Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts. (b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any of the following: (i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock or repurchase, redeem or otherwise reacquire, directly or indirectly, any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement); (ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries; (iii) except as required to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions; (iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity; (A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”); (vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause; (vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned); (viii) enter into any material transaction other than in the Ordinary Course of Business; (ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business; (x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business); (xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes; (xii) enter into, materially amend or terminate any Company Material Contract; (xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures; (xiv) initiate or settle any Legal Proceeding (xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or (xvi) agree, resolve or commit to do any of the foregoing. (c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 5 contracts
Samples: Merger Agreement (Bell Robert G.), Merger Agreement (Tanimoto Sarina), Merger Agreement (Silverback Therapeutics, Inc.)
Operation of the Company’s Business. (a) Except During the Pre-Closing Period:
(i) as set forth in Section 4.2(a) the Company shall ensure that each of the Company Disclosure Schedule, Entities conducts its business and operations: (A) in the ordinary course and in accordance with past practices; and (B) in material compliance with all applicable Laws and with the requirements of all Contracts of Company Entities that constitute Material Contracts;
(ii) as expressly permitted by or required in accordance this Agreementthe Company shall use commercially reasonable efforts to ensure that each of the Company Entities preserves intact its current business organization, keeps available the services of its current officers and other key employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, distributors, resellers, employees and other Persons having material business relationships with the respective Company Entities;
(iii) as the Company shall promptly notify Parent in writing of (A) any notice from any Person alleging that the Consent of such Person is or may be required by applicable Lawin connection with any of the Transactions and (B) any Legal Proceeding commenced, or, to the Knowledge of the Company, threatened against, relating to, involving or otherwise affecting any of the Company Entities that relates to the Merger or any of the other Transactions;
(iv) use commercially reasonable efforts to keep in connection full force all insurance policies referred to in Section 3.26 (other than any such policies that are immediately replaced with substantially similar policies), provided that if it is unable to do so, it shall notify Parent at least 20 days before such policies terminate or otherwise lapse; and
(v) the COVID-19 pandemic, Company shall (to the extent reasonably necessary, (Arequested by Parent and permitted under applicable Law) to protect cause the health officers and safety other key employees of the Company’s or any Company Entities to freely communicate (without limitation) with Parent regarding the Company Entities’ results of its Subsidiaries’ employees, operations and material developments.
(Bb) to respond to third party supply or service disruptions caused by Without limiting the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, generality of the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned)foregoing, during the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, (ii) except as set forth in Section 4.2(bSchedule 5.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the Parent’s prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditionedand except as permitted by Section 6.2(d), at all times during the Pre-Closing Period, the Company (A) shall not, nor and (B) shall it cause or not permit any of its Subsidiaries the other Company Entities to, do any of the following:
(i) amend its certificate of incorporation or bylaws or comparable organizational documents or create any new Subsidiaries;
(ii) issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any security of any Company Entity, except for the issuance and sale of shares of Company Common Stock pursuant to Company Equity Awards outstanding as of the date of this Agreement upon the exercise or vesting thereof, as applicable;
(iii) directly or indirectly acquire, repurchase or redeem any security of any Company Entity, except in connection with Tax withholdings and exercise price settlements upon the exercise, vesting or issuance of shares under Company Equity Awards;
(iv) (A) split, combine, subdivide or reclassify any shares of capital stock, or (B) declare, accrue, set aside or pay any dividend or make any other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock, except for cash dividends made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its capital stock wholly-owned Subsidiaries;
(v) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any Company Entity, except for this Agreement and the Transactions;
(vi) (A) redeem, repurchase, redeem prepay, defease, cancel, incur, create, assume or otherwise reacquireacquire or modify in any material respect any long-term or short-term debt for borrowed monies or issue or sell any debt securities or calls, directly or indirectlyoptions, any shares of its capital stock warrants or other rights to acquire any debt securities (except in connection with of any Company Entity or enter into any agreement having the payment economic effect of any of the exercise price and/or withholding Taxes foregoing, except for (1) debt incurred upon in the exerciseordinary course of business under letters of credit, settlement lines of credit or vesting other credit facilities or arrangements in effect on the date hereof, (2) loans or advances between the Company and any direct or indirect Subsidiaries, or between any direct or indirect Subsidiaries of the Company in the ordinary course of business consistent with past practices, and (3) the issuance of credit to new customers for the purchase of products or services of the Company Entities in the ordinary course of business consistent with past practices, (B) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any award granted under other Person, except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company Plan in accordance with the terms of such award in effect place on the date of this Agreement);
, (iiC) sellmake any loans, issue, grant, pledge advances (other than any retainer for legal services) or otherwise dispose of capital contributions to or encumber or authorize investments in any of the foregoing with respect to: other Person (A) any capital stock or other security of than the Company or any of its Subsidiaries (direct or indirect wholly-owned Subsidiaries), except for shares travel advances or business expenses in the ordinary course of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted business consistent with past practice to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iii) except as required to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of othersEntities, or (D) mortgage or pledge any asset owned or used by any Company Entity, or create or suffer to exist any Encumbrance thereupon (other than Permitted Encumbrances), except pursuant to the incurrence or payment terms of any Transaction Expensesletters of credit, make any capital expenditure lines of credit or other credit facilities or arrangements, in excess of effect on the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”)date hereof;
(vivii) other than except as may be required by applicable Law or the terms of this Agreement or of any Company Benefit Employee Plan as in effect on the date of this Agreement: , (A) enter into, adopt, terminateamend (including acceleration of vesting), establish modify or enter into terminate any bonus, profit sharing, incentive, compensation, severance, retention, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, change in control, pension, retirement, collective bargaining or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any Company Benefit Plan; Associate, (B) cause increase the compensation payable or permit to become payable to any Company Benefit Plan Associate, pay or agree to be amended in any material respect; (C) pay any special bonus or make special remuneration to any profit-sharing or similar payment toCompany Associate, or increase the amount pay or agree to pay any benefit not required by any Company Employee Plan as in effect as of the wagesdate hereof, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made except in the Ordinary Course ordinary course of Business business consistent with past practice and which do with respect to any Company Associate who is not exceeda member of the board of directors or officer, (C) hire any employee with an annual base salary in excess of $100,000 or at the aggregatelevel of Vice President, the amounts specifically budgeted therefore in the Company Budget; (D) increase the grant or pay any severance or change of control benefits offered termination pay to (or amend any such existing arrangement with) any current or new employeesformer member of the board of directors, officer, employee or independent contractor of any Company Entity, except in the ordinary course of business with respect to any employee or independent contractor who is not a member of the board of directors or consultants; officer, (E) hire increase benefits payable under any (x) officer existing severance or (y) employee whose annual base salary is termination pay policies or is expected to be more than $250,000 per year similar employment agreements, or (F) terminate accelerate the vesting or give notice of termination payment of, or fund or in any other way secure the payment, compensation or benefits under, any Company Employee Plan to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise the extent not required by applicable Law and after prior written consent the terms of Parent (which consent shall not be unreasonably withheld, delayed this Agreement or conditioned)such Company Employee Plan as in effect on the date of this Agreement;
(viii) enter into commence any material transaction other than Legal Proceeding or settle any pending or threatened Legal Proceeding, except for the settlement of any Legal Proceeding solely for money damages not in excess of $250,000 in the Ordinary Course of Businessaggregate and as would not be reasonably likely to have any adverse impact on any other Legal Proceeding;
(ix) acquire except as may be required as a result of a change in applicable Law or in GAAP, make any material asset or sell, lease or otherwise irrevocably dispose of change in any of its assets the accounting methods, principles or properties, practices used by it or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Businesschange an annual accounting period;
(x) sell, assign, transfer, license, sublicense (A) make or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, (B) settle or compromise any material federal, state, local or foreign income or other material Tax liability or submit any voluntary disclosure applicationliability, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or C) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes, (D) change any income annual Tax accounting period or method of Tax accounting, (E) file any materially amended Tax Return, (F) enter into any closing agreement with respect to any Tax or (G) surrender any right to claim a material Tax refund;
(xi) (A) acquire (by merger, consolidation or acquisition of stock or assets or otherwise) any other Entity or any material Taxes equity interest therein, (B) sell or otherwise dispose of, lease or license any properties or assets of any Company Entity (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course ordinary course of Business of not more than seven (7) monthsbusiness), which are material to the Company Entities, taken as a whole, (C) acquire, lease or adopt or change license any material accounting method right or other asset from any Person (other than in respect the ordinary course of Taxesbusiness consistent with past practice);
(xii) make any capital expenditures in excess of $50,000 individually or $200,000 in the aggregate;
(xiii) make any material changes or modifications to any investment or risk management policy or other similar policies (including with respect to hedging), or any cash management policy;
(xiv) other than in the ordinary course of business, enter into, materially or amend in any material respect, terminate or terminate fail to renew, any Company Material Contract;
(xiiixv) change any of its product return policies, product maintenance polices, service policies, product modification or upgrade policies in any material respect;
(xvi) enter into any material transaction with any of its Affiliates (other than a Company Entity) other than as required by Law pursuant to written arrangements in effect on the date of this Agreement and excluding any employment, compensation or GAAP, similar arrangements otherwise expressly permitted pursuant to this Section 5.2(b);
(xvii) abandon or permit to lapse any right to any material patent or patent application;
(xviii) take any action that is intended or is reasonably likely to change accounting policies or procedures;
result in the conditions set forth in Sections 7.1, 7.2, 7.3 (xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impedeexcept after compliance with Section 6.2(d)), interfere with7.5, hinder or delay the consummation of the Contemplated Transactions7.7, 7.11, 7.12, 7.13, 7.15 and 7.16 not being satisfied; or
(xvixix) agree, resolve agree or commit to do take any of the foregoingactions described in clauses above in this Section 5.2(b).
(c) Nothing During the Pre-Closing Period, the Company shall promptly notify Parent in writing of any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in ARTICLE 7 impossible or unlikely or that has had or could reasonably be expected to have or result in a Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any Legal Proceeding or material claim commenced or, to the Company’s Knowledge, threatened against or with respect to any of the Company Entities. No notification given to Parent pursuant to this Section 5.2(c) or any information or knowledge obtained pursuant to Section 5.1 shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations any of the Company prior remedies available to Parent under this Agreement.
(d) During the Effective Time. Prior to the Effective TimePre-Closing Period, the Company shall exercise, consistent with promptly notify Parent in writing if the terms and conditions Company has the right to exercise any right or option to repurchase shares of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent capital stock from any Company Associate or other Person upon termination of Parent shall be required with respect such Person’s service to any matter set forth in this Section 4.2 or elsewhere in this Agreement of the Company Entities. The Company shall not exercise any such repurchase right except to the extent that the requirement of such consent could violate any applicable Lawsdirected by Parent in writing.
Appears in 5 contracts
Samples: Merger Agreement (Aml Communications Inc), Merger Agreement (Aml Communications Inc), Merger Agreement (Aml Communications Inc)
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: (i) the Company shall ensure that each of the Company and its Subsidiaries shall conduct Acquired Corporations conducts its business and operations (A) in the Ordinary Course of Business ordinary course and in accordance with past practices or the operating plan previously delivered by the Company to Parent and (B) in compliance in all material respects with all applicable Laws Legal Requirements and the requirements of all Acquired Company Contracts that constitute Company Material Contracts; (ii) the Company shall use all reasonable efforts to ensure that each of the Acquired Corporations preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Acquired Corporations; (iii) the Company shall keep in full force all insurance policies referred to in Section 2.18 or replace any such policies that terminate with comparable or superior policies; (iv) the Company shall provide all notices, assurances and support required by any Acquired Corporation Contract relating to any Proprietary Asset in order to ensure that no condition under such Acquired Corporation Contract occurs which could result in, or could increase the likelihood of, any transfer or public disclosure by any Acquired Corporation of any Proprietary Asset; and (v) the Company shall (to the extent requested by Parent) cause its officers to report regularly to Parent concerning the status of the Company's business.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during During the Pre-Closing Period, the Company shall notnot (without the prior written consent of Parent), nor and shall it cause or not permit any of its Subsidiaries the other Acquired Corporations to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock stock, or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (securities, except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement for repurchases at less than fair market value pursuant to employment or vesting of any award granted under the Company Plan in accordance with the terms of such award consulting agreements in effect on prior to the date of this Agreement)hereof;
(ii) hire any new employees except employees hired to fill those positions identified on a schedule (the "New Company Employee Schedule") previously provided to Parent or employees hired to replace employees who terminate their employment with an Acquired Corporation during the Pre-Closing Period (the "New Company Employees");
(iii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any the issuance or grant of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company OptionsOptions or Company warrants outstanding on the date of this Agreement or the Exercise of Rights under the ESPP); , (B) any option, call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iii) except as required to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant options to non-exclusive licenses in the Ordinary Course purchase an aggregate of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvi) agree, resolve or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.up to
Appears in 4 contracts
Samples: Agreement and Plan of Merger and Reorganization (Arris Pharmaceutical Corp/De/), Merger Agreement (Sequana Therapeutics Inc), Merger Agreement (Sequana Therapeutics Inc)
Operation of the Company’s Business. (a) Except During the Pre-Closing Period the Company shall: (i) as set forth in Section 4.2(a) ensure that each of the Constituent Corporations conducts its business and operations (A) in the ordinary course and substantially in accordance with past practices, and (B) in material compliance with all applicable Legal Requirements and the requirements of all Company Disclosure Schedule, Material Contracts; (ii) as expressly permitted by or required in accordance this Agreementto the extent consistent with its business, use its reasonable best efforts to ensure that each of the Constituent Corporations preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, distributors, landlords, creditors, licensors, licensees and other Persons having business relationships with the respective Constituent Corporations; (iii) as provide all notices, assurances and support required by applicable Lawany Contract relating to any Proprietary Asset in order to ensure that no condition under such Contract occurs which could result in, or could increase the likelihood of any transfer or disclosure by any Constituent Corporation of any source code materials or other Proprietary Asset; and (iv) keep in connection full force and effect (with the COVID-19 pandemic, to the extent reasonably necessary, (Asame scope and limits of coverage) to protect the health and safety all insurance policies in effect as of the Company’s or any date of its Subsidiaries’ employees, this Agreement covering all material assets of the Constituent Corporations.
(Bb) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, (ii) except as set forth in Section 4.2(b) of the Company Disclosure Schedule, the Company shall not (iii) as required by applicable Law or (iv) with without the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed withheld or conditioneddelayed), at all times during the Pre-Closing Period, the Company and shall not, nor shall it cause or not permit any of its Subsidiaries the other Constituent Corporations to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)securities;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any the issuance or grant of the foregoing with respect to: (A) any capital stock or other security of or (B) any Company Stock Right (except that the Company or any of its Subsidiaries (except for shares of outstanding may issue Company Common Stock issued upon the valid exercise of Company Options); Options outstanding as of the date of this Agreement or pursuant to the Company's ESPP as in effect on the date hereof and may grant options out of the Company 1996 Incentive and Nonqualified Stock Option Plan (Bor on terms substantially equivalent to the terms of existing options granted under the Company 1996 Incentive and Nonqualified Stock Option Plan) to any optionemployee consistent with past practice, warrant or which options represent in the aggregate the right to acquire any capital stock or any other security, other no more than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course 250,000 shares (net of Business which are included in the calculation cancellations) of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its SubsidiariesCommon Stock);
(iii) except as required to give effect to anything in contemplation of the Closing, amend or waive any of its rights under, or its Subsidiaries’ Organizational accelerate the vesting under, any provision of any of the Company's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant, or other security or any related Contract;
(iv) amend or permit the adoption of any amendment to the Company Organization Documents, or effect or be become a party to any merger, consolidation, share exchange, business combinationCompany Acquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(Avi) make any capital expenditure except in the ordinary course of business not to exceed $125,000 in the aggregate;
(vii) enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any Company Material Contract, or amend or terminate, or waive or exercise any material right or remedy under, any Company Material Contract;
(viii) acquire, lease or license any right or other asset from any other Person or sell or otherwise dispose of, or lease or license, any right or other asset to any other Person (except in each case for immaterial assets acquired, leased, licensed or disposed of by the Company in the ordinary course of business and consistent with past practices, and except for licensing of intellectual property in the sale or licensing of the Company's products in the ordinary course of business and consistent with past practices), or waive or relinquish any material right;
(ix) lend money to any Person (except for the advancement of expenses to employeesPerson, directors and consultants in the Ordinary Course of Business), (B) or incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities except that the Company may make routine borrowings in the ordinary course of others, or (D) other than business and in accordance with past practices under the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess Company's credit facilities outstanding as of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement date hereof (the “Company Budget”without any amendment or modification thereto);
(vix) other than except as required by applicable Law Legal Requirements, establish, adopt or the terms of amend any Company Benefit Employee Plan as in effect on the date of this Agreement: (A) adoptor collective bargaining agreement, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases employees in base salary and annual cash bonus opportunities and payments made in the Ordinary Course excess of Business consistent with past practice and which do not exceed, $100,000 in the aggregate, the amounts specifically budgeted therefore in except that the Company Budget; may implement normally scheduled salary increases for employees other than officers of the Company;
(D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (Exi) hire any (x) officer or (y) new employee whose having an annual base salary is or is expected to be more than in excess of $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause100,000;
(viixii) recognize change any labor union of its methods of accounting or labor organizationaccounting practices in any respect, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned)GAAP;
(viiixiii) make any material Tax election;
(xiv) commence or settle any material Legal Proceeding;
(xv) enter into any material transaction or take any other than in material action outside the Ordinary Course ordinary course of Businessbusiness or inconsistent with past practices;
(ixxvi) acquire take, or permit the taking of any material asset or sellaction, lease or otherwise irrevocably dispose which could reasonably be expected to cause the vesting of any Company Options to be accelerated in accordance with the terms of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of BusinessCompany Stock Option Plans;
(xxvii) selltake, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant agree to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months)take, or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, intentionally omit to take any action which would (A) make any of the representations and warranties of the Company contained in this Agreement untrue or incorrect, (B) prevent the Company from performing or cause the Company not to change accounting policies perform its covenants hereunder, or procedures;(C) cause any of the conditions set forth in Section 6 or Section 7 not to be able to be satisfied prior to the Termination Date; or
(xivxviii) initiate agree or settle commit to take any Legal Proceedingof the actions described in clauses "(i)" through "(xvii)" of this Section 4.2(b).
