Common use of Operation of the Business of the Company Clause in Contracts

Operation of the Business of the Company. During the Pre-Closing Period, the Company agrees to operate the business of the Company to ensure that: (a) each Acquired Company shall conduct its business and operations in the ordinary course and in substantially the same manner as such business and operations have been conducted prior to the date of this Agreement, including management of cash in the ordinary course and in substantially the same manner (which includes normal payment of payables and normal collection of receivables); (b) each Acquired Company shall use commercially reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and maintain its relations and goodwill with all suppliers, customers, landlords, creditors, employees and other Persons having business relationships with the Acquired Companies; (c) upon request by Parent, each Acquired Company shall report to Parent concerning operational, financial, regulatory, and Intellectual Property matters and otherwise report to Parent concerning the status of the business of the Acquired Companies; (d) no Acquired Company shall cancel any of its insurance policies identified in Section 2.19(a) of the Disclosure Schedule or reduce the amount of any insurance coverage provided by such insurance policies; (e) no Acquired Company shall declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock or other securities, or repurchase, redeem, otherwise reacquire or adjust the conversion price of any shares of capital stock or other securities, except repurchases of unvested shares or cancellation of unvested options in connection with the termination of the service relationship with any employee and in connection with the termination of the service relationship with any other service provider pursuant to stock option or stock purchase agreements in effect on the date hereof; (f) no Acquired Company shall sell, issue or authorize the issuance of: (i) any capital stock or other security; (ii) any option or right to acquire any capital stock (or cash based on the value of capital stock) or other security; or (iii) any instrument convertible into or exchangeable for any capital stock (or cash based on the value of capital stock) or other security (except that the Company shall be permitted to issue Common Stock upon the exercise of Options, or upon the conversion of Preferred Stock, in each case outstanding as of the date of this Agreement and in accordance with their terms as in effect on the date of this Agreement); provided, however, that the Company shall timely grant Options or other securities of the Company pursuant to and in accordance with any promise, commitment or other Contract to grant such Options or other securities of the Company which is outstanding as of the date of this Agreement and is set forth on Section 4.2(f) of the Disclosure Schedule; (g) no Acquired Company shall amend or waive any of its rights under, or permit the acceleration of vesting under: (i) any provision of any Stock Plan; (ii) any provision of any agreement evidencing any outstanding Option; (iii) any provision of any restricted stock agreement; or (iv) any other compensation obligation; (h) no Acquired Company shall amend or permit the adoption of any amendment to any Charter Document, or effect or permit any Acquired Company to become a party to any Acquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (i) no Acquired Company shall form any Subsidiary or acquire any equity interest or other interest in any other Entity; (j) no Acquired Company shall make any unbudgeted capital expenditure in excess of $15,000 in any one instance or $30,000 in the aggregate; (k) no Acquired Company shall: (i) enter into, or permit any of the assets owned or used by it to become bound by, any Contract that is or would constitute a Material Contract (other than the sale or license of Company Products and Company Services on a non-exclusive basis to end users thereof in the ordinary course of business consistent with past practices pursuant to agreements in the form provided to Parent prior to the date hereof); or (ii) amend or prematurely terminate, or waive any material right or remedy under, any Contract that is or would constitute a Material Contract; (l) no Acquired Company shall: (i) acquire, lease or license any right or other asset from any other Person; (ii) sell or otherwise dispose of, or lease or license, any right or other asset to any other Person or amend or modify any Contract identified in Section 2.11(s) of the Disclosure Schedule; or (iii) waive or relinquish any right, in the case of each of (i), (ii) and (iii), except in the ordinary course of business consistent with past practices; (m) no Acquired Company shall: (i) lend money to any Person (except that the Company may make routine travel or business expense advances to current employees of the Company in the ordinary course of business consistent with past practices); or (ii) incur or guarantee any Indebtedness; (n) no Acquired Company shall: (i) enter into any collective bargaining agreement; (ii) establish, adopt, amend or terminate any Company Benefit Plan (other than (A) as may have been required by the terms of the Company Benefit Plan, (B) standard renewals of Company Benefit Plans in accordance with any automatic or elective renewal terms contained therein, (C) the involuntary termination of any employee for which a general release of claims in favor of the Company was obtained or (D) the termination of any consulting or independent contractor pursuant to the terms of his or her consulting agreement); (iii) pay, or make any new commitment to pay, any bonus or make any profit-sharing payment, cash incentive payment or similar payment, other than commissions paid in the ordinary course of business and consistent with past practices; (iv) increase, or make any new commitment to increase, the amount of the wages, salary, commissions, fringe benefits, employee benefits or other compensation (including equity-based compensation, whether payable in cash or otherwise) or remuneration payable to any of its directors, officers or employees; (v) fund, or make any commitment to fund, any compensation obligation (whether by grantor trust or otherwise); (vi) promote or change the title of any of its employees (retroactively or otherwise); or (vii) hire or make an offer to hire any new employee; (o) no Acquired Company shall change any of its methods of accounting or accounting practices in any material respect; (p) no Acquired Company shall make or change any Tax election or adopt or change a material accounting method in respect of Taxes (other than in circumstances where such election or adoption is made on a Tax Return required to be filed under applicable Legal Requirements other than for the purpose of making such election or adopting such method), enter into a Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement (other than customary Tax allocation or Tax sharing provisions in real property leases and subleases or other commercial contracts not primarily related to Taxes), settle or compromise a material claim, notice, audit report or assessment in respect of Taxes, request a ruling with respect to Taxes, grant any power of attorney relating to Tax matters, prepare any Tax Return in a manner inconsistent with past practices, consent to an extension or waiver of the statutory limitation period applicable to a claim or assessment in respect of Taxes, file a U.S. federal income tax return more than thirty days prior to the extended due date for such return, or fail to timely make all permitted applications for automatic extensions of time to file U.S. federal income tax returns on IRS Form 7004; (q) no Acquired Company shall commence or settle any Legal Proceeding; (r) no Acquired Company shall perform any acts with respect to Patent applications or take any actions involving the United States Patent and Trademark Office; and (s) no Acquired Company shall agree or commit to take any of the actions described in clauses “(d)” through “(r)” above. Notwithstanding the foregoing, the Company may take any action (i) described in clauses “(d)” through “(s)” above if Parent gives its prior written consent to the taking of such action by the Company, (ii) described in Section 4.2 of the Disclosure Schedule after consultation with Parent, and (iii) expressly required by this Agreement or any Legal Requirement.

Appears in 2 contracts

Samples: Merger Agreement (Under Armour, Inc.), Merger Agreement (Under Armour, Inc.)

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Operation of the Business of the Company. (a) During the Pre-Closing Period, the Company agrees to operate the business of the Company to shall ensure that: that (ai) each Acquired Company shall conduct its business and operations in the ordinary course and in substantially the same manner as such business and operations have been conducted prior to the date of this Agreement, including management of cash in the ordinary course Agreement and in substantially the same manner (which includes normal payment of payables and normal collection of receivables); (bii) each Acquired Company shall use commercially reasonable efforts to (A) preserve intact its current business organization, (B) keep available the services of its current officers and employees and (C) maintain its relations and goodwill good will with all suppliers, customers, landlords, creditors, employees and other Persons having business relationships with the Acquired Companies;. (cb) upon request Except as required or otherwise contemplated by Parentthe terms of this Agreement, each Acquired Company shall report to Parent concerning operational, financial, regulatory, and Intellectual Property matters and otherwise report to Parent concerning the status of the business of the Acquired Companies; (d) no Acquired Company shall shall: (i) cancel any of its insurance policies identified in Section 2.19(a) Part 2.20 of the Disclosure Schedule or reduce the amount of any insurance coverage provided by such insurance policies; (eii) no Acquired Company shall declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock or other securities, or repurchase, redeem, redeem or otherwise reacquire or adjust the conversion price of any shares of capital stock or other securities, except repurchases of unvested shares or cancellation of unvested options in connection with the termination of the service relationship with any employee and or in connection with the termination of the service relationship with any other service provider pursuant to stock option or stock purchase agreements in effect on the date hereof; (fiii) no Acquired Company shall sell, issue or authorize the issuance or grant of: (iA) any capital stock or other securitysecurity (other than pursuant to the exercise of a Company Option, warrant to purchase capital stock of the Company or pursuant to a Company RSU, in each case, only to the extent identified on Part 2.2(a)(v) through (viii) of the Disclosure Schedule); (iiB) any option option, warrant or right to acquire any capital stock (or cash based on the value of capital stock) or other security; or (iiiC) any instrument convertible into or exchangeable for any capital stock (or cash based on the value of capital stock) or other security (except that the Company shall be permitted to issue Common Stock upon the exercise of Options, or upon the conversion of Preferred Stock, in each case outstanding as of the date of this Agreement and in accordance with their terms as in effect on the date of this Agreement); provided, however, that the Company shall timely grant Options or other securities of the Company pursuant to and in accordance with any promise, commitment or other Contract to grant such Options or other securities of the Company which is outstanding as of the date of this Agreement and is set forth on Section 4.2(f) of the Disclosure Schedulesecurity; (giv) no Acquired Company shall amend or waive any of its rights under, or permit the acceleration of vesting under: (i) any provision of any Stock Plan; (ii) any provision of any agreement evidencing any outstanding Option; (iiiA) any provision of any restricted stock agreement; agreement (other than any acceleration of vesting provided for in any such agreement as in effect on the date of this Agreement) or (ivB) any Company Benefit Plan or other compensation obligationcompensation-related Contract or arrangement; (hv) no Acquired Company shall amend or permit the adoption of any amendment to any of its Charter DocumentDocuments (other than the Charter Amendment), or effect or permit any Acquired Company to become a party to any Acquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (ivi) no Acquired Company shall form any Subsidiary or acquire any equity interest or other interest in any other Entity; (jvii) no Acquired Company shall make any unbudgeted capital expenditure in excess of $15,000 in any one instance or $30,000 100,000 other than in the aggregateordinary course of business consistent with past practices; (kviii) no Acquired Company shall: other than in the ordinary course of business consistent with past practice (iA) enter into, or permit any of the assets owned or used by it to become bound by, any Contract that is or would constitute a Material Contract (other than the sale or license of Company Products and Company Services on a non-exclusive basis to end users thereof in the ordinary course of business consistent with past practices pursuant to agreements in the form provided to Parent prior to the date hereof); or (iiB) amend or prematurely terminate, or waive any material right or remedy under, any Contract that is or would constitute a Material Contract; (lix) no Acquired Company shall: (iA) acquire, lease or exclusively license any right or other asset from any other Person; (iiB) sell or otherwise dispose of, or lease or exclusively license, any right or other asset to any other Person or Person, including the Intellectual Property of any Acquired Company; (C) amend or modify any Contract identified in Section 2.11(s) of the Disclosure Schedule; or (iiiD) waive or relinquish any right, in the case of each of (i), (ii) and (iii)case, except in the ordinary course of business consistent with past practices; (m) no Acquired Company shall: (iA) lend money to any Person (except that the Company may make routine travel or business expense advances to current employees of the Company in the ordinary course of business consistent with past practices); , make any investments in or capital contributions to any Person, forgive or discharge in whole or in party any outstanding loans or advances or (iiB) incur or guarantee any IndebtednessIndebtedness of any Person, guarantee any such Indebtedness of another Person or issue or sell any debt securities or guarantee any debt securities of another Person; (nxi) no Acquired except as may be expressly required by applicable Law or a Company shall: Benefit Plan, (iA) enter into any collective bargaining or similar agreement; (iiB) establish, adopt, amend or terminate any Company Benefit Plan (other than (A) as may have been required by the terms of the Company Benefit Plan, (B) standard renewals of Company Benefit Plans in accordance with any automatic or elective renewal terms contained therein, ; (C) the involuntary termination of any employee for which a general release of claims in favor of the Company was obtained or (D) the termination of any consulting or independent contractor pursuant to the terms of his or her consulting agreement); (iii) pay, or make any new commitment to pay, any bonus bonus, severance or change in control payments or make any profit-sharing payment, cash incentive payment or similar payment, other than commissions paid in the ordinary course of business and consistent with past practices, or grant, or make any new commitment to grant, any award under any Company Benefit Plan; (ivD) increase, or make any new commitment to increase, the amount of the wages, salary, commissions, fringe benefits, employee commissions or benefits or other compensation (including equity-based compensation, whether payable in cash or otherwise) or remuneration payable to any of its directors, officers or employees, except for increases of wages or salary in the ordinary course of business and consistent with past practices and changes to group benefit plans made in the ordinary course of business consistent with past practice, each provided that the Acquired Company provides advance written notice to Parent and Parent consents to such change (such consent not to be unreasonably withheld, conditioned or delayed); (vE) fund, or make any commitment to fund, any compensation obligation (whether by grantor trust or otherwise); (viF) promote or change the title of any employee with a title of its employees senior vice president or above; (retroactively or otherwise); or (viiG) hire or make an offer to hire any new employeeemployee except in the ordinary course of business and consistent with past practices; or (H) terminate any employee at the level of vice president or above, other than for cause; (oxii) no Acquired Company shall change any of its methods of accounting or accounting practices in any material respect, other than changes as are required by GAAP; (pxiii) no Acquired Company shall make (A) make, change or change rescind any Tax election or adopt or change a material accounting method in respect of Taxes (other than in circumstances where such election or adoption is made on a Tax Return required to be filed under applicable Legal Requirements other than for the purpose of making such election or adopting such method), enter into a Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement (other than customary Tax allocation or Tax sharing provisions in real property leases and subleases or other commercial contracts not primarily related relating to Taxes), ; (B) settle or compromise a material any claim, notice, audit report controversy or assessment in respect of Taxes, request a ruling with respect Legal Proceeding relating to Taxes; (C) except as required by applicable Legal Requirements, grant make any power change to any of attorney relating its methods, policies or practices of Tax accounting or methods of reporting income or deductions for Tax purposes; (D) amend, refile or otherwise revise any previously filed Tax Return, or forego the right to any amount of refund or rebate of a previously paid Tax; (E) enter into or terminate any agreements with a Tax matters, Authority; (F) prepare any Tax Return in a manner inconsistent with past practices, ; (G) consent to an extension or waiver of the statutory limitation period applicable to a claim or assessment in respect of Taxes; (H) enter into a Tax allocation agreement, file Tax sharing agreement or Tax indemnity agreement; (I) grant any power of attorney relating to Tax matters; or (J) request a U.S. federal income tax return more than thirty days prior ruling with respect to the extended due date for such return, or fail to timely make all permitted applications for automatic extensions of time to file U.S. federal income tax returns on IRS Form 7004Taxes; (qxiv) no Acquired Company shall commence or settle any material Legal Proceeding; (rxv) no Acquired Company shall perform merge, consolidate or reorganize with, acquire, or enter into any acts other business combination with respect to Patent applications any corporation, partnership, limited liability company or take any actions involving other entity (other than Parent and Merger Sub), acquire any material portion of the United States Patent and Trademark Office; andassets of any such entity; (sxvi) no Acquired place or allow the creation of any Lien (other than Permitted Liens) on any of its material assets or properties; (xvii) abandon, cancel or withdraw, or permit the expiration of (other than pursuant to the applicable statutory period), any Company shall Registered Intellectual Property; or (xviii) agree or commit to take any of the actions described in clauses “(db)(i)” through “(rb)(xvii)” above. Notwithstanding the foregoing, the Company may take any action (i) described in clauses “(db)(i)” through “(sb)(xviii)” above if Parent gives its prior written consent to the taking of such action by the CompanyCompany (such consent not to be unreasonably withheld, (iiconditioned or delayed) described or if such action is set forth in Section 4.2 Part 4.2(b) of the Disclosure Schedule after consultation Schedule. (c) Notwithstanding anything in this Section 4.2 to the contrary, prior to Closing, Parent may not intentionally and materially interfere with Parentor control the Company’s consolidated business operations, and (iii) expressly required by provided that the Company is in compliance with this Agreement or any Legal RequirementAgreement.

Appears in 1 contract

Samples: Merger Agreement (Ca, Inc.)

