an “excess parachute payment” within the meaning of Section 280G(b)(2) of the Code, any excise tax owing under Section 4999 of the Code or any other amount that would not be deductible under Section 280G of the Code;
(xix) take any action that would reasonably be expected to cause the Mergers to fail to qualify as a “reorganization” under Section 368(a) of the Code (whether or not otherwise permitted by the provisions of this Section 4.2(b)) or fail to take any commercially reasonable action necessary to cause the Mergers to so qualify;
(xx) convene any special meeting (or any adjournment or postponement thereof) of the Company’s stockholders other than (x) the Company Stockholders Meeting or (y) any special meeting requested by holders of ten percent or more of the total voting power of all the shares of the Company;
(xxi) except as required by existing Company Employee Plans or by applicable Legal Requirements, recognize any union or enter into, modify, amend, extend, renew, replace or terminate any collective bargaining or other Contract with any labor organization;
(xxii) enter into any new line of business, or discontinue or shut down any material line of business or division;
(xxiii) enter into or amend any agreement with any holder of Company Common Stock with respect to holding, voting or disposing of shares of Company Common Stock;
(xxiv) adopt or enter into a plan of complete or partial liquidation, dissolution, reclassification, recapitalization or other reorganization;
(xxv) in the case of a Subsidiary of the Company, acquire any shares of Company Common Stock;
(xxvi) amend any of the Company Financial Advisor Agreements;
(xxvii) enter into any transaction that would be required to be reported by the Company pursuant to Item 404 of Regulation S-K promulgated by the SEC; or
(xxviii) agree or commit to take any of the actions described in clauses “(i)” through “(ivxxvii)” of this Section 4.2(b). Parent shall be deemed to have consented to any request to take the foregoing actions if Parent is notified in writing of such request and fails to respond to such request within two business days.
(c) During the Pre-Closing Period, the Company shall promptly notify Parent in writing of of, and use commercially reasonable efforts to prevent or promptly remedy, any event, condition, fact or circumstance that would reasonably be expected to make the timely satisfaction of any of the conditions set forth in Article 6 Section 6.1 and Section 6.2 impossible or that unlikely or that, individually or in the aggregate, has had had, or would reasonably be expected to have or result in have, a Company Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any material Legal Proceeding or material claim threatened, commenced, or asserted against or with respect to any of the Company Entities. No notification given to Parent pursuant to this Section 4.2(c) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this AgreementAgreement or limit or otherwise affect the remedies available hereunder to Parent.
Appears in 1 contract
Samples: Merger Agreement (Tidewater Inc)
Operation of the Business of the Company Entities. (a) During the Pre-Closing Period, except as set forth in Part 4.2(a) of the Company Disclosure Schedule, as otherwise contemplated by this Agreement, as required by Legal Requirements or to the extent that Parent shall otherwise consent in writing: (i) the Company shall ensure that each of the Company Entities conducts its business and operations in the ordinary course and in accordance in all material respects consistent with past practices; and (ii) the Company shall use commercially reasonable efforts to attempt to ensure that each of the Company Entities preserves intact the material components of its current business organization, keeps available the services of its current officers Executive Officers and key employees holding a Designated Position and maintains its relations and goodwill with all material suppliers, material customers, material licensors and Governmental Bodies; and (iii) the Company shall promptly notify Parent following its becoming aware of any Legal Proceeding commenced, or, to the Company’s Knowledge, either: (A) with respect to a Governmental Body, overtly threatened; or (B) with respect to any other Person, threatened in writing, in either case of clause “(A)” or “(B)” of this sentence, against, involving or that would reasonably be expected to affect any of the Company Entities and that relates to any of the Contemplated Transactions.