(xvc) enter into During the Pre-Closing Period, the Company shall promptly notify Parent in writing of: (i) the discovery by the Company of any event, condition, fact or amend circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a Contract material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance, or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Company; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any condition set forth in Section 6 or Section 7 impossible or unlikely or that has had or would reasonably be expected to prevent have a Material Adverse Effect on the Constituent Corporations. No notification given to Parent pursuant to this Section 4.2(c) shall limit or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvi) agree, resolve or commit to do otherwise affect any of the foregoing.
(c) Nothing representations, warranties, covenants or obligations of the Company contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 3 contracts
Samples: Merger Agreement (Cuseeme Networks Inc), Merger Agreement (First Virtual Communications Inc), Merger Agreement (Cuseeme Networks Inc)
Operation of the Company’s Business. (a) Except During the Pre-Closing Period, except to the extent Parent shall otherwise consent in writing (such consent not to be unreasonably withheld or delayed) and except as required by this Agreement:
(i) the Company and its subsidiaries shall conduct its business and operations (A) in the ordinary course and in accordance with past practices and (B) in material compliance with all applicable laws and the material requirements of all Material Contracts to which any of them is a party;
(ii) the Company and its subsidiaries 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, licensors, licensees, employees and other persons having business relationships with the Company or any of its subsidiaries, as the case may be;
(iii) the Company shall keep in full force all insurance policies referred to in Section 3.24;
(iv) the Company shall provide all notices, assurances and support required by any Material Contract to which it or any of its subsidiaries is a party relating to any Company Intellectual Property in order to ensure that no condition under such Material Contract occurs that could result in, or could increase the likelihood of (A) any transfer or disclosure by the Company or any of its subsidiaries of any of their source code, or (B) a release from any escrow of any source code that has been deposited or is required to be deposited in escrow under the terms of such Material Contract to which either the Company or any of it subsidiaries is a party;
(v) the Company shall promptly notify Parent of (A) any notice or other communication from any person alleging that the consent of such person is or may be required in connection with the transactions contemplated by this Agreement, and (B) any claim or action commenced or, to the knowledge of the Company threatened against, relating to or involving or otherwise affecting the Company or any of its subsidiaries that relates to the consummation of the transactions contemplated by this Agreement; and
(vi) the Company shall (to the extent reasonably requested by Parent) cause its officers to report regularly to Parent concerning the status of the Company's business.
(b) During the Pre-Closing Period, except as set forth in on Section 4.2(a5.02(b) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreementthe Company shall not, (iii) as required by applicable Law, (iv) in connection with without the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety prior written consent of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheldwithheld or delayed, delayed or conditioned), during the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall not, nor shall it cause or permit any of its Subsidiaries subsidiaries to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock or stock,
(ii) repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities except for repurchases of outstanding unvested shares of Company Common Stock in respect of which the Company has a right under specified circumstances to repurchase such shares at a fixed purchase price (except which shall not exceed the Cash Consideration) pursuant to restricted stock purchase agreements in connection with the payment form attached as Exhibit A to Section 3.03 of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)Disclosure Schedule;
(iiiii) sell, issue, grantgrant or authorize the issuance or grant of, or pledge or otherwise dispose of or encumber or authorize subject to any of the foregoing with respect to: Lien (A) any shares of capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); security, (B) any option, call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security security, or (D) any phantom stock or stock rights, SARs or stock-based performance units, except that (1) the Company may issue Company Common Stock (x) upon the valid exercise of Stock Options and Warrants outstanding as of the date of this Agreement in accordance with their present terms, and (y) pursuant to the ESPP, and (2) the Company may grant up to 500,000 options under its stock option plans to its existing employees and employees hired by the Company after the date of this Agreement in the ordinary course of business and consistent with past practice;
(iv) amend or waive any of its rights under, or accelerate the vesting under, any provision of any of the Company Stock Plans, any provision of any agreement evidencing any outstanding Stock Option or any restricted stock purchase agreement, or otherwise modify any of its Subsidiariesthe terms of any outstanding Stock Option, Warrant or other security or any related Contract;
(iiiv) except as required amend or permit the adoption of any amendment to give effect to anything in contemplation its certificate of the Closing, amend any of its incorporation or its Subsidiaries’ Organizational Documentsbylaws or other charter or organizational documents, or effect or be become a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivvi) form any Subsidiary subsidiary or acquire any equity interest or other interest in any other Entity entity or acquire by any manner, any person or division, business or any assets that individually or in the aggregate have a purchase price in excess of $100,000, except for purchases of components or supplies in the ordinary course of business and consistent with past practice;
(vii) make any capital expenditure or enter into a joint venture with any other Entityagreements providing for payments which, individually or in the aggregate, are in excess of amounts set forth in Section 5.02(b)(vii) of the Company Disclosure Schedule;
(Aviii) enter into or become bound by, or permit any of the assets owned or used by the Company or any of its subsidiaries to become bound by, any Material Contract, or amend or terminate, or waive or exercise any material right or remedy under, any Material Contract other than in the ordinary course of business and consistent with past practice not in excess of $50,000;
(ix) acquire or license any right or other asset from any other person or sell, encumber or otherwise dispose of, or lease or license, any right or other asset to any other person (except in each case for assets acquired, leased, licensed or disposed of by the Company in the ordinary course of business and consistent with past practice with an aggregate value not in excess of $100,000), or waive or relinquish any material right;
(x) lend money or make any advance to any Person person (other than transfers or loans among the Company and its wholly-owned subsidiaries who are also parties to the Loan and Security Agreement);
(xi) except for the advancement of expenses to employeesas required by law or as otherwise contemplated by this Agreement (A) establish, directors and consultants in the Ordinary Course of Business)adopt or amend or terminate any Benefit Plan or Benefit Agreement, (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth except in the Company operating budget delivered to Parent concurrently ordinary course of business and consistent with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adoptpast practice, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees; (C) grant any current or former director, consultant, officer or other than increases employee any increase in base salary and annual cash bonus opportunities and payments severance or termination pay, (D) amend or modify any Stock Option, (E) make any payment to any person under any Benefit Plan that is not required to be made to such person under such Benefit Plan as in effect on the date of this Agreement, (F) change the manner in which contributions to any Pension Plan are made or the basis on which such contributions are determined, or (G) take any action to accelerate any rights or benefits, or make any material determinations not in the Ordinary Course ordinary course of Business business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; under any Benefit Plan or Benefit Agreement;
(Dxii) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (EA) hire any (x) officer new employee at the level of director or (y) employee whose above or with an annual base salary is or is expected in excess of $100,000, (B) promote any employee except in order to be more than $250,000 per year fill a position vacated after the date of this Agreement, or (FC) terminate engage any consultant or give notice of termination to any officer independent contractor for a period exceeding 30 days other than for causein the ordinary course of business and consistent with past practice;
(viixiii) recognize any labor union or labor organization, except insofar as otherwise may be required by applicable Law a change in GAAP, make any changes in accounting methods, principles or practices;
(xiv) make any tax election or compromise or settle any material income tax liability;
(xv) commence or settle any legal proceeding (other than (A) with respect to patent lawsuits currently pending and after prior written consent set forth in Section 5.02(b)(xv) of Parent the Company Disclosure Schedule and (which consent shall not be unreasonably withheld, delayed or conditionedB) Collection Actions);
(viiixvi) enter into or amend any Contract whether written or oral that contains any guarantees as to the Company's or any of its subsidiaries future revenues;
(xvii) enter into or amend any agreements pursuant to which any person is granted exclusive marketing, manufacturing or other rights with respect to any product process or technology of the Company or any of its subsidiaries;
(xviii) transfer or license to any person or entity or otherwise extend or modify any rights to the Intellectual Property of the Company and its subsidiaries other than in the ordinary course of business and consistent with past practice; provided that in no event shall the Company or any of its subsidiaries license on an exclusive basis or sell any Intellectual Property of the Company or its subsidiaries;
(xix) enter into any material transaction or take any other than in material action outside the Ordinary Course ordinary course of Businessbusiness or inconsistent with past practices;
(ixxx) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies that would, or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay result in any condition to the consummation of the Contemplated TransactionsMerger set forth in Article VII not being satisfied; or
(xvixxi) agree(A) pay, resolve discharge, settle or commit satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to do the date of this Agreement), or modify the terms of any existing settlement agreement or arrangement, other than the payment, discharge, settlement or satisfaction, in the ordinary course of business and consistent with past practices or in accordance with their terms, of Non-Litigation Liabilities recognized or disclosed in the foregoing.
most recent consolidated financial statements (cor the notes thereto) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, included in the Company shall exercise, SEC Documents or Non-Litigation Liabilities incurred since the date of such financial statements in the ordinary course of business consistent with past practice, (B) cancel any indebtedness, (C) waive or assign any claims or rights of substantial value, (D) waive any benefit of, agree to modify in any manner, terminate, release any person from or fail to enforce any standstill or similar agreement to which the terms and conditions Company or any of its subsidiaries is a party or of which the Company or any of its subsidiaries is a beneficiary or (E) waive any material benefit of, agree to modify in any material respect, terminate, release any person from or fail to enforce any confidentiality or similar agreement to which the Company or any of its subsidiaries is a party or of which the Company or any of its subsidiaries is a beneficiary. For purposes of this Agreement, complete unilateral control "Non-Litigation Liabilities" means all liabilities of the Company and supervision over its business operations. Notwithstanding anything subsidiaries of a type that would be disclosed in consolidated financial statements of the Company prepared in accordance with GAAP, other than liabilities pertaining to the contrary set forth in this Agreement, no consent line item "Reserve for litigation and copyright matters" (or any similar line item) on any condensed consolidated balance sheet of Parent shall be required with respect to any matter set forth in this Section 4.2 the Company or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.related notes thereto; or
Appears in 3 contracts
Samples: Merger Agreement (Netratings Inc), Merger Agreement (Netratings Inc), Merger Agreement (Netratings Inc)
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: each of (i) the Company and its Subsidiaries shall conduct ensure that the Company conducts its business and operations (A) in the Ordinary Course of Business ordinary course and in accordance with past practices and (B) in material compliance in all material respects with all applicable Laws Legal Requirements and the requirements of all Company Contracts that constitute Company Material Contracts; (ii) the Company shall use all reasonable efforts to ensure that the Company preserves intact its current business organization, keeps available the services of its current officers and other employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the Company; (iii) the Company shall keep in full force all insurance policies referred to in Section 2.19; (iv) the Company shall provide all notices, assurances and support required by any Company Contract relating to any Company Proprietary Asset in order to ensure that no condition under such Company Contract occurs which could result in, or could increase the likelihood of, (A) any transfer or disclosure by the Company of any Company Source Code, or (B) a release from any escrow of any Company Source Code which has been deposited or is required to be deposited in escrow under the terms of such Acquired Corporation Contract; and (v) cause all new employees and consultants to enter into an agreement that is substantially identical to the form of Confidential Information and Invention Assignment Agreement previously delivered by the Company to Parent.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during During the Pre-Closing Period, the Company shall notnot (without the prior written consent of Parent), nor and shall it cause or not permit any of its Subsidiaries the Company to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock stock, or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)securities;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any the issuance or grant of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); security, (B) any option, call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted security (except that the Company may grant options to employees hired after the date hereof below the level of vice president in amounts and service providers in with such terms as are consistent with the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; Company's past practices), or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that the Company may issue shares of Company Common Stock (x) upon the valid exercise of Company Options outstanding as of the Company or any date of its Subsidiariesthis Agreement pursuant to the Option Plans, and (y) pursuant to the ESPP);
(iii) except as required to give effect to anything in contemplation of for the ClosingPlan Amendment, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of the Option Plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract;
(iv) amend or permit the adoption of any amendment to its Subsidiaries’ Organizational Documentscertificate of incorporation or bylaws or other charter or organizational documents, or effect or be become a party to any merger, consolidation, amalgamation, share exchange, business combination, recapitalization, reclassification of shares, stock split, division or subdivision of shares, reverse stock split split, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(Avi) make any individual capital expenditure in excess of $50,000 or capital expenditures made on behalf of the Company during the Pre-Closing Period, exceeding $200,000 in the aggregate;
(vii) make any payments outside of the ordinary course of business;
(viii) enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any Material Contract, or amend or terminate, waive any material right or remedy under, or, except in the ordinary course of business consistent with past practice, exercise any material right under, any Material Contract;
(ix) acquire, lease or license any right, property or other asset from any other Person or sell or otherwise dispose of, or lease or license, any right, property or other asset to any other Person (except in each case for immaterial assets acquired, leased, licensed or disposed of by the Company in the ordinary course of business and consistent with past practices), or waive or relinquish any material right;
(x) lend money to any Person (except for the advancement of expenses to employeesPerson, directors and consultants in the Ordinary Course of Business), (B) or incur or guarantee any indebtedness for borrowed moneyindebtedness, (C) or issue or sell any debt securities or warrants or right to acquired debt securities of the Company or guarantee any debt securities of others, or others (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth travel advances to employees in the Company operating budget delivered to Parent concurrently with the execution ordinary course of this Agreement (the “Company Budget”business);
(vixi) other than as required establish, adopt or amend any employee benefit plan (including adding employees who are not covered by applicable Law or the terms of any Company Benefit Severance Plan as in effect on of the date of this Agreement: (A) adoptAgreement to the Severance Plan), terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employeesemployees (except that the Company may make routine, reasonable salary increases in connection with the Company's customary employee review process and may pay customary bonuses consistent with past practices payable in accordance with existing bonus plans referred to in Part 2.17(a) of the Company Disclosure Schedule);
(xii) hire any employee at the level of director or above, or with an annual base salary in excess of $100,000, or engage any consultant or independent contractor for a period exceeding sixty (60) days or for monthly compensation in excess of $10,000;
(xiii) materially revalue any of its assets or change any of its pricing policies, product return policies, product maintenance polices, service policies, product modification or upgrade policies, personnel policies or other business policies, or any of its methods of accounting or accounting practices in any respect;
(xiv) change the status, title or responsibilities, including without limitation, termination or promotion, of any vice president level employee or above of the Company, promote any employee to the level of vice president or above in the Company, or promote anyone to an officer position in the Company;
(xv) transfer or license to any Person or otherwise extend the term of any agreement with respect to, amend or modify in any material respect any rights (including without limitation distribution rights) to the Proprietary Assets of the Company, or enter into assignments of future patent rights, other than increases in base salary non-exclusive licenses and annual cash bonus opportunities and payments made distribution rights in the Ordinary Course ordinary course of Business business and consistent with past practice and practice;
(xvi) encumber any properties or assets which do not exceedare material, individually or in the aggregate, to the amounts specifically budgeted therefore business of the Company, except in the Company Budget; (D) increase the severance or change ordinary course of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for causebusiness consistent with past practice;
(viixvii) recognize make any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned)Tax election;
(viiixviii) commence or settle any Legal Proceeding;
(xix) enter into any material transaction or take any other than in material action outside the Ordinary Course ordinary course of Businessbusiness or inconsistent with past practices;
(ixxx) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in for the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAPMerger, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably result in or contribute to the acceleration of options or require any payment to be expected made pursuant to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated TransactionsSeverance Plan; or
(xvixxi) agree, resolve agree or commit to do take any of the foregoing.