Operation of the Business of the Company. During the Pre-Closing Period, the Company agrees to operate the business of the Company to ensure that: (a) each Acquired Company shall conduct its business and operations in the ordinary course and in substantially the same manner as such business and operations have been conducted prior to the date of this Agreement, including management of cash in the ordinary course and in substantially the same manner (which includes normal payment of payables and normal collection of receivables); (b) each Acquired Company shall use commercially reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and maintain its relations and goodwill with all suppliers, customers, landlords, creditors, employees and other Persons having business relationships with the Acquired Companies; (c) upon request by Parent, each Acquired Company shall report to Parent concerning operational, financial, regulatory, and Intellectual Property matters and otherwise report to Parent concerning the status of the business of the Acquired Companies; (d) no Acquired Company shall cancel any of its insurance policies identified in Section 2.19(a) of the Disclosure Schedule or reduce the amount of any insurance coverage provided by such insurance policies; (e) no Acquired Company shall declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock or other securities, or repurchase, redeem, otherwise reacquire or adjust the conversion price of any shares of capital stock or other securities, except repurchases of unvested shares or cancellation of unvested options in connection with the termination of the service relationship with any employee and in connection with the termination of the service relationship with any other service provider pursuant to stock option or stock purchase agreements in effect on the date hereof; (f) no Acquired Company shall sell, issue or authorize the issuance of: (i) any capital stock or other security; (ii) any option or right to acquire any capital stock (or cash based on the value of capital stock) or other security; or (iii) any instrument convertible into or exchangeable for any capital stock (or cash based on the value of capital stock) or other security (except that the Company shall be permitted to issue Common Stock upon the exercise of Options, or upon the conversion of Preferred Stock, in each case outstanding as of Between the date of this Agreement and in accordance with their terms as in effect on the date of this Agreement); providedClosing Date, howeverSellers will, that and will cause the Company shall timely grant Options or other securities to conduct the business of the Company pursuant to and only in accordance with any promisethe Ordinary Course of Business, commitment or other Contract to grant such Options or other securities except as set forth in SCHEDULE 5.2. (b) Without limiting the generality of the provisions of (a) above, the Sellers shall cause the Company which is outstanding to (absent the prior written consent of Buyer and except as of the date of this Agreement and is set forth on Section 4.2(f) of the Disclosure Schedule; (g) no Acquired Company shall amend or waive any of its rights under, or permit the acceleration of vesting under: (i) any provision of any Stock Plan; (ii) any provision of any agreement evidencing any outstanding Option; (iii) any provision of any restricted stock agreement; or (iv) any other compensation obligation; (h) no Acquired Company shall amend or permit the adoption of any amendment to any Charter Document, or effect or permit any Acquired Company to become a party to any Acquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction;in SCHEDULE 5.2): (i) no Acquired Company shall form not issue any Subsidiary additional shares of capital stock of any class or acquire redeem any equity interest or other interest in any other Entityoutstanding shares of capital stock; (jii) no Acquired Company shall maintain the fixed assets essential to the Company's operations in good operating repair and condition, subject to normal wear and tear, and make any unbudgeted capital expenditure repairs and replacements in excess of $15,000 in any one instance or $30,000 in the aggregateaccordance with prior practices; (kiii) no Acquired report to Buyer concerning operational matters of a material nature and otherwise report periodically to Buyer concerning any material changes to status of the business, operations, and finances of the Company; (iv) continue to pay and satisfy the Company's liabilities in the Ordinary Course of Business, paying such liabilities in accordance with prior practices; (v) continue to maintain in full force and effect or renew or replace all policies of insurance now in effect which cover the assets or the Company shall: and give all notices and present all material claims under all policies of insurance in due and timely fashion; (ivi) not enter into any material leases or contracts for the purchase or sale of products, utilities, or services, except (A) those made in the Ordinary Course of Business or (B) those which may be canceled without liability upon not more than thirty (30) days' notice; or (C) with approval of Buyer; (vii) use Best Efforts to preserve the business organization and properties to be transferred hereunder intact, including present operations and relationships with lessors, licensors, customers and employees; use reasonable efforts to preserve for Buyer the goodwill of the Company's employees, suppliers, customers, and other persons with whom the Company has business relations; (viii) not enter into any contract, agreement, or understanding with any labor union or other association representing any employee; not enter into, amend, or permit any of the assets owned terminate, fully or used by it to become bound bypartially, any Contract that is benefit plan; and not withdraw any funds from any benefit plan or would constitute a Material Contract trust or other funding arrangement maintained pursuant thereto; (other than the sale or license of Company Products and Company Services on a ix) except for annual merit increases awarded to non-exclusive basis to end users thereof officer employees in the ordinary course Ordinary Course of business Business consistent with past business practices pursuant not authorize or grant any wage or salary increase, otherwise directly or indirectly increase post Closing compensation to agreements in the form provided to Parent prior to the date hereof); or (ii) amend or prematurely terminatefor any employee, or waive agree in any material right or remedy under, manner to any Contract that is or would constitute a Material Contractsuch post Closing increase; (lx) no Acquired Company shall: not create or incur any indebtedness for borrowed money or assume directly or indirectly any debt, obligation, or liability (iwhether absolute or contingent, whether directly or as surety or guarantor, and whether or not currently due or payable) acquirewhich will exist after the Closing Date, lease except in the Ordinary Course of Business consistent with past business practices and policies and as required for the operation of the Company; (xi) not make any material change in the accounting methods, practices, policies, principles, or license procedures of the Company, except as necessary to perform this Agreement, without consulting with Buyer; (xii) not enter into any right lease, sublease, or contract, regarding the acquisition, leasing, or occupancy of any real estate, equipment, vehicles, or other asset from any other Person; items relating to the Company except in the Ordinary Course of Business or upon approval of the Buyer; (iixiii) sell not sell, convey, lease, abandon, or otherwise dispose of, or lease grant, suffer, or licensepermit any lien or encumbrance upon, any right of the Company's material assets, except on arm's length terms or other asset to any other Person or amend in the Ordinary Course of Business; (xiv) not enter into or modify in any manner any material Contract identified in Section 2.11(s) of the Disclosure Schedule; or (iii) waive or relinquish any right, in the case of each of (i), (ii) and (iii), to which it is a party except in the ordinary course Ordinary Course of business Business, other than as contemplated in clause (viii) above; and (xv) accrue and/or pay all withholding and other Taxes on a timely basis. (c) Notwithstanding the foregoing, nothing in this Agreement shall be construed to limit the right of the Sellers to take actions or engage in transactions (or to cause the Company to take actions or engage in transactions) which are consistent with past practices; (m) no Acquired Company shall: (i) lend money to any Person (except the obligations under this Agreement. The parties contemplate that the Company may make routine travel or business expense advances to current employees of the Company in the ordinary course of business consistent with past practices); or (ii) incur or guarantee any Indebtedness; (n) no Acquired Company shall: (i) enter into any collective bargaining agreement; (ii) establish, adopt, amend or terminate any Company Benefit Plan (other than (A) as may have been required by the terms of the Company Benefit Plan, (B) standard renewals of Company Benefit Plans in accordance with any automatic or elective renewal terms contained therein, (C) the involuntary termination of any employee for which a general release of claims in favor of the Company was obtained or (D) the termination of any consulting or independent contractor pursuant to the terms of his or her consulting agreement); (iii) pay, or make any new commitment to pay, any bonus or make any profit-sharing payment, cash incentive payment or similar payment, other than commissions paid in the ordinary course of business and consistent with past practices; (iv) increase, or make any new commitment to increase, the amount of the wages, salary, commissions, fringe benefits, employee benefits or other compensation (including equity-based compensation, whether payable in cash or otherwise) or remuneration payable to any of refinance its directors, officers or employees; (v) fund, or make any commitment to fund, any compensation obligation (whether by grantor trust or otherwise); (vi) promote or change the title of any of its employees (retroactively or otherwise); or (vii) hire or make an offer to hire any new employee; (o) no Acquired Company shall change any of its methods of accounting or accounting practices in any material respect; (p) no Acquired Company shall make or change any Tax election or adopt or change a material accounting method in respect of Taxes (other than in circumstances where such election or adoption is made on a Tax Return required to be filed under applicable Legal Requirements other than for the purpose of making such election or adopting such method), enter into a Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement (other than customary Tax allocation or Tax sharing provisions in real property leases and subleases or other commercial contracts not primarily related to Taxes), settle or compromise a material claim, notice, audit report or assessment in respect of Taxes, request a ruling debt with respect to Taxesits Milton, grant any power of attorney relating to Tax mattersPennsylvania facility, prepare any Tax Return in a manner inconsistent with past practices, consent to an extension or waiver of and the statutory limitation period applicable to a claim or assessment in respect of Taxes, file a U.S. federal income tax return more than thirty days prior to the extended due date for such return, or fail to timely make all permitted applications for automatic extensions of time to file U.S. federal income tax returns on IRS Form 7004; (q) no Acquired Company parties shall commence or settle any Legal Proceeding; (r) no Acquired Company shall perform any acts cooperate with respect to Patent applications or take any actions involving the United States Patent and Trademark Office; and (s) no Acquired Company shall agree or commit to take any of the actions described in clauses “(d)” through “(r)” above. Notwithstanding the foregoing, the Company may take any action (i) described in clauses “(d)” through “(s)” above if Parent gives its prior written consent to the taking of such action by the Company, (ii) described in Section 4.2 of the Disclosure Schedule after consultation with Parent, and (iii) expressly required by this Agreement or any Legal Requirementthereto.

Appears in 1 contract

Samples: Stock Purchase Agreement (Able Energy Inc)

Operation of the Business of the Company. During Without the prior written consent of Parent during the Pre-Closing Period, the Company agrees to operate the business of the Company to ensure thatand except as otherwise contemplated or permitted by this Agreement: (a) each Acquired the Company shall conduct its business and operations in the ordinary course and in substantially the same manner as such business and operations have been conducted prior to the date of this Agreement, including management of cash in the ordinary course shall pay its debts and in substantially the same manner Taxes when due (which includes normal payment of payables subject to good faith disputes, if any, over such debts and normal collection of receivablesTaxes), and shall pay or perform its other obligations when due; (b) each Acquired the Company shall use commercially reasonable efforts to (i) preserve intact its current business organization, (ii) keep available the services of its current officers and employees and (iii) maintain its relations and goodwill good will with all suppliers, customers, landlords, creditors, employees and other Persons having business relationships with the Acquired CompaniesCompany; (c) upon request by Parent, each Acquired the Company shall report to Parent concerning operational, financial, regulatory, and Intellectual Property matters and otherwise report to Parent concerning the status of the business of the Acquired Companies; (d) no Acquired Company shall cancel any of its insurance policies identified in Section 2.19(a) of the Disclosure Schedule or reduce the amount of any insurance coverage provided by such insurance policies; (e) no Acquired Company shall not declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock or other securities, or stock; (d) the Company shall not repurchase, redeem, redeem or otherwise reacquire or adjust the conversion price of any shares of capital stock or other securities, except repurchases of unvested shares or cancellation of unvested options securities other than pursuant to Contracts in connection with the termination effect as of the service relationship with any employee date of this Agreement; except for Company Common Stock issued upon the exercise of options and in connection with the termination of the service relationship with any other service provider pursuant warrants to stock option or stock purchase agreements in effect Company Common Stock outstanding on the date hereof; (f) no Acquired of this Agreement and upon the conversion of Company Preferred Stock, the Company shall not sell, issue or authorize the issuance of: of (i) any capital stock or other security; , (ii) any option or right to acquire any capital stock (or cash based on the value of capital stock) or other security; provided, however, that Parent may not unreasonably withhold its consent with respect to options granted consistent with the Company's past practices to the new employees permitted by subsection (h) (iii) below as long as the grant of such options is consistent with the rules governing a pooling of interests transaction; or (iii) any instrument convertible into or exchangeable for any capital stock (or cash based on the value of capital stock) or other security security; (except that e) the Company shall be permitted to issue Common Stock upon not amend the exercise articles of Options, incorporation or upon the conversion of Preferred Stock, in each case outstanding as bylaws of the date of this Agreement and in accordance with their terms as in effect on the date of this Agreement); provided, however, that the Company shall timely grant Options or other securities of the Company pursuant to and in accordance with any promise, commitment or other Contract to grant such Options or other securities of the Company which is outstanding as of the date of this Agreement and is set forth on Section 4.2(f) of the Disclosure Schedule; (g) no Acquired Company shall amend or waive any of its rights under, or permit the acceleration of vesting under: (i) any provision of any Stock Plan; (ii) any provision of any agreement evidencing any outstanding Option; (iii) any provision of any restricted stock agreement; or (iv) any other compensation obligation; (h) no Acquired Company shall amend or permit the adoption of any amendment to any Charter DocumentCompany, or effect or permit any Acquired the Company to become a party to any Acquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (if) no Acquired the Company shall not form any Subsidiary subsidiary or acquire any equity interest or other interest in any other Entity; (jg) no Acquired the Company shall make any unbudgeted capital expenditure in excess of $15,000 in any one instance or $30,000 in the aggregate; (k) no Acquired Company shall: not (i) enter intoestablish, or permit any of the assets owned or used by it to become bound by, any Contract that is or would constitute a Material Contract (other than the sale or license of Company Products and Company Services on a non-exclusive basis to end users thereof in the ordinary course of business consistent with past practices pursuant to agreements in the form provided to Parent prior to the date hereof); or (ii) amend or prematurely terminate, or waive any material right or remedy under, any Contract that is or would constitute a Material Contract; (l) no Acquired Company shall: (i) acquire, lease or license any right or other asset from any other Person; (ii) sell or otherwise dispose of, or lease or license, any right or other asset to any other Person adopt or amend or modify any Contract identified in Section 2.11(s) of the Disclosure Schedule; or (iii) waive or relinquish any right, in the case of each of (i)employee benefit plan, (ii) and (iii), except in the ordinary course of business consistent with past practices; (m) no Acquired Company shall: (i) lend money to any Person (except that the Company may make routine travel or business expense advances to current employees of the Company in the ordinary course of business consistent with past practices); or (ii) incur or guarantee any Indebtedness; (n) no Acquired Company shall: (i) enter into any collective bargaining agreement; (ii) establish, adopt, amend or terminate any Company Benefit Plan (other than (A) as may have been required by the terms of the Company Benefit Plan, (B) standard renewals of Company Benefit Plans in accordance with any automatic or elective renewal terms contained therein, (C) the involuntary termination of any employee for which a general release of claims in favor of the Company was obtained or (D) the termination of any consulting or independent contractor pursuant to the terms of his or her consulting agreement); (iii) pay, or make any new commitment to pay, pay any bonus or make any profit-sharing payment, severance, cash incentive payment or similar paymentpayment to, other than commissions paid in the ordinary course of business and consistent with past practices; (iv) increase, or make any new commitment to increase, increase the amount of the wages, salary, commissions, fringe benefits, employee benefits or other compensation (including equity-based compensation, whether payable in cash or otherwise) or remuneration payable to to, any of its directors, officers or employees; (v) fund, or make any commitment to fund, any compensation obligation (whether by grantor trust or otherwise); (vi) promote or change accelerate the title vesting of any of its employees (retroactively Company Option or otherwise); any Company Common Stock subject to vesting or (viiiii) hire or make an offer to hire any new employee, other than (x) 12 new employees, (y) new employees who accept offers that are currently outstanding that have been previously disclosed to Parent, in either case on at-will terms, and provided that prior to making any such offers the Company gives Parent three business days notice and (z) new employees hired to replace employees who leave the employ of the Company consistent with the Company's; past practices.; or, (iv) except with prior written consent of Parent which will not be unreasonably withheld, terminate any current employee; (oh) no Acquired the Company shall not change any of its methods of accounting or accounting practices in any material respectpractices; (pi) no Acquired the Company shall not make or change any Tax election or adopt or change a material accounting method in respect of Taxes (other than in circumstances where such election or adoption is made on a Tax Return required to be filed under applicable Legal Requirements other than for the purpose of making such election or adopting such method), enter into a Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement (other than customary Tax allocation or Tax sharing provisions in real property leases and subleases or other commercial contracts not primarily related to Taxes), settle or compromise a material claim, notice, audit report or assessment in respect of Taxes, request a ruling with respect to Taxes, grant any power of attorney relating to Tax matters, prepare any Tax Return in a manner inconsistent with past practices, consent to an extension or waiver of the statutory limitation period applicable to a claim or assessment in respect of Taxes, file a U.S. federal income tax return more than thirty days prior to the extended due date for such return, or fail to timely make all permitted applications for automatic extensions of time to file U.S. federal income tax returns on IRS Form 7004election; (qj) no Acquired the Company shall not, except with prior written consent of Parent which will not be unreasonably withheld, commence or settle any Legal Proceeding; (rk) no Acquired except in the ordinary course of business (which specifically does not include any licenses for source code or exclusive licenses) the Company shall perform not enter into any acts license agreement with respect to Patent applications or take otherwise transfer any actions involving rights to any Company Proprietary Asset, or except in the United States Patent and Trademark Officeordinary course of business enter into any license with respect to any Proprietary Asset of any other person or entity; (l) except in the ordinary course of business (which specifically shall not include exclusive licenses), the Company shall not enter into or amend any Contract pursuant to which any other party is granted marketing, distribution or similar rights of any type or scope with respect to any products or technology of the Company; (m) the Company shall not amend or otherwise modify or violate the terms of any of the Contracts set forth or described in the Disclosure Schedule; (n) except with prior written consent of Parent which will not be unreasonably withheld, the Company shall not incur any indebtedness for borrowed money (other than indebtedness to trade creditors in the ordinary course of business) or guarantee any such indebtedness or issue or sell any debt securities or guarantee any debt securities of others; (o) the Company shall not grant any loans to others (other than advances of employee travel expenses in the ordinary course of business consistent with past practices) or purchase debt securities of others or amend the terms of any outstanding loan agreement; (p) the Company shall not revalue any of its assets, including without limitation writing down the value of inventory or writing off notes or accounts receivable; (q) the Company shall not pay, discharge or satisfy, in an amount in excess of $75,000 (in any one case or in the aggregate), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise); provided, that for any amounts in excess of $25,000, the Company will provide Parent three days prior written notice of any such payments; and (sr) no Acquired the Company shall not agree or commit to take any of the actions described in clauses "(dc)" through "(rq)" above. Notwithstanding the foregoing, the Company may take any action (i) described in clauses “(d)” through “(s)” above if Parent gives its prior written consent to the taking of such action by the Company, (ii) described in Section 4.2 of the Disclosure Schedule after consultation with Parent, and (iii) expressly required by this Agreement or any Legal Requirement.

Appears in 1 contract

Samples: Merger Agreement (Puma Technology Inc)