(b) Except as set forth in Part 4.2(b) of the Company Disclosure Schedule, as otherwise contemplated by this Agreement (including, without limitation, Section 5.1(a) hereof) or as required by Legal Requirements, during the Pre-Closing Period, the Company shall not (without the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed), and the Company shall ensure that each of the other Company Entities does not (without the prior written consent of Parent, which consent shall not 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, or repurchase, redeem or otherwise reacquire any shares of capital stock or other securities, other than: (1) dividends or distributions by a direct or indirect wholly-owned Subsidiary of the Company to the Company or any direct or indirect wholly-owned Subsidiary of the Company to the extent consistent with past practice; (2) dividends or distributions required under the applicable organizational documents of such Company Entity in effect on the date of this Agreement; or (3) redemptions or acquisitions of securities tendered by holders of Company Stock-Based Awards in order to satisfy obligations to pay the exercise price and/or Tax withholding obligations with respect thereto or (B) enter into any stockholder rights plan (or similar plan commonly referred to as a “poison pill”);
(ii) sell, issue, grant or authorize the sale, issuance or grant of: (A) any capital stock or other security; (B) any option, call, warrant or right to acquire any capital stock or other security (or whose value is directly related to shares of Company Common Stock); or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that that: (1) the Company may issue shares of Company Common Stock upon the valid exercise exercise, settlement or conversion, as applicable, of any Company RSUs and Company Warrants outstanding as of the date hereof, in each case in accordance with their existing terms; and (2) the Company may, in the ordinary course of business and consistent with past practices grant Company RSUs (and issue shares of Company Common Stock upon the settlement thereof): (x) to any newly hired employee or service provider of a Company Entity (other than any officers or directors) under a Company Equity Plan commensurate with his or her position with such Company Entity; and (y) to Company Employees (other than any officers or directors) in connection with the Company’s ordinary course equity award grant process as described on Part 4.2(b)(ii) of the Company Disclosure Schedule; provided, however, that: (aa) except as required in any Company Equity Plan or Company Employee Agreement in effect as of the date of this Agreement, no such Company Stock-Based Awards shall contain any “single-trigger,” “double-trigger” or other vesting acceleration provisions or shall otherwise be subject to acceleration (in whole or in part) as a result of the Merger, any of the other Contemplated Transactions or any other similar transaction (whether alone or in combination with any termination of employment or other event); and (bb) subject to the foregoing, such Company Stock-Based Awards shall be granted or issued pursuant to the Company’s applicable standard agreement and shall contain the Company’s standard vesting schedule);
(iii) amend or waive any of its rights under, or accelerate the vesting under, any provision of any Company Equity Plan or any provision of any agreement evidencing any outstanding Company Stock-Based Award, or otherwise modify any of the terms of any outstanding Company Stock-Based Award, warrant or other security or any related Contract, other than any acceleration of vesting that is contemplated in any Company Equity Plan or Company Employee Agreement in effect as of the date hereof;
(iv) amend or waive, or permit the adoption of or waiver of, any amendment to its certificate of incorporation or bylaws or other charter or organizational documents;
(iv) (A) acquire any equity interest or other interest in any other EntityEntity or Entities other than (I) such acquisition(s) for which consideration paid (including assumption of liabilities), individually or in the aggregate, does not exceed $250,000; (II) capital expenditures permitted by clause (vi) below and (III) transactions between any wholly-owned Company Entities; (B) except in the ordinary course of business and consistent with past practices, form any Subsidiary; or (C) effect or become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split, division or subdivision of shares, consolidation of shares or similar transaction;
(vi) make any capital expenditure, incur regulatory dry dock and related expenses deferred in accordance with the Company’s current accounting policies or make investments other than (A) capital expenditures, deferred dry dock and related expenses and investments provided for in the Company’s 2018 budget Made Available to Parent prior to the date of this Agreement or otherwise not exceeding $5,000,000 in the aggregate for the period from the date of this Agreement through December 31, 2018, (B) capital expenditures, deferred dry dock and related expenses and investments provided for in the Company’s 2019 budget (which will be provided to Parent when approved by the Company Board) not to exceed $3,500,000 in the aggregate, and (C) additional capital expenditures, deferred dry dock and related expenses and investments approved by the Company Board and related to the return to active service of currently stacked or otherwise idle vessels not to exceed $5,000,000 in the aggregate;
(vii) other than in the ordinary course of business and consistent with past practices: (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 if entered into prior to the date hereof would be deemed a Company Material Contract; or (B) materially amend, terminate, or waive any material right or remedy under, any Company Material Contract;
(viii) except as otherwise permitted by clauses “(v)” and “(vi)”, acquire, lease or license any right or other asset from any other Person, sell or otherwise dispose of, or lease or license, any right or other asset to any other Person (except in each case for assets: (A) acquired, leased, licensed, sold or disposed of by the Company in the ordinary course of business and consistent with past practices; or (B) that are, in the aggregate, immaterial to the business of the Company Entities);
(ix) sell, assign, transfer, license, sublicense, covenant not to xxx or assert with respect to, or otherwise dispose of, any material Intellectual Property or Intellectual Property Rights (other than non-exclusive licenses or non-exclusive sublicenses of Intellectual Property or Intellectual Property Rights granted by any Company Entity to any Person, in each case in the ordinary course of business) or abandon, cancel or permit to lapse or expire any material Intellectual Property Rights (except for any issuances, registrations or applications that the Company Entities have allowed to be abandoned or cancelled, or permitted to lapse or expire, in their reasonable business judgment);