actions described in clauses "(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions i)" through "(xx)" of this AgreementSection 4.2(b); provided, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth however, that nothing in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.this
Appears in 3 contracts
Samples: Agreement and Plan of Merger and Reorganization (Meridian Data Inc), Agreement and Plan of Merger and Reorganization (Snap Appliances Inc), Agreement and Plan of Merger and Reorganization (Quantum Corp /De/)
Operation of the Company’s Business. (a) Except (i) as set forth otherwise expressly permitted under this Agreement or as specified in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by the Financing Documents or as reasonably necessary to comply with applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned)Legal Requirements, during the Pre-Closing Period: (i) the Company shall use reasonable efforts to ensure that each of the Company and its Subsidiaries shall conduct Acquired Corporations (A) conducts its business and operations in the Ordinary Course ordinary course and in accordance with past practices, and (B) preserves intact its current business organization, keeps available the services of Business its current officers and employees and maintains its relations and goodwill with all suppliers, customers, Producers, Company Partners, strategic partners, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Acquired Corporations, other than where the failure to maintain such relations and goodwill is commercially reasonable and is not reasonably likely to have an effect on the Acquired Corporations of a magnitude in excess of $50,000 (individually), or where the Company receives Parent's prior written approval; (ii) the Company shall use commercially reasonable efforts to ensure that each of the Acquired Corporations conducts its business and operations in compliance in all material respects with all applicable Laws Legal Requirements and the requirements of all Contracts that constitute Company Material Contracts; (iii) the Company shall use commercially reasonable efforts to keep in full force all insurance policies referred to in Section 3.18 or comparable replacements, except where the Company receives Parent's prior written approval; and (iv) the Company shall promptly notify Parent of (A) any written notice (or other communication known to the Company) received from any Person alleging that the Consent of such Person is or may be required in connection with any of the transactions contemplated by this Agreement, and (B) any material Legal Proceeding commenced or, to the Knowledge of the Company, threatened against, relating to or involving or otherwise affecting any of the Acquired Corporations.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during During the Pre-Closing Period, the Company shall use commercially reasonable efforts to (i) effectuate the transfer from Xxxxxx to Yuhan (or with the consent of Parent not to be unreasonably withheld, another third party) of the technology necessary to manufacture Bulk Emtricitabine in accordance with Exhibit 18 of the Xxxxxx Agreement and in accordance with the plans, procedures, requirements and timetable set forth in Schedule 5.2(b)(i) and (ii) effectuate the transfer from Xxxxxx to a third-party contract manufacturer of the technology necessary to formulate Finished Emtricitabine from Bulk Emtricitabine as promptly as reasonably practicable.
(c) During the Pre-Closing Period, the Company shall use commercially reasonable efforts to: (i) prosecute and secure the approval by the FDA of the Coviracil NDA; and (ii) file with the European Medicines Evaluation Agency (the "EMEA"), and prosecute and secure approval by the EMEA of, a Marketing Authorisation Application for marketing approval of Coviracil in the European Union (the "MAA").
(d) During the Pre-Closing Period, the Company shall (i) consult with Parent in connection with any proposed meeting with the FDA or any other Governmental Body 37. relating to any Company Pharmaceutical Product and promptly provide Parent with a summary report of any such meeting that occurs and (ii) provide Parent and its Representatives with a reasonable opportunity to review any filing made on or after December 11, 2002 and any correspondence or other material communication, proposed to be submitted or otherwise transmitted to the FDA or any other Governmental Body on behalf of any of the Acquired Corporations relating to any Company Pharmaceutical Product.
(e) During the Pre-Closing Period, the Company shall (i) make and keep Parent reasonably informed of the Company's plans and arrangements to obtain and maintain the quantities of Bulk Emtricitabine and Finished Emtricitabine and related raw materials and components, and (ii) use commercially reasonable efforts to obtain and maintain on a commercially reasonable basis quantities of Bulk Emtricitabine and Finished Emtricitabine and related raw materials and components that the Company reasonably expects to be required by the Acquired Corporations to make sales of Coviracil for one year.
(f) During the Pre-Closing Period, except as otherwise expressly permitted or required by this Agreement or the Financing Documents, without the prior written consent of Parent, the Company shall not, nor and shall it cause or not permit any either of its Subsidiaries to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock stock, or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)securities;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any the issuance or grant of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); security, (B) any option, call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that (1) the Company may issue shares of Company Common Stock (x) upon the valid exercise of Company Options outstanding as of the date of this Agreement or issued in a manner permitted by this Agreement, and (y) pursuant to the ESPP, and (2) the Company may (x) in the ordinary course of business grant options in 2002 to purchase no more than a total of 2,500,000 shares of Company Common Stock in the aggregate pursuant to the Company Option Plan, and (y) in the ordinary course of business and consistent with past practices grant options to purchase no more than 200,000 shares of Company Common Stock in the aggregate in each calendar month in 2003 prior to the Acceptance Date pursuant to the Company Stock Option Plan; provided that such options (1) are issued only to employees of the Company or any and (2) have an exercise price equal to the fair market value of its Subsidiariesthe Company Common Stock covered by such options as of the time of grant of such options;
(iii) except as may be required to give effect to anything in contemplation of the Closingby applicable Legal Requirements, amend or waive any of its rights under, or alter the acceleration of vesting under, any provision of the Company Option Plan, the CEO Incentive Plan, any provision of any agreement evidencing any outstanding Company Option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract;
(iv) amend or terminate the Company Rights Agreement or amend or permit the adoption of any amendment to its Subsidiaries’ Organizational Documentscertificate of incorporation or bylaws or other charter or organizational documents, or effect or be become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, division or subdivision of shares, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(Avi) make any capital expenditure (except that the Acquired Corporations may make capital expenditures that, when added to all other capital expenditures made on behalf of the Acquired Corporations during the Pre-Closing Period, do not exceed $2,200,000 in the aggregate);
(vii) except as otherwise expressly permitted by this Section 5.2, enter into or become bound by, or permit any of the material assets owned or used by it to become bound by, any Material Contract, or amend or terminate, or waive or exercise any material right or remedy under, any Material Contract, in each case other than in the ordinary course of business consistent with past practices;
(viii) acquire, lease or license any right or other asset from any other Person or sell or otherwise dispose of, or lease or license, any right or other asset to any other Person (except in each case for assets acquired, leased, licensed or disposed of by the Company in the ordinary course of business and consistent with past practices or for non-exclusive licenses to other Persons granted only for research or to enable third parties to render services for the Acquired Corporations), or waive or relinquish any material right;
(ix) commence, sponsor, participate in, or provide funding for any clinical trial except those trials being conducted as of the date of this Agreement or for which the Company has a written protocol proposal as of the date of this Agreement;
(x) place, cancel or modify any order for any Company Pharmaceutical Product (in bulk active pharmaceutical or finished product form) other than the placement of orders that are reasonably necessary for the Company to comply with its obligations under Section 5.2(e)(ii) to maintain adequate and suitable quantities of Company Pharmaceutical Product to conduct trials permitted by Section 5.2(f)(ix);
(xi) enter into any Contract covering multiple manufacturing "campaigns" or any Contract with a term of more than 270 days, in each case for manufacture of any Company Pharmaceutical Product (in bulk active pharmaceutical or finished product form) or any raw material relating to such manufacture, that cannot be terminated (without penalty) within 60 days after delivery of a termination notice by the Company;
(xii) other than in the ordinary course of business consistent with past practices, write off as uncollectible, or establish any extraordinary reserve with respect to, any receivable or other indebtedness;
(xiii) make any pledge of any of its assets or permit any of its material assets to become subject to any Encumbrances other than Encumbrances of the type described in Section 3.6(1) and (2);
(xiv) lend money to any Person (except for the advancement of expenses to employeesPerson, directors and consultants in the Ordinary Course of Business), (B) or incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities except that the Company may make routine borrowings and advancement of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth expenses in the Company operating budget delivered to Parent concurrently ordinary course of business and in accordance with the execution of this Agreement (the “Company Budget”past practices);
(vixv) other than except as may be required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) Legal Requirements, adopt, terminateestablish, establish or enter into or amend any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) employee benefit plan, pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employeesemployees (except that the Company (A) may make routine, other than reasonable salary increases in base salary connection with the Company's customary employee review process, and annual cash (B) may pay customary bonus opportunities payments and profit sharing payments made in the Ordinary Course of Business consistent with past practice practices payable in accordance with existing bonus and which do not exceed, profit sharing plans referred to in the aggregate, the amounts specifically budgeted therefore in Part 3.16(g) of the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditionedDisclosure Schedule);
(viiixvi) enter into hire any material transaction other than employee or promote any employee (except that the Company may hire or promote any employee in order to fill a necessary position vacated after the Ordinary Course date of Business;
(ix) acquire any material asset this Agreement if the Company has provided Parent with notice of the Company's intent to hire or sell, lease promote such employee at least ten days prior to the hiring or otherwise irrevocably dispose promotion of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Businessemployee);
(xixvii) makeexcept as may be required by applicable Legal Requirements, change in any material respect any of its personnel policies or revoke other business policies, or any of its methods of accounting or accounting practices in any material respect;
(xviii) make any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xiixix) enter into, materially amend commence (except to the extent reasonably necessary to avoid the actual or terminate potential loss of any Company Material Contract;
(xiiimaterial legal right of the Acquired Corporations) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvixx) agree, resolve commit or commit offer to do take any of the foregoingactions described in clauses "(i)" through "(xix)" of this Section 5.2(f).
(cg) Nothing During the Pre-Closing Period, the Acquired Corporations shall use commercially reasonable efforts to maintain adequate and suitable quantities of Emtricitabine, Amdoxovir and Clevudine in bulk active pharmaceutical and finished product form for the conduct of all clinical trials being conducted by or on behalf of any of the Acquired Corporations.
(h) During the Pre-Closing Period, the Company shall not willfully conceal from Parent: (i) its Knowledge of any material inaccuracy in any representation or warranty made by the Company in this Agreement as of the date hereof; (ii) its Knowledge of any material breach of any covenant or obligation of the Company hereunder; or (iii) if Acquisition Sub shall not yet have accepted for payment any shares of Company Common Stock pursuant to the Offer, the Company's Knowledge of an event, condition, fact or circumstance that the Company Knows makes the timely satisfaction of any of the Offer Conditions impossible. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any Legal Proceeding or material claim threatened in writing or commenced against or with respect to any Acquired Corporation. No notifications given to Parent pursuant to this Section 5.2(h) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement shall give Parent, directly or indirectlyconstitute an admission by the Company that any such material inaccuracy or breach has actually occurred. For the avoidance of doubt, the right to control events in clauses "(i) - (iii)" above, respectively, are Knowledge of each inaccuracy, breach or direct the operations impossibility, not just knowledge of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Lawsunderlying facts giving rise thereto.
Appears in 3 contracts
Samples: Merger Agreement (Triangle Pharmaceuticals Inc), Merger Agreement (Triangle Pharmaceuticals Inc), Merger Agreement (Gilead Sciences Inc)
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: (i) the Company shall ensure that each of the Company and its Subsidiaries shall conduct Acquired Corporations conducts its business and operations (A) in the Ordinary Course of Business ordinary course and in accordance with past practices and (B) in substantial compliance in all material respects with all applicable Laws Legal Requirements and the material requirements of all Contracts that constitute Company Material Contracts; (ii) the Company shall use commercially reasonable efforts to ensure that each of the Acquired Corporations preserves intact its current business organization, keeps available the services of its current officers and other employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Acquired Corporations; and (iii) the Acquired Corporations shall keep in full force or renew all insurance policies referred to in Section 2.19.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during During the Pre-Closing Period, the Company shall notnot (without the prior written consent of Parent), nor and shall it cause or not permit any of its Subsidiaries the other Acquired Corporations to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock stock, or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except in connection for the repurchase of Common Stock from employees or consultants upon termination of their employment or consulting relationship with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)Company;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any the issuance or grant of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); security, (B) any option, call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that (1) the Company may issue shares of Company Common Stock (x) upon the valid exercise of Company Options or Company Warrants outstanding as of the date of this Agreement, or (y) pursuant to the ESPP, and (2) the Company or any may, in the ordinary course of business and consistent with past practices, grant options under its Subsidiariesstock option plans to purchase no more than a total of 75,000 shares of Company Common Stock to employees of the Acquired Corporations);
(iii) except as required to give effect to anything in contemplation of the Closing, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of the Company's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract;
(iv) amend or permit the adoption of any amendment to its Subsidiaries’ Organizational Documentscertificate of incorporation or bylaws or other charter or organizational documents, or effect or be become a party to any merger, consolidation, amalgamation, share exchange, business combination, recapitalization, reclassification of shares, stock split, division or subdivision of shares, reverse stock split split, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase capital expenditure (except that the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made Acquired Corporations may make capital expenditures in the Ordinary Course ordinary course of Business business and consistent with past practice and which practices that, when added to all other capital expenditures made on behalf of the Acquired Corporations during the Pre-Closing Period, do not exceed, exceed $100,000 in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause);
(vii) recognize enter into or become bound by, or permit any labor union of the assets owned or labor organization, used by it to become bound by any Material Contract (except as otherwise required that the Acquired Corporations may enter into or become bound by applicable Law Contracts and after prior written consent Material Contracts in the ordinary course of Parent (which consent shall not be unreasonably withheld, delayed or conditionedbusiness and consistent with past practices);
(viii) enter into amend or terminate, or waive or exercise any material transaction right or remedy under, any Material Contract, other than in the Ordinary Course ordinary course of Businessbusiness consistent with past practices;
(ixA) acquire any material asset or sellacquire, lease or otherwise irrevocably dispose of license any of its assets right or properties, other asset from any other Person or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense sell or otherwise dispose of of, or lease or license, any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income right or other material Tax as such Tax becomes due and payable, file any amendment making any material change asset to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvi) agree, resolve or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.any
Appears in 3 contracts
Samples: Agreement and Plan of Merger and Reorganization (Molecular Devices Corp), Agreement and Plan of Merger and Reorganization (LJL Biosystems Inc), Merger Agreement (Molecular Devices Corp)
Operation of the Company’s Business. (a) Except as (i) as set forth in Section 4.2(a) of the Company Disclosure Scheduleexpressly required by this Agreement, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (Ciii) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing in advance by Parent (which consent shall not be unreasonably withheld, delayed or conditioned)Parent, during the Pre-Closing Period: each period commencing on the Agreement Date and continuing until such time as designees of Parent first constitute at least a majority of the Company Board pursuant to Section 1.3(a), the Company shall, and shall cause its Subsidiaries shall to: (A) conduct its business and operations (1) in the Ordinary Course of Business ordinary course consistent with past practices and (2) in compliance in all material respects with all applicable Laws Laws; (B) pay its debts and Taxes when due, in each case subject to good faith disputes over such debts or Taxes for which adequate reserves have been established in accordance with GAAP on the requirements appropriate financial statements; (C) pay or perform all material obligations when due; (D) use commercially reasonable efforts to ensure that it preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all Contracts that constitute suppliers, customers, landlords, licensors, licensees and other Persons having business relationships with the Company; (E) keep in full force and effect (with the same scope and limits of coverage) all insurance policies in effect as of the Agreement Date covering all material assets of the Company; and (F) keep in full force and effect all Company Material ContractsRegistered IP and all material Company Owned IP.