Operation of the Business of the Company. During the Pre-Closing Period, the Company agrees to operate the business of Selling Shareholders shall ensure and shall procure that the Company to ensure ensures that: (a) each Acquired Company shall conduct its business and operations in the ordinary course and in substantially the same manner as such business and operations have been conducted prior to the date of this Agreement, including management of cash in the ordinary course and in substantially the same manner (which includes normal payment of payables and normal collection of receivables); (b) each Acquired Company shall use commercially reasonable efforts to preserve intact its current business organization, keep available the services of its current officers officers, managers and employees and maintain its relations and goodwill good will with all suppliers, customers, landlords, creditors, employees and other Persons having business relationships with the any Acquired CompaniesCompany; (c) upon request by Parent, each Acquired Company the Selling Shareholders shall report to Parent concerning operational, financial, regulatory, and Intellectual Property matters and otherwise report to Parent concerning Purchaser any material changes in the status of the business of the such Acquired CompaniesCompany; (d) no Acquired Company shall cancel any of its insurance policies identified in Section 2.19(a) of the Disclosure Schedule or reduce the amount of any insurance coverage provided by such insurance policies; (e) no Acquired Company shall declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock or other securities, or repurchase, redeem, redeem or otherwise reacquire or adjust the conversion price of any shares of capital stock or other securities, except repurchases of unvested shares or cancellation of unvested options in connection with the termination of the service relationship with any employee and in connection with the termination of the service relationship with any other service provider pursuant to stock option or stock purchase agreements in effect on the date hereof; (fe) no Acquired Company shall sell, issue or authorize the issuance of: (i) any capital stock shares or other security; (ii) any option or right to acquire any capital stock shares (or cash based on the value of capital stockshares) or other security; or (iii) any instrument convertible into or exchangeable for any capital stock shares (or cash based on the value of capital stockshares) or other security (except that the Company shall be permitted to issue Common Stock upon the exercise of Options, or upon the conversion of Preferred Stock, in each case outstanding as of the date of this Agreement and in accordance with their terms as in effect on the date of this Agreement); provided, however, that the Company shall timely grant Options or other securities of the Company pursuant to and in accordance with any promise, commitment or other Contract to grant such Options or other securities of the Company which is outstanding as of the date of this Agreement and is set forth on Section 4.2(f) of the Disclosure Schedulesecurity; (g) no Acquired Company shall amend or waive any of its rights under, or permit the acceleration of vesting under: (i) any provision of any Stock Plan; (ii) any provision of any agreement evidencing any outstanding Option; (iii) any provision of any restricted stock agreement; or (iv) any other compensation obligation; (hf) no Acquired Company shall amend or permit the adoption of any amendment to any such Acquired Company’s Charter DocumentDocuments, or effect or permit any such Acquired Company to become a party to any Acquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (ig) no Acquired Company shall form any Subsidiary or acquire any equity interest or other interest in any other Entity; (jh) no Acquired Company shall make any unbudgeted capital expenditure in excess of $15,000 in any one instance or $30,000 exceeding in the aggregateaggregate $ 20,000; (ki) no Acquired Company shall: (i) enter into, or permit any of the assets owned or used by it to become bound by, any Contract that is or would constitute a Material Contract (other than the sale or license of Company Products and Company Services on a non-exclusive basis to end users thereof in the ordinary course of business consistent with past practices pursuant to agreements in the form provided to Parent prior to the date hereof)material Contract; or (ii) amend or prematurely terminate, or waive any material right or remedy under, any Contract that is or would constitute a Material such Contract; (lj) no Acquired Company shall: (i) acquire, lease or license any right or other asset from any other PersonPerson for an aggregate value in excess of $ 10,000; (ii) sell or otherwise dispose of, or lease or license, any right or other asset to any other Person or amend or modify any Contract identified in Section 2.11(s) of the Disclosure SchedulePerson; or (iii) waive or relinquish any right, in the case of each of clauses “(i), (ii) and ” through “(iii), except in the ordinary course of business consistent with past practices; (mk) no Acquired Company shall: (i) lend money to any Person (except that the an Acquired Company may make routine travel or business expense advances to its current employees of the Company in the ordinary course of business consistent with past practices); or (ii) incur or guarantee any Indebtednessindebtedness for borrowed money; (nl) no Acquired Company shall: (i) enter into any collective bargaining agreement; (ii) establish, adopt, amend or terminate any Acquired Company Benefit Plan (other than (A) as may have been required by the terms of the Company Benefit Employee Plan, (B) standard renewals of Company Benefit Plans in accordance with any automatic or elective renewal terms contained therein, (C) the involuntary termination of any employee for which a general release of claims in favor of the Company was obtained or (D) the termination of any consulting or independent contractor pursuant to the terms of his or her consulting agreement); (iiiii) pay, or make any new commitment to pay, pay any bonus or make any profit-sharing payment, cash incentive payment or similar payment, other than commissions paid in the ordinary course of business and consistent with past practices; (iviii) increase, or make any new commitment to increase, increase the amount of the wages, salary, commissions, fringe benefits, employee benefits or other compensation (including equity-based compensation, whether payable in cash or otherwise) or remuneration payable to any of its directors, officers officers, managers or other employees; (v) fund, or make any commitment to fund, any compensation obligation (whether by grantor trust or otherwise); (viiv) promote or change the title of any of its employees (retroactively or otherwise); or (viiv) hire or make an offer to hire any new employee; (om) no Acquired Company shall change any of its methods of accounting or accounting practices in any material respect; (pn) no Acquired Company shall make any payments in respect of Tax, unless due, make or change any Tax election or election, adopt or change a material accounting method in respect of Taxes (other than in circumstances where such election or adoption is made on a Tax Return required to be filed under applicable Legal Requirements other than for the purpose of making such election or adopting such method)Taxes, enter into a Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement (other than customary Tax allocation or Tax sharing provisions in real property leases and subleases or other commercial contracts not primarily related to Taxes)agreement, settle or compromise comprise a material claim, notice, audit report or assessment in respect of Taxes, request a ruling with respect to Taxes, grant any power of attorney relating to Tax matters, prepare any Tax Return in a manner inconsistent with past practices, or consent to an extension or waiver of the statutory limitation period applicable to a claim or assessment in respect of Taxes, file a U.S. federal income tax return more than thirty days prior to the extended due date for such return, or fail to timely make all permitted applications for automatic extensions of time to file U.S. federal income tax returns on IRS Form 7004; (qo) no Acquired Company shall commence or settle any Legal Proceeding; (rp) no Acquired Company shall perform enter into any acts with respect to Patent applications material transaction or take any actions involving other material action outside the United States Patent and Trademark Officeordinary course of business or inconsistent with its past practices; and (sq) no Acquired Company shall agree or commit to take any of the actions described in clauses “(d)” through “(rp)” above. Notwithstanding the foregoing, the Company may take any action described in: (i) described in clauses “(dclauses“(d)” through “(sq)” above if Parent if: (A) Purchaser gives its prior written consent to the taking of such action by the such Acquired Company, ; or (iiB) described in Section 4.2 of the Disclosure Schedule after consultation with Parent, and (iii) such action is expressly required contemplated by this Agreement or any Legal RequirementAgreement.

Appears in 1 contract

Samples: Share Purchase Agreement (Silicom Ltd.)

Operation of the Business of the Company. During Between the Pre-Closing Period, date of this Agreement and the Company agrees to operate the business of the Company to ensure thatClosing: (a) each Acquired The Company shall (i) conduct its business and operations only in the ordinary course and in substantially the same manner as such of business and operations have been conducted prior to the date of this Agreement, including management of cash in the ordinary course and in substantially the same manner consistent with past practice (which includes normal payment of payables and normal collection of receivables); (bii) each Acquired Company shall use commercially reasonable its best efforts to preserve intact its current business organization, keep available the services of its current officers officers, employees, and employees agents, and maintain its relations with, and goodwill with all the good will of, its suppliers, customers, landlords, creditors, employees employees, agents, and other Persons others having business relationships with the Acquired Companies; (c) upon request by Parentit, each Acquired Company shall report to Parent concerning operational, financial, regulatory, and Intellectual Property matters and otherwise report to Parent concerning the status of the business of the Acquired Companies; (d) no Acquired Company shall cancel any of its insurance policies identified in Section 2.19(a) of the Disclosure Schedule or reduce the amount of any insurance coverage provided by such insurance policies; (e) no Acquired Company shall declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock or other securities, or repurchase, redeem, otherwise reacquire or adjust the conversion price of any shares of capital stock or other securities, except repurchases of unvested shares or cancellation of unvested options in connection with the termination of the service relationship with any employee and in connection with the termination of the service relationship with any other service provider pursuant to stock option or stock purchase agreements in effect on the date hereof; (f) no Acquired Company shall sell, issue or authorize the issuance of: (i) any capital stock or other security; (ii) any option or right to acquire any capital stock (or cash based on the value of capital stock) or other security; or (iii) any instrument convertible into or exchangeable for any capital stock (or cash based on the value of capital stock) or other security (except that the Company shall be permitted to issue Common Stock upon the exercise of Optionscontinue its current advertising and promotional activities and pricing, or upon the conversion of Preferred Stock, in each case outstanding as of the date of this Agreement warranty and in accordance with their terms as in effect on the date of this Agreement); provided, however, that the Company shall timely grant Options or other securities of the Company pursuant to and in accordance with any promise, commitment or other Contract to grant such Options or other securities of the Company which is outstanding as of the date of this Agreement and is set forth on Section 4.2(f) of the Disclosure Schedule; (g) no Acquired Company shall amend or waive any of its rights under, or permit the acceleration of vesting under: (i) any provision of any Stock Plan; (ii) any provision of any agreement evidencing any outstanding Option; (iii) any provision of any restricted stock agreement; or (iv) any other compensation obligation; (h) no Acquired Company shall amend or permit the adoption of any amendment to any Charter Document, or effect or permit any Acquired Company to become a party to any Acquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (i) no Acquired Company shall form any Subsidiary or acquire any equity interest or other interest in any other Entity; (j) no Acquired Company shall make any unbudgeted capital expenditure in excess of $15,000 in any one instance or $30,000 in the aggregate; (k) no Acquired Company shall: (i) enter into, or permit any of the assets owned or used by it to become bound by, any Contract that is or would constitute a Material Contract (other than the sale or license of Company Products and Company Services on a non-exclusive basis to end users thereof purchasing policies in the ordinary course of business consistent with past practices pursuant practice, (iv) continue in full force and effect without material modification all of its existing policies and binders of insurance, (v) confer with Purchaser concerning operational matters of a material nature, and (vi) otherwise report immediately to agreements in the form provided to Parent prior to the date hereof); Purchaser any adverse event concerning its business, assets, Liabilities, operations, financial condition or (ii) amend prospects, whether or prematurely terminate, or waive any material right or remedy under, any Contract that is or would constitute a Material Contract;not material. (lb) no Acquired The Company shall: shall not, without the consent of the Purchaser, (i) acquiresell, lease lease, license or license dispose of any right property or other asset from any other Person; (ii) sell Assets having a value individually or otherwise dispose of, or lease or license, any right or other asset to any other Person or amend or modify any Contract identified in Section 2.11(s) of the Disclosure Schedule; or (iii) waive or relinquish any right, in the case of each of (i)an aggregate value exceeding $5,000, (ii) and (iii)enter into any Contract that would be required to be listed in the Disclosure Schedule if such Contract were in effect on the date hereof, except in the ordinary course of business consistent business, (iii) mortgage, pledge or subject to Encumbrance, other than Permitted Encumbrances, any of its properties or Assets, (iv) sell, transfer, license, sublicense or otherwise dispose of, or allow any rights to lapse with past practices; (m) no Acquired Company shall: (i) lend money respect to any Person (except that the Company may make routine travel or business expense advances to current employees of the Company in Company’s Intellectual Property, (v) amend or modify any existing agreements with respect to any of the ordinary course of business consistent with past practices); Company’s Intellectual Property, (vi) increase the wages, salaries, compensation, severance, pension or other benefits payable to any employee, (ii) incur or guarantee any Indebtedness; (n) no Acquired Company shall: (ivii) enter into or modify in any collective bargaining agreement; (ii) establishmaterial respect any employment, adoptdeferred compensation, amend severance, retirement or terminate other agreement or arrangement providing for additional or different benefits with any Company Benefit Plan (employee than those payable on the date hereof, in each case other than pursuant to existing Contracts or Benefit Plans or in the Ordinary Course of Business, (Aviii) as may have been required by the terms of the Company adopt or amend any Benefit Plan, (B) standard renewals of Company Benefit Plans in accordance with any automatic or elective renewal terms contained thereinexcept as required by applicable Law, (Cix) the involuntary termination of any employee for which a general release of claims in favor of the Company was obtained or (D) the termination of any consulting or independent contractor pursuant to the terms of his or her consulting agreement); (iii) pay, or make any new commitment to pay, any bonus or make any profit-sharing payment, cash incentive payment or similar payment, other than commissions paid in the ordinary course of business and consistent with past practices; (iv) increase, or make any new commitment to increase, the amount of the wages, salary, commissions, fringe benefits, employee benefits or other compensation (including equity-based compensation, whether payable in cash or otherwise) or remuneration payable to any of its directors, officers or employees; (v) fund, or make any commitment to fund, any compensation obligation (whether by grantor trust or otherwise); (vi) promote or change the title of any of its employees (retroactively or otherwise); or (vii) hire or make an offer to hire any new employee; (o) no Acquired Company shall change any of its methods of accounting or accounting practices in any material respect; (p) no Acquired Company shall make or change any Tax election or adopt or change a material accounting method in respect of Taxes (other than in circumstances where such election or adoption is made on a Tax Return required to be filed under applicable Legal Requirements other than for the purpose of making such election or adopting such method), enter into a Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement (other than customary Tax allocation or Tax sharing provisions in real property leases and subleases or other commercial contracts not primarily related to Taxes)election, settle or compromise a material claim, notice, audit report any Liability of the Company relating to the payment (or assessment in respect non-payment) of Taxes, request a ruling with respect to Taxes, grant or file any power of attorney relating to Tax matters, prepare any amended Tax Return or refund claim, (x) permit any material increase in a manner inconsistent with past practices, consent to an extension or waiver the number of the statutory limitation period applicable to a claim or assessment in respect of Taxes, file a U.S. federal income tax return more than thirty days prior to the extended due date for such return, or fail to timely make all permitted applications for automatic extensions of time to file U.S. federal income tax returns on IRS Form 7004; (q) no Acquired Company shall commence or settle any Legal Proceeding; (r) no Acquired Company shall perform any acts with respect to Patent applications or take any actions involving the United States Patent and Trademark Office; and (s) no Acquired Company shall agree or commit to take any of the actions described in clauses “(d)” through “(r)” above. Notwithstanding the foregoing, employees employed by the Company may take on the date hereof, (xi) accelerate or defer any action (i) described in clauses “(d)” through “(s)” above if Parent gives its prior written consent obligation or payment by or to the taking of such action by the Company, (iixii) described in Section 4.2 commence, pay, discharge, settle or compromise any pending or threatened Action, or (xiii) agree to do any of the Disclosure Schedule after consultation with Parent, and (iii) expressly required by this Agreement or any Legal Requirementforegoing.

Appears in 1 contract

Samples: Stock Purchase Agreement (National Automation Services Inc)

Operation of the Business of the Company. During Unless Parent gives its prior written consent or as provided in Section 4.4 otherwise, during the Pre-Closing Period, the Company agrees to operate the business of the Company to ensure that: (a) each Acquired subject to Section 5.11, the Company shall (i) conduct its (and shall cause each Subsidiary to conduct its) business and operations (A) in the ordinary course and in substantially accordance with the same manner as Company Operating Plan and (B) in compliance with all applicable material Legal Requirements and the material requirements of all Company Contracts that constitute Material Contracts; (ii) promptly notify Parent of (A) any notice or other communication from any Person alleging that the Consent of such business Person is or may be required in connection with the transactions contemplated by this Agreement and operations have been conducted prior (B) any Legal Proceedings commenced or, to its Knowledge threatened against, relating to or involving or otherwise affecting any of the Acquired Companies which relate to the date consummation of the transactions contemplated by this Agreement, including management ; and (iii) cause its officers to report regularly to Parent concerning the status of cash in the ordinary course and in substantially the same manner (which includes normal payment of payables and normal collection of receivables);Acquired Companies' business. (b) each Acquired the Company shall use commercially reasonable efforts to preserve intact its (and shall cause each Subsidiary to preserve intact its) current business organization, keep available the services of its current officers and employees and maintain its relations and goodwill good will with all suppliers, customers, landlords, creditors, employees and other Persons having business relationships with the Acquired Companies; (c) upon request by Parent, each Acquired the Company shall report to Parent concerning operational, financial, regulatory, (and Intellectual Property matters and otherwise report to Parent concerning the status shall cause each Subsidiary to) keep in full force all insurance policies identified in Part 2.18 of the business of the Acquired CompaniesDisclosure Schedule; (d) no Acquired the Company shall cancel any of its insurance policies identified in Section 2.19(anot (and shall cause each Subsidiary not to) of the Disclosure Schedule or reduce the amount of any insurance coverage provided by such insurance policies; (e) no Acquired Company shall declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock (except for dividends or other securitiesdistributions by a Subsidiary to another Subsidiary or to the Company), or and the Company shall not (and shall cause each Subsidiary not to) repurchase, redeem, redeem or otherwise reacquire or adjust the conversion price of any shares of capital stock or other securitiessecurities except from former employees, except repurchases directors and consultants in accordance with agreements providing for the repurchase of unvested shares or cancellation of unvested options in connection with the any termination of service to the service relationship with any employee and in connection with Company or the termination of Subsidiary, as the service relationship with any other service provider pursuant to stock option or stock purchase agreements in effect on the date hereofcase may be; (fe) no Acquired except for the issuance of shares of Company Common Stock upon exercise or conversion of presently outstanding Company Preferred Stock, Company Options or Company Warrants, the Company shall not (and shall cause each Subsidiary not to) sell, issue or authorize the issuance of: of (i) any capital stock or other security; , (ii) any option or right to acquire any capital stock (or cash based on the value of capital stock) or other security; security or (iii) any instrument convertible into or exchangeable for any capital stock (or cash based on the value of capital stock) or other security security; (f) except that as contemplated by this Agreement, the Company shall be permitted to issue Common Stock upon the exercise of Options, or upon the conversion of Preferred Stock, in not (and shall cause each case outstanding as of the date of this Agreement and in accordance with their terms as in effect on the date of this Agreement); provided, however, that the Company shall timely grant Options or other securities of the Company pursuant to and in accordance with any promise, commitment or other Contract to grant such Options or other securities of the Company which is outstanding as of the date of this Agreement and is set forth on Section 4.2(fSubsidiary not to) of the Disclosure Schedule; (g) no Acquired Company shall amend or waive any of its rights under, or permit the acceleration of vesting under: (i) any provision of any Stock Plan; (ii) any provision of any agreement evidencing any outstanding Option; (iii) any provision of any restricted stock agreement; or (iv) any other compensation obligation; (h) no Acquired Company shall amend or permit the adoption of any amendment to any Charter Documentthe certificate of incorporation or bylaws (or similar organizational documents) of the Company (or a Subsidiary, as the case may be), or effect or permit any Acquired the Company (or a Subsidiary, as the case may be) to become a party to any Acquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (ig) no Acquired the Company shall not (and shall cause each Subsidiary not to) form any Subsidiary subsidiary or acquire any equity interest or other interest in any other Entity; (jh) no Acquired the Company shall not (and shall cause each Subsidiary not to) make any unbudgeted capital expenditure expenditure, except for capital expenditures made substantially in excess of $15,000 in any one instance or $30,000 in accordance with the aggregateCompany Operating Plan; (ki) no Acquired except for Contracts and proposals set forth or incorporated in Schedule 4.2(i) hereto with the parties identified therein, and as provided in Section 5.11 hereto, the Company shall: shall not (and shall cause each Subsidiary not to) (i) enter into, or permit any of the assets owned or used by it to become bound by, any Contract that is or would constitute a Material Contract (other than the sale or license of Company Products and Company Services on a non-exclusive basis to end users thereof in the ordinary course of business consistent with past practices pursuant to agreements in the form provided to Parent prior to the date hereof); or (ii) amend or prematurely terminate, or waive any material right or remedy under, any Contract that is or would constitute a such Material Contract; (l) no Acquired Company shall, including in each case, without limitation, any Contract relating to: (iA) acquirethe sale, lease or license licensing of any right unbuilt collocation space except to the extent such collocation space is built between the date hereof and the Closing Date in accordance with the Company Operating Plan; (B) the sale, lease or licensing of more than one 150 square foot lot of collocation space in Waltham, Massachusetts per customer, up to an aggregate 1,000 square feet of collocation space in Waltham, Massachusetts; (C) the sale, lease or licensing of more than one 150 square foot lot of collocation space in Houston, Texas per customer, up to an aggregate 1,000 square feet of collocation space in Houston, Texas; (D) the sale, lease or licensing of any collocation space in Somerville, Massachusetts or New York, New York; (E) any assignment or other asset from transfer of any other Person; (ii) sell or otherwise dispose of, or lease or license, interest in any right or other asset to any other Person or amend or modify any Contract identified in Section 2.11(s) of the Disclosure ScheduleLease; or (iiiF) waive or relinquish any rightlease of an interest in real property; PROVIDED, in HOWEVER, that the case of each of (i), (ii) and (iii), except Acquired Companies may enter into Material Contracts in the ordinary course of business consistent with past practicesrespect to the sale, lease or licensing of (X) an Acquired Company's currently available built collocation space in New Jersey and, subject to Section 5.11(b) hereof, Atlanta, Georgia; (Y) up to an aggregate 1,000 square feet of collocation space in Waltham, Massachusetts in 150 square foot or less lots limited to one lot per customer; and (Z) up to an aggregate 1,000 square feet of collocation space in Houston, Texas in 150 square foot or less lots limited to one lot per customer; and PROVIDED, FURTHER, HOWEVER, that the Acquired Companies shall consult with Parent prior to entering into any Contract related to the proposals set forth or incorporated in Schedule 4.2(i) hereto (it being understood that the Acquired Companies shall not be required to obtain Parent's consent prior to entering into Contracts related to the proposals set forth or incorporated in Schedule 4.2(i) hereto); (mj) no Acquired [RESERVED]; (k) the Company shall: shall not (and shall cause each Subsidiary not to) (i) lend money to any Person (except that the Company may make routine travel or business expense advances to current employees of the Company in the ordinary course of business consistent with past practices); business) or (ii) incur or guarantee any Indebtednessindebtedness for borrowed money; (nl) no Acquired except as set forth in Schedule 4.2(l) or Schedule 4.2(i) hereto, the Company shall: shall not (and shall cause each Subsidiary not to) (i) enter into any collective bargaining agreement; (ii) establish, adopt, adopt or amend or terminate any Company Benefit Plan (other than (A) as may have been required by the terms of the Company Employee Benefit Plan, (Bii) standard renewals other than in the ordinary course of Company Benefit Plans in accordance with any automatic or elective renewal terms contained thereinbusiness, (C) the involuntary termination of any employee for which a general release of claims in favor of the Company was obtained or (D) the termination of any consulting or independent contractor pursuant to the terms of his or her consulting agreement); (iii) pay, or make any new commitment to pay, pay any bonus or make any profit-sharing payment, cash incentive payment or similar payment, other than commissions paid in the ordinary course of business and consistent with past practices; (iv) increasepayment to, or make any new commitment to increase, increase the amount of the wages, salary, commissions, fringe benefits, employee benefits or other compensation (including equity-based compensation, whether payable in cash or otherwise) or remuneration payable to to, any of its directors, officers or employees; (v) fund, or make any commitment to fund, any compensation obligation (whether by grantor trust or otherwise); (vi) promote or change the title of any of its employees (retroactively or otherwise); or (viiiii) hire or make an offer to hire any new employee; (om) no Acquired the Company shall not (and shall cause each Subsidiary not to) change any of its methods of accounting or accounting practices in any material respect; (pn) no Acquired the Company shall not (and shall cause each Subsidiary not to) make or change any Tax election or adopt or change a material accounting method in respect of Taxes (other than in circumstances where such election or adoption is made on a Tax Return required to be filed under applicable Legal Requirements other than for the purpose of making such election or adopting such method), enter into a Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement (other than customary Tax allocation or Tax sharing provisions in real property leases and subleases or other commercial contracts not primarily related to Taxes), settle or compromise a material claim, notice, audit report or assessment in respect of Taxes, request a ruling with respect to Taxes, grant any power of attorney relating to Tax matters, prepare any Tax Return in a manner inconsistent with past practices, consent to an extension or waiver of the statutory limitation period applicable to a claim or assessment in respect of Taxes, file a U.S. federal income tax return more than thirty days prior to the extended due date for such return, or fail to timely make all permitted applications for automatic extensions of time to file U.S. federal income tax returns on IRS Form 7004election; (qo) no Acquired the Company shall not (and shall cause each Subsidiary not to) commence or settle any Legal Proceeding; (r) no Acquired Company shall perform any acts with respect to Patent applications or take any actions involving the United States Patent and Trademark Office; and (sp) no Acquired the Company shall not (and shall cause each Subsidiary not to) agree or commit to take any of the actions described in clauses "(de)" through "(ro)" above. Notwithstanding the foregoing, the Company may take any action (i) described in clauses “(d)” through “(s)” above if Parent gives its prior written consent to the taking of such action by the Company, (ii) described in Section 4.2 of the Disclosure Schedule after consultation with Parent, and (iii) expressly required by this Agreement or any Legal Requirement.