(x) make any pledge of any of its material assets or permit any of its material assets to become subject to any Encumbrances, except for Encumbrances: (A) that are required by or automatically effected by Contracts in place as of the date hereof; (B) that do not materially detract from the value of such assets; or (C) that do not materially impair the operations of any of the Company Entities;
(xi) lend money to any Person (other than extensions of credit to trade creditors, intercompany indebtedness and routine travel and business expense advances made to directors or employees, in each case in the ordinary course of business), forgive any loan to any employee, officer or director of any Company Entity or, except in the ordinary course of business and consistent with past practices, incur or guarantee any indebtedness for borrowed money in an aggregate principal amount exceeding $2,000,000 in the aggregate;
(xii) establish, adopt, enter into or amend to materially increase the value of benefits under any Company Employee Plan or under any Company Employee Agreement with any Executive Officer of the Company, pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation (including equity-based compensation, whether payable in stock, cash or other property) or remuneration payable to, or adopt or agree to any retention arrangements with or for the benefit of, any of its directors or any of its officers or other employees (except that the Company: (A) may provide routine, reasonable wage or salary increases to employees in the ordinary course of business and in accordance with past practices in connection with the Company’s customary employee review process; (B) may make customary bonus payments, commission payments and profit sharing payments consistent in all material respects with past practices and the terms of any bonus, commission and/or profit sharing plans existing on the date of this Agreement; and (C) may enter into offer letters or employment agreements with any newly hired employees in the ordinary course of business and consistent with past practices, other than employment agreements with Executive Officers of the Company);
(xiii) hire any employee at the level of Vice President or above or with an annual base salary in excess of $200,000, promote any employee to the level of Vice President or above (except in order to fill a position vacated after the date of this Agreement), or terminate any employee at the level of Vice President or above without cause;
(xiv) other than in the ordinary course of business and consistent with past practices or as required by concurrent changes in GAAP or SEC rules and regulations, change any of its methods of accounting or accounting practices in effect at December 31, 2017 in any respect;
(xv) make, change or rescind any material Tax election, change any annual Tax accounting period or adopt or change any method of Tax accounting, in each case, relating to a material amount of Tax, settle or compromise any claim relating to a material amount of Taxes, file any material amended Tax Return, surrender any claim for a refund of a material amount of Taxes or file any material Tax Return other than one prepared in accordance with past practice;
(xvi) commence any Legal Proceeding, except with respect to: (A) routine matters in the ordinary course of business and consistent with past practices; (B) in such cases where the Company reasonably determines in good faith that the failure to commence suit would result in a material impairment of a valuable aspect of its business (provided, that the Company consults with Parent and considers the views and comments of Parent with respect to such Legal Proceedings prior to commencement thereof); or (C) in connection with a breach of this Agreement or the other agreements listed in the definition of “Contemplated Transactions;”
(xvii) settle, or offer or propose to settle, any Legal Proceeding involving or against any of the Company Entities: (A) that was commenced by a Governmental Body; or (B) that was commenced by a Person other than a Governmental Body, other than any Legal Proceeding or material claim addressed by Section 5.16, except pursuant to a settlement: (1) that results solely in monetary obligation involving payment by the Company Entities of up to the amount specifically reserved in accordance with GAAP with respect to such Legal Proceedings or claim on the Company Balance Sheet; or (2) in an amount in excess of such reserves, if any, of not more than $150,000 for individual settlements and $500,000 in the aggregate for all settlements during the Pre-Closing Period;
(xviii) enter into any Contract covering any Company Employee, or make any payment to any Company Employee (other than as required by a Contract in effect on the date hereof), that in either case, considered individually or considered collectively with any other such Contracts or payments, will, or would reasonably be expected to, give rise to an “excess parachute payment” within the meaning of Section 280G(b)(2) of the Code, any excise tax owing under Section 4999 of the Code or any other amount that would not be deductible under Section 280G of the Code;
(xix) take any action that would reasonably be expected to cause the Mergers to fail to qualify as a “reorganization” under Section 368(a) of the Code (whether or not otherwise permitted by the provisions of this Section 4.2(b)) or fail to take any commercially reasonable action necessary to cause the Mergers to so qualify;
(xx) convene any special meeting (or any adjournment or postponement thereof) of the Company’s stockholders other than (x) the Company Stockholders Meeting or (y) any special meeting requested by holders of ten percent or more of the total voting power of all the shares of the Company;
(xxi) except as required by existing Company Employee Plans or by applicable Legal Requirements, recognize any union or enter into, modify, amend, extend, renew, replace or terminate any collective bargaining or other Contract with any labor organization;
(xxii) enter into any new line of business, or discontinue or shut down any material line of business or division;
(xxiii) enter into or amend any agreement with any holder of Company Common Stock with respect to holding, voting or disposing of shares of Company Common Stock;
(xxiv) adopt or enter into a plan of complete or partial liquidation, dissolution, reclassification, recapitalization or other reorganization;
(xxv) in the case of a Subsidiary of the Company, acquire any shares of Company Common Stock;
(xxvi) amend any of the Company Financial Advisor Agreements;
(xxvii) enter into any transaction that would be required to be reported by the Company pursuant to Item 404 of Regulation S-K promulgated by the SEC; or
(xxviii) agree or commit to take any of the actions described in clauses “(i)” through “(ivxxvii)” of this Section 4.2(b). Parent shall be deemed to have consented to any request to take the foregoing actions if Parent is notified in writing of such request and fails to respond to such request within two business days.