(b) Except as (i) as expressly permitted required by this Agreement, (ii) required by applicable Law, or (iii) consented to in writing in advance by Parent, during the period commencing on the Agreement Date and continuing until such time as set forth in Section 4.2(b) designees of Parent first constitute at least a majority of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditionedBoard pursuant to Section 1.3(a), at all times during the Pre-Closing Period, the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other actual, constructive or deemed distribution in respect of any shares of its capital stock stock; split, combine or repurchasereclassify any capital stock; or acquire, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)securities;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any the sale, issuance or grant of the foregoing with respect toany: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options)security; (B) any option, warrant call, warrant, restricted stock unit or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security security, except that, in the case of clause (A), the Company may issue shares of Company Common Stock pursuant to the exercise of Company Options under the Option Plans, in each case, outstanding on the Agreement Date;
(iii) amend or otherwise modify any of the terms of any outstanding Company Option or other security, except as required by applicable Laws or as contemplated by this Agreement;
(iv) amend or permit the adoption of any amendment to the Company Charter Documents or the organizational documents of any Subsidiary of the Company;
(v) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its SubsidiariesSubsidiaries (other than the transactions contemplated hereby, including the Offer and the Merger);
(iiivi) except as required to give effect to anything in contemplation of the Closing, amend acquire any of its or its Subsidiaries’ Organizational DocumentsEquity Interest, or effect or be become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, division or subdivision of shares, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivvii) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture any Contract that would impose any restriction or Encumbrance on any Company Owned IP, including Company Registered IP, or on the right or ability of the Company or any of its Subsidiaries: (A) to compete with any other EntityPerson; (B) to acquire any product or other asset or any services from any other Person; (C) to develop, sell, manufacture, license, market, assemble, supply, distribute, offer, support or service any product or any technology or other asset to or for any other Person; (D) to perform services for any other Person; (E) to transact business with any other Person; or (F) to operate at any location in the world;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (Dviii) other than in a manner materially consistent with the incurrence or payment of any Transaction ExpensesCompany’s 2012 budget (as made available to Parent prior to the date hereof), make any capital expenditure expenditure;
(ix) other than in excess the ordinary course of business and consistent with past practice, enter into, amend or terminate any Material Contract, or waive any material term of, right, remedy or material default under, or release, settle or compromise any material claim against the Company or any of its Subsidiaries under, any Material Contract;
(x) sell or otherwise dispose of, or lease or license, any right or other asset to any other Person (except in each case: (A) the sale of goods or grants of non-exclusive licenses in the ordinary course of business consistent with past practice; or (B) transactions with respect to assets that are not material to the business of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”or its Subsidiaries);
(vixi) make any pledge of any of its assets or permit any of its assets, or any of its cash equivalents or short-term investments, to become subject to any Encumbrances;
(xii) forgive any loans to any employees, officers or directors of the Company or any of its Subsidiaries, or any of their respective Affiliates;
(xiii) enter into any agreement to purchase or sell any interest in real property, grant any security interest in any real property, enter into any lease, sublease, license or other than as required by applicable Law occupancy agreement with respect to any real property or alter, amend, modify, violate or terminate any of the terms of any Company Benefit Plan Leases;
(xiv) redeem, repurchase, prepay, defease, cancel, incur or otherwise acquire, or modify the terms of, any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person for borrowed money, except for indebtedness incurred under, or payments of indebtedness applied to, the Company’s existing credit facilities, provided that the total indebtedness thereunder shall at no time exceed such amounts as in effect on are available under the date terms of this Agreement: the Company’s existing credit facilities as of the Agreement Date;
(Axv) establish, adopt, terminate, establish or enter into or amend any Company Benefit Plan; (B) cause Employee Plan or permit any Company Benefit Plan to be amended in any material respect; (C) Employee Agreement, pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation (including equity-based compensation, whether payable in stock, cash or other property) or remuneration payable to, any of its directors, officers or employees, other than Company Employees (except that the Company may: (A) provide routine salary increases in base salary and annual cash bonus opportunities and payments made to Company Employees in the Ordinary Course ordinary course of Business consistent business and in connection with past practice and which do not exceed, the Company’s customary employee review process; (B) enter into Company Employee Agreements with newly-hired Company Employees in substantially the aggregate, form provided to Parent prior the amounts specifically budgeted therefore in Agreement Date; (C) amend the Company BudgetEmployee Plans to the extent required by applicable Legal Requirements; and (D) increase make customary bonus and profit-sharing payments in accordance with plans or arrangements existing on the severance or change date of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditionedthis Agreement);
(viiixvi) communicate with employees of the Company or any Subsidiary regarding the compensation, benefits or other treatment that they will receive from the Surviving Corporation;
(xvii) make any deposits or contributions of cash or other property to or take any other action to fund or in any other way secure the payment of compensation or benefits under the Company Employee Plans or agreements subject to the Company Employee Plans or any other Contract of the Company other than deposits and contributions that are required pursuant to the terms of the Company Employee Plans or any agreements subject to the Company Employee Plans in effect as of the date hereof;
(xviii) hire any employee with an annual base salary in excess of $150,000;
(xix) enter into any material transaction other than in the Ordinary Course of Businesscollective bargaining agreement;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiiixx) other than as required by Law concurrent changes in GAAP or SEC rules and regulations, change any of its methods of accounting or accounting practices in any material respect;
(xxi) except as required by applicable Laws or GAAP, take revalue in any action to change accounting policies material respect any of its properties or proceduresassets including without limitation writing-off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
(xivxxii) initiate except as required by applicable Laws, make or change any material Tax election, make any change in any of the accounting methods or practices presently used for any Tax purpose, enter into any agreement or settle any claim or assessment in respect of Taxes or extend any statute of limitations for the collection of any Taxes;
(xxiii) commence any Legal Proceeding, except: (A) with respect to routine matters in the ordinary course of business consistent with past practice; or (B) in connection with a breach of this Agreement or related to the Offer or the Merger;
(xvxxiv) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any claim, liability or obligation (absolute or accrued, asserted or unasserted, contingent or otherwise), other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings, claims and other liabilities (A) reflected or reserved against in full in the Company Balance Sheet or incurred since March 31, 2012 in the ordinary course of business consistent with past practice or (B) subject to Section 5.9, in respect of certain shareholder litigation that involves only the payment or receipt of money (and not the assumption of any liability or obligation, including the grant to any third party of any license, covenant not to xxx, immunity or other right with respect to or under any of the Company Owned IP) in an amount less than $250,000; provided, that in connection with such payment the Company shall have received a complete and unconditional release against the Company and its Subsidiaries;
(xxv) except as required by applicable Laws, convene any regular or special meeting (or any adjournment or postponement thereof) of the shareholders of the Company other than the Company Shareholders Meeting;
(xxvi) enter into any new line of business outside of its existing business segments or amend discontinue or otherwise cease operations in any material footwear product style within any existing material business segment;
(xxvii) adopt or implement a Contract that would reasonably be expected shareholder rights plan;
(xxviii) fail to prevent or materially impedemaintain in full force and effect material insurance policies covering the Company and its Subsidiaries and their respective properties, interfere with, hinder or delay assets and businesses in a form and amount consistent with past practice;
(xxix) hire any employee without requiring them to execute the consummation Company’s standard form of the Contemplated Transactionsconfidentiality and inventions assignment agreement; or
(xvixxx) agreeauthorize any of, resolve or commit commit, resolve, propose or agree in writing or otherwise to do take any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectlyof, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Lawsforegoing actions.
Appears in 3 contracts
Samples: Merger Agreement (Abc-Mart, Inc.), Merger Agreement (Abc-Mart, Inc.), Merger Agreement (Lacrosse Footwear Inc)
Operation of the Company’s Business. (a) Except During the period from the date of this Agreement through the Effective Time (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the “Pre-Closing Period”), the Company shall: (i) ensure that each of the Company and its Subsidiaries shall conduct Acquired Corporations conducts its business and operations (A) in the Ordinary Course of Business ordinary course and in accordance with past practices, and (B) in compliance in all material respects with all applicable Laws Legal Requirements and the requirements of all Acquired Corporations Contracts that constitute Company Material Contracts; (ii) use commercially reasonable efforts to ensure that each of the Acquired Corporations preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Acquired Corporations; (iii) provide all notices, assurances and support required by any Contract relating to any Proprietary Asset in order to ensure that no condition under such Contract occurs which could result in, or could increase the likelihood of any transfer or disclosure by any Acquired Corporation of any Proprietary Asset; (iv) keep in full force and effect (with the same scope and limits of coverage) all insurance policies in effect as of the date of this Agreement covering all material assets of the Acquired Corporations and (v) to the extent requested by Parent, cause its officers to report regularly to Parent concerning the status of the Acquired Corporations’ respective businesses.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during During the Pre-Closing Period, the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (securities, except repurchases of unvested shares at cost in connection with the payment termination of the exercise price and/or withholding Taxes incurred upon the exercise, settlement employment or vesting of consulting relationship with any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)employee or consultant pursuant to stock option or purchase agreements;
(ii) except as set forth in Schedule 4.1(b) with respect to grants of options to new employees during the Pre-Closing Period, sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any the issuance or grant of the foregoing with respect to: (Ai) any capital stock or other security of the Company or any of its Subsidiaries security, (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (Bii) any optionStock Rights, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (Ciii) any instrument convertible into or exchangeable for any capital stock or other security (except that (A) the Company may issue Company Common Stock upon the valid exercise of Company Options outstanding as of the Company or any date of its Subsidiariesthis Agreement);
(iii) except as required to give effect to anything in contemplation of the Closing, amend or waive any of its rights under, or its Subsidiaries’ Organizational accelerate the vesting under, any provision of any of the Company’s stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option or any related Contract;
(iv) amend or permit the adoption of any amendment to any of the Acquired Corporations Constituent Documents, or effect or be become a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivv) form any Subsidiary subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than capital expenditures set forth on Schedule 4.1(b) of the Company Disclosure Schedule and as required previously provided to Parent, make any capital expenditure outside the ordinary course of business or make any single capital expenditure in excess of $50,000; provided however, that, other than capital expenditures set forth on Schedule 4.1(b) of the Company Disclosure Schedule, the maximum amount of all capital expenditures made on behalf of the Acquired Corporations during the Pre-Closing Period shall not exceed $100,000 in the aggregate;
(vii) except in the ordinary course of business and consistent with past practice, enter into or become bound by, or permit any of the assets owned or used by applicable Law it to become bound by, any material Contract, or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, amend or terminate, establish or waive or exercise any material right or remedy under, any material Acquired Corporations Contract;
(viii) enter into any Contract, or modify or amend any existing Contract, providing for (1) severance or termination pay, (2) indemnification, or (3) benefits which are contingent upon the occurrence of a transaction involving the Company Benefit Plan; of the nature contemplated by this Agreement.
(Bix) cause other than capital expenditures set forth on Schedule 4.1(b) of the Company Disclosure Schedule, acquire, lease or permit license any right or other asset from any other Person or sell or otherwise dispose of, or lease or license, any right or other asset to any other Person (except in each case for assets acquired, leased, licensed or disposed of by the Company in the ordinary course of business and not having a value, or not requiring payments to be made or received, in excess of $10,000 individually, or $100,000 in the aggregate), or waive or relinquish any material right;
(x) lend money to any Person, or incur or guarantee any indebtedness (except that the Company may make routine borrowings in the ordinary course of business and in accordance with past practices under the Company’s credit facilities outstanding as of the date hereof (without any amendment or modification thereto));
(xi) (a) establish, adopt, amend, or make contributions to, any Company Benefit Employee Plan to be amended in any material respect; (C) or collective bargaining agreement, pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultantsofficers; (E) hire any (x) officer or (yb) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvi) agree, resolve or commit become obligated to do any of the foregoing.
(c; provided, however, that the Company may make regular contributions to its employee benefit plans and may make the payments and increase the amount of wages paid to employees only as set forth on other than capital expenditures set forth on Schedule 4.1(b) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary Disclosure Schedule;
(xii) except as set forth in this AgreementSchedule 4.1(b), no consent hire any new employee;
(xiii) change any of Parent shall be its methods of accounting or accounting practices in any respect except as required with respect to by generally accepted accounting principles;
(xiv) make any matter material Tax election;
(xv) commence or settle any material Legal Proceeding;
(xvi) other than capital expenditures set forth on Schedule 4.1(b) of the Company Disclosure Schedule, enter into any material transaction or take any other material action outside the ordinary course of business and inconsistent with past practices;
(xvii) take or agree to take any action which would result in the failure to satisfy the conditions provided for in Section 6.1 or Section 6.2; or
(xviii) agree or commit to take any of the actions described in clauses “(i)” through “(xvii)” of this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws4.1(b).
Appears in 2 contracts
Samples: Merger Agreement (Jni Corp), Merger Agreement (Applied Micro Circuits Corp)
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Scheduleexpressly contemplated, (ii) as expressly required or permitted by or required in accordance this Agreement, (iiiii) as required by applicable Law, (iviii) as set forth in connection with the COVID-19 pandemic, to the extent reasonably necessary, (ASection 5.2(a) to protect the health and safety or Section 5.2(b) of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19)Company Disclosure Schedules, or (viv) as may be consented to in writing by Parent (which consent shall will not be unreasonably withheld, delayed conditioned or conditioneddelayed), during the Pre-Closing Interim Period: each of , the Company shall and its shall cause the Company Subsidiaries shall conduct to: (A) ensure that it conducts its business and operations (x) in the Ordinary Course of Business ordinary course and substantially in accordance with past practices; and (y) in material compliance in all material respects with all applicable Laws Laws; (B) use commercially reasonable efforts to ensure that it preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with material customers, suppliers, landlords, and other Persons having material business relationships with the requirements Company; and (C) keep in full force and effect all appropriate insurance policies covering all material assets of all Contracts that constitute Company Material Contractsthe Company.