Appears in 1 contract

Samples: Merger Agreement (Internap Network Services Corp/Wa)

Operation of the Business of the Company. During (a) Except as contemplated by this Agreement, as set forth in Section 5.01 of the Pre-Company Disclosure Letter or with the prior written consent of Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned), between the date of this Agreement and the Closing PeriodDate, the Company agrees to operate the business of shall, and Seller shall cause the Company to ensure that: (a) each Acquired Company shall to, conduct its business and operations in the ordinary course of business and in substantially the same manner as such business previously conducted, and operations have been conducted prior to the date of this Agreement, including management of cash in the ordinary course and in substantially the same manner (which includes normal payment of payables and normal collection of receivables); (b) each Acquired Company shall use commercially reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees employees, and maintain its relations and goodwill with all suppliers, customers, landlords, creditors, employees licensors and other Persons others having business relationships with it so that its goodwill and ongoing business shall be unimpaired on the Acquired Companies;Closing Date. In addition, and without limiting the generality of the foregoing, except for matters set forth in Section 5.01 of the Company Disclosure Letter, required by applicable Law or otherwise contemplated by this Agreement, between the date of this Agreement and the Closing Date, the Company shall not, and Seller shall cause the Company not to, without the prior written consent of Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned) take any of the following actions: (ci) upon request by Parent, each Acquired Company shall report to Parent concerning operational, financial, regulatory, and Intellectual Property matters and otherwise report to Parent concerning in the status case of the business of the Acquired Companies; Company, (dA) no Acquired Company shall cancel split, combine or reclassify any of its insurance policies identified in Section 2.19(a) of capital stock or issue or authorize the Disclosure Schedule or reduce the amount issuance of any insurance coverage provided by such insurance policies; other securities (ewhether debt, equity or otherwise) no Acquired Company shall declare, accrue, set aside or pay any dividend or make any other distribution in respect of, in lieu of or in substitution for shares of its capital stock or (B) purchase, redeem or otherwise acquire any shares of capital stock or other securitiesequity interests of the Company or any other securities thereof or any rights, warrants or options to acquire any such shares or other equity interests; (ii) issue, pledge, transfer, subject to any Lien, sell or otherwise encumber or dispose of, or repurchaseagree or commit to issue, redeempledge, transfer, subject to any Lien, sell or otherwise reacquire encumber or adjust the conversion price of dispose of, (A) any shares of its capital stock or equity interests, (B) any Voting Company Debt or other voting securities, except repurchases of unvested shares or cancellation of unvested options in connection with the termination of the service relationship with any employee and in connection with the termination of the service relationship with any other service provider pursuant to stock option or stock purchase agreements in effect on the date hereof; (f) no Acquired Company shall sell, issue or authorize the issuance of: (iC) any capital stock or other security; (ii) any option or right to acquire any capital stock (or cash based on the value of capital stock) or other security; or (iii) any instrument securities convertible into or exchangeable for for, or any capital options, warrants or rights to acquire, any such shares, Voting Company Debt, voting securities or convertible or exchangeable securities or (D) any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units; (or cash based on iii) amend the value of capital stock) Company Charter, the Company Bylaws or other security comparable charter or organizational documents; (except that the Company shall be permitted iv) acquire or agree to issue Common Stock upon the exercise of Optionsacquire (A) any business or any corporation, partnership, joint venture, association or other business organization or division thereof by merging or consolidating with, or upon by purchasing a substantial equity interest in or portion of the conversion assets of, or by any other manner or (B) any assets other than in the ordinary course of Preferred Stockbusiness consistent with past practice; (v) except (A) in the ordinary course of business consistent with past practice, (B) as required pursuant to the terms of any Benefit Plan, Benefit Agreement or collective bargaining agreement in each case outstanding as of the date of this Agreement and in accordance with their terms as in effect on the date of this Agreement), (C) as required to comply with applicable Law or (D) as permitted by this Agreement, (1) grant to any director or officer of the Company any increase in compensation, (2) grant to any director, officer or employee of the Company any increase in severance or termination pay, (3) enter into any severance or termination agreement with any director, officer or employee, (4) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or material Benefit Plan or (5) take any action to accelerate any rights or benefits, or make any material determinations, under any material Benefit Plan; provided, however, that the foregoing clauses (1), (2), (3) and (4) shall not restrict the Company shall timely grant Options from entering into or other securities making available to newly hired employees or to employees in the context of promotions or increased responsibilities based on job performance or workplace requirements (in each case in the ordinary course of business), plans, agreements, benefits and compensation arrangements (including incentive grants) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees in similar positions or employees with similar levels of responsibility; (vi) make any change in financial accounting methods, principles or practices materially affecting the reported consolidated assets, liabilities or results of operations of the Company, except insofar as may be required by a change in GAAP or the interpretation thereof; (vii) sell, lease (as lessor), license, mortgage, pledge or otherwise dispose of or subject to any Lien (other than Permitted Liens) any properties or assets that are material, individually or in the aggregate, to the Company, taken as a whole, except sales of personal property and excess or obsolete assets in the ordinary course of business consistent with past practice; (viii) make any loans, advances or capital contributions to, or investments in, any other person, other than to or in the Company, other than the extension of credit to vendors and customers (including equipment and appliance financing) in the ordinary course of business consistent with past practice; (ix) (A) make, revoke or amend any material Tax election; (B) change any Tax accounting methods, policies or practices except as required by the Code, (C) file any amended material Tax Return or claim for refund with respect to any material amount of Tax, (D) consent to extend the period of limitations for the payment or assessment of any material Tax, (E) enter into any closing agreement affecting any material Tax liability or refund, or (F) settle or compromise any material Tax liability or refund; (x) amend the Company Credit Agreement in a manner that causes it to no longer be repayable in full on or prior to the Closing Date without any adverse impact on Purchaser following the Closing; (xi) loan or advance any amount to, or sell, transfer or lease any of its assets to, pay any dividend to, or enter into any agreement or arrangement with, Seller or any of its affiliates (other than the Company), except for (A) dividends up to $32,400,000 during the 12-month period ended September 30, 2014 and up to $28,500,000 during the 12-month period ended September 30, 2015, (B) intercompany transactions in the ordinary course of business consistent with past practice, (C) arrangements or obligations pursuant to existing contracts, including under the Second Amended and in accordance with any promiseRestated Tax Reimbursement Agreement among Seller, commitment or other Contract to grant such Options or other securities of the Company and the other affiliates of Seller dated as of January 1, 2014 and any agreements and arrangements relating to the provision of shared services among the Seller and its subsidiaries consistent with past practices, (D) Benefit Plans or Benefit Agreements the entry into of which is outstanding as not prohibited by Section 5.01(a)(v), and (E) sales, transfers or exchanges among Seller and its affiliates of personal property located in their respective corporate offices to clarify and rationalize the ownership of such personal property with the current and expected post-Closing uses thereof; (xii) enter into any natural gas supply, gathering, distribution, transportation or storage Contract, other than any such Contract entered into in the ordinary course of business consistent with Good Utility Practice and (A) not reasonably likely to require payments by the Company in excess of $10,000,000 during any calendar year, or $50,000,000 over the term of such Contract, and (B) the result of which does not extend the term for fixed-price purchases of natural gas for more than 24 months; provided, however, that, in the ordinary course of business consistent with Good Utility Practice, the Company may renew any existing transportation or storage Contract the term of which will expire within twenty-four (24) months of the date of this Agreement and is set forth on Section 4.2(f) of the Disclosure ScheduleAgreement; (gxiii) no Acquired Company shall amend or waive any of its rights under, or permit to the acceleration of vesting under: (i) any provision of any Stock Plan; (ii) any provision of any agreement evidencing any outstanding Option; (iii) any provision of any restricted stock agreement; or (iv) any other compensation obligation; (h) no Acquired Company shall amend or permit the adoption of any amendment to any Charter Document, or effect or permit any Acquired Company to become extent not expressly permitted by a party to any Acquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (i) no Acquired Company shall form any Subsidiary or acquire any equity interest or other interest in any other Entity; (j) no Acquired Company shall make any unbudgeted capital expenditure in excess of $15,000 in any one instance or $30,000 specific exclusion in the aggregate; restrictions set forth in another paragraph of this Section 5.01(a), (k) no Acquired Company shall: (iA) enter into, terminate, renew, amend or permit modify in any material respect any Material Contract, other than in the ordinary course of the assets owned or used by it to become bound by, any Contract business consistent with past practice and provided that is or would constitute a such Material Contract (as entered, renewed, amended or modified) is cancelable upon notice of 60 days or less without a penalty that is material relative to the payments to be made by the Company pursuant to such Material Contract, (B) pay, discharge or satisfy any material claims, liabilities or obligations with respect to any Material Contract other than in accordance with the sale or license of Company Products and Company Services on a non-exclusive basis to end users terms thereof in the ordinary course of business consistent with past practices pursuant to agreements in the form provided to Parent prior to the date hereof); practice or (iiC) amend waive, release, assign or prematurely terminate, or waive settle any material right claims, liabilities or remedy under, obligations with respect to any Contract that is or would constitute a Material Contract; (l) no Acquired Company shall: (i) acquire, lease or license any right or other asset from any other Person; (ii) sell or otherwise dispose of, or lease or license, any right or other asset to any other Person or amend or modify any Contract identified in Section 2.11(s) of the Disclosure Schedule; or (iii) waive or relinquish any right, in the case of each of (i), (ii) and (iii), except than in the ordinary course of business consistent with past practicespractice; (mxiv) no Acquired terminate any officer or senior executive of the Company shall: other than for cause (other than the officers listed on Section 1.03(d) of the Company Disclosure Letter), or, except for terminations of individual employees for issues related to such employees, engage in any employee layoffs or facility closures; or (xv) authorize any of, or commit or agree to take any of, the foregoing actions. (b) The Company shall not take any action that would, or that would reasonably be expected to, (i) lend money to result in any Person condition set forth in Article VII not being satisfied or (except that ii) impair the ability of Purchaser, Seller or the Company may to obtain, or adversely impact the terms or conditions of, the HSR Approval and the Required Regulatory Approvals. (c) From the date of this Agreement until the Closing Date, the Company shall, and Seller shall cause the Company to, use commercially reasonable efforts to make routine travel or business expense advances to current employees capital expenditures during the rate year of the Company ending September 30, 2014 in amounts generally consistent with the amounts set forth in the Company’s capital expenditure budget for the rate year of the Company ending September 30, 2014 attached to the Company Disclosure Letter as Exhibit A (the “Capital Expenditure Budget”), and during the rate year of the Company ending September 30, 2015, in accordance with the Company’s capital expenditure budget for the rate year of the Company ending September 30, 2015 approved by the Company’s board of directors (which budget shall provide for capital expenditures during the rate year of the Company ending September 30, 2015 in an aggregate amount that is not less than 80% of the amount of capital expenditures provided for in the Capital Expenditure Budget, subject in each case to normal timing and amount variances, and such capital expenditures incurred shall be paid as they become due and payable in the ordinary course of business consistent with past practices); or (ii) incur or guarantee any Indebtedness; (n) no Acquired Company shall: (i) enter into any collective bargaining agreement; (ii) establish, adopt, amend or terminate any Company Benefit Plan (other than (A) as may have been required by the terms of the Company Benefit Plan, (B) standard renewals of Company Benefit Plans in accordance with any automatic or elective renewal terms contained therein, (C) the involuntary termination of any employee for which a general release of claims in favor of the Company was obtained or (D) the termination of any consulting or independent contractor pursuant to the terms of his or her consulting agreement); (iii) pay, or make any new commitment to pay, any bonus or make any profit-sharing payment, cash incentive payment or similar payment, other than commissions paid in the ordinary course of business and consistent with past practices; (iv) increase, or make any new commitment to increase, the amount of the wages, salary, commissions, fringe benefits, employee benefits or other compensation (including equity-based compensation, whether payable in cash or otherwise) or remuneration payable to any of its directors, officers or employees; (v) fund, or make any commitment to fund, any compensation obligation (whether by grantor trust or otherwise); (vi) promote or change the title of any of its employees (retroactively or otherwise); or (vii) hire or make an offer to hire any new employee; (o) no Acquired Company shall change any of its methods of accounting or accounting practices in any material respect; (p) no Acquired Company shall make or change any Tax election or adopt or change a material accounting method in respect of Taxes (other than in circumstances where such election or adoption is made on a Tax Return required to be filed under applicable Legal Requirements other than for the purpose of making such election or adopting such method), enter into a Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement (other than customary Tax allocation or Tax sharing provisions in real property leases and subleases or other commercial contracts not primarily related to Taxes), settle or compromise a material claim, notice, audit report or assessment in respect of Taxes, request a ruling with respect to Taxes, grant any power of attorney relating to Tax matters, prepare any Tax Return in a manner inconsistent with past practices, consent to an extension or waiver of the statutory limitation period applicable to a claim or assessment in respect of Taxes, file a U.S. federal income tax return more than thirty days prior to the extended due date for such return, or fail to timely make all permitted applications for automatic extensions of time to file U.S. federal income tax returns on IRS Form 7004; (q) no Acquired Company shall commence or settle any Legal Proceeding; (r) no Acquired Company shall perform any acts with respect to Patent applications or take any actions involving the United States Patent and Trademark Office; and (s) no Acquired Company shall agree or commit to take any of the actions described in clauses “(d)” through “(r)” above. Notwithstanding the foregoing, the Company may take any action (i) described in clauses “(d)” through “(s)” above if Parent gives its prior written consent to the taking of such action by the Company, (ii) described in Section 4.2 of the Disclosure Schedule after consultation with Parent, and (iii) expressly required by this Agreement or any Legal Requirementpractice.