(c) During the Pre-Closing Period, the Company shall promptly notify Parent in writing of of, and use commercially reasonable efforts to prevent or promptly remedy, any event, condition, fact or circumstance that would reasonably be expected to make the timely satisfaction of any of the conditions set forth in Article 6 Section 6.1 and Section 6.2 impossible or that unlikely or that, individually or in the aggregate, has had had, or would reasonably be expected to have or result in have, a Company Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any material Legal Proceeding or material claim threatened, commenced, or asserted against or with respect to any of the Company Entities. No notification given to Parent pursuant to this Section 4.2(c) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this AgreementAgreement or limit or otherwise affect the remedies available hereunder to Parent.
Appears in 1 contract
Operation of the Business of the Company Entities. (a) During the Pre-Closing Period, except as set forth in Part 4.2(a4.3(a) of the Company Disclosure Schedule, as otherwise contemplated by this Agreement, as required by Legal Requirements or to the extent that Parent shall otherwise consent in writing: (i) the Company shall ensure that cause each of the Company Entities conducts to conduct its business and operations in the ordinary course and in accordance in all material respects consistent with past practicespractices and, without limiting the foregoing covenant, shall not (without the prior written consent of Parent), and shall ensure that each of the Company Entities shall not, declare, accrue, set aside or pay any dividend or distribution (including without limitation a distribution in redemption of an interest in any Company Entity and excluding any distribution by AlphaGraphics to BC Alpha, LLC, the proceeds of which are used solely to make payments owing to East West Bank), or incur any indebtedness for borrowed money; (ii) the Company shall use commercially reasonable efforts to attempt to ensure that cause each of the Company Entities preserves to preserve intact the material components of its current business organization, keeps available the services of certain of its current officers (other than its chief executive officer) and other key employees and maintains its relations and goodwill with all material suppliers, material customers, material licensors and Governmental Bodies; and (iii) the Company shall promptly notify Parent following its becoming aware of any Legal Proceeding commenced, or, to the Company’s Knowledge, either: (A) with respect to a Governmental Body, overtly threatened; or (B) with respect to any other Person, threatened in writing, in either case of clause “(A)” ) or “(B)” ) of this sentence, against, involving or that would reasonably be expected to materially affect any of the Company Entities and that relates to any of the Contemplated Transactions.
(b) Except as set forth in Part 4.2(b) of the Company Disclosure Schedule, as otherwise contemplated by this Agreement (including, without limitation, Section 5.1(a) hereof) or as required by Legal Requirements, during the Pre-Closing Period, the Company shall not (without the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed), and the Company shall ensure that each of the other Company Entities does not (without the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed):
(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;
(ii) sell, issue, grant or authorize the sale, issuance or grant of: (A) any capital stock or other security; (B) any option, call, warrant or right to acquire any capital stock or other security (or whose value is directly related to shares of Company Common Stock); or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that the Company may issue shares of Company Common Stock upon the valid exercise of Company Warrants outstanding as of the date of this Agreement);
(iii) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documents;
(iv) (A) acquire any equity interest or other interest in any other Entity; (B) form any Subsidiary; or (C) effect or become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split, division or subdivision of shares, consolidation of shares or similar transaction;
(v) agree or commit to take any of the actions described in clauses “(i)” through “(iv)” of this Section 4.2(b). Parent shall be deemed to have consented to any request to take the foregoing actions if Parent is notified in writing of such request and fails to respond to such request within two business days.
(c) During the Pre-Closing Period, the Company shall promptly notify Parent in writing of any event, condition, fact or circumstance that would reasonably be expected to make the timely satisfaction of any of the conditions set forth in Article 6 impossible or that has had or would reasonably be expected to have or result in a Company Material Adverse Effect. No notification given to Parent pursuant to this Section 4.2(c) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement.