(b) Except (iw) as expressly contemplated, required or permitted by this Agreement, (iix) as required by applicable Law, (y) as set forth in Section 4.2(b5.2(b) of the Company Disclosure ScheduleSchedules, or (iiiz) as required consented to in writing by applicable Law or (iv) with the prior written consent of Parent (which consent shall will not be unreasonably withheld, delayed conditioned or conditioneddelayed), at all times during the Pre-Closing Interim Period, the Company shall not, nor not and shall it cause or permit any of its the Company Subsidiaries not to, do any of the following:
(i) except as permitted by clauses (x) or (y) of Section 5.2(b)(ii), declare, accrue, set aside or pay any dividend, make or pay any dividend or make any other distribution (whether in cash, stock, property or otherwise) in respect of any shares of its capital stock or repurchaseany other Company or Company Subsidiary securities (other than dividends or distributions paid in cash from a direct or indirect wholly owned Company Subsidiary to the Company or another direct or indirect wholly owned Company Subsidiary); adjust, split, combine or reclassify any capital stock or otherwise amend the terms of any Company or Company Subsidiary securities; or acquire, redeem or otherwise reacquirereacquire or offer to acquire, directly redeem or indirectly, otherwise reacquire any shares of its capital stock or other securities (except in connection with securities, other than pursuant to the payment Company’s right to acquire restricted shares of the exercise price and/or withholding Taxes incurred Company Common Stock held by a Company Employee upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms termination of such award in effect on the date of this Agreement)Company Employee’s employment;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any of the foregoing with respect tosale, issuance, or grant of: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options)equity security; (B) any option, call, warrant or right to acquire any capital stock or any other equity security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security equity security, in each case of the Company or any Company Subsidiary, except that (w) the Company may make intra-company sales, issuances or grants of its Subsidiariesequity securities of any Company Subsidiary to the Company or any other wholly-owned Company Subsidiary, (x) the Company may issue shares of Company Common Stock pursuant to the exercise of Company Equity Awards under the Stock Plans, in each case, outstanding on the Agreement Date; (y) the Company may grant Company RSUs pursuant to the 2015 Plan to any newly-hired non-executive officer employee of the Company and the Company Subsidiaries and to any promoted non-executive officer Company Employees in the ordinary course business (provided that the aggregate number of shares subject to such Company RSUs issued to such Persons may not exceed 200,000); and (z) the Company may adopt a shareholder rights plan in response to an Acquisition Proposal and issue rights to Company stockholders in connection therewith;
(iii) except as required to give effect to anything in contemplation otherwise contemplated by Section 1.5, amend or otherwise modify any of the Closingterms of any outstanding Company Equity Awards;
(iv) amend or permit the adoption of any amendment to the Company Charter Documents other than in connection with the adoption of a shareholder rights plan as contemplated in Section 5.2(b)(ii);
(v) subject to Section 5.3, amend acquire any Equity Interest, material assets or material business of its or its Subsidiaries’ Organizational Documentsany other Person, or effect or be become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, division or subdivision of shares, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivvi) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture any Contract that would explicitly impose any material restriction on the right or ability of the Company or any Company Subsidiary: (A) to compete with any other EntityPerson; (B) to acquire any product or other asset or any services from any other Person; (C) to perform services for or sell products to any other Person; (D) to transact business with any other Person; or (E) to operate at any location in the world, in each case, other than Contracts that contain covenants that prohibit the Company or any Company Subsidiary from using any trade names other than the Company’s or a Company Subsidiary’s trade names;
(Avii) other than in the ordinary course of business, amend or terminate (other than expiration in accordance with its terms), or waive any material right, remedy or default under any Company Material Contract;
(viii) sell, assign, abandon, or otherwise dispose of, or lease or license or grant any Lien in, any right, asset or property material to the Company and the Company Subsidiaries, taken as a whole, to any other Person, except inventory and transactions and except for Permitted Liens, in each case in the ordinary course of business;
(ix) lend money to any Person (except for the advancement of expenses other than advances to employees, directors and consultants customers or Company Employees in the Ordinary Course ordinary course of Businessbusiness consistent with past practices), guarantee any Indebtedness (other than in the ordinary course of business consistent with past practices), or incur any Indebtedness (other than guarantees and letters of credit provided to customers in the ordinary course of business);
(A) hire or terminate any employee whose annual base cash compensation is $400,000 or more, other than individuals who are replacing former employees on substantially the same terms and conditions of employment, (B) incur except to the extent required by applicable Law or guarantee by written agreements existing on the Agreement Date that have been disclosed or made available to Parent, pay or agree to pay any indebtedness for borrowed moneypension, retirement allowance, termination or severance pay, material bonus or other material employee benefit not required by any existing Company Plan set forth on Section 3.16 of the Company Disclosure Schedules or other agreement or arrangement in effect on the Agreement Date to any employee, officer, director, stockholder or other service provider of the Company or any of the Company Subsidiaries, whether past or present, (C) guarantee except to the extent required by applicable Law or by written agreements existing on the Agreement Date that have been disclosed or made available to Parent, enter into or amend any debt securities material Contracts of othersemployment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base salary not to exceed $150,000, or (D) other than except as required to ensure that any Company Employee Benefit Plan is not then out of compliance with applicable Law and except as required by any Company Employee Benefit Plan in effect on the incurrence Agreement Date or payment of otherwise required by Law, enter into or adopt any Transaction Expensesnew, make or materially increase benefits under or renew, amend or terminate any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the existing Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”)Employee Benefit Plan or benefit arrangement or any collective bargaining agreement;
(vixi) implement any employee layoffs that would implicate the Worker Adjustment and Retraining Notification Act or any similar Law, or any other reductions in force or voluntary or involuntary employment termination programs outside the ordinary course of business;
(xii) other than as required by applicable Law changes in GAAP or the terms SEC rules and regulations, change any of its methods of accounting or accounting practices in any Company Benefit Plan as in effect on the date of this Agreement: material respect;
(Axiii) adoptamend, terminatemodify, establish extend, renew or terminate any material Lease or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any new material respect; (C) pay any bonus or make any profit-sharing or similar payment tolease, or increase the amount of the wagessublease, salary, commissions, benefits license or other compensation agreement for the use or remuneration payable to, occupancy of any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for causereal property;
(viixiv) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent Law, (which consent shall not be unreasonably withheld, delayed A) make or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income method, period, policy or other material Tax as such Tax becomes due and payablepractice, (B) file any material amendment making to any material change to any Tax Return, (C) settle or compromise any income or other material Tax liability or submit any voluntary disclosure applicationfor Taxes, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or D) consent to or request any extension or waiver of any limitation period with respect to any material claim or assessment for Taxes, (E) incur any income material Tax liability outside of the ordinary course of business, (F) prepare or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in a manner inconsistent with past practice, provided that if there has been a change of law or such change is otherwise required by Law, then the Ordinary Course Company and the Company Subsidiaries shall be permitted to prepare or file Tax Returns in compliance with such Law, (G) surrender any right to claim a material refund of Business of not more than seven (7) months)Taxes, or adopt or change (H) fail to pay any material accounting method in respect of TaxesTaxes as they become due and payable (including estimated taxes);
(xiixv) enter intosell, materially amend assign, transfer, license, permit to lapse, abandon or terminate otherwise dispose of any material Company Material ContractIntellectual Property, except for in the ordinary course of business;
(xiiixvi) other than except as required by Law or GAAP, take revalue in any action to change accounting policies material respect any of its properties or proceduresassets, including writing off notes or accounts receivable, in any case other than in the ordinary course of business consistent with past practice;
(xivxvii) initiate or except as with respect to Transaction Litigation, which shall be governed by Section 5.11, and appraisal litigation which shall be governed by Section 1.4, settle any Legal Proceeding
litigation or other proceedings before a Governmental Authority if such settlement (xvA) enter into with respect to the payment of monetary damages, involves the payment of monetary damages that exceed $3,000,000 individually or amend a Contract $7,000,000 in the aggregate, net of any amount covered by insurance to the extent proceeds therefrom are actually received or indemnification, or (B) with respect to any non-monetary terms and conditions therein, imposes or requires actions that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay have a material effect on the consummation continuing operations of the Contemplated TransactionsCompany and the Company Subsidiaries, taken as a whole; or
(xvixviii) agreeauthorize any of, resolve or commit commit, resolve, propose or agree in writing or otherwise to do take any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectlyof, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Lawsforegoing actions.
Appears in 2 contracts
Samples: Merger Agreement (SolarWinds, Inc.), Merger Agreement (SolarWinds, Inc.)
Operation of the Company’s Business. (a) Except The Company agrees that, between the date of this Agreement and the Effective Time or the earlier termination of this Agreement, except as (i) as set forth in Section 4.2(a) expressly contemplated by any other provision of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s Agreement or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreementother Transaction Document, (ii) as set forth in Section 4.2(b5.2(a) of the Company Disclosure Schedule, and (iii) as required by applicable Law (including as may be requested or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditionedcompelled by any Governmental Authority), at all times during the Pre-Closing Period, the Company unless MEDS shall not, nor shall it cause or permit any of its Subsidiaries to, do any of the followingotherwise consent in writing:
(i) declarethe Company shall and shall cause the Subsidiaries to, accrueuse its best efforts conduct its and their respective businesses in the ordinary course of business and in a manner consistent with past practice in all material respects; and
(ii) the Company shall, set aside or pay any dividend or make and shall cause each Subsidiary to, use its best efforts to maintain and preserve intact in all material respects the business organization, assets, properties and material business relations of the Company and the Subsidiaries taken as a whole.
(b) By way of amplification and not limitation, except as (i) expressly required by any other distribution provision of this Agreement or any other Transaction Documents, (ii) as set forth in respect Section 5.2(b) of any shares of its capital stock or repurchasethe Company Disclosure Schedule, redeem and (iii) as required by applicable Law:
(i) amend or otherwise reacquire, directly change its certificate of incorporation or indirectly, any shares of its capital stock bylaws or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)equivalent Organizational Documents;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect to: (A) issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any capital stock or other security Equity Interests of the Company or any Subsidiary, or any options, warrants, convertible securities or other rights of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right kind to acquire any capital stock or Equity Interests (including, without limitation, any other securityphantom interest), other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any Subsidiary; or (B) sell any assets of its Subsidiariesthe Company or any Subsidiary that would be expected to have a Company Material Adverse Effect; provided, however, that the actions described in subsection (A) shall be permissible to the extent made in the ordinary course of business consistent with past practice and in compliance with the Plans;
(iii) except as required to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary subsidiary or acquire any equity interest Equity Interest or other interest in any other Entity entity or enter into a joint venture with any other Entityentity;
(Aiv) lend money declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any Person of its Equity Interests (except for other than tax distributions in accordance with the advancement of expenses to employeesCompany’s Organizational Documents, directors and consultants in the Ordinary Course of Businessif any);
(v) reclassify, (B) incur combine, split, subdivide or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of othersredeem, or (D) other than the incurrence purchase or payment otherwise acquire, directly or indirectly, any of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”)its Equity Interests;
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adoptacquire (including, terminatewithout limitation, establish by merger, consolidation, or enter into acquisition of stock or substantially all of the assets or any Company Benefit Planother business combination) any material assets or any corporation, partnership, other business organization or any division thereof; (B) cause incur any indebtedness for borrowed money or permit issue any Company Benefit Plan to be amended in debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any material respect; (C) pay any bonus person, or make any profit-sharing loans or similar payment toadvances, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, intentionally grant any security interest in any of its directors, officers or employeesassets, other than increases in base salary (1) intercompany indebtedness among the Company and annual cash bonus opportunities and payments made its Subsidiaries or (2) indebtedness that is incurred in the Ordinary Course ordinary course of Business business consistent with past practice (and, with respect to borrowed money indebtedness, is reasonably necessary to meet any current obligations of the Company and which do not exceedits Subsidiaries); or (C) merge, consolidate, combine or amalgamate with any person;
(vii) (A) grant any increase in the aggregatecompensation, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance incentives or change of control benefits offered payable or to become payable to any current or former executive officer, (B) enter into any new employeesor materially amend any existing, directors employment, retention, bonus, change in control, severance, redundancy or consultantstermination agreement with any current or former executive officer whose base salary is in excess of $250,000, (C) accelerate or commit to accelerate the funding, payment, or vesting of any compensation or benefits to any current or former executive officer whose base salary is in excess of $250,000, (D) establish or become obligated under any collective bargaining agreement, collective agreement, or other contract or agreement with a labor union, trade union, works council, or other representative of executive officers; (E) hire any (x) officer or (y) employee new executive officers whose annual base salary is or is expected in excess of $250,000; provided, however, that the actions described in subsection (A) shall be permissible to be more than $250,000 per year or the extent made in the ordinary course of business consistent with past practice (F) terminate or give notice of termination and not to exceed 10% with respect to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditionedsuch executive officer);
(viii) enter into adopt, amend and/or terminate any material transaction other than Plan except as may be required by applicable Law, is necessary in order to consummate the Contemplated Transactions, or health and welfare plan renewals in the Ordinary Course ordinary course of Businessbusiness;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except materially amend (other than reasonable and usual amendments in the Ordinary Course ordinary course of Businessbusiness), the accounting policies or procedures, other than as required by GAAP;
(x) sell(A) amend any material Tax Return, assign(B) change any material method of Tax accounting, transfer(C) make (inconsistent with past practice), licensechange or rescind any material election relating to Taxes (including, sublicense for the avoidance of doubt, any election that results in the Company or otherwise dispose of any Company IP (Subsidiary being treated as other than pursuant to a partnership or a disregarded entity for U.S. federal income tax purposes), or (D) settle or compromise any material U.S. federal, state, local or non-exclusive licenses in the Ordinary Course of Business)U.S. Tax audit, assessment, Tax claim or other controversy relating to Taxes;
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xii) fail to maintain the Leased Real Property, including the improvements located thereon or used in connection therewith, in substantially the same condition as of the date of this Agreement, except where the failure to maintain such Leased Real Property would reasonably be expected to have a Company Material Adverse Effect;
(xiii) other than as required by Law fail to maintain the existence of, or GAAPuse reasonable efforts to protect, take any Company Registered IP to the extent that such action or inaction would reasonably be expected to change accounting policies or procedureshave a Company Material Adverse Effect;
(xiv) initiate permit any item of Company Registered IP to lapse or settle to be abandoned, invalidated, dedicated to the public, or disclaimed, or otherwise become unenforceable or fail to perform or make any Legal Proceedingapplicable filings, recordings or other similar actions or filings, or fail to pay all required fees and Taxes required or advisable to maintain and protect its interest in each and every material item of Company Registered IP to the extent that such action or inaction would reasonably be expected to have a Company Material Adverse Effect;
(xv) enter into waive, release, assign, settle or amend a Contract compromise any Legal Proceeding, other than waivers, releases, assignments, settlements or compromises that are solely monetary in nature and do not exceed $500,000 individually or $1,000,000 in the aggregate;
(xvi) take any action or knowingly fail to take any action, which action or failure to act would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of impede the Contemplated TransactionsTransactions from qualifying for the Intended Tax Treatment; or
(xvixvii) agree, resolve or commit to do any of the foregoing.
(c) . Nothing contained in this Agreement shall give ParentMEDS, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 2 contracts
Samples: Agreement and Plan of Merger (TRxADE HEALTH, INC), Merger Agreement (TRxADE HEALTH, INC)
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: :
(a) the Company shall ensure that it and each of the Company and its Subsidiaries shall conduct other Acquired Companies:
(i) conducts its business and operations in the Ordinary Course ordinary course, in substantially the same manner as such business and operations have been conducted prior to the date of Business this Agreement;
(ii) conducts its business and in compliance in all material respects operations consistent with all applicable Laws the Company’s 2006 balance sheet and cash flow projections as of June 20, 2006 delivered by the Company to Parent prior to the date hereof (the “2006 Street Case”) and the requirements Company’s income statement forecasts for 2006, 2007 and 2008 delivered by the Company to Parent prior to the date hereof (the “Three Year Projections”); provided, however, that failure by the Company to meet the 2006 Street Case and Three Year Projections shall not, in and of itself, be conclusive evidence that the Company conducted its business and operations in a manner inconsistent with such projections and forecasts;
(iii) uses reasonable efforts to, as a whole, preserve intact its current business organization, keep available the services of its current officers and employees and maintain its relations and good will with suppliers, customers, landlords, creditors, employees, labor organizations, Governmental Bodies, and other Persons having business relationships with the Acquired Companies;
(iv) keeps in full force all Contracts insurance policies identified in Part 2.17 of the Disclosure Schedule (except for replacement of insurance policies providing substantially similar levels of coverage);
(v) promptly notifies Parent of (A) any notice or other written communication from any Person alleging that constitute the Consent of such Person is or may be required in connection with any of the Contemplated Transactions, or (B) any Legal Proceeding commenced, or, to the Knowledge of the Company, overtly threatened in writing against any of the Acquired Companies; and
(vi) (A) pays (in a timely manner) any amounts due and owing to International Business Machines Corporation (“IBM”) under the License Agreement dated July 1, 2004, by and between the Company Material Contracts.and IBM (the “IBM License Agreement”) and (B) shall not exercise the option, under the IBM License Agreement, to designate a third “have-made sublicensee” without Parent’s prior written consent, not to be unreasonably withheld;
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall not, nor and shall it cause or not permit any of its Subsidiaries the other Acquired Companies to, do except as consented to by Parent (which consent may not except in the cases of clauses (i) through (iii), (v) through (viii), (xi) and (xii) below and clause (xv) below (to the extent clause (xv) relates to any matter set forth in any of clauses (i) through (iii), (v) through (viii), (xi) or (xii) below) be unreasonably withheld, conditioned or delayed) or as set forth in Part 4.2(b) of the followingDisclosure Schedule:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock or stock, and shall not repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except upon the exercise of a repurchase right in connection with the payment favor of the exercise price and/or withholding Taxes incurred upon Company arising under a Company Stock Option that was previously exercised or as provided in the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this AgreementConexant Supply Termination Agreement Amendment);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber issue or authorize any the issuance of the foregoing with respect to: (Ai) any capital stock or other security of the Company or any of its Subsidiaries security, (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (Bii) any option, warrant option or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (Ciii) any instrument convertible into or exchangeable for any capital stock or other security of (except that the Company or any shall be permitted (x) to grant stock options to employees in accordance with its past practices, (y) to issue Company Common Stock to employees upon the exercise of its Subsidiariesoutstanding Company Options, and (z) issue Company Common Stock upon conversion of Company Preferred Stock);
(iii) except as required to give effect to anything in contemplation of the Closing, amend or waive any of its or its Subsidiaries’ Organizational Documentsrights under, or effect permit the acceleration of vesting under, (A) any provision of the Company Stock Appreciation Rights Plan, or be a party to (B) any merger, consolidation, share exchange, business combination, recapitalization, reclassification provision of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactionsany agreement evidencing any outstanding Stock Appreciation Rights;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to establish, adopt or materially amend any Person Acquired Company Employee Benefit Plan, Acquired Company Employment Agreement or Acquired Company Pension Plan (except for that the advancement of expenses Company will enter into the Employment Agreements and except as required to employees, directors comply with applicable Legal Requirements and consultants in the Ordinary Course of Businesswith prior notice to Parent), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-profit sharing payment, cash incentive payment or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees, employees (other than payments or increases required pursuant to the Labor Agreement, any Acquired Company Employee Benefit Plan or any Acquired Company Employment Agreement as in base effect on the date hereof and salary increases and annual cash bonus opportunities and payments made bonuses for non-executive employees in the Ordinary Course ordinary course of Business business consistent with past practice practice), (C) hire any new officer or any new employee whose annual base compensation is greater than $100,000, or (D) terminate any existing officers or employees at the level of director or above of any of the Acquired Companies;
(v) decrease quarterly contributions to the Acquired Company Pension Plan below (A) $260,000 per quarter for the quarter ended September 30, 2006 and which December 31, 2006 and (B) thereafter actuarially determined amounts;
(vi) amend its Organizational Documents, or effect or become a party to (other than as a stockholder) any Acquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction;
(vii) form any Subsidiary or acquire any equity interest or other interest in any other Entity;
(viii) make any capital expenditure, except for capital expenditures that, when added to all other capital expenditures made by or on behalf of the Acquired Companies since July 1, 2006, do not exceed, in the aggregate: (A) $20.2 million through September 29, the amounts specifically budgeted therefore in 2006, (B) $30.2 million through March 31, 2007; provided, however, that Parent shall not unreasonably withhold its consent to any proposal by the Company Budget; (D) to increase the severance amount of permitted capital expenditures for the period from December 31, 2006 through March 31, 2007 by an amount not in excess of $1.75 million or change of control benefits offered (C) $33.45 million through May 31, 2007, provided, however that Parent shall not unreasonably withhold its consent to any current or new employeesproposal by the Company to increase the permitted amount of capital expenditures for the period from March 31, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected 2007 to be more than May 31, 2007 by an amount not in excess of $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business1.75 million;
(ix) acquire enter into any material asset Contract that is or sell, lease or otherwise irrevocably dispose of any of its assets or propertieswould constitute a Material Contract, or grant any Encumbrance with respect to such assets amend, renew or propertiesprematurely terminate, or (except in the Ordinary Course ordinary course of Business;
(xbusiness) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke knowingly waive any material Tax electionright or remedy under, fail to pay any income or other material Tax as such Tax becomes due and payable, file Material Contract (except for: (r) any amendment making any material change to any Tax Returnthe Alliance Program Attachment to Customer Agreement MA4747, settle or compromise any income or other material Tax liability or submit any voluntary disclosure applicationdated June 3, enter into any Tax allocation2002, sharingbetween the Company and Mentor Graphics Corporation, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter sole effect of which is to expand the definition of “AP Products” under such agreement to include additional products and to establish corresponding pricing for such additional products, but which does not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in otherwise alter the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation terms and conditions of the Contemplated Transactionsagreement; or
(xvis) agreeany amendment (including amendments implementing new “Product Quotations”) to the Fixed-Term License Agreement FTLA-02JAZZ0816, resolve or commit dated August 16, 2002, between Newport Fab, LLC and Cadence Design Systems, the sole effect of which is to do any expand the definition of “Licensed Programs” under such agreement to include additional products and to establish corresponding pricing for such additional products, but which does not otherwise alter the terms and conditions of the foregoing.