Appears in 1 contract

Samples: Stock Purchase Agreement (Alabama Gas Corp)

Operation of the Business of the Company. During the Pre-Closing Period, the Company agrees to operate the business of Selling Shareholders shall ensure and shall procure that the Company to ensure ensures that: : (a) each Acquired Company shall conduct its business and operations in the ordinary course and in substantially the same manner as such business and operations have been conducted prior to the date of this Agreement, including management of cash in the ordinary course and in substantially the same manner (which includes normal payment of payables and normal collection of receivables); ; (b) each Acquired Company shall use commercially reasonable efforts to preserve intact its current business organization, keep available the services of its current officers officers, managers and employees and maintain its relations and goodwill good will with all suppliers, customers, landlords, creditors, employees and other Persons having business relationships with the any Acquired Companies; Company; (c) upon request by Parent, each Acquired Company the Selling Shareholders shall report to Parent concerning operational, financial, regulatory, and Intellectual Property matters and otherwise report to Parent concerning Purchaser any material changes in the status of the business of the such Acquired Companies; Company; (d) no Acquired Company shall cancel any of its insurance policies identified in Section 2.19(a) of the Disclosure Schedule or reduce the amount of any insurance coverage provided by such insurance policies; (e) no Acquired Company shall declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock or other securities, or repurchase, redeem, redeem or otherwise reacquire or adjust the conversion price of any shares of capital stock or other securities, except repurchases of unvested shares or cancellation of unvested options in connection with the termination of the service relationship with any employee and in connection with the termination of the service relationship with any other service provider pursuant to stock option or stock purchase agreements in effect on the date hereof; ; (fe) no Acquired Company shall sell, issue or authorize the issuance of: (i) any capital stock shares or other security; (ii) any option or right to acquire any capital stock shares (or cash based on the value of capital stockshares) or other security; or (iii) any instrument convertible into or exchangeable for any capital stock shares (or cash based on the value of capital stockshares) or other security (except that the Company shall be permitted to issue Common Stock upon the exercise of Options, or upon the conversion of Preferred Stock, in each case outstanding as of the date of this Agreement and in accordance with their terms as in effect on the date of this Agreement); provided, however, that the Company shall timely grant Options or other securities of the Company pursuant to and in accordance with any promise, commitment or other Contract to grant such Options or other securities of the Company which is outstanding as of the date of this Agreement and is set forth on Section 4.2(f) of the Disclosure Schedule; (g) no Acquired Company shall amend or waive any of its rights under, or permit the acceleration of vesting under: (i) any provision of any Stock Plansecurity; (ii) any provision of any agreement evidencing any outstanding Option; (iii) any provision of any restricted stock agreement; or (iv) any other compensation obligation; (hf) no Acquired Company shall amend or permit the adoption of any amendment to any such Acquired Company’s Charter DocumentDocuments, or effect or permit any such Acquired Company to become a party to any Acquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; ; (ig) no Acquired Company shall form any Subsidiary or acquire any equity interest or other interest in any other Entity; ; (jh) no Acquired Company shall make any unbudgeted capital expenditure in excess of $15,000 in any one instance or $30,000 exceeding in the aggregate; aggregate $ 20,000; (ki) no Acquired Company shall: (i) enter into, or permit any of the assets owned or used by it to become bound by, any Contract that is or would constitute a Material Contract (other than the sale or license of Company Products and Company Services on a non-exclusive basis to end users thereof in the ordinary course of business consistent with past practices pursuant to agreements in the form provided to Parent prior to the date hereof)material Contract; or (ii) amend or prematurely terminate, or waive any material right or remedy under, any Contract that is or would constitute a Material such Contract; ; - 29 - (lj) no Acquired Company shall: (i) acquire, lease or license any right or other asset from any other PersonPerson for an aggregate value in excess of $ 10,000; (ii) sell or otherwise dispose of, or lease or license, any right or other asset to any other Person or amend or modify any Contract identified in Section 2.11(s) of the Disclosure SchedulePerson; or (iii) waive or relinquish any right, in the case of each of clauses “(i), (ii) and ” through “(iii), except in the ordinary course of business consistent with past practices; ; (mk) no Acquired Company shall: (i) lend money to any Person (except that the an Acquired Company may make routine travel or business expense advances to its current employees of the Company in the ordinary course of business consistent with past practices); or (ii) incur or guarantee any Indebtedness; indebtedness for borrowed money; (nl) no Acquired Company shall: (i) enter into any collective bargaining agreement; (ii) establish, adopt, amend or terminate any Acquired Company Benefit Plan (other than (A) as may have been required by the terms of the Company Benefit Employee Plan, (B) standard renewals of Company Benefit Plans in accordance with any automatic or elective renewal terms contained therein, (C) the involuntary termination of any employee for which a general release of claims in favor of the Company was obtained or (D) the termination of any consulting or independent contractor pursuant to the terms of his or her consulting agreement); (iiiii) pay, or make any new commitment to pay, pay any bonus or make any profit-sharing payment, cash incentive payment or similar payment, other than commissions paid in the ordinary course of business and consistent with past practices; (iviii) increase, or make any new commitment to increase, increase the amount of the wages, salary, commissions, fringe benefits, employee benefits or other compensation (including equity-based compensation, whether payable in cash or otherwise) or remuneration payable to any of its directors, officers officers, managers or other employees; (v) fund, or make any commitment to fund, any compensation obligation (whether by grantor trust or otherwise); (viiv) promote or change the title of any of its employees (retroactively or otherwise); or (viiv) hire or make an offer to hire any new employee; ; (om) no Acquired Company shall change any of its methods of accounting or accounting practices in any material respect; ; (pn) no Acquired Company shall make any payments in respect of Tax, unless due, make or change any Tax election or election, adopt or change a material accounting method in respect of Taxes (other than in circumstances where such election or adoption is made on a Tax Return required to be filed under applicable Legal Requirements other than for the purpose of making such election or adopting such method)Taxes, enter into a Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement (other than customary Tax allocation or Tax sharing provisions in real property leases and subleases or other commercial contracts not primarily related to Taxes)agreement, settle or compromise comprise a material claim, notice, audit report or assessment in respect of Taxes, request a ruling with respect to Taxes, grant any power of attorney relating to Tax matters, prepare any Tax Return in a manner inconsistent with past practices, or consent to an extension or waiver of the statutory limitation period applicable to a claim or assessment in respect of Taxes, file a U.S. federal income tax return more than thirty days prior to the extended due date for such return, or fail to timely make all permitted applications for automatic extensions of time to file U.S. federal income tax returns on IRS Form 7004; ; (qo) no Acquired Company shall commence or settle any Legal Proceeding; ; (rp) no Acquired Company shall perform enter into any acts with respect to Patent applications material transaction or take any actions involving other material action outside the United States Patent ordinary course of business or inconsistent with its past practices; and Trademark Office; and (sq) no Acquired Company shall agree or commit to take any of the actions described in clauses “(d)” through “(rp)” above. Notwithstanding the foregoing, the Company may take any action described in: (i) described in clauses “(dclauses“(d)” through “(sq)” above if Parent if: (A) Purchaser gives its prior written consent to the taking of such action by the such Acquired Company, ; or (iiB) described in Section 4.2 of the Disclosure Schedule after consultation with Parent, and (iii) such action is expressly required contemplated by this Agreement or any Legal Requirement.Agreement. 6.2. Notification (a)

Appears in 1 contract

Samples: Share Purchase Agreement

Operation of the Business of the Company. During the Pre-Closing Period, except as set forth on Part 5.2 of the Disclosure Schedule the Company agrees to operate the business of the Company to shall ensure that: (a) each Acquired Company shall uses its commercially reasonable efforts to conduct its business and operations in the ordinary course and in substantially the same manner as such business and operations have been conducted prior to the date of this Agreement, including management of cash in the ordinary course and in substantially the same manner (which includes normal payment of payables and normal collection of receivables); (b) each Acquired Company shall use uses its commercially reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and maintain its relations and goodwill good will with all suppliers, customers, landlords, creditors, employees and other Persons having business relationships with the Acquired Companies; (c) upon reasonable request by Parentfrom Parent in writing, each Acquired the Company shall report to Parent regarding matters set forth on Schedule 5.2 concerning operational, financial, regulatory, and Intellectual Property matters and otherwise report to Parent concerning the status of the business of the Acquired Companies; provided that no report shall consist of competitively sensitive information; (d) no Acquired Company shall cancel any of its insurance policies identified in Section 2.19(aPart 2.20(b) of the Disclosure Schedule or reduce the amount of any insurance coverage provided by such insurance policies; (e) no Acquired Company shall declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock equity interests or other securitiessecurities of the Acquired Companies, or repurchase, redeem, redeem or otherwise reacquire or adjust the conversion price of any shares of capital stock equity interests or other securitiessecurities of the Acquired Companies, except repurchases of unvested shares or cancellation of unvested options units in connection with the termination of the service relationship with any employee and in connection with the termination of the service relationship with any other service provider pursuant to stock option or stock purchase agreements in effect on the date hereofemployee; (f) no Acquired Company shall sell, issue or authorize the issuance of: or grant of (i) any capital stock Equity Interests or equity-based interests or other security; , (ii) any option option, warrant or right to acquire any capital stock Equity Interests or equity-based interests (or cash based on the value of capital stockEquity Interests) or other security; , or (iii) any instrument convertible into or exchangeable for any capital stock Equity Interests or equity-based interests (or cash based on the value of capital stockEquity Interests) or other security (except that the Company shall be permitted to issue Common Stock upon the exercise of Options, or upon the conversion of Preferred Stock, in each case outstanding as of the date of this Agreement and in accordance with their terms as in effect on the date of this Agreement); provided, however, that the Company shall timely grant Options or other securities of the Company pursuant to and in accordance with any promise, commitment or other Contract to grant such Options or other securities of the Company which is outstanding as of the date of this Agreement and is set forth on Section 4.2(f) of the Disclosure Schedulesecurity; (g) no Acquired Company shall amend or waive any of its rights under, or permit the acceleration of vesting under: under (i) any provision of any the Stock Plan; , (ii) any provision of other equity or equity-based incentive plan or any agreement evidencing any outstanding Option; award agreement, or (iii) any provision other compensation-related Contract or arrangement, in each case, other than as required by the terms of any restricted stock agreement; such plan or (iv) any other compensation obligationagreement as in effect on the date of this Agreement; (h) no Acquired Company shall amend or permit the adoption of any amendment to any of its Charter DocumentDocuments (other than the Amended and Restated LLC Agreement), or effect or permit any Acquired Company to become a party to any Acquisition Transaction, recapitalization, reclassification of sharesunits, stock split, reverse stock split or similar transaction; (i) no Acquired Company shall form any Subsidiary or acquire any equity interest or other interest in any other Entity; (j) no Acquired Company shall make any unbudgeted capital expenditure expenditures in excess of $15,000 in any one instance or $30,000 in the aggregate; (k) no Acquired Company shall: (i) shall enter into, into or permit any of the assets owned or used by it to become bound by, any Contract that is or would constitute a Material Contract (other than the sale or license of Company Products and Company Services on a non-exclusive basis to end users thereof in the ordinary course of business consistent with past practices pursuant to agreements in the form provided to Parent prior to the date hereof); or (ii) materially amend or prematurely terminate, or waive any material right or remedy under, any Contract that is or would constitute a Material Contract, outside of the ordinary course of business; (l) no Acquired Company shall: shall (i) acquire, assume, lease or license any right or other asset material to any Acquired Company from any other Person; , (ii) sell sell, transfer, assign, convey or otherwise dispose of, or lease or license, any right or other asset material to any Acquired Company (excluding any Intellectual Property or Intellectual Property Rights) to any other Person or amend or modify any Contract identified in Section 2.11(s) of the Disclosure Schedule; Person, or (iii) waive or relinquish any right, in the case of each of (i), (ii) and (iii)case, except in the ordinary course of business consistent with past practices; (m) no Acquired Company shall: (i) lend money shall grant any license, sublicense, covenant, non-assert, permission, consent, release, immunity, waiver or other right under or with respect to, any Intellectual Property or Intellectual Property Rights, other than non-exclusive licenses for the use of Company Products or Company Software granted to any Person (except that the Company may make routine travel or business expense advances to current employees of the Company customers in the ordinary course of business consistent with past practices); or (ii) incur or guarantee any Indebtednesspractice pursuant to an Acquired Company’s unmodified form of standard customer agreement, the forms of which have been Made Available to Parent; (n) no Acquired Company shall: shall (i) cancel (or permit to become cancelled), abandon or permit to lapse or expire, or otherwise fail to maintain, any Registered Company IP (unless the applicable Acquired Company determines, in its reasonable business judgement, that such Registered Company IP is (A) not material and (B) longer economically practicable or commercially desirable to maintain) or (ii) fail to maintain any Trade Secret included in the Owned Company IP as a Trade Secret; (o) except as otherwise required by any applicable Legal Requirement or by a Company Benefit Plan in effect on the date of this Agreement, no Acquired Company shall (i) enter into into, amend or terminate any collective bargaining agreement; , (ii) approve, establish, adopt, amend or terminate any Company Benefit Plan (other than (A) as may have been required by the terms of the Company Benefit Plan, (B) standard renewals of Company Benefit Plans in accordance with any automatic or elective renewal terms contained therein, (C) the involuntary termination of any employee for which a general release of claims in favor of the Company was obtained or (D) the termination of any consulting or independent contractor pursuant to the terms of his or her consulting agreement); (iii) grant, increase, pay, or make any new commitment to pay, any bonus or make any severance, retention, change in control, termination, bonus, profit-sharing paymentsharing, cash incentive payment or similar payment, other than cash incentive payments, bonuses, and commissions paid in the ordinary course of business and consistent with past practices; practices pursuant to Company Benefit Plans in effect on the date of this Agreement based on actual performance achievement under such Company Benefit Plans, (iv) increase, or make any new commitment to increase, the amount compensation or benefits of the any Company Employees or current or former contractor or consultant of any Acquired Company, including wages, salary, commissions, fringe benefits, employee benefits or any other compensation (including equity-based compensation, whether payable in cash or otherwise) or remuneration payable to any of its directors), officers or employees; (v) take any action to accelerate the vesting or payment, or fund, or make any commitment to fund, or in any compensation obligation other way secure the payment of (whether by grantor trust or otherwise); , any compensation or benefits under any Company Benefit Plan, (vi) promote or change the title of any of its employees (retroactively or otherwise); or (vii) hire or make an offer to hire any new employee whose base salary exceeds $150,000, other than to replace any departing employee, or (vii) terminate the employment of any Company Employee (other than for cause or poor performance) whose base salary exceeds $150,000; (op) no Acquired Company shall change any of its methods of accounting or accounting practices in any material respect; (pq) no Acquired Company shall make (i) make, change or change rescind any Tax material election or adopt or change a material accounting method in respect of Taxes (other than in circumstances where such election or adoption is made on a Tax Return required to be filed under applicable Legal Requirements other than for the purpose of making such election or adopting such method), enter into a Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement (other than customary Tax allocation or Tax sharing provisions in real property leases and subleases or other commercial contracts not primarily related relating to Taxes), (ii) settle or compromise a material any claim, notice, audit report controversy or assessment in respect of Taxes, request a ruling with respect Legal Proceeding relating to Taxes, grant (iii) except as required by applicable Legal Requirements, make any power change to any of attorney relating its methods, policies or practices of Tax accounting or methods of reporting income or deductions for Tax purposes, (iv) amend, refile or otherwise revise any previously filed Tax Return, or surrender or forgo the right to Tax mattersany refund or rebate of a previously paid Tax, (v) enter into or terminate any agreements with a Taxing Authority, (vi) prepare any Tax Return in a manner inconsistent with past practices, (vii) consent to an extension or waiver of the statutory limitation period applicable to a claim or assessment in respect of Taxes, file (viii) enter into a U.S. federal income tax return more than thirty days prior to the extended due date for such returnTax allocation agreement, Tax sharing agreement, or fail Tax indemnity agreement, (ix) grant any power of attorney relating to timely make all permitted applications Tax matters, (x) request a ruling with respect to Taxes, or (xi) incur any liability for automatic extensions a material amount of time to file U.S. federal income tax returns on IRS Form 7004Taxes outside the ordinary course of business (other than in connection with the Contemplated Transactions); (qr) no Acquired Company shall commence or settle any Legal ProceedingProceeding for an amount in excess of $50,000; provided, however, no Acquired Company shall commence or settle any Legal Proceeding relating to or involving any injunctive relief; (rs) no Acquired Company shall perform implement any acts with respect employee layoffs that would result in an obligation to Patent applications give notice at or take any actions involving before the United States Patent and Trademark OfficeClosing Date under the WARN Act; and (st) no Acquired Company shall agree or commit to take any of the actions described in clauses “(d)” through “(rs)” above. Notwithstanding anything to the foregoingcontrary contained in this Agreement, the any Acquired Company may take any action (i) described in clauses “(d)” through “(st)” above if Parent gives its prior written consent to the taking of such action by the Company, (ii) described in Section 4.2 . None of the Disclosure Schedule after consultation with Parent, and (iii) expressly required by restrictions set forth in this Agreement Section 5.2 shall be deemed to directly or any Legal Requirementindirectly give Parent or Merger Sub the right to control or direct the operations of the Acquired Companies prior to the Closing.

Appears in 1 contract

Samples: Merger Agreement (RealPage, Inc.)