Appears in 1 contract
Operation of the Business of the Company Entities. (a) During the Pre-Closing Period, except as set forth in Part 4.2(a) of the Company Disclosure Schedule, in connection with a Permitted Bridge Financing, as otherwise contemplated by this Agreement, as required by Legal Requirements or to the extent that Parent shall otherwise consent in writing: (i) the Company shall ensure that each of the Company Entities conducts its business and operations in the ordinary course and in accordance in all material respects with past practices; (ii) the Company shall use commercially reasonable efforts to attempt to ensure that each of the Company Entities preserves intact the material components of its current business organization, keeps available the services of its current officers and key employees and maintains its relations and goodwill with all material suppliers, material customers, material licensors and Governmental Bodies; and (iii) the Company shall promptly notify Parent following its becoming aware of any Legal Proceeding commenced, or, to the Company’s Knowledge, either: (A) with respect to a Governmental Body, overtly threatened; or (B) with respect to any other Person, threatened in writing, in either case of clause “(A)” or “(B)” of this sentence, against, involving or that would reasonably be expected to affect any of the Company Entities and that relates to any of the Contemplated Transactions.
(b) Except as set forth in Part 4.2(b) of the Company Disclosure Schedule, as otherwise contemplated by this Agreement (including, without limitation, Section 5.1(a5.4(a) hereof) or as required by Legal Requirements, during the Pre-Closing Period, the Company shall not (without the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed), and the Company shall ensure that each of the other Company Entities does not (without the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed):
(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, other than: (A) pursuant to the Company’s right to repurchase Company Restricted Stock held by an employee of the Company upon termination of such employee’s employment; or (B) in connection with the withholding of shares of Company Common Stock to satisfy Tax obligations with respect to the exercise of Company Options outstanding as of the date of this Agreement;
(ii) sell, issue, grant or authorize the sale, issuance or grant of: (A) any capital stock or other security; (B) any option, call, warrant or right to acquire any capital stock or other security (or whose value is directly related to shares of Company Common Stock); or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that the Company may issue shares of Company Common Stock upon the valid exercise of Company Options or Company Warrants outstanding as of the date of this Agreement);
(iii) amend, waive any of its rights under or, except as contemplated by the terms of the Company Equity Plans (other than the Company Equity Plan Increase), Company Equity Award agreements or any applicable employment agreement, in each case as in effect as of the date of this Agreement, accelerate the vesting under, any provision of the Company Equity Plan or any provision of any agreement evidencing any outstanding Company Equity Award except for the acceleration of the Company Options set forth on Schedule 1.10(a), or otherwise modify any of the terms of any outstanding Company Equity Award, Company 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 other charter or organizational documents;
(iv) (A) acquire any equity interest or other interest in any other Entity; (B) form any Subsidiary; or (C) effect or become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split, division or subdivision of shares, consolidation of shares or similar transaction;
(vvi) make any capital expenditure in excess of $5,000 (except that the Company Entities may make any capital expenditure that is provided for in the Company’s capital expense budget delivered or made available to the Company prior to the date of this Agreement);
(vii) other than in the ordinary course of business and consistent with past practices: (A) enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any Company Material Contract; or (B) amend, terminate, or waive any material right or remedy under, any Company 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: (A) acquired, leased, licensed or disposed of by the Company in the ordinary course of business and consistent with past practices; or (B) that are immaterial to the business of the Company Entities (taken as a whole));
(ix) make any pledge of any of its material assets or permit any of its material assets to become subject to any Encumbrances, except for Company Permitted Encumbrances;
(x) lend money to any Person (other than extensions of credit to trade creditors, intercompany indebtedness and routine travel and business expense advances made to directors or employees, in each case in the ordinary course of business), or, except in the ordinary course of business and consistent with past practices, incur or guarantee any indebtedness;
(xi) establish, adopt, enter into or amend any Company Employee Plan or Company Employee Agreement (except as contemplated by this Agreement), pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation (including equity-based compensation, whether payable in stock, cash or other property) or remuneration payable to, or adopt or agree to any retention arrangements with or for the benefit of, any of its directors or any of its officers or other employees (except that the Company: (A) may provide routine, reasonable salary increases to non-officer employees in the ordinary course of business and in accordance with past practices in connection with the Company’s customary employee review process; and (B) may make customary bonus payments and profit sharing payments consistent with past practices in accordance with bonus and profit sharing plans existing on the date of this Agreement);