agreement; (ct) Nothing contained in this any amendment (including amendments to the relevant Statement of Work attachments) to the Standard Cell Library Development & License Agreement shall give Parentdated May 31, directly 2006, between the Company and Synopsys, Inc. or indirectlythe Drom Library Development & License Agreement dated May 31, 2006, between the right Company and Synopsys, Inc., to control or direct expand the operations definition of “Licensed Libraries” under such agreements to include additional products and to establish corresponding pricing for such additional products, but which does not otherwise alter the terms and conditions of the agreement (u) any purchase order accepted by an Acquired Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, from a customer; (v) any agreement with a customer that is consistent in all material respects with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operationsthe Company’s standard form of wafer purchase agreement (rev. Notwithstanding anything 0704) (other than modifications negotiated at arms’ length with a customer that are not material to the contrary set forth in this Agreementoperation of the Acquired Companies’ business), which contains no consent obligations of Parent shall be required with respect the Company to reserve any matter set forth in this Section 4.2 or elsewhere in this Agreement fabrication capacity for such customer except to the extent that the requirement Company has accepted a binding purchase order from such customer and contains no obligations of such consent could violate exclusivity binding upon the Company; (w) any applicable Lawsagreement with a supplier for the purchase of equipment, raw materials, services or supplies; (x) any Employment Agreements not prohibited by subsection (iv) above; (y) any Contract for capital expenditures permitted by subsection (viii) above; and (z) any Contract for licenses permitted by subsection (xi) below; provided, however, that each of (r) through (z) above shall be in the ordinary course of business of the Company);
(i) acquire any asset for a purchase price exceeding $250,000 or assets for an aggregate purchase price exceeding $1 million (other than the acquisition of raw materials or supplies in the ordinary course of business consistent with past practice and licenses of the type required to be disclosed on Part 2.9 of the Disclosure Schedule and the acquisition of capital assets subject to subclause (viii) above); (ii) sell or otherwise dispose of any asset other than the sale of finished goods inventory in the ordinary course of business consistent with past practice, scrapped inventory and the disposal of obsolete equipment consistent with past practice; (iii) enter into a license or lease for any asset involving the payment by an Acquired Company of, or the receipt by an Acquired Company of payments, greater than $100,000 in any twelve month period or $250,000 over the term of the lease or license; or (iv) knowingly waive or relinquish any material rights outside of the ordinary course of business;
(xi) lend money to any Person (except that the Acquired Companies may make advances to employees, officers, directors or independent contractors for business expenses and the Company may allow employees to acquire Company Common Stock in exchange for promissory notes upon exercise of Company Options, in each case in the ordinary course of business consistent with past practice), or incur or guarantee any indebtedness for borrowed money (except for (1) the issuance of letters of credit in the ordinary course of business, (2) borrowings under the Loan and Security Agreement with Wachovia Capital Finance Corporation (Western) or (3) borrowings from any Key Stockholders (not to exceed $15 million in the aggregate) that are repaid at or prior to the Closing);
(xii) change any of its methods of accounting or accounting practices in any material respect, except as required by GAAP;
(xiii) make any material Tax election;
(xiv) commence any Legal Proceeding seeking amounts in excess of $100,000 or seeking any non-monetary relief or settle any material Legal Proceeding except for settlements involving solely monetary consideration; or
(xv) agree or commit to take any of the actions described in this clause (b).
Appears in 2 contracts
Samples: Merger Agreement (Acquicor Technology Inc), Merger Agreement (Conexant Systems Inc)
Operation of the Company’s Business. (a) Except (i) The Company covenants and agrees that, during the period from the date hereof until the Effective Time, except as expressly contemplated or expressly permitted by this Agreement, as set forth in Section 4.2(a) 6.1 of the Company Disclosure Schedule, (ii) as expressly permitted by Schedule or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s Law or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out ofregulation, or unless Parent shall otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to consent in writing by Parent (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), during the Pre-Closing Period: Company shall, and shall cause each Company Subsidiary to, conduct its business in the ordinary course of business consistent with past practice, and use its reasonable best efforts to preserve substantially intact its and each of the Company Subsidiaries’ business organizations and its Subsidiaries shall conduct its business and operations capital structure, maintain in the Ordinary Course of Business and in compliance in effect all material respects with all applicable Laws permits required for the Company and the requirements Company Subsidiaries to carry on their respective business, keep available the services of all Contracts that constitute present officers and key employees, and maintain its present relationships with customers, suppliers, distributors, employees and other Persons with which the Company Material Contracts.
(b) Except (i) or the Company Subsidiaries have significant business relationships. Without limiting the generality of the foregoing, between the date hereof and the Effective Time, except as otherwise expressly contemplated or expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) 6.1 of the Company Disclosure Schedule, (iii) Schedule or as required by applicable Law or (iv) with the prior written regulation, or unless Parent shall otherwise consent of Parent (in writing, which consent shall not be unreasonably withheld, delayed conditioned or conditioned), at all times during the Pre-Closing Perioddelayed, the Company shall not, nor and shall it cause or not permit any Company Subsidiary to, between the date of its Subsidiaries tothis Agreement and the Effective Time, directly or indirectly, do any of the following:
(i) amend or otherwise change the Company Memorandum and Articles of Association, any Company Subsidiary Memorandum and Articles of Association or any similar governing instruments, other than as expressly contemplated by this Agreement;
(ii) issue, deliver, sell, pledge, mortgage, dispose of, transfer, subject to any Lien or encumber any shares, ownership interests or voting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of, any other ownership interests or any voting securities (including share appreciation rights, phantom stock or similar instruments) of the Company or any Company Subsidiary (in each case except for the issuance, delivery or sale of ADSs upon the exercise of Company Options or the vesting of Company Restricted Shares outstanding on the date hereof, in accordance with the terms of the Company Plan under which they were granted);
(iii) declare, accrueset aside, set aside make or pay any dividend or make other distribution, payable in cash, shares, property or otherwise, with respect to any other of the share capital of the Company or any Company Subsidiary (except for any dividend or distribution in by a Company Subsidiary to the Company or another Company Subsidiary) or enter into any agreement with respect of any shares to the voting or registration of its capital stock share capital;
(iv) reclassify, combine, split, subdivide or repurchaseamend the terms of, redeem or redeem, purchase or otherwise reacquireacquire, directly or indirectly, any shares of its capital stock Shares, or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercisereclassify, settlement combine, split or vesting of any award granted under the Company Plan in accordance with subdivide or amend the terms of such award in effect on any share capital or other ownership interests of any of the date of this Agreement)Company Subsidiaries;
(iiv) (A) directly or indirectly acquire (whether by merger, consolidation or acquisition of stock or assets or otherwise) in one transaction or any series of related transactions any equity interests in any corporation, partnership or other business organization or division thereof or any material assets, other than purchases of inventory and other assets in the ordinary course of business consistent with past practice or pursuant to existing Contracts, or (B) sell, issuepledge, grantmortgage, pledge lease, license, subject to any Lien, transfer or otherwise dispose of (whether by merger, consolidation or encumber acquisition of stock or authorize assets or otherwise) any of the foregoing with respect to: (A) any capital stock material property or other security assets of the Company or any Company Subsidiary; provided that these restrictions do not apply to (x) transfers among the Company and the Company Subsidiaries, or (y) transactions in the ordinary course of its Subsidiaries business consistent with past practice (except which for shares the avoidance of outstanding doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition of supplies or inventory in the ordinary course of business and the purchase or sale of securities which may be classified as short-term investments on the consolidated balance sheet of the Company);
(vi) terminate, cancel, renew, transfer, assign, license, encumber or request or agree to any material change in or waiver under any Material Contract, or enter into or amend in any material respect any Contract that, if existing on the date hereof, would be a Material Contract, other than in the ordinary course of business consistent with past practice;
(vii) (A) transfer, sell, assign, mortgage, surrender, encumber, grant any security interest in, divest, cancel, disclaim, abandon, allow to lapse or expire (including by failure to pay required fees), dedicate to the public, or otherwise dispose of, any material Intellectual Property owned or licensed by the Company Common Stock issued upon or any Company Subsidiary, other than licenses or other Contracts granted in the valid exercise ordinary course of business, or cancellation, abandonment, allowing to lapse or expire such Intellectual Property that is no longer used or useful in any of the Company’s or Company Options)Subsidiaries’ respective businesses or pursuant to Contracts in effect prior to the date hereof; (B) grant any option, warrant material licenses or right other Contracts to acquire any capital stock third party or enter into any covenant not to xxx with respect to any Intellectual Property owned by the Company or any other securityCompany Subsidiary, other than option grants or restricted stock unit awards granted to employees and service providers except non-exclusive licenses in the Ordinary Course ordinary course of Business which are included in the calculation of the Company Outstanding Sharesbusiness; or (C) disclose to or allow to be disclosed to or discovered by any instrument convertible into Person any material Trade Secrets except pursuant to valid and appropriate non-disclosure or exchangeable for license agreements or pursuant to obligations to maintain confidentiality arising by operation of law; (D) fail to notify Parent promptly of any capital stock material infringement, misappropriation, misuse, unauthorized disclosure, or other violation of or conflict with any material Intellectual Property or Trade Secrets owned by the Company or any Company Subsidiary or entrusted to the Company or any Company Subsidiary by their customers, clients or other Persons to whom the Company or any Company Subsidiary owes an obligation of confidentiality, security breach, or material breach of or non-compliance with Intellectual Property and information security measures and procedures of the Company or respective Company Subsidiaries, of which the Company or any Company Subsidiary becomes aware and to reasonably consult with Parent regarding the actions (if any) to take to protect such Intellectual Property and Trade Secrets; and (E) fail to continue to follow and practice the Intellectual Property and information security measures of its Subsidiariesthe Company or respective Company Subsidiaries consistent with past practice in any material respect;
(iiiviii) except as required to give effect to anything in contemplation of the Closingincur, amend any of its issue, prepay, redeem, otherwise acquire or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest modify in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for material respect the advancement terms of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) or assume, guarantee any debt securities of othersor endorse, or (D) otherwise as an accommodation become responsible for, the obligations of any Person other than a Company Subsidiary, or make, forgive or cancel any loans, advances or capital contributions to, or investments in, any other Person (other than a wholly-owned Company Subsidiary), in each case, except the incurrence or payment guarantee of any Transaction Expenses, make any capital expenditure in excess of indebtedness (A) under the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law Company’s or the terms of any Company Benefit Plan Subsidiary’s existing credit facilities as in effect on the date of this Agreement: hereof (Aif any) adoptin an amount not to exceed the maximum amount authorized under the credit agreements evidencing such indebtedness, terminate, establish or enter into any Company Benefit Plan; (B) cause in an amount not in excess of $500,000 (or permit an equivalent amount in RMB) individually or $1,000,000 (or an equivalent amount in RMB) in the aggregate or (C) in the ordinary course of business consistent with past practice;
(ix) except pursuant to any Company Benefit Plan to be amended in any material respect; effect on the date hereof or as required by applicable Law, (CA) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, fringe benefits of any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course ordinary course of Business business consistent with past practice, (B) grant any severance or termination pay not expressly provided for under any Company Benefit Plan, or any retention pay, (C) waive or amend in any material respect any performance, or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan to the extent not already required in any such Company Benefit Plan or contemplated by this Agreement, (D) enter into or amend in any material respect any employment, consulting or severance agreement or arrangement with any of its present directors, officers, employees or independent consultants, other than in the ordinary course of business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered with respect to any current or new non-executive officer employees, directors employees with an annual base salary of less than $100,000 (or an equivalent amount in RMB) and independent consultants; , (E) hire establish, adopt, enter into or amend or terminate any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or Company Benefit Plan, (F) terminate or give notice of termination to hire any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction new employees other than in the Ordinary Course ordinary course of Business;
business consistent with past practice with respect to non-executive officer employee positions or employees with an annual base salary of less than $100,000 (ixor an equivalent amount in RMB), or (G) acquire any material asset terminate the employment or sellservices, lease or otherwise irrevocably dispose as applicable, of any of its assets present directors or propertiesofficers, or grant any Encumbrance employees with respect to such assets annual compensation of more than $100,000 (or properties, except an equivalent amount in the Ordinary Course of BusinessRMB);
(x) selloffer, assignplace or arrange any issue of debt securities or commercial bank or other credit facilities, transfer, license, sublicense or otherwise dispose in each case in an amount in excess of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business)$750,000;
(xi) makemake any material change in any financial or tax accounting principles, policies, methods or procedures used by the Company, except as may be required by changes in statutory or regulatory accounting rules or GAAP or regulatory requirements with respect thereto;
(xii) except to the extent permitted by clause (vi) or clause (ix) of this Section 6.1(a), enter into or amend any Contract with any executive officer, director, or other Affiliate of the Company or any of its Subsidiaries or any Person beneficially owning five percent or more of the Shares or the voting power of the Shares, other than Contracts solely between the Company and/or wholly-owned Company Subsidiaries entered into or amended in the ordinary course of business consistent with past practice;
(xiii) make or change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to materially amend any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure applicationReturn (except as required by applicable Law), enter into any Tax allocation, sharing, indemnification or other similar material closing agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to Taxes, surrender any right to claim a material refund of Taxes, settle or assessment for finally resolve any income material controversy with respect to Taxes or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or materially change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or proceduresTax accounting;
(xiv) initiate settle or settle compromise any Legal Proceedinglitigation other than settlements or compromises of litigation where the amount paid in settlement or compromise, in each case, does not exceed the amount set forth in Section 6.1(a)(xiv) of the Company Disclosure Schedule;
(xv) enter into except for this Agreement, adopt a plan of complete or amend a Contract that would reasonably be expected to prevent partial liquidation, scheme of arrangement, dissolution, merger, consolidation, restructuring, recapitalization or materially impede, interfere with, hinder or delay the consummation other reorganization of the Contemplated TransactionsCompany or any Company Subsidiary (other than among the Company Subsidiaries);
(xvi) enter into, amend or modify any union recognition agreement, collective bargaining agreement or similar agreement with any trade union or representative body;
(xvii) make or authorize capital expenditures except (A) as budgeted in the Company’s current plan approved by the board of directors of the Company that was provided to Parent, (B) as necessary to maintain existing assets in good repair and consistent with past practice, and (C) for any single capital expenditure not in excess of $2,000,000 or capital expenditures for the Company and the Company Subsidiaries not in excess of $5,000,000 in the aggregate; or
(xvixviii) agreeauthorize, resolve agree or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 2 contracts
Samples: Merger Agreement (Ninetowns Internet Technology Group Co LTD), Merger Agreement (Wang Shuang)
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: each of (i) the Company shall ensure that the Company and its Subsidiaries shall conduct each Company Subsidiary conducts its business and operations (A) in the Ordinary Course of Business ordinary course and in accordance with past practices and (B) in compliance in all material respects with all applicable Laws Legal Requirements and the requirements of all Company Contracts that constitute Material Company Material Contracts; (ii) the Company shall use all reasonable efforts to ensure that the Company and each Company Subsidiary preserves intact its current business organization, keeps available the services of its current officers and other employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees, consultants and other Persons having business relationships with the Company or a Company Subsidiary; (iii) the Company shall keep in full force all insurance policies referred to in Section 2.13; and (iv) the Company shall (to the extent requested by Parent) cause its officers and the officers of each Company Subsidiary to report regularly to Parent concerning the status of the Company's and each Company Subsidiary's business.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during During the Pre-Closing Period, the Company shall not, nor except as set forth on Schedule 4.2(b), (without the prior written consent of Parent), and shall it cause or not permit any of its Subsidiaries Company Subsidiary to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock stock, or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except in connection with the payment for any repurchase of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan Warrants in accordance with the terms of such award in effect on the date of this Agreementtheir existing terms);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any the issuance or grant of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); security, (B) any option, call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that the Company may issue shares and grant options to purchase shares of Company Common Stock under stock option plans approved by its board of directors and stockholders totaling up to 100,000 shares and issue shares of Company Common Stock (w) upon the valid exercise of Company Options outstanding as of the date of this Agreement or such additional options, (x) pursuant to the ESPP, (y) upon the exercise of Company or any Warrants outstanding as of its Subsidiariesthe date of this Agreement and (z) upon the conversion of Company Preferred Stock outstanding as of the date of this Agreement);
(iii) except as required to give effect to anything in contemplation of the Closing, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of the Company's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, other than pursuant to agreements in existence on the date hereof, copies of which have been provided to the other parties hereto, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract;
(iv) amend or permit the adoption of any amendment to its Subsidiaries’ Organizational Documentscertificate of incorporation or bylaws or other charter or organizational documents, adopt any shareholder rights plan ("poison pill") or effect or be become a party to any merger, consolidation, amalgamation, share exchange, business combination, recapitalization, reclassification of shares, stock split, division or subdivision of shares, reverse stock split split, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entitybusiness;
(Avi) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”)$100,000;
(vivii) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or become bound by, or permit any of the assets owned or used by it to become bound by, any Company Benefit Plan to be amended in Collaboration Agreement or any Material Company Contract, or amend or terminate, or waive or exercise any Company Collaboration Agreement or any material respect; right or remedy under, any Material Company Contract, other than in the ordinary course of business consistent with past practices;
(Cviii) acquire, lease or license any right or other asset from any other Person or sell or otherwise dispose of, or lease or license, any right or other asset to any other Person (except in each case for immaterial assets (other than Company Proprietary Assets) acquired, leased, licensed or disposed of by the Company in the ordinary course of business and consistent with past practices), or waive or relinquish any material right;
(ix) lend money to any Person, or incur or guarantee any indebtedness;
(x) establish, adopt or amend any employee benefit plan, pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees;
(xi) prepay any material claim, Liability or obligation, or pay, discharge or satisfy any material unliquidated or contingent Liability;
(xii) enter into or amend any employment agreement, severance agreement, special pay arrangement with respect to termination of employment or other similar arrangement or agreement with any director, officer or employee of the Company,
(xiii) make or fail to make any material election concerning the term, scope or termination of any real property lease, or waive any material provision of any such lease or enter into any new real property lease;
(xiv) engage in any transaction with any stockholder, director, officer or employee other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course ordinary course of Business business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for causepractice;
(viixv) recognize make any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned)Tax election;
(viiixvi) commence or settle any Legal Proceeding;
(xvii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire or take any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle action outside the ordinary course of business or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period inconsistent with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactionspast practices; or
(xvixviii) agree, resolve agree or commit to do take any of the foregoingactions described in clauses "(i)" through "(xviii)" of this Section 4.2(b).