Operation of the Business of the Company. During the Pre-Closing Period, the Company agrees to operate the business of the Company to ensure that: (a) each Acquired the Company shall shall: (i) conduct its business and operations in the ordinary course Ordinary Course and in substantially the same manner as such business and operations have been conducted prior to the date of this Agreement, including management of cash in the ordinary course and in substantially the same manner (which includes normal payment of payables and normal collection of receivables);; and (bii) each Acquired Company shall use commercially reasonable efforts to preserve intact its current business organization, keep available the services of Key Employees and its other current officers and employees Company Associates and maintain its relations and goodwill with with, all suppliers, customers, landlords, creditorsemployees, employees merchants, lenders, originators, processors, servicers and other Persons having beneficial business relationships with the Acquired Companies;Company, including all Key Business Partners (other than terminations of employees (A) that were, in good faith, for cause or (B) following reasonable consultation with Parent); and (cb) upon request by Parent, each Acquired the Company shall report to Parent concerning operational, financial, regulatory, and Intellectual Property matters and otherwise report to Parent concerning the status of the business of the Acquired Companies;not: (di) no Acquired Company shall cancel any of its insurance policies required to be identified in Section 2.19(a) 2.17 of the Disclosure Schedule or reduce the amount of any insurance coverage provided by such insurance policies; (eii) no Acquired Company shall declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock or other securities, or repurchase, redeem, redeem or otherwise reacquire or adjust the conversion price of any shares of capital stock or other securities, except securities (other than forfeitures of unvested Company Options or forfeitures or repurchases of unvested shares or cancellation of unvested options Company Restricted Stock Awards, in connection with the either case, upon termination of the service relationship with any employee and in connection with the termination of the service relationship with any other service provider pursuant to stock option or stock purchase the underlying award agreements in effect on the date hereofof this Agreement); (fiii) no Acquired Company shall sell, issue or authorize the issuance of: (iA) any capital stock or other security; (iiB) any option or right to acquire any capital stock (or cash based on the value of capital stock) or other security; or (iiiC) other than the issuance of convertible promissory notes to Parent, any instrument convertible into or exchangeable for any capital stock (or cash based on the value of capital stock) or other security (except that the Company shall be permitted to issue Common Company Capital Stock (I) upon the exercise of OptionsCompany Options not later than three Business Days prior to the Closing Date, or (II) upon the lapse of restrictions on Company Restricted Stock Awards, and (III) upon the conversion of Company Preferred Stock, in each case case, outstanding as of the date of this Agreement and in accordance with their respective terms as in effect on the date of this Agreement); provided, however, that the Company shall timely grant Options or other securities of the Company pursuant to and in accordance with any promise, commitment or other Contract to grant such Options or other securities of the Company which is outstanding as of the date of this Agreement and is set forth on Section 4.2(f) of the Disclosure Schedule; (g) no Acquired Company shall amend or waive any of its rights under, or permit the acceleration of vesting under: (i) any provision of any Stock Plan; (ii) any provision of any agreement evidencing any outstanding Option; (iii) any provision of any restricted stock agreement; or (iv) any other compensation obligation; (h) no Acquired Company shall amend or permit the adoption of any amendment to any Charter Documentits Organizational Documents, or effect or permit any Acquired the Company to become a party to any Acquisition TransactionTransaction (other than the transactions contemplated by this Agreement), recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (iv) no Acquired Company shall form any Subsidiary or acquire any equity interest Equity Interest or other interest in any other Entity; (jvi) no Acquired Company shall make any unbudgeted capital expenditure expenditure, except for capital expenditures that, when added to all other capital expenditures (in excess each case, as determined in accordance with GAAP) made on behalf of the Company during the Pre-Closing Period, do not exceed $15,000 in any one instance or $30,000 in the aggregate100,000; (k) no Acquired Company shall: (ivii) enter into, or permit any of the assets owned or used by it to become bound by, any Contract that is or would constitute a Material Contract (Contract, other than the sale or license of Company Products and Company Services on a non-exclusive basis to end users thereof in the ordinary course of business consistent with past practices pursuant to agreements in the form provided to Parent prior to the date hereof); or Ordinary Course; (iiviii) amend amend, extend or prematurely terminate, or waive any material right or remedy under, any Company Contract that is or would constitute a Material Contract; (lix) no Acquired Company shall: (iA) acquire, lease or license any right or other asset from any other PersonPerson for an aggregate value in excess of $100,000; (iiB) sell or otherwise dispose of, or lease or licenselicense (or grant any other right with respect to), any right or other asset to any other Person or amend or modify any Contract identified in Section 2.11(s) of the Disclosure SchedulePerson; or (iiiC) waive or relinquish any rightright or (D) acquire, lease or license any interest in real property or other licensed space, except in the case of each of clauses (iA)-(C), (ii) and (iii), except in the ordinary course of business consistent with past practicesOrdinary Course; (m) no Acquired Company shall: (ix) lend money to any Person (except that the Company may make routine travel or and business expense advances to current employees of the Company in the ordinary course of business consistent with past practicesOrdinary Course); or (ii) incur or guarantee any Indebtedness; (nxi) no Acquired Company shall: (iA) enter into any collective bargaining agreement; (iiB) establish, adopt, amend or terminate any Company Benefit Employee Plan (except to the extent required by applicable Legal Requirements or as necessary to comply with this Agreement and other than (A) as may have been required by routine Company Employee Plan renewals and entering into at-will employment offer letters in connection with the terms of the Company Benefit Plan, (B) standard renewals of Company Benefit Plans in accordance with any automatic or elective renewal terms contained therein, (C) the involuntary termination hiring of any non-management level employee for which a general release of claims in favor of the Company was obtained or (D) the termination of any consulting or independent contractor pursuant to the terms of his or her consulting agreementOrdinary Course whose annual cash compensation does not exceed $100,000); (iiiC) pay, or make any new commitment to pay, any bonus or make any profit-sharing payment, cash incentive payment or similar payment, other than commissions and bonuses paid in the ordinary course of business and consistent with past practices; Ordinary Course (ivD) increase, or make any new commitment to increase, the amount of the wages, salary, commissions, fringe benefits, benefits or other employee benefits or other compensation (including equity-based compensation, whether payable in cash or otherwise) or remuneration payable to any of its directorsthe officers, officers employees or employeesmembers of the board of directors of the Company; (v) fund, or make any commitment to fund, any compensation obligation (whether by grantor trust or otherwise); (viE) promote or change the title of any of its management-level employees (retroactively or otherwise); or , (viiF) hire or make an offer to hire any new management-level employee, or (G) grant any new right to severance or termination pay to any present or former officer, director, employee or other personnel (whether employees or individual independent contractors); (oxii) no Acquired Company shall change any of its methods of accounting or accounting practices in any material respectrespect (other than as required by applicable accounting or auditing standards); (pxiii) no Acquired Company shall make (A) make, change or change revoke any material Tax election or adopt or election; (B) change a material accounting method in respect of Taxes Taxes; (other than in circumstances where such election or adoption is made on a Tax Return required to be filed under applicable Legal Requirements other than for C) enter into any agreement the primary purpose of making such election which is Tax allocation, Tax sharing, or adopting such method), Tax indemnity; (D) amend any material Tax Return; (E) enter into a Tax allocation any “closing agreement” within the meaning of Section 7121 of the Code (or any similar or corresponding provision of state, Tax sharing agreement, Tax indemnity agreement local or closing agreement foreign law); (other than customary Tax allocation or Tax sharing provisions in real property leases and subleases or other commercial contracts not primarily related to Taxes), F) settle or compromise a material any claim, notice, audit report or material assessment in respect of Taxes, ; or (G) request a any ruling or similar guidance with respect to TaxesTaxes from a governmental Tax authority, grant any power in the case of attorney relating items (A) through (G), to Tax matters, prepare any Tax Return in a manner inconsistent with past practices, consent the extent reasonably expected to an extension or waiver adversely affect the future Taxes of the statutory limitation period applicable to a claim Company, the Surviving LLC, Parent and its Affiliates (including the amount of any tax attribute, carryforward or assessment in respect of Taxes, file a U.S. federal income tax return more than thirty days prior to the extended due date for such return, or fail to timely make all permitted applications for automatic extensions of time to file U.S. federal income tax returns on IRS Form 7004credit); (qxiv) no Acquired Company shall commence or settle any material Legal ProceedingProceeding for damages in excess of $250,000, other than to enforce rights under this Agreement or in connection with the transactions contemplated hereby; (rxv) no Acquired make any pledge of any of its assets or otherwise permit any of its assets to become subject to any Encumbrance (other than Permitted Encumbrances), except for (A) pledges of immaterial assets made in the Ordinary Course; and (B) nonexclusive licenses granted by the Company shall perform any acts with respect to Patent applications or take any actions involving in the United States Patent and Trademark OfficeOrdinary Course; andor (sxvi) no Acquired Company shall agree or commit to take any of the actions described in clauses “(diii)” through “(rxv)” above. Notwithstanding the foregoing, the Company may take any action (i) described in clauses “(db)(i)” through “(sb)(xvi)” above if if: (i) Parent gives its prior written consent to the taking of such action by the Company, ; (ii) described in Section 4.2 of the Disclosure Schedule after consultation with Parent, and such action is expressly required to be taken by this Agreement; (iii) expressly such action is disclosed in Schedule 4.2(b); or (iv) such action is required by this Agreement any applicable Legal Requirements or any Legal RequirementOrder (and the Company promptly notifies Parent of such action).

Appears in 1 contract

Samples: Merger Agreement (Life360, Inc.)

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Operation of the Business of the Company. During Between the Pre-Closing Period, date of this Agreement and the Company agrees to operate the business of the Company to ensure thatClosing: (a) each Acquired The Company shall (i) conduct its business and operations only in the ordinary course and in substantially the same manner as such of business and operations have been conducted prior to the date of this Agreement, including management of cash in the ordinary course and in substantially the same manner consistent with past practice (which includes normal payment of payables and normal collection of receivables); (bii) each Acquired Company shall use commercially reasonable its best efforts to preserve intact its current business organization, keep available the services of its current officers officers, employees, and employees agents, and maintain its relations with, and goodwill with all the good will of, its suppliers, customers, landlords, creditors, employees employees, agents, and other Persons others having business relationships with the Acquired Companies; (c) upon request by Parentit, each Acquired Company shall report to Parent concerning operational, financial, regulatory, and Intellectual Property matters and otherwise report to Parent concerning the status of the business of the Acquired Companies; (d) no Acquired Company shall cancel any of its insurance policies identified in Section 2.19(a) of the Disclosure Schedule or reduce the amount of any insurance coverage provided by such insurance policies; (e) no Acquired Company shall declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock or other securities, or repurchase, redeem, otherwise reacquire or adjust the conversion price of any shares of capital stock or other securities, except repurchases of unvested shares or cancellation of unvested options in connection with the termination of the service relationship with any employee and in connection with the termination of the service relationship with any other service provider pursuant to stock option or stock purchase agreements in effect on the date hereof; (f) no Acquired Company shall sell, issue or authorize the issuance of: (i) any capital stock or other security; (ii) any option or right to acquire any capital stock (or cash based on the value of capital stock) or other security; or (iii) any instrument convertible into or exchangeable for any capital stock (or cash based on the value of capital stock) or other security (except that the Company shall be permitted to issue Common Stock upon the exercise of Optionscontinue its current advertising and promotional activities and pricing, or upon the conversion of Preferred Stock, in each case outstanding as of the date of this Agreement warranty and in accordance with their terms as in effect on the date of this Agreement); provided, however, that the Company shall timely grant Options or other securities of the Company pursuant to and in accordance with any promise, commitment or other Contract to grant such Options or other securities of the Company which is outstanding as of the date of this Agreement and is set forth on Section 4.2(f) of the Disclosure Schedule; (g) no Acquired Company shall amend or waive any of its rights under, or permit the acceleration of vesting under: (i) any provision of any Stock Plan; (ii) any provision of any agreement evidencing any outstanding Option; (iii) any provision of any restricted stock agreement; or (iv) any other compensation obligation; (h) no Acquired Company shall amend or permit the adoption of any amendment to any Charter Document, or effect or permit any Acquired Company to become a party to any Acquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (i) no Acquired Company shall form any Subsidiary or acquire any equity interest or other interest in any other Entity; (j) no Acquired Company shall make any unbudgeted capital expenditure in excess of $15,000 in any one instance or $30,000 in the aggregate; (k) no Acquired Company shall: (i) enter into, or permit any of the assets owned or used by it to become bound by, any Contract that is or would constitute a Material Contract (other than the sale or license of Company Products and Company Services on a non-exclusive basis to end users thereof purchasing policies in the ordinary course of business consistent with past practices pursuant practice, (iv) continue in full force and effect without material modification all of its existing policies and binders of insurance, (v) confer with GreenHouse concerning operational matters of a material nature, and (vi) otherwise report immediately to agreements in the form provided to Parent prior to the date hereof); GreenHouse any adverse event concerning its business, assets, Liabilities, operations, financial condition or (ii) amend prospects, whether or prematurely terminate, or waive any material right or remedy under, any Contract that is or would constitute a Material Contract;not material. (lb) no Acquired The Company shall: shall not, without the consent of GreenHouse, (i) acquiresell, lease lease, license or license dispose of any right property or other asset from any other Person; (ii) sell Assets having a value individually or otherwise dispose of, or lease or license, any right or other asset to any other Person or amend or modify any Contract identified in Section 2.11(s) of the Disclosure Schedule; or (iii) waive or relinquish any right, in the case of each of (i)an aggregate value exceeding $5,000, (ii) and (iii)enter into any Contract that would be required to be listed in the Disclosure Schedule if such Contract were in effect on the date hereof, except in the ordinary course of business consistent business, (iii) mortgage, pledge or subject to Encumbrance, other than Permitted Encumbrances, any of its properties or Assets, (iv) sell, transfer, license, sublicense or otherwise dispose of, or allow any rights to lapse with past practices; (m) no Acquired Company shall: (i) lend money respect to any Person (except that the Company may make routine travel or business expense advances to current employees of the Company in Company’s Intellectual Property, (v) amend or modify any existing agreements with respect to any of the ordinary course of business consistent with past practices); Company’s Intellectual Property, (vi) increase the wages, salaries, compensation, severance, pension or other benefits payable to any employee, (ii) incur or guarantee any Indebtedness; (n) no Acquired Company shall: (ivii) enter into or modify in any collective bargaining agreement; (ii) establishmaterial respect any employment, adoptdeferred compensation, amend severance, retirement or terminate other agreement or arrangement providing for additional or different benefits with any Company Benefit Plan (employee than those payable on the date hereof, in each case other than pursuant to existing Contracts or Benefit Plans or in the Ordinary Course of Business, (Aviii) as may have been required by the terms of the Company adopt or amend any Benefit Plan, (B) standard renewals of Company Benefit Plans in accordance with any automatic or elective renewal terms contained thereinexcept as required by applicable Law, (Cix) the involuntary termination of any employee for which a general release of claims in favor of the Company was obtained or (D) the termination of any consulting or independent contractor pursuant to the terms of his or her consulting agreement); (iii) pay, or make any new commitment to pay, any bonus or make any profit-sharing payment, cash incentive payment or similar payment, other than commissions paid in the ordinary course of business and consistent with past practices; (iv) increase, or make any new commitment to increase, the amount of the wages, salary, commissions, fringe benefits, employee benefits or other compensation (including equity-based compensation, whether payable in cash or otherwise) or remuneration payable to any of its directors, officers or employees; (v) fund, or make any commitment to fund, any compensation obligation (whether by grantor trust or otherwise); (vi) promote or change the title of any of its employees (retroactively or otherwise); or (vii) hire or make an offer to hire any new employee; (o) no Acquired Company shall change any of its methods of accounting or accounting practices in any material respect; (p) no Acquired Company shall make or change any Tax election or adopt or change a material accounting method in respect of Taxes (other than in circumstances where such election or adoption is made on a Tax Return required to be filed under applicable Legal Requirements other than for the purpose of making such election or adopting such method), enter into a Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement (other than customary Tax allocation or Tax sharing provisions in real property leases and subleases or other commercial contracts not primarily related to Taxes)election, settle or compromise a material claim, notice, audit report any Liability of the Company relating to the payment (or assessment in respect non-payment) of Taxes, request a ruling with respect to Taxes, grant or file any power of attorney relating to Tax matters, prepare any amended Tax Return or refund claim, (x) permit any material increase in a manner inconsistent with past practices, consent to an extension or waiver the number of the statutory limitation period applicable to a claim or assessment in respect of Taxes, file a U.S. federal income tax return more than thirty days prior to the extended due date for such return, or fail to timely make all permitted applications for automatic extensions of time to file U.S. federal income tax returns on IRS Form 7004; (q) no Acquired Company shall commence or settle any Legal Proceeding; (r) no Acquired Company shall perform any acts with respect to Patent applications or take any actions involving the United States Patent and Trademark Office; and (s) no Acquired Company shall agree or commit to take any of the actions described in clauses “(d)” through “(r)” above. Notwithstanding the foregoing, employees employed by the Company may take on the date hereof, (xi) accelerate or defer any action (i) described in clauses “(d)” through “(s)” above if Parent gives its prior written consent obligation or payment by or to the taking of such action by the Company, (iixii) described in Section 4.2 commence, pay, discharge, settle or compromise any pending or threatened Action, or (xiii) agree to do any of the Disclosure Schedule after consultation with Parent, and (iii) expressly required by this Agreement or any Legal Requirementforegoing.

Appears in 1 contract

Samples: Share Exchange Agreement (GreenHouse Holdings, Inc.)

Operation of the Business of the Company. During the Pre-Closing Period, the Company agrees to operate the business shall ensure that, except as specifically disclosed in Part 4.2 of the Company to ensure thatDisclosure Schedule: (a) each Acquired Company shall conduct its business and operations in the ordinary course and in substantially the same manner as such business and operations have been conducted prior to the date of this Agreement, including management of cash in the ordinary course and in substantially the same manner (which includes normal payment of payables and normal collection of receivables); (b) each Acquired Company shall use commercially its reasonable best efforts to preserve intact its current business organization, keep available the services of its current officers and employees and maintain its relations and goodwill with all suppliers, customers, landlords, creditors, employees and other Persons having business relationships with the Acquired Companies; (c) upon request by Parent, each Acquired Company shall report prepare and file or cause to Parent concerning operational, financial, regulatory, be prepared and Intellectual Property matters filed any Tax Returns that are required to be filed on or prior to the Closing Date and otherwise report shall pay all Taxes due with respect to Parent concerning such Tax Returns and all previously filed Tax Returns within the status of time and in the business of the Acquired Companiesmanner required by applicable Legal Requirements; (d) each Acquired Company shall continue to prosecute and maintain all Intellectual Property Rights (including applications therefor) in which an Acquired Company has or purports to have an ownership interest; (e) no Acquired Company shall cancel or fail to renew any of its insurance policies identified in Section 2.19(a) effect as of the Disclosure Schedule date of this Agreement or reduce the amount of any insurance coverage provided by such insurance policies; (ef) no Acquired Company shall declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock or other securities, or repurchase, redeem, redeem or otherwise reacquire or adjust the conversion price of any shares of capital stock or other securities, except repurchases of unvested shares or cancellation of unvested options in connection with the termination of the service relationship with any employee and in connection with the termination of the service relationship with any or other service provider pursuant to stock option or stock purchase agreements in effect on the date hereofprovider; (fg) no Acquired Company shall sell, issue issue, grant or authorize the issuance or grant of: (i) any capital stock or other security; (ii) any option option, warrant or right to acquire any capital stock (or cash based on the value of capital stock) or other securitysecurity (except that the Company shall be permitted to issue: (A) Common Stock upon the exercise of Company Equity Awards or upon the conversion of Preferred Stock; and (B) Capital Stock upon the exercise of Warrants, in the case of each of clauses “(A)” and “(B),” outstanding as of the date of this Agreement and in accordance with their terms as in effect on the date of this Agreement); or (iii) any instrument convertible into or exchangeable for any capital stock (or cash based on the value of capital stock) or other security (except that the Company shall be permitted to issue Common Stock upon the exercise of Options, or upon the conversion of Preferred Stock, in each case outstanding as of the date of this Agreement and in accordance with their terms as in effect on the date of this Agreement); provided, however, that the Company shall timely grant Options or other securities of the Company pursuant to and in accordance with any promise, commitment or other Contract to grant such Options or other securities of the Company which is outstanding as of the date of this Agreement and is set forth on Section 4.2(f) of the Disclosure Schedulesecurity; (gh) no Acquired Company shall grant or issue any equity or equity-based award, shall permit the early exercise of any Company Equity Award or shall amend or waive any of its rights under, or permit the acceleration of vesting or exercisability under: (i) any provision of any Stock Plan; (ii) any provision of any agreement Contract evidencing any outstanding OptionCompany Equity Award or Warrant; or (iii) any other Contract or arrangement relating to compensation, benefits or the provision of any restricted stock agreement; services to or (iv) any other compensation obligationfor the benefit of an Acquired Company; (hi) no Acquired Company shall amend or permit the adoption of any amendment to any of its Charter DocumentDocuments, or effect or permit any Acquired Company to become a party to any Acquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (ij) no Acquired Company shall form any Subsidiary or acquire any equity interest or other interest in any other Entity; (jk) no Acquired Company shall make any unbudgeted capital expenditure in excess of $15,000 in any one instance or $30,000 in the aggregate50,000; (kl) no Acquired Company shall: (i) enter into, or permit any of the assets owned or used by it to become bound by, any Contract that is or would constitute a Material Contract (other than the sale or license of Company Products and Company Services on a non-exclusive basis to end users thereof in the ordinary course of business consistent with past practices pursuant to agreements in the form provided to Parent prior to the date hereof)Contract; or (ii) amend or prematurely terminate, or waive any material right or remedy under, any Contract that is or would constitute a Material Contract; (lm) no Acquired Company shall: (i) acquire, lease or license any right or other asset from any other Person; (ii) sell or otherwise dispose of, or lease or license, any right or other asset to any other Person or amend or modify any Contract identified in Section 2.11(s) of the Disclosure SchedulePerson; or (iii) waive or relinquish any rightright or claim, except, in the case of each of clauses “(i), ” and “(ii) and (iii), except ,” in the ordinary course of business consistent with past practices; (mn) no Acquired Company shall: (i) lend money to any Person (except that the Company may make routine travel or business expense advances to current employees of the Company in the ordinary course of business consistent with past practices); or (ii) incur any Indebtedness; or (iii) guarantee any IndebtednessIndebtedness of any Person; (no) no Acquired Company shall: (i) enter into into, modify or negotiate any collective bargaining agreement, works council agreement or other Contract with any employee representative body; (ii) establish, adopt, amend enter into, amend, take any action to accelerate rights under or terminate any Company Benefit Plan (other than (A) as may have been required by the terms of the Company Benefit Plan, (B) standard renewals of Company Benefit Plans in accordance with any automatic or elective renewal terms contained therein, (C) the involuntary termination of any employee for which a general release of claims in favor of the Company was obtained or (D) the termination of any consulting or independent contractor pursuant to the terms of his or her consulting agreement); (iii) pay, or make any new commitment to pay, any bonus or make any profit-sharing payment, cash incentive payment or similar payment, other than commissions paid in the ordinary course of business and consistent with past practices; (iv) increase, or make any new commitment to increase, the amount of the wages, salary, bonuses, incentives, commissions, fringe benefits, employee benefits or other compensation (including equity or equity-based compensation, whether payable in cash or otherwise) or other remuneration payable to any of its directors, officers or employeesCompany Associate; (v) fund, or make any commitment to fund, any compensation obligation (whether by grantor trust or otherwise); (vi) promote or change the title of any of its employees (retroactively or otherwise); or (vii) hire or engage, or make an offer to hire or engage, any new employeeCompany Associate; (viii) grant any new right to severance, termination, retention or change of control pay to any Company Associate; or (ix) terminate the employment of any Company Associate with the title of manager or any higher rank; (op) no Acquired Company shall change any of its methods of accounting or accounting practices in any material respect; (pq) no Acquired Company shall make shall: (i) make, change or change rescind any Tax election or adopt or change a material accounting method in respect of Taxes (other than in circumstances where such election or adoption is made on a Tax Return required to be filed under applicable Legal Requirements other than for the purpose of making such election or adopting such method), enter into a Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement (other than customary Tax allocation or Tax sharing provisions in real property leases and subleases or other commercial contracts not primarily related relating to Taxes), ; (ii) settle or compromise a material any claim, notice, audit report controversy or assessment in respect of Taxes, request a ruling with respect Legal Proceeding relating to Taxes; (iii) except as required by applicable Legal Requirements, grant make any power change to (or make a request to any Taxing Authority to change) any of attorney relating its methods, policies or practices of Tax accounting or methods of reporting income or deductions for Tax purposes; (iv) amend, refile or otherwise revise any previously filed Tax Return, or forgo the right to Tax matters, any amount of refund or rebate of a previously paid Tax; (v) enter into or terminate any agreements with a Taxing Authority; (vi) prepare any Tax Return in a manner inconsistent with past practices, ; (vii) consent to an extension or waiver of the statutory limitation period applicable to a claim or assessment in respect of Taxes; (viii) enter into a Tax allocation agreement, file Tax sharing agreement or Tax indemnity agreement; (ix) grant any power of attorney relating to Tax matters; or (x) request a U.S. federal income tax return more than thirty days prior ruling with respect to the extended due date for such return, or fail to timely make all permitted applications for automatic extensions of time to file U.S. federal income tax returns on IRS Form 7004Taxes; (qr) no Acquired Company shall commence or settle any Legal Proceeding; (r) no Acquired Company shall perform any acts with respect to Patent applications or take any actions involving the United States Patent and Trademark Office; and (s) no Acquired Company shall agree waive, relinquish, abandon, forfeit, permit to lapse, terminate or cancel any right (including any Intellectual Property Rights) or take any action or fail to take any action if the taking of or failure to take such action will, or could reasonably be expected to, result in any of the foregoing; (t) no Acquired Company shall: (i) change its practices or procedures with respect to the collection of accounts receivable or the payment of accounts payable; (ii) offer to discount the amount of any account receivable; (iii) extend any incentive (whether to an account debtor, an account creditor or any employee or third party responsible for the collection of receivables or the payment of payables) with respect to any account receivable or account payable or the payment or collection thereof; or (iv) take or omit to take any other action with the intent or effect of accelerating the collection of receivables or delaying the payment of payables; and (u) no Acquired Company shall authorize, approve, agree, commit or offer to take any of the actions described in clauses “(de)” through “(rt)” above. Notwithstanding the foregoing, the Company may take any action (i) described in clauses “(de)” through “(su)” above if Parent gives its prior written consent to the taking of such action by the Company, (ii) described and may take any action specified in Section Part 4.2 of the Disclosure Schedule after consultation with Parent, and (iii) expressly required by this Agreement or any Legal Requirement.