(xii) hire any employee at the level of Vice President or above or with an annual base salary in excess of $100,000, or promote any employee to the level of Vice President or above (except in order to fill a position vacated after the date of this Agreement);
(xiii) other than in the ordinary course of business and consistent with past practices or as required by concurrent changes in GAAP or SEC rules and regulations, change any of its methods of accounting or accounting practices in any respect;
(xiv) make any material Tax election;
(xv) commence any Legal Proceeding, except with respect to: (A) routine matters in the ordinary course of business and consistent with past practices; (B) in such cases where the Company reasonably determines in good faith that the failure to commence suit would result in a material impairment of a valuable aspect of its business (provided that the Company consults with Parent and considers the views and comments of Parent with respect to such Legal Proceedings prior to commencement thereof); or (C) in connection with a breach of this Agreement or the other agreements listed in the definition of “Contemplated Transactions;”
(xvi) settle any Legal Proceeding or other material claim, other than pursuant to a settlement: (A) that results solely in monetary obligation involving payment by the Company Entities of the amount specifically reserved in accordance with GAAP with respect to such Legal Proceedings or claim on the Company Unaudited Balance Sheet; or (B) that results solely in monetary obligation involving only the payment of monies by the Company Entities of not more than $50,000 in the aggregate;
(xvii) take any action that would reasonably be expected to cause the Merger to fail to qualify as a “reorganization” under Section 368(a) of the Code (whether or not otherwise permitted by the provisions of this Section 4) or fail to take any reasonable action necessary to cause the Merger to so qualify; or
(xviii) agree or commit to take any of the actions described in clauses “(i)” through ““ (ivxvii)” “ of this Section 4.2(b). Parent shall be deemed to have consented to any request to take the foregoing actions if Parent is notified in writing of such request and fails to respond to such request within two business days.
(c) During the Pre-Closing Period, the Company shall promptly notify Parent in writing of any event, condition, fact or circumstance that would reasonably be expected to make the timely satisfaction of any of the conditions set forth in Article Section 6 impossible or that has had or would reasonably be expected to have or result in a Company Material Adverse Effect. No notification given to Parent pursuant to this Section 4.2(c) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement.
Appears in 1 contract
Operation of the Business of the Company Entities. (a) During the Pre-Closing Period, except as set forth in Part 4.2(a) of the Company Disclosure Schedule, as otherwise contemplated by this Agreement, as required by Legal Requirements or to the extent that Parent shall otherwise consent in writing: (i) the Company shall ensure that each of the Company Entities conducts its business and operations in the ordinary course and in accordance in all material respects with past practices; (ii) the Company shall use commercially reasonable efforts to attempt to ensure that each of the Company Entities preserves intact the material components of its current business organization, keeps available the services of its current officers and key employees and maintains its relations and goodwill with all material suppliers, material customers, material licensors and Governmental Bodies; and (iii) the Company shall promptly notify Parent following its becoming aware of any Legal Proceeding commenced, or, to the Company’s Knowledge, either: (A) with respect to a Governmental Body, overtly threatened; or (B) with respect to any other Person, threatened in writing, in either case of clause “(A)” or “(B)” of this sentence, against, involving or that would reasonably be expected to affect any of the Company Entities and that relates to any of the Contemplated Transactions.
(b) Except as set forth in Part 4.2(b) of the Company Disclosure Schedule, as otherwise contemplated by this Agreement (including, without limitation, Section 5.1(a) hereof) or as required by Legal Requirements, during the Pre-Closing Period, the Company shall not (without the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed), and the Company shall ensure that each of the other Company Entities does not (without the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed):
(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, other than in connection with the withholding of shares of Company Common Stock to satisfy Tax obligations with respect to the exercise of Company Options outstanding as of the date of this Agreement;
(ii) sell, issue, grant or authorize the sale, issuance or grant of: (A) any capital stock or other security; (B) any option, call, warrant or right to acquire any capital stock or other security (or whose value is directly related to shares of Company Common Stock); or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that the Company may issue shares of Company Common Stock upon the valid exercise of Company Options or Company Warrants outstanding as of the date of this Agreement);