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, During the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective TimePre-Closing Period, the Company shall exercisepromptly notify Parent in writing of: (i) the discovery by the Company of any event, consistent with condition, fact or circumstance that occurred or existed on or prior to the terms date of this Agreement and conditions that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance, or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Company; and (iv) any event, complete unilateral control and supervision over its business operations. Notwithstanding anything to condition, fact or circumstance that would make the contrary timely satisfaction of any of the conditions set forth in this AgreementSection 6 or Section 7 impossible or unlikely or that has had or could reasonably be expected to have a Material Adverse Effect on the Company or any Company Subsidiary. Without limiting the generality of the foregoing, no consent the Company shall promptly advise Parent in writing of Parent shall be required any Legal Proceeding or other claim threatened, commenced or asserted against or with respect to the Company or any matter set forth Company Subsidiary. No notification given to Parent pursuant to this Section 4.2(c) shall limit, modify, amend or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable LawsAgreement.
Appears in 2 contracts
Samples: Merger Agreement (Cypros Pharmaceutical Corp), Merger Agreement (Cypros Pharmaceutical Corp)
Operation of the Company’s Business. (a) Except During the Pre-Closing Period the Company shall: (i) as set forth in Section 4.2(a) ensure that each of the Acquired Corporations conducts its business and operations (A) in the ordinary course and substantially in accordance with past practices, and (B) in material compliance with all applicable Legal Requirements and the requirements of all Company Disclosure Schedule, Material Contracts; (ii) to the extent consistent with its business, use its commercially reasonable efforts to ensure that each of the Acquired Corporations preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill at least as expressly permitted by or required in accordance favorable as at the date of this AgreementAgreement with all suppliers, customers, distributors, landlords, creditors, licensors, licensees and other Persons having business relationships with the respective Acquired Corporations; (iii) as provide all notices, assurances and support required by applicable Lawany Contract relating to any Proprietary Asset in order to ensure that no condition under such Contract occurs which could result in, or could increase the likelihood of any transfer or disclosure by any Acquired Corporation of any source code materials or other Proprietary Asset; and (iv) keep in connection full force and effect (with the COVID-19 pandemic, to the extent reasonably necessary, (Asame scope and limits of coverage) to protect the health and safety all insurance policies in effect as of the Company’s or any date of its Subsidiaries’ employees, this Agreement covering all material assets of the Acquired Corporations.
(Bb) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, (ii) except as set forth in Section 4.2(b) of the Company Disclosure Schedule, the Company shall not (iii) as required by applicable Law or (iv) with without the prior written consent of Parent (which consent Parent), and shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall not, nor shall it cause or permit any of its Subsidiaries the other Acquired Corporations to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)securities;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any the issuance or grant of the foregoing with respect to: (A) any capital stock or other security (including the sale, transfer or grant of any treasury shares) or (B) any Company Stock Right (except that, prior to the Offer Acceptance Time, the Company or any of its Subsidiaries (except for shares of outstanding may issue Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation Options outstanding as of the Company Outstanding Shares; date of this Agreement or (C) any instrument convertible into or exchangeable for any capital stock or other security of pursuant to the Company or any of its SubsidiariesESPP as in effect on the date hereof);
(iii) except as required to give effect to anything in contemplation of the Closing, amend or waive any of its rights under, or its Subsidiaries’ Organizational accelerate the vesting under, any provision of any of the Company Stock Option Plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant, or other security or any related Contract;
(iv) amend or permit the adoption of any amendment to the Company Organization Documents, or effect or be become a party to any merger, consolidation, share exchange, business combinationCompany Acquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(Avi) make any capital expenditure not included in the Company's 2002 capital expenditure budget, a copy of which has been furnished to Parent, to the extent such new capital expenditures exceed $75,000 in the aggregate;
(vii) enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any Company Contract with obligations in excess of $250,000, or amend or terminate, or waive or exercise any material right or remedy under, any Company Material Contract with obligations in excess of $250,000;
(viii) acquire, lease or license any right or other asset from any other Person or sell or otherwise dispose of, or lease or license, any right or other asset to any other Person (except in each case for immaterial assets acquired, leased, licensed or disposed of by the Company in the ordinary course of business and consistent with past practices, and except for licensing of intellectual property in the sale or licensing of the Company's products in the ordinary course of business and consistent with past practices), or waive or relinquish any material right;
(ix) lend money to any Person (except for the advancement of expenses to employeesPerson, directors and consultants in the Ordinary Course of Business), (B) or incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities except that the Company may make routine borrowings in the ordinary course of others, or (D) other than business and in accordance with past practices under the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess Company's credit facilities outstanding as of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement date hereof (the “Company Budget”without any amendment or modification thereto));
(vix) other than except as required by applicable Law Legal Requirements, (i) establish, adopt or the terms of amend any Company Benefit Employee Plan as in effect on the date of this Agreement: or collective bargaining agreement, (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (Cii) pay any bonus or make any profit-sharing or similar payment toto any employee or director of any Acquired Corporation, (iii) or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, (1) any employee (who is not an officer or director) other than in the ordinary course of business and consistent with scheduled salary increases, or (2) to any officer or director; (iv) pay or make available any benefit not provided for under any Company Employee Plan, or (v) enter into, amend or change in any way, or make any severance or termination payments under, any agreement or other arrangement not in existence as of the date of this Agreement;
(xi) hire or fire (1) any employee who is (or would be) an officer of any Acquired Corporation, or (2) any employee (other than an officer of any Acquired Corporation) except in the ordinary course of business;
(xii) change any of its directorsmethods of accounting or accounting practices in any respect, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for causeexcept as required by GAAP;
(viixiii) recognize make any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned)material Tax election;
(viiixiv) commence or settle any Legal Proceeding;
(xv) enter into any material transaction or take any other than in material action outside the Ordinary Course ordinary course of Businessbusiness or inconsistent with past practices;
(ixxvi) acquire any material asset take, or sell, lease or otherwise irrevocably dispose permit the taking of any of its assets or propertiesaction, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would could reasonably be expected to prevent or materially impede, interfere with, hinder or delay cause the consummation vesting of any Company Options to be accelerated in accordance with the terms of any of the Contemplated TransactionsCompany Stock Option Plans;
(xvii) take, agree to take, or omit to take any action which would (A) make any of the representations and warranties of the Company contained in this Agreement untrue or incorrect, (B) prevent the Company from performing or cause the Company not to perform its covenants hereunder, or (C) cause any of the conditions set forth in Section 6 or Section 7 not to be able to be satisfied prior to the Termination Date; or
(xvixviii) agree, resolve agree or commit to do take any of the foregoingactions described in clauses "(i)" through "(xvii)" of this Section 4.2(b).
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, During the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective TimePre-Closing Period, the Company shall exercisepromptly notify Parent in writing of: (i) the discovery by the Company of any event, consistent with condition, fact or circumstance that occurred or existed on or prior to the terms date of this Agreement and conditions that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance, or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Company; and (iv) any event, complete unilateral control and supervision over its business operations. Notwithstanding anything to condition, fact or circumstance that would make the contrary timely satisfaction of any condition set forth in Section 6 or ANNEX I impossible or unlikely or that has had or could reasonably be expected to have a Material Adverse Effect on the Acquired Corporations. No notification given to Parent pursuant to this Section 4.2(c) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement.
(d) During the Pre-Closing Period, no consent of Parent shall be required with respect promptly notify the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any matter representation or warranty made by Parent in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by Parent in this Agreement if (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance, or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of Parent; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any condition set forth in Section 6 or ANNEX I impossible or unlikely or that has had or could reasonably be expected to have a Material Adverse Effect on the Parent. No notification given to the Company pursuant to this Section 4.2 4.2(d) shall limit or elsewhere otherwise affect any of the representations, warranties, covenants or obligations of Parent contained in this Agreement to the extent that the requirement of such consent could violate any applicable LawsAgreement.
Appears in 2 contracts
Samples: Merger Agreement (Datron Systems Inc/De), Merger Agreement (Titan Corp)
Operation of the Company’s Business. (a) Except During the Pre-Closing Period: (i) except (x) as required or otherwise contemplated under this Agreement, (y) with the written consent of Parent (not to be unreasonably withheld, conditioned or delayed) or (z) as set forth in Section 4.2(a) on Part 5.2 of the Company Disclosure Schedule, the Company will, and will cause each of the other Acquired Companies to, conduct its business and operations (A) in the ordinary course and in substantially the same manner as previously conducted and (B) use commercially reasonable efforts to maintain compliance with all applicable Legal Requirements and the requirements of all Material Contracts; and (ii) as expressly permitted by the Company will promptly notify Parent of (A) any notice or other communication from any Person alleging that the Consent of such Person is or may be required in accordance connection with any of the transactions contemplated by this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) any Legal Proceeding commenced, or, to respond its knowledge, threatened, relating to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, involving or otherwise related affecting any of the Acquired Companies that relates to any of the Transactions. The Company will, and will cause each other Acquired Company to, use all reasonable efforts to preserve intact the COVID-19 pandemic components of its current business organization, including keeping available the services of current officers, directors, managers, employees, advisors and consultants, and use all reasonable efforts to maintain relations and goodwill with their respective suppliers, distributors, manufacturers, customers and other business associates and Governmental Bodies.