Appears in 1 contract

Samples: Merger Agreement (Indie Semiconductor, Inc.)

Operation of the Business of the Company. During the Pre-Closing Period, the Company agrees to operate the business of the Company to shall ensure that: (a) each Acquired (i) except as specifically disclosed in Section 4.2 of the Disclosure Schedule, (ii) with the prior written consent of Parent or (iii) as specifically contemplated by this Agreement or the other Transaction Documents, the Company shall conduct its business and operations in the ordinary course and in substantially the same manner as such business and operations have been conducted prior to the date of this Agreement, including management of cash in the ordinary course and in substantially the same manner (which includes normal payment of payables and normal collection of receivables); (b) each Acquired the Company shall use commercially reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and maintain its relations and goodwill good will with all suppliers, customers, landlords, creditors, employees and other Persons having business relationships with the Acquired CompaniesCompany; (c) upon request by Parent, each Acquired Company the Company’s officers shall report to Parent concerning operational, financial, regulatory, and Intellectual Property matters and otherwise report regularly to Parent concerning the status of the business of the Acquired CompaniesCompany as Parent may reasonably request; (d) no Acquired the Company shall not cancel any of its insurance policies identified in Section 2.19(a) 2.21 of the Disclosure Schedule or reduce the amount of any insurance coverage provided by such insurance policiesSchedule; (e) no Acquired the Company shall not declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock or other securities, or repurchase, redeem, redeem or otherwise reacquire or adjust the conversion price of any shares of capital stock or other securities, except repurchases of unvested shares or cancellation of unvested options in connection with the termination of the service relationship with any employee and in connection with the termination of the service relationship with any other service provider pursuant to stock option or stock purchase agreements in effect on the date hereof; (f) no Acquired the Company shall not sell, issue or authorize the issuance of: (i) any capital stock or other securitysecurity (other than debt securities, which shall be convertible into capital stock of the Company, issued to Catalyst, Kodiak or Kodiak Ventures); (ii) any option or right to acquire any capital stock (or cash based on the value of capital stock) or other security; or (iii) any instrument convertible into or exchangeable for any capital stock (or cash based on the value of capital stock) or other security (except that the Company shall be permitted to issue Common Company Capital Stock upon the exercise of OptionsCompany Options or Company Warrants, or upon the conversion of Company Preferred StockStock or the Convertible Notes or other convertible notes that shall be issued to Catalyst, Kodiak or Kodiak Ventures, in each case outstanding as of the date of this Agreement and in accordance with their terms as in effect on the date of this Agreement); provided, however, that the Company shall timely grant Options or other securities of the Company pursuant to and in accordance with any promise, commitment or other Contract to grant such Options or other securities of the Company which is outstanding as of the date of this Agreement and is set forth on Section 4.2(f) of the Disclosure Schedule; (g) no Acquired the Company shall not amend or waive any of its rights under: (i) any provision of any Company Option Plans; or (ii) any provision of any agreement evidencing any outstanding Company Option; (h) the Company shall not amend or waive any of its rights under, or permit the acceleration of vesting under: (i) any provision of any Stock Plan; (ii) any provision of any agreement evidencing any outstanding Option; (iii) under any provision of any restricted stock agreement; or (iv) any other compensation obligation; (hi) no Acquired the Company shall not amend or permit the adoption of any amendment to any its Charter DocumentDocuments, or effect or permit any Acquired Company to become a party to any Acquisition TransactionProposal, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (ij) no Acquired the Company shall not form any Subsidiary or acquire any equity interest or other interest in any other Entity; (jk) no Acquired the Company shall not make any unbudgeted capital expenditure in excess expenditure, except for capital expenditures that, when added to all other capital expenditures made on behalf of the Company during the Pre-Closing Period, do not exceed $15,000 in any one instance 25,000 or $30,000 in the aggregatewhich are otherwise set forth on Schedule 4.2(k); (kl) no Acquired the Company shallshall not: (i) enter into, or permit any of the assets owned or used by it to become bound by, any Contract that is or would constitute a Material Contract (other than the sale or license of Company Products and Company Services on a non-exclusive basis to end users thereof in the ordinary course of business consistent with past practices pursuant to agreements in the form provided to Parent prior to the date hereof)Contract; or (ii) amend or prematurely terminate, or waive any material right or remedy under, any Contract that is or would constitute a Material such Contract; (lm) no Acquired the Company shall: shall not, except as set forth on Schedule 4.2(m): (i) acquire, lease or license any right or other asset from any other PersonPerson for an aggregate value in excess of $25,000; (ii) sell or otherwise dispose of, or lease or license, any right or other asset to any other Person or amend or modify any Contract identified in Section 2.11(s) of the Disclosure SchedulePerson; or (iii) waive or relinquish any right, in right material to the case conduct of each the business of (i), (ii) and (iii), except in the ordinary course of business consistent with past practicesCompany as currently conducted; (mn) no Acquired the Company shallshall not: (i) lend money to any Person (except that the Company may make routine travel or business expense advances to current employees of the Company in the ordinary course of business consistent with past practices)Person; or (ii) incur or guarantee any Indebtednessindebtedness for borrowed money (other than Promissory Notes issued to Catalyst, Kodiak or Kodiak Ventures which Promissory Notes shall convert into shares of the Company’s Series A-1 Preferred Stock immediately prior to the Closing); (no) no Acquired the Company shall: shall not, except as set forth on Schedule 4.2(o): (i) enter into any collective bargaining agreement; (ii) establish, adopt, amend or terminate any Company Benefit Plan (other than (A) as may have been required by the terms of the Company Benefit Employee Plan, (B) standard renewals of Company Benefit Plans in accordance with any automatic or elective renewal terms contained therein, (C) the involuntary termination of any employee for which a general release of claims in favor of the Company was obtained or (D) the termination of any consulting or independent contractor pursuant to the terms of his or her consulting agreement)except as otherwise contemplated under this Agreement; (iiiii) pay, or make any new commitment to pay, pay any bonus or make any profit-sharing payment, cash incentive payment or similar payment, other than commissions paid in the ordinary course of business and consistent with past practices; (iviii) increase, or make any new commitment to increase, increase the amount of the wages, salary, commissions, fringe benefits, employee benefits or other compensation (including equity-based compensation, whether payable in cash or otherwise) or remuneration payable to any of its directors, officers or employees; (v) fund, or make any commitment to fund, any compensation obligation (whether by grantor trust or otherwise); (viiv) promote or change the title of any of its employees (retroactively or otherwise); or (viiv) hire or make an offer to hire any new employee; (op) no Acquired the Company shall not change any of its methods of accounting or accounting practices in any material respect; (pq) no Acquired the Company shall not make or change any Tax election or election, file an amended Tax Return, adopt or change a material an accounting method in respect of Taxes (other than in circumstances where such election or adoption is made on a Tax Return required to be filed under applicable Legal Requirements other than for the purpose of making such election or adopting such method)Taxes, enter into a Tax allocation agreementagreement or other agreement with respect to Taxes, Tax sharing agreement, Tax indemnity agreement or closing agreement (other than customary Tax allocation or Tax sharing provisions in real property leases and subleases or other commercial contracts not primarily related to Taxes)agreement, settle or compromise comprise a material claim, notice, audit report or assessment in respect of Taxes, request a ruling with respect to Taxes, grant any power of attorney relating to Tax matters, prepare any Tax Return in a manner inconsistent with past practices, or consent to an extension or waiver of the statutory limitation period applicable to a claim or assessment in respect of Taxes, file a U.S. federal income tax return more than thirty days prior to the extended due date for such return, or fail to timely make all permitted applications for automatic extensions of time to file U.S. federal income tax returns on IRS Form 7004; (qr) no Acquired the Company shall not commence or settle any Legal Proceeding; (rs) no Acquired the Company shall perform not accelerate the collection of any acts with respect to Patent applications accounts receivable or take delay the payment of any actions involving the United States Patent and Trademark Officeaccounts payable; and (st) no Acquired the Company shall not agree or commit to take any of the actions described in clauses “(d)” through “(rs)” above. Notwithstanding the foregoing, the Company may take any action (i) described in clauses “(da)” through “(st)” above if if: Parent gives its prior written consent to the taking of such action by the Company, ; (iiB) such action is expressly contemplated by this Agreement or the other Transaction Documents or (C) such action is described in Section 4.2 of the Disclosure Schedule after consultation with Parent, and (iii) expressly required by this Agreement or any Legal RequirementSchedule.

Appears in 1 contract

Samples: Merger Agreement (Veracyte, Inc.)

Operation of the Business of the Company. During the Pre-Closing Period, the Company agrees to operate the business of the Company to shall ensure that: (a) each Acquired Company shall conduct its business and operations in the ordinary course and in substantially the same manner as such business and operations have been conducted prior to the date of this Agreement, including management of cash in the ordinary course and in substantially the same manner (which includes normal payment of payables and normal collection of receivables); (b) each Acquired Company shall use commercially reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and maintain its relations and goodwill good will with all suppliers, customers, landlords, creditors, employees and other Persons having business relationships with the Acquired Companies; (c) upon request by Parent, each Acquired Company shall report regularly to Parent concerning operational, financial, regulatory, and Intellectual Property matters Property, and otherwise report regularly to Parent concerning the status of the business of the Acquired Companies; (d) no Acquired Company shall cancel any of its insurance policies identified in Section 2.19(a2.19(b) of the Disclosure Schedule or reduce the amount of any insurance coverage provided by such insurance policies; (e) no Acquired Company shall declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock or other securities, or repurchase, redeem, redeem or otherwise reacquire or adjust the conversion price of any shares of capital stock or other securities, except repurchases of unvested shares or cancellation of unvested options in connection with the termination of the service relationship with any employee and in connection with the termination of the service relationship with any other service provider pursuant to stock option or stock purchase agreements in effect on the date hereof; (f) no Acquired Company shall sell, issue or authorize the issuance of: (i) any capital stock or other security; (ii) any option or right to acquire any capital stock (or cash based on the value of capital stock) or other security; or (iii) any instrument convertible into or exchangeable for any capital stock (or cash based on the value of capital stock) or other security (except that the Company shall be permitted to issue Common Stock upon the exercise of OptionsOptions or Warrants, or upon the conversion of Preferred Stock, in each case outstanding as of the date of this Agreement and in accordance with their terms as in effect on the date of this Agreement); provided, however, that the Company shall timely grant Options or other securities of the Company pursuant to and in accordance with any promise, commitment or other Contract to grant such Options or other securities of the Company which is outstanding as of the date of this Agreement and is set forth on Section 4.2(f) of the Disclosure Schedule; (g) no Acquired Company shall amend or waive any of its rights under, or permit the acceleration of vesting under: under (except as provided for under any Stock Plan as of the date of this Agreement): (i) any provision of any Stock Plan; (ii) any provision of any agreement evidencing any outstanding Option; (iii) any provision of any restricted stock agreement; or (iv) any other compensation obligation; (h) no Acquired Company shall amend or permit the adoption of any amendment to any Charter Document, or effect or permit any Acquired Company to become a party to any Acquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (i) no Acquired Company shall form any Subsidiary or acquire any equity interest or other interest in any other Entity; (j) no Acquired Company shall make any unbudgeted capital expenditure in excess of $15,000 10,000 in any one instance or $30,000 25,000 in the aggregate; (k) no Acquired Company shall: (i) enter into, or permit any of the assets owned or used by it to become bound by, any Contract that is or would constitute a Material Contract (other than the sale or license of Company Products and Company Services on a non-exclusive basis to end users thereof in the ordinary course of business consistent with past practices pursuant to agreements in the form provided to Parent prior to the date hereof)Contract; or (ii) amend or prematurely terminate, or waive any material right or remedy under, any Contract that is or would constitute a Material Contract; (l) no Acquired Company shall: (i) acquire, lease or license any right or other asset from any other Person; (ii) sell or otherwise dispose of, or lease or license, any right or other asset to any other Person or amend or modify any Contract identified in Section 2.11(s2.11(t)(i) of the Disclosure Schedule; or (iii) waive or relinquish any right, in the case of each of (i), (ii) and (iii), except in the ordinary course of business consistent with past practices; (m) no Acquired Company shall: (i) lend money to any Person (except that the Company may make routine travel or business expense advances to current employees of the Company in the ordinary course of business consistent with past practices); or (ii) incur or guarantee any Indebtedness; (n) no Acquired Company shall: (i) enter into any collective bargaining agreement; (ii) establish, adopt, amend or terminate any Company Benefit Plan (other than (A) as may have been required by the terms of the Company Benefit Plan, (B) standard renewals of Company Benefit Plans in accordance with any automatic or elective renewal terms contained therein, (C) the involuntary termination of any employee for which a general release of claims in favor of the Company was obtained or (D) the termination of any consulting or independent contractor pursuant to the terms of his or her consulting agreement); (iii) pay, or make any new commitment to pay, any bonus or make any profit-sharing payment, cash incentive payment or similar payment, other than commissions paid in the ordinary course of business and consistent with past practices; (iv) increase, or make any new commitment to increase, the amount of the wages, salary, commissions, fringe benefits, employee benefits or other compensation (including equity-based compensation, whether payable in cash or otherwise) or remuneration payable to any of its directors, officers or employees; (v) fund, or make any commitment to fund, any compensation obligation (whether by grantor trust or otherwise); (vi) promote or change the title of any of its employees (retroactively or otherwise); or (vii) hire or make an offer to hire any new employee; (o) no Acquired Company shall change any of its methods of accounting or accounting practices in any material respect; (p) no Acquired Company shall make or change any Tax election or election, adopt or change a material accounting method in respect of Taxes (other than in circumstances where such election or adoption is made on a Tax Return required to be filed under applicable Legal Requirements other than for the purpose of making such election or adopting such method)Taxes, enter into a Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement (other than customary Tax allocation or Tax sharing provisions in real property leases and subleases or other commercial contracts not primarily related to Taxes)agreement, settle or compromise a material claim, notice, audit report claim or assessment in respect of Taxes, request a ruling with respect to Taxes, grant any power of attorney relating to Tax matters, prepare any Tax Return in a manner inconsistent with past practices, or consent to an extension or waiver of the statutory limitation period applicable to a claim or assessment in respect of Taxes, file a U.S. federal income tax return more than thirty days prior to the extended due date for such return, or fail to timely make all permitted applications for automatic extensions of time to file U.S. federal income tax returns on IRS Form 7004; (q) no Acquired Company shall commence or settle any Legal Proceeding; (r) no Acquired Company shall perform any acts with respect to Patent applications or take any actions involving the United States Patent and Trademark Office; and (s) no Acquired Company shall agree or commit to take any of the actions described in clauses “(d)” through “(r)” above. Notwithstanding the foregoing, the Company may take any action (i) required by the terms of this Agreement, (ii) described in clauses “(d)” through “(s)” above above, if Parent gives its prior written consent to the taking of such action by the Company, and (iiiii) described in Section 4.2 of the Disclosure Schedule after consultation with Parent, and (iii) expressly required by this Agreement or any Legal Requirement.