(iii) amend, waive any of its rights under or, except as contemplated by the terms of the Company Equity Plans, Company Equity Award agreements or any applicable employment agreement, in each case as in effect as of the date of this Agreement, accelerate the vesting under, any provision of the Company Equity Plan or any provision of any agreement evidencing any outstanding Company Equity Award except for the acceleration of the Company Options set forth on Part 2.3(b) of the Company Disclosure Schedule, or otherwise modify any of the terms of any outstanding Company Equity Award, Company 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 other charter or organizational documents;
(iv) (A) acquire any equity interest or other interest in any other Entity; (B) form any Subsidiary; or (C) effect or become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split, division or subdivision of shares, consolidation of shares or similar transaction;
(vvi) make any capital expenditure in excess of $25,000;
(vii) other than in the ordinary course of business and consistent with past practices: (A) enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any Company Material Contract; or (B) amend, terminate, or waive any material right or remedy under, any Company 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: (A) acquired, leased, licensed or disposed of by the Company in the ordinary course of business and consistent with past practices; or (B) that are immaterial to the business of the Company Entities, taken as a whole);
(ix) make any pledge of any of its material assets or permit any of its material assets to become subject to any Encumbrances, except for Company Permitted Encumbrances;
(x) lend money to any Person (other than extensions of credit to trade creditors, intercompany indebtedness and routine travel and business expense advances made to directors or employees, in each case in the ordinary course of business), or, except in the ordinary course of business and consistent with past practices, incur or guarantee any indebtedness;
(xi) establish, adopt, enter into or amend any Company Employee Plan or Company Employee Agreement (except as contemplated by this Agreement), pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation (including equity-based compensation, whether payable in stock, cash or other property) or remuneration payable to, or adopt or agree to any retention arrangements with or for the benefit of, any of its directors or any of its officers or other employees (except that the Company: (A) may provide routine, reasonable salary increases to non-officer employees in the ordinary course of business and in accordance with past practices in connection with the Company’s customary employee review process; and (B) may make customary bonus payments and profit sharing payments consistent with past practices in accordance with bonus and profit sharing plans existing on the date of this Agreement);
(xii) other than in the ordinary course of business and consistent with past practices or as required by concurrent changes in GAAP or SEC rules and regulations, change any of its methods of accounting or accounting practices in any respect;
(xiii) make any material Tax election;
(xiv) commence any Legal Proceeding, except in connection with a breach of this Agreement or the other agreements listed in the definition of “Contemplated Transactions”;
(xv) settle any Legal Proceeding or other material claim, other than pursuant to a settlement: (A) that results solely in monetary obligation involving payment by the Company Entities of the amount specifically reserved in accordance with GAAP with respect to such Legal Proceedings or claim on the Company Latest Balance Sheet; or (B) that results solely in monetary obligation involving only the payment of monies by the Company Entities of not more than $20,000 in the aggregate; or
(xvi) agree or commit to take any of the actions described in clauses “(i)” ) through “(iv)” xvii) of this Section 4.2(b). Parent shall be deemed to have consented to any request to take the foregoing actions if Parent is notified in writing of such request and fails to respond to such request within two business days.
(c) During the Pre-Closing Period, the Company shall promptly notify Parent in writing of any event, condition, fact or circumstance that would reasonably be expected to make the timely satisfaction of any of the conditions set forth in Article 6 impossible or that has had or would reasonably be expected to have or result in a Company Material Adverse Effect. No notification given to Parent pursuant to this Section 4.2(c) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement.
Appears in 1 contract
Operation of the Business of the Company Entities. (a) During the Pre-Closing Period, except as set forth in Part 4.2(a) of the Company Disclosure Schedule, in connection with a Permitted Bridge Financing, as otherwise contemplated by this Agreement, as required by Legal Requirements or to the extent that Parent shall otherwise consent in writing: (i) the Company shall ensure that each of the Company Entities conducts its business and operations in the ordinary course and in accordance in all material respects with past practices; (ii) the Company shall use commercially reasonable efforts to attempt to ensure that each of the Company Entities preserves intact the material components of its current business organization, keeps available the services of its current officers and key employees and maintains its relations and goodwill with all material suppliers, material customers, material licensors and Governmental Bodies; and (iii) the Company shall promptly notify Parent following its becoming aware of any Legal Proceeding commenced, or, to the Company’s Knowledge, either: (A) with respect to a Governmental Body, overtly threatened; or (B) with respect to any other Person, threatened in writing, in either case of clause “(A)” or “(B)” of this sentence, against, involving or that would reasonably be expected to affect any of the Company Entities and that relates to any of the Contemplated Transactions.