Appears in 1 contract

Samples: Merger Agreement (Under Armour, Inc.)

Operation of the Business of the Company. During the Pre-Closing Period, the Company agrees to operate the business shall, and shall cause each of the Company to ensure thatother Acquired Companies to: (a) each Acquired Company shall conduct its business and operations in all material respects in the ordinary course and in substantially the same manner as such business and operations have been conducted prior to the date of this Agreement, including management of cash in the ordinary course and in substantially the same manner (which includes normal payment of payables and normal collection of receivables); (b) each Acquired Company shall use commercially reasonable efforts to preserve intact its current business organizationorganization and assets, keep available the services of its current officers and employees and maintain its relations and goodwill with all suppliers, customers, landlords, creditors, employees and other Persons having material business relationships with the Company or any other Acquired CompaniesCompany (other than terminations of employees for cause); (c) upon request by Parent, each Acquired Company shall report to Parent concerning operational, financial, regulatory, and Intellectual Property matters and otherwise report to Parent concerning the status of the business of the Acquired Companies; (d) no Acquired Company shall not cancel any of its respective insurance policies identified in Section 2.19(a) Part 2.16 of the Disclosure Schedule or reduce the amount of any insurance coverage provided by such insurance policiespolicies with respect to the assets, operations and activities of the Acquired Companies as are in effect as of the date of this Agreement; (ed) no Acquired Company shall not issue, declare, accrue, set aside aside, deliver, pledge, encumber, sell, or dispose, or pay any dividend or make any other distribution in respect of of, any shares of capital stock Company Capital Stock, or other securitiesOwnership Interests of the Company or any other Acquired Company, or repurchase, redeem, redeem or otherwise reacquire or adjust the conversion price of any shares of capital stock Company Capital Stock or other securities, except repurchases Ownership Interests of the Company or any other Acquired Company (other than (i) forfeitures of unvested shares or cancellation of unvested options in connection with the Company Options upon termination of the service relationship with any employee and in connection with the termination of the service relationship with any other service provider pursuant to stock option or stock purchase award agreements in effect on the date hereof, or (ii) redemptions or repurchases pursuant to the terms of Contracts of the Company and its Subsidiaries in effect on the date hereof); (fe) no Acquired Company shall not sell, issue or authorize the issuance of: (i) any capital stock stock, other security or Ownership Interest of the Company or any other securityAcquired Company; (ii) any option or right to acquire any capital stock (or cash based on the value of capital stock) ), other security or Ownership Interest of the Company or any other securityAcquired Company; or (iii) any instrument convertible into or exchangeable for any capital stock (or cash based on the value of capital stock) or ), other security or Ownership Interest of the Company or any other Acquired Company (except that the Company shall be permitted to issue Common Company Capital Stock upon the exercise of Options, Company Options or upon the conversion of Company Preferred Stock, in each case outstanding as of the date of this Agreement and in accordance with their terms as in effect on the date of this Agreement); provided, however, that the Company shall timely grant Options or other securities of the Company pursuant to and in accordance with any promise, commitment or other Contract to grant such Options or other securities of the Company which is outstanding as of the date of this Agreement and is set forth on Section 4.2(f) of the Disclosure Schedule; (gf) no Acquired Company shall amend or waive any of its rights under, or permit the acceleration of vesting under: not (i) any provision of any Stock Plan; (ii) any provision of any agreement evidencing any outstanding Option; (iii) any provision of any restricted stock agreement; or (iv) any other compensation obligation; (h) no Acquired Company shall amend or permit the adoption of any amendment to the Charter Documents of the Company or any Charter Document, or effect or permit any other Acquired Company to become a party to or (ii) authorize or facilitate any Acquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transactiontransaction with respect to the Company Capital Stock or (iii) adopt a plan or agreement of complete or partial bankruptcy, liquidation, dissolution, restructuring, merger, consolidation, recapitalization, reorganization or the like; (ig) no Acquired Company shall form not acquire (by merger, consolidation or combination, or acquisition of stock or assets) any Subsidiary business or acquire any equity interest or other interest Ownership Interest in any other Entity; (jh) no Acquired Company shall make any unbudgeted capital expenditure in excess of $15,000 in any one instance or $30,000 in the aggregate; (k) no Acquired Company shallnot: (i) enter intomake any loan, advance or permit any of the assets owned capital contribution to or used by it to become bound by, any Contract that is or would constitute a Material Contract (other than the sale or license of Company Products and Company Services on a non-exclusive basis to end users thereof investment in the ordinary course of business consistent with past practices pursuant to agreements in the form provided to Parent prior to the date hereof); or (ii) amend or prematurely terminate, or waive any material right or remedy under, any Contract that is or would constitute a Material Contract; (l) no Acquired Company shall: (i) acquire, lease or license any right or other asset from any other Person; (ii) sell or otherwise dispose of, or lease or license, any right or other asset to any other Person or amend or modify any Contract identified in Section 2.11(s) of the Disclosure Schedule; or (iii) waive or relinquish any right, in the case of each of (i), (ii) and (iii), except in the ordinary course of business consistent with past practices; (m) no Acquired Company shall: (i) lend money to any Person (except that the each Acquired Company may make routine travel or and business expense advances to current employees of the such Acquired Company in the ordinary course of business consistent with past practices); or (ii) incur or guarantee any IndebtednessIndebtedness in excess of $5,000,000 beyond the Indebtedness outstanding as of the date of the 2015 Audited Financial Statements, other than indebtedness in connection with borrowings under the Company’s existing Credit Facility in the ordinary course of business consistent with the Company’s past practices (in each case, to the extent the amount of such Indebtedness is included in the Estimated Closing Indebtedness Amount); (ni) no Acquired other than as required by applicable Legal Requirement or the terms of any Company shallEmployee Plan or Contract in effect prior to the date of this Agreement, not: (i) enter into any collective bargaining agreementagreement or Contract with any trade union or labor organization or agree to pay any pension, retirement allowance, termination, or severance pay or other employee benefit not required by any Company Employee Plan or Contract in effect prior to the date of this Agreement; (ii) establish, adopt, amend amend, increase or terminate any Company Benefit Plan (other than (A) as may have been required by the terms Employee Plan, in any case, that establishes or materially increases bonus, compensation or benefits for any director, officer or executive of the Company Benefit Plan, (B) standard renewals of Company Benefit Plans in accordance with or any automatic or elective renewal terms contained therein, (C) the involuntary termination of any employee for which a general release of claims in favor of the Company was obtained or (D) the termination of any consulting or independent contractor pursuant to the terms of his or her consulting agreement)other Acquired Company; (iii) pay, or make any new commitment to pay, any bonus or make any profit-sharing payment, cash incentive payment or similar payment, other than commissions paid any such payment made in the ordinary course of business and consistent with past practices; (iv) increase, or make any new commitment to increase, the amount of the wages, salary, commissions, fringe benefits, benefits or other employee benefits or other compensation (including equity-based compensation, whether payable in cash or otherwise) or remuneration payable to any of its directors, officers officers, employees or employeesservice providers other than annual merit increases or other increases in the ordinary course of business consistent with past practices; (v) fund, or make any commitment to fund, any compensation obligation (whether by grantor trust or otherwise), other than in the ordinary course of business consistent with past practices; (vi) promote or change the title of any of its employees (retroactively or otherwise); or (vii) hire hire, or make an offer to hire hire, any new employeeemployee on a full-time, part-time, consulting or other basis with an annual compensation in excess of $200,000 and unless such hiring is in the ordinary course of business consistent with past practice; (vii) take any action to accelerate any payment or benefit or the funding of any payment or benefit, payable or to be provided to any of its directors, officers, employees, independent contractors or consultants; or (viii) terminate any officer, other than for cause; (oj) no Acquired Company shall not change any of its methods of financial or tax accounting or accounting methods, policies, procedures or practices in any material respectrespect (other than as required by applicable accounting or auditing standards) or change the Company’s fiscal year; (pk) no Acquired Company shall except as to the extent required by applicable Legal Requirement, not: (i) make or change any material Tax election or adopt or election, (ii) change a material any annual Tax accounting method in respect of Taxes period, (other than in circumstances where such election or adoption is made on a Tax Return required to be filed under applicable Legal Requirements other than for the purpose of making such election or adopting such method), iii) enter into a Tax allocation agreement, Tax sharing agreement, or Tax indemnity agreement or closing agreement agreement, (other than customary Tax allocation or Tax sharing provisions in real property leases and subleases or other commercial contracts not primarily related to Taxes)iv) amend a material Company Return, (v) settle or otherwise compromise a material any claim, notice, audit report or assessment in respect of relating to material Taxes, (vi) enter into any closing agreement or similar agreement relating to material Taxes, (vii) otherwise settle any dispute relating to material Taxes, (viii) request a any ruling or similar guidance with respect to Taxes, grant any power of attorney relating to Tax matters, prepare any Tax Return in a manner inconsistent with past practices, or (ix) consent to an extension or waiver of the statutory limitation period applicable to a claim or assessment in respect of material Taxes; (l) not make any mortgage, file a U.S. federal income tax return more pledge of any of its material assets or any material portion of the assets or otherwise permit any of its material assets or material portion of the assets to become subject to any Encumbrance, except for Permitted Encumbrances and pledges of immaterial assets made in the ordinary course of business consistent with the past practices of the Acquired Companies; (m) not sell, assign or transfer any tangible assets of any Acquired Company except in the ordinary course of business consistent with past practices; (n) not sell, assign, license (except in the ordinary course of business consistent with past practices) or transfer, mortgage, pledge of subject to any Encumbrance, or abandon, permit to lapse or otherwise dispose of, any of the Owned Intellectual Property; (o) not settle or compromise any Legal Proceeding, other than thirty days any routine workers’ compensation matters that do not impose any Liability on the Company or any other Acquired Company other than cash payments paid prior to the extended due date for such returnClosing Date of less than $250,000; (p) not enter into any transaction, agreement or fail arrangement with any Related Party (other than pursuant to timely make all permitted applications for automatic extensions of time to file U.S. federal income tax returns on IRS Form 7004a Company Employee Plan); (q) no Acquired Company shall commence or settle not implement any Legal Proceedingemployee layoffs that could implicate WARN; (r) no Acquired Company shall perform any acts manage its working capital in the ordinary course of business consistent with respect to Patent applications past practices (including (A) not deferring, delaying or take any actions involving postponing the United States Patent payment of accounts payable or other liabilities or obligations other than in the ordinary course of business consistent with past practices, (B) not accelerating the collection of accounts receivable other than in the ordinary course of business consistent with past practices and Trademark Office(C) managing and purchasing inventory in the ordinary course of business consistent with past practices); and (s) no Acquired Company shall not agree or commit to take any of the actions described in clauses “(dc)” through “(r)” above. Notwithstanding the foregoing, the Company may take any action described in: (i) described in clauses “(dc)” through “(sr)” above if if: (A) Parent gives its prior written consent to the taking of such action by the CompanyCompany (which consent shall not be unreasonably conditioned, withheld, delayed or denied); (B) required by Legal Requirement, or (C) such action is expressly required to be taken by this Agreement; and (ii) described in Section Part 4.2 of the Disclosure Schedule after consultation with Parent, and (iii) expressly required by this Agreement or any Legal RequirementSchedule.

Appears in 1 contract

Samples: Merger Agreement (Compass Group Diversified Holdings LLC)

Operation of the Business of the Company. During Except with the prior written consent of Purchaser, during the Pre-Closing Period, the Company agrees to operate the business shall ensure, and each of the Selling Stockholders shall support the Company to ensure in ensuring and shall not hinder the Company from ensuring that: (a) each Acquired the Company shall conduct its business and operations in the ordinary course and in substantially the same manner as such business and operations have been conducted prior to the date of this Agreement, including management of cash in the ordinary course and in substantially the same manner (which includes normal payment of payables and normal collection of receivables); (b) each Acquired the Company shall use commercially reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and maintain its relations and goodwill good will with all suppliers, customers, landlords, creditors, employees creditors and other Persons having business relationships with the Acquired Companiesemployees; (c) upon request by Parent, each Acquired the Company shall not cancel any of its insurance policies identified or required to be identified in Part 2.17 of the Disclosure Schedule; (d) the Company's officers shall report regularly to Parent concerning operational, financial, regulatory, and Intellectual Property matters and otherwise report to Parent Purchaser concerning the status of the business of the Acquired Companies; (d) no Acquired Company shall cancel any of its insurance policies identified in Section 2.19(a) of the Disclosure Schedule or reduce the amount of any insurance coverage provided by such insurance policiesCompany; (e) no Acquired the Company shall not declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock or other securities, or repurchase, redeem, redeem or otherwise reacquire or adjust the conversion price of any shares of capital stock or other securities, except repurchases of unvested shares or cancellation of unvested options in connection with the termination of the service relationship with any employee and in connection with the termination of the service relationship with any other service provider pursuant to stock option or stock purchase agreements in effect on the date hereof; (f) no Acquired the Company shall not sell, issue or authorize the issuance of: (i) any capital stock or other security; (ii) any option or right to acquire any capital stock (or cash based on the value of capital stock) or other security; or (iii) any instrument convertible into or exchangeable for any capital stock (or cash based on the value of capital stock) or other security (except that the Company shall be permitted to issue Common Stock upon the exercise of Options, or upon the conversion of Preferred Stock, in each case outstanding as of the date of this Agreement and in accordance with their terms as in effect on the date of this Agreement); provided, however, that the Company shall timely grant Options or other securities of the Company pursuant to and in accordance with any promise, commitment or other Contract to grant such Options or other securities of the Company which is outstanding as of the date of this Agreement and is set forth on Section 4.2(f) of the Disclosure Schedulesecurity; (g) no Acquired the Company shall amend or waive any of its rights under, or permit the acceleration of vesting under: (i) any provision of any Stock Plan; (ii) any provision of any agreement evidencing any outstanding Option; (iii) any provision of any restricted stock agreement; or (iv) any other compensation obligation; (h) no Acquired Company shall not amend or permit the adoption of any amendment to any the Company's Charter DocumentDocuments, or effect or permit any Acquired Company to become a party to any Acquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (ih) no Acquired the Company shall not form any Subsidiary or acquire any equity interest or other interest in any other Entity; (ji) no Acquired the Company shall not make any unbudgeted capital expenditure in excess expenditure, except for capital expenditures that, when added to all other capital expenditures made on behalf of the Company during the Pre-Closing Period, do not exceed $15,000 in any one instance or $30,000 in the aggregate10,000; (kj) no Acquired the Company shallshall not: (i) enter into, or permit any of the assets owned or used by it to become bound by, any Contract that is or would constitute a Material Contract (other than the sale or license of Company Products and Company Services on a non-exclusive basis to end users thereof in the ordinary course of business consistent with past practices pursuant to agreements in the form provided to Parent prior to the date hereof)Contract; or (ii) amend or prematurely terminate, or waive any material right or remedy under, any Contract that is or would constitute a Material such Contract; (lk) no Acquired the Company shallshall not: (i) acquire, lease or license any right or other asset from any other PersonPerson for an aggregate value in excess of $50,000 ; (ii) sell or otherwise dispose of, or lease or license, any right or other asset to any other Person or amend or modify any Contract identified in Section 2.11(s) of the Disclosure SchedulePerson; or (iii) waive or relinquish any right, in the case of each of clauses “(i), (ii) and ” through “(iii), except in the ordinary course of business consistent with past practices; (ml) no Acquired the Company shallshall not: (i) lend money to any Person (except that the Company may make routine travel or business expense advances to current employees of the Company in the ordinary course of business consistent with past practices); or (ii) incur or guarantee any Indebtednessindebtedness for borrowed money; (nm) no Acquired the Company shallshall not: (i) enter into any collective bargaining agreement; (ii) establish, adopt, amend or terminate any Company Benefit Plan (other than (A) as may have been required by the terms of the Company Benefit Employee Plan, (B) standard renewals of Company Benefit Plans in accordance with any automatic or elective renewal terms contained therein, (C) the involuntary termination of any employee for which a general release of claims in favor of the Company was obtained or (D) the termination of any consulting or independent contractor pursuant to the terms of his or her consulting agreement); (iiiii) pay, or make any new commitment to pay, pay any bonus or make any profit-sharing payment, cash incentive payment or similar payment, other than commissions paid in the ordinary course of business and consistent with past practices; (iviii) increase, or make any new commitment to increase, increase the amount of the wages, salary, commissions, fringe benefits, employee benefits or other compensation (including equity-based compensation, whether payable in cash or otherwise) or remuneration payable to any of its directors, officers or employees; (v) fund, or make any commitment to fund, any compensation obligation (whether by grantor trust or otherwise); (viiv) promote or change the title of any of its employees (retroactively or otherwise); or (viiv) hire or make an offer to hire any new employee; (on) no Acquired the Company shall not change any of its methods of accounting or accounting practices in any material respect; (po) no Acquired the Company shall not make or change any Tax election or election, adopt or change a material accounting method in respect of Taxes (other than in circumstances where such election or adoption is made on a Tax Return required to be filed under applicable Legal Requirements other than for the purpose of making such election or adopting such method)Taxes, enter into a Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement (other than customary Tax allocation or Tax sharing provisions in real property leases and subleases or other commercial contracts not primarily related to Taxes)agreement, settle or compromise comprise a material claim, notice, audit report or assessment in respect of Taxes, request a ruling with respect to Taxes, grant any power of attorney relating to Tax matters, prepare any Tax Return in a manner inconsistent with past practices, or consent to an extension or waiver of the statutory limitation period applicable to a claim or assessment in respect of Taxes, file a U.S. federal income tax return more than thirty days prior to the extended due date for such return, or fail to timely make all permitted applications for automatic extensions of time to file U.S. federal income tax returns on IRS Form 7004; (qp) no Acquired the Company shall not commence or settle any Legal Proceeding; (r) no Acquired Company shall perform any acts with respect to Patent applications or take any actions involving the United States Patent and Trademark Office; and (sq) no Acquired the Company shall not agree or commit to take any of the actions described in clauses “(de)” through “(rp)” above. Notwithstanding the foregoing, the Company may take any action (i) described in clauses “(d)” through “(s)” above if Parent gives its prior written consent to the taking of such action by the Company, (ii) described in Section 4.2 of the Disclosure Schedule after consultation with Parent, and (iii) expressly required by this Agreement or any Legal Requirement.

Appears in 1 contract

Samples: Stock Purchase Agreement (Silicon Graphics International Corp)

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