(b) Except as set forth in Part 4.2(b) of the Company Disclosure Schedule, as otherwise contemplated by this Agreement (including, without limitation, Section 5.1(a5.4(a) hereof) or as required by Legal Requirements, during the Pre-Closing Period, the Company shall not (without the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed), and the Company shall ensure that each of the other Company Entities does not (without the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed):
(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, other than: (A) pursuant to the Company’s right to repurchase Company Restricted Stock held by an employee of the Company upon termination of such employee’s employment; or (B) in connection with the withholding of shares of Company Common Stock to satisfy Tax obligations with respect to the exercise of Company Options outstanding as of the date of this Agreement;
(ii) sell, issue, grant or authorize the sale, issuance or grant of: (A) any capital stock or other security; (B) any option, call, warrant or right to acquire any capital stock or other security (or whose value is directly related to shares of Company Common Stock); or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that the Company may issue shares of Company Common Stock upon the valid exercise of Company Options or Company Warrants outstanding as of the date of this Agreement);
(iii) amend, waive any of its rights under or, except as contemplated by the terms of the Company Equity Plans (other than the Company Equity Plan Increase), Company Equity Award agreements or any applicable employment agreement, in each case as in effect as of the date of this Agreement, accelerate the vesting under, any provision of the Company Equity Plan or any provision of any agreement evidencing any outstanding Company Equity Award except for the acceleration of the Company Options set forth on Schedule 1.10(a), or otherwise modify any of the terms of any outstanding Company Equity Award, Company 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 other charter or organizational documents;
(iv) (A) acquire any equity interest or other interest in any other Entity; (B) form any Subsidiary; or (C) effect or become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split, division or subdivision of shares, consolidation of shares or similar transaction;
(vvi) make any capital expenditure in excess of $5,000 (except that the Company Entities may make any capital expenditure that is provided for in the Company’s capital expense budget delivered or made available to the Company prior to the date of this Agreement);
(vii) other than in the ordinary course of business and consistent with past practices: (A) enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any Company Material Contract; or (B) amend, terminate, or waive any material right or remedy under, any Company 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: (A) acquired, leased, licensed or disposed of by the Company in the ordinary course of business and consistent with past practices; or (B) that are immaterial to the business of the Company Entities (taken as a whole));
(ix) make any pledge of any of its material assets or permit any of its material assets to become subject to any Encumbrances, except for Company Permitted Encumbrances;
(x) lend money to any Person (other than extensions of credit to trade creditors, intercompany indebtedness and routine travel and business expense advances made to directors or employees, in each case in the ordinary course of business), or, except in the ordinary course of business and consistent with past practices, incur or guarantee any indebtedness;
(xi) establish, adopt, enter into or amend any Company Employee Plan or Company Employee Agreement (except as contemplated by this Agreement), pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation (including equity-based compensation, whether payable in stock, cash or other property) or remuneration payable to, or adopt or agree to any retention arrangements with or for the benefit of, any of its directors or any of its officers or other employees (except that the Company: (A) may provide routine, reasonable salary increases to non-officer employees in the ordinary course of business and in accordance with past practices in connection with the Company’s customary employee review process; and (B) may make customary bonus payments and profit sharing payments consistent with past practices in accordance with bonus and profit sharing plans existing on the date of this Agreement);
(xii) hire any employee at the level of Vice President or above or with an annual base salary in excess of $100,000, or promote any employee to the level of Vice President or above (except in order to fill a position vacated after the date of this Agreement);
(xiii) other than in the ordinary course of business and consistent with past practices or as required by concurrent changes in GAAP or SEC rules and regulations, change any of its methods of accounting or accounting practices in any respect;
(xiv) make any material Tax election;
(xv) commence any Legal Proceeding, except with respect to: (A) routine matters in the ordinary course of business and consistent with past practices; (B) in such cases where the Company reasonably determines in good faith that the failure to commence suit would result in a material impairment of a valuable aspect of its business (provided that the Company consults with Parent and considers the views and comments of Parent with respect to such Legal Proceedings prior to commencement thereof); or (C) in connection with a breach of this Agreement or the other agreements listed in the definition of “Contemplated Transactions;”
(xvi) settle any Legal Proceeding or other material claim, other than pursuant to a settlement: (A) that results solely in monetary obligation involving payment by the Company Entities of the amount specifically reserved in accordance with GAAP with respect to such Legal Proceedings or claim on the Company Unaudited Balance Sheet; or (B) that results solely in monetary obligation involving only the payment of monies by the Company Entities of not more than $50,000 in the aggregate;
(xvii) take any action that would reasonably be expected to cause the Merger to fail to qualify as a “reorganization” under Section 368(a) of the Code (whether or not otherwise permitted by the provisions of this Section 4) or fail to take any reasonable action necessary to cause the Merger to so qualify; or
(xviii) agree or commit to take any of the actions described in clauses “(i)” through ““ (ivxvii)” of this Section 4.2(b). Parent shall be deemed to have consented to any request to take the foregoing actions if Parent is notified in writing of such request and fails to respond to such request within two business days.
(c) During the Pre-Closing Period, the Company shall promptly notify Parent in writing of any event, condition, fact or circumstance that would reasonably be expected to make the timely satisfaction of any of the conditions set forth in Article Section 6 impossible or that has had or would reasonably be expected to have or result in a Company Material Adverse Effect. No notification given to Parent pursuant to this Section 4.2(c) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement.
Appears in 1 contract