(including any response to COVID-19), or (vb) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned)Without limiting the generality of the foregoing, during the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
, except (b) Except (ix) as expressly permitted by required or otherwise contemplated under this Agreement, (iiy) with the written consent of Parent (not to be unreasonably withheld, conditioned or delayed) or (z) as set forth in Section 4.2(b) on Part 5.2 of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall will not, nor shall it cause or and will not permit any of its Subsidiaries other Acquired Company to, do any of the following:
(i) declare, accrueauthorize, set aside or pay any dividend or make any other distribution in respect of any shares of its the Company’s capital stock stock, or purchase or repurchase, redeem or otherwise reacquire, directly or indirectly, acquire any shares of its the Company’s capital stock stock, other than (A) dividends or other securities distributions between or among any of the Acquired Companies, (except B) acquisitions by the Company of Shares in connection with the payment surrender by holders of Company Stock Options to pay the exercise price and/or of such Company Stock Options, (C) the withholding Taxes incurred upon of Shares to satisfy Tax obligations with respect to awards granted pursuant to Company Equity Plans and (D) the exerciseacquisition by the Company of Company Stock Options, settlement Company Stock-Based Awards, Company Performance Awards or vesting of any award granted purchase rights under the Company Plan ESPP in accordance with the terms of such award thereof in effect on as of the date of this Agreement), as applicable, in connection with the forfeiture of such awards;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any of the foregoing with respect to: issuance or grant of, or accelerate the vesting or modify the terms of, (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); security, (B) any option, warrant call, warrant, share of phantom stock or phantom stock right, stock purchase or stock appreciation right, restricted stock unit, performance stock unit or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security security; provided, however, that Company may issue Shares upon the valid exercise of Company Stock Options or pursuant to Company Stock-Based Awards or ESPP Purchase Rights, in each case outstanding as of the Company or any date of its Subsidiariesthis Agreement;
(iii) except as required split, combine or reclassify its outstanding shares of capital stock or enter into any agreement with respect to give effect to anything in contemplation voting of the Closing, amend any of its capital stock or its Subsidiaries’ Organizational Documents, any securities convertible into or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, exchangeable for the avoidance of doubt, the Contemplated Transactionssuch capital stock;
(iv) form (A) except as required by applicable Legal Requirement, (1) increase the compensation payable or that could become payable by any Subsidiary Acquired Company to directors, managers, officers or employees, (2) enter into or amend in any material respect, any existing employment, severance, retention or change in control agreement with any of its past or present officers or employees, including any arrangement that would require disclosure pursuant to the first sentence of Section 3.17 if entered into prior to the date of this Agreement, (3) promote any officers or employees, except as the result of the termination or resignation of any officer or employee, or (4) establish, adopt, enter into, amend, terminate, exercise any discretion under, or take any action to accelerate rights under any Employee Plans or any plan, agreement, program, policy, trust, fund or other arrangement that would be an Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Employee Plan, other than contributions required by applicable Legal Requirements or the terms of such Employee Plans as in effect on the date hereof, or (B) pay or enter into a Contract to pay any “stay bonus,” “closing bonus” or any other bonus or compensation in connection with the execution and delivery of this Agreement or the Transactions;
(v) enter into, adopt, amend, terminate or extend any collective bargaining Contract, or any similar agreement with any union, works council or similar employee representative body;
(vi) make any widespread communication with the employees of the Acquired Companies or make any commitments to any employees regarding the compensation, benefits or other treatment they will receive in connection with the Offer or the Merger, unless any such communications are consistent in all respects with prior directives or documentation approved by Parent (in which case, the Acquired Companies will provide Parent with prior notice of and the opportunity to review and comment upon any such written or other formal or group communications);
(vii) amend, modify or waive any provision of, or permit the adoption of, any amendment to its certificate of incorporation or bylaws or other charter or organizational documents;
(viii) (A) acquire any equity interest or other interest in any other Entity Entity, or (B) enter into a any joint venture with any other Entityventure, partnership or similar arrangement providing for the sharing of profits and losses;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (Bix) incur or guarantee any indebtedness for borrowed money, (C) guarantee money or issue any debt securities or other rights to acquire debt securities of othersthe Company or any Acquired Company or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any other Person (D) other than another Acquired Company), other than the incurrence of indebtedness under the Loan and Security Agreement by and between the Company and Silicon Valley Bank (as amended, modified or payment supplemented from time to time) in an aggregate amount outstanding at any time prior to the Closing of up to $4,000,000; provided that the Company provides Parent with no fewer than three (3) Business Days’ prior written notice for any individual incurrence of indebtedness under such Loan and Security Agreement in excess of $500,000;
(x) enter into, or amend, modify, terminate or waive any provision of any Transaction ExpensesContract relating to Debt (whether incurred, assumed, guaranteed or secured by any asset);
(xi) make any capital expenditure in excess of $25,000 individually or $100,000 in the budgeted aggregate, other than capital expenditures made in the ordinary course of business or otherwise consistent with the Company’s capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently prior to the date hereof;
(xii) other than in the ordinary course of business: (A) acquire, lease, license or sublicense any right or other asset, including Intellectual Property Rights, from any other Person; (B) sell or otherwise dispose of, or lease, license or sublicense, or grant any covenants not to assert or xxx with respect to, any material right or other material asset, including material Intellectual Property Rights, to any other Person, except sales of products and grants of non-exclusive licenses associated with sales of products in the execution ordinary course of this Agreement business; or (C) waive or relinquish, abandon, allow to lapse or encumber (except for any Permitted Encumbrance) any material right or material asset, including material Intellectual Property Rights (except for any patents within the “Company Budget”Managed IP having lapsed or expired at the end of their statutory term);
(vixiii) other than as lend money or make capital contributions to, or make investments in, any Person, except in each case in the ordinary course of business;
(xiv) enter into, modify, amend or terminate any Material Contract or waive, release or assign any rights or claims thereunder, which if so entered into, modified, amended, terminated, waived, released or assigned would be reasonably expected to (A) result in a Material Adverse Effect; or (B) limit or restrict the Surviving Corporation, any Affiliate of the Surviving Corporation or any of their successors and assigns from engaging or competing in any line of business or in any geographical area;
(xv) except to the extent required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adoptLegal Requirements, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability liability, claim or submit assessment, change any voluntary disclosure applicationannual Tax accounting period, change or consent to any change in any Tax accounting method, file any amended material Tax Return, enter into any closing agreement, surrender any right to claim a material Tax allocationrefund, sharing, indemnification waive or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request extend or consent to any extension or waiver of any limitation the statute of limitations period with respect applicable to any material Taxes, Tax claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months)assessment, or adopt or change incur any material accounting method in respect liability for Tax outside the ordinary course of Taxesbusiness;
(xiixvi) enter into, materially amend hire or terminate any Company Material Contractemployee or independent contractor outside of the ordinary course of business or with annual aggregate compensation in excess of $100,000;
(xiiixvii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate commence or settle any Legal Proceeding;
(xvxviii) enter into change any of its methods of accounting or amend a Contract that would reasonably be expected to prevent accounting practices in any material respect unless required by GAAP or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactionsapplicable Legal Requirements; or
(xvixix) agree, resolve agree or commit to do take any of the actions described in clauses (i) through (xviii) of this Section 5.2(b). Notwithstanding the foregoing.
(c) Nothing , nothing contained in this Agreement shall herein will give Parentto Parent or Purchaser, directly or indirectly, the right rights to control or direct the operations of the Company Acquired Companies prior to the Effective Offer Acceptance Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth Nothing in this Section 4.2 5.2 will constitute, or elsewhere in this Agreement be interpreted to the extent that the requirement include, any promise or guarantee of such consent could violate any applicable Lawsfinancial performance or other results of operations.
Appears in 2 contracts
Samples: Merger Agreement (Anadigics Inc), Merger Agreement (Anadigics Inc)
Operation of the Company’s Business. (a) Except (i) During the Pre-Closing Period, except as set forth in Section 4.2(a) Part 4.3 of the Company Disclosure Schedule, the Company shall: (iii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with ensure that the COVID-19 pandemic, to the extent reasonably necessary, Company and each Company Subsidiary conducts its business and operations (A) as it relates to protect the health Company’s development of its pilot plant and safety demonstration plant and their associated assets and liabilities, in a manner consistent in all material respects with the Company’s business plan and budget for those plants (as delivered or made available to Parent on or prior to the date of this Agreement), and with respect to the rest of the Company’s business on a basis that is in all material respects in the ordinary course and in accordance with past practices and is consistent in all material respects with the Company’s budget (as delivered or any made available to Parent on or prior to the date of its Subsidiaries’ employeesthis Agreement), and (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws Legal Requirements and the requirements of all Company Contracts that constitute Material Company Material Contracts; (ii) use its commercially reasonable efforts to ensure that the Company and each Company Subsidiary preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the Company or the applicable Company Subsidiary; (iii) keep in full force and effect (with the same scope and limits of coverage) all insurance policies identified in Part 2.17 of the Company Disclosure Schedule or replacement policies with equivalent coverage; and (iv) the Company shall promptly notify Parent of: (A) any written notice or other communication received by an officer of the Company or of which any officer of the Company has Knowledge from any Person alleging that the Consent of such Person is or may be required in connection with any of the transactions contemplated by this Agreement; and (B) any Legal Proceeding against or involving the Company that is commenced, or, to Company’s Knowledge, threatened.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) Part 4.3 of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall notnot and shall not agree to, nor and shall it cause each Company Subsidiary not to and to not agree to (without the prior written consent of Parent), subject to any Legal Requirement or permit GAAP requirement, take any action set forth in Section 2.5(c), (f), (g), (m), (n), (o) or (p) (except, in the case of (p), any Legal Proceeding against Parent or any of its Subsidiaries toAffiliates).
(c) The Company shall notify Parent within two business days of taking any action described in Section 2.5(d), do any including reasonable detail as to the amount and material terms (including issue price and exercise price or conversion price, as applicable) of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock or repurchase, redeem or otherwise reacquire, directly or indirectly, any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exerciseCompany, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect to: (A) any capital stock options or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iii) except as required to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational Documentsrights, or effect instruments sold, issued or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvi) agree, resolve or commit to do any of the foregoingauthorized.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 2 contracts
Samples: Merger Agreement (Celunol Corp), Merger Agreement (Diversa Corp)
Operation of the Company’s Business. (a) Except (iA) as set forth in Section 4.2(a6.1(a ) of the Company Disclosure ScheduleLetter, (iiB) as expressly permitted by or required in accordance by this Agreement, (iii) as Agreement or required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, with the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by prior written consent of Parent (which such consent shall not to be unreasonably withheld, delayed or conditioned), during from the Pre-date hereof until the Closing Period: Date, the Company shall, and shall cause each of the Company and its Subsidiaries shall conduct to, carry on its business and operations in the Ordinary Course of Business ordinary course and in compliance a manner consistent with past practice in all material respects and use its reasonable best efforts to (i) preserve intact its present business organization, goodwill and assets, (ii) maintain in effect all Governmental Authorizations required to carry on its business as now conducted, (iii) keep available the services of its present officers and other employees (provided, that the Company shall not be obligated to, or to cause its Subsidiaries to, increase the compensation of, or make any other payments or grant any concessions to, such officers and employees), and (iv) preserve its present relationships with all applicable Laws material customers, suppliers and other Persons with which it has a business relationship (provided, that they shall not be obligated to make any payments or grant any concessions to such Persons other than payments in the requirements of all Contracts that constitute Company Material Contractsordinary course consistent with past practice).
(b) Except Without limiting the generality of Section 6.1(a), except (i) as expressly permitted by this Agreement, (iiA) as set forth in Section 4.2(b6.1(b) of the Company Disclosure ScheduleLetter, (iiiB) as expressly permitted or required by this Agreement or required by applicable Law Law, or (ivC) with the prior written consent of Parent (which such consent shall not to be unreasonably withheld, delayed or conditionedconditioned other than any consent with respect to Section 6.1(b)(vi) which Parent may withhold in its sole discretion), at all times during from the Pre-date hereof until the Closing PeriodDate, the Company shall not, nor shall it cause or permit any of its Subsidiaries (or, with respect to any Company Vessels that are entered into a pool, any applicable pool management company to the extent that the Company shall have the right to consent to such action pursuant to the Contracts between such pool management company and the Company or its Subsidiaries) to, do any of the following:
(i) amend its articles of incorporation, bylaws or other comparable charter or organizational documents (whether by merger, consolidation or otherwise);
(ii) (A) declare, accrue, set aside or pay any dividend dividends on, or make any other distribution distributions (whether in cash, stock, property or otherwise) in respect of of, any shares of Company Common Stock, other Company Securities or Company Subsidiary Securities, other than from a wholly-owned Subsidiary to its capital stock parent, (B) split, combine or repurchasereclassify any shares of Company Common Stock, other Company Securities or Company Subsidiary Securities, (C) issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, any shares of Company Common Stock, other Company Securities or Company Subsidiary Securities (D) purchase, redeem or otherwise reacquire, directly or indirectly, acquire any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other securityStock, other than option grants Company Securities or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; Subsidiary Securities, or (CE) amend, modify or change any instrument convertible into term of, or exchangeable for take any capital stock or other security action that would result in a default under, any Indebtedness of the Company or any of its Subsidiaries;
(iii) except as required (A) issue, deliver, sell, grant, pledge, transfer, subject to give effect to anything in contemplation any Lien or otherwise encumber or dispose of the Closingany shares of Company Common Stock, other Company Securities or Company Subsidiary Securities, or (B) amend any term of its any Company Securities or its Subsidiaries’ Organizational Documentsany Company Subsidiary Securities (in each case, or effect or be a party to any whether by merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split consolidation or similar transaction except, for the avoidance of doubt, the Contemplated Transactionsotherwise);
(iv) form accelerate or delay (A) the payment of any Subsidiary or acquire any equity interest accounts payable or other interest liability or (B) the collection of notes or accounts receivable, other than in any other Entity or enter into a joint venture the ordinary course of business consistent with any other Entitypast practice;
(Av) lend money to any Person (except for the advancement incur more than $200,000 of expenses to employees, directors and consultants capital expenditures in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure aggregate in excess of amounts budgeted for by the budgeted Company or its Subsidiaries as described in Section 6.1(b)(v) of the Company Disclosure Letter, other than capital expenditure amounts set forth expenditures relating to the maintenance of the Company Vessels in the Company operating budget delivered to Parent concurrently ordinary course of business consistent with the execution of this Agreement (the “Company Budget”)past practice;
(vi) other than as required acquire or commit to acquire (A) all or any substantial portion of a business or Person or division thereof (whether by applicable Law purchase of stock, purchase of assets, merger, consolidation, or otherwise), or (B) any assets or properties involving a price in excess of $200,000 in the terms aggregate, except (1) acquisitions by the Company or any of any its wholly-owned Subsidiaries of or from an existing wholly-owned Subsidiary of the Company, (2) the acquisitions described on Section 6.1(b)(vi) of the Company Benefit Plan as Disclosure Letter, (3) acquisitions of assets, materials and supplies in the ordinary course of business consistent with past practice, (4) the purchase of bunkers in the ordinary course of business, or (5) pursuant to Contracts for Newbuildings in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize enter into any labor union Contract that, if in existence on the date hereof, would be a Material Contract or labor organizationCompany Interested Party Transaction, except as otherwise required or amend, modify, extend or terminate any Material Contract or Company Interested Party Transaction (other than the expiration of any such Contract in accordance with its terms, and the termination of any such Contract in connection with any breach by the applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditionedcounterparty);
(viii) enter into sell, lease, license, transfer, subject to any material transaction other than Lien or otherwise dispose of, any of its assets or properties except (A) sales of used equipment in the Ordinary Course ordinary course of Businessbusiness consistent with past practice, and (B) Company Permitted Liens (it being agreed that if the Company or any of its Subsidiaries shall desire to sell any Company Vessel or to charter out any Company Vessel for a period of more than seven (7) months (excluding charters of Company Vessels made by the pools where the charterer has a right, if at the end of this period the vessel is on a ballast voyage to a port of redelivery or is upon a laden voyage, to continue to have use of the vessel for as long as necessary to complete such ballast voyage, or to complete such laden voyage and to return to a port of redelivery), Parent shall have a right of first refusal to purchase or charter each and any such Company Vessel on the same terms the Company or its Subsidiary intends to accept from a Third Party and if Parent fails to exercise such right of first refusal within two (2) Business Days of Parent's receipt of written notice from the Company, then Parent shall be deemed to have consented to such sale or charter of such Company Vessel by the Company to such Third Party);
(ix) acquire any material asset adopt a plan of complete or sellpartial liquidation, lease dissolution, merger, consolidation, restructuring, recapitalization or otherwise irrevocably dispose other reorganization of the Company or any of its assets or propertiesSubsidiaries, or grant enter into any Encumbrance agreement with respect to such assets the voting of its capital stock or properties, except in other securities held by the Ordinary Course Company or any of Businessits Subsidiaries;
(x) sellexcept as required pursuant to the terms of any Company Benefit Plan existing as of the date hereof or to the extent required under applicable Law, assign(A) grant to any director, transferofficer, licenseemployee or consultant of the Company or any of its Subsidiaries any increase or enhancement in compensation, sublicense bonus or other benefits, (B) grant to any director, officer or employee of the Company or any of its Subsidiaries any right to receive severance, change in control, retention or termination pay or benefits or any increase in severance, change of control or termination pay or benefits or (C) adopt, enter into or amend or commit to adopt, enter into or amend any Company Benefit Plan except for amendments required under applicable Law;
(xi) except as required by GAAP (or any interpretation thereof) or a Governmental Authority, make any change in any method of accounting principles, method or practices;
(xii) (A) incur or issue any Indebtedness (other than accrual of interests, drawdowns, premiums, penalties, fees, expenses and breakage costs under any Material Contracts existing as of the date hereof), (B) make any loans, advances or capital contributions to, or investments in, any other Person (including in connection with any pool in which a Company Vessel is entered), other than to the Company or any of its Subsidiaries or (C) repay or satisfy any Indebtedness (other than scheduled payments of Indebtedness when due); provided that this clause (xii) shall not limit the issuance or incurrence of any intercompany Indebtedness or the repayment or satisfaction of such intercompany Indebtedness; provided, further, notwithstanding anything in this clause (xii) to the contrary, the Company and its Subsidiaries may incur Indebtedness in an aggregate principal amount not to exceed $300,000 at any one time outstanding and may repay or satisfy any such Indebtedness from time to time;
(xiii) change any material method of Tax accounting, make or change any material Tax election, file any material amended return (except as required by applicable Law), settle or compromise any material Tax liability, enter into any closing agreement with respect to any material amount of Taxes, surrender any right to claim a material Tax refund or offset or otherwise reduce a material Tax liability or take into account on any Tax Return required to be filed prior to the Closing any adjustment or benefit arising from the Transactions;
(xiv) institute, settle, or agree to settle any action, suit, litigation, investigation or proceeding (other than actions, suits, litigations, investigations or proceedings where Parent is adverse to the Company) pending or threatened before any arbitrator, court or other Governmental Authority, in each case in excess of $100,000 (exclusive of any amounts covered by insurance) or that imposes injunctive or other non-monetary relief on the Company or its Subsidiaries;
(xv) disclose, or consent to the disclosure of, any trade secrets or other proprietary information, other than in the ordinary course of business consistent with past practice;
(xvi) waive, release or assign any claims or rights having a value in excess of $100,000;
(xvii) fail to use commercially reasonable efforts to cause the current material insurance (or re-insurance) policies maintained by the Company or any of its Subsidiaries, including directors' and officers' insurance, not to be canceled or terminated or any of the coverage thereunder to lapse, unless, simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing having comparable deductions and providing coverage equal to or greater than the coverage under the canceled, terminated or lapsed policies for substantially similar premiums or less are in full force and effect; provided, that neither the Company nor any of its Subsidiaries shall obtain or renew any insurance (or reinsurance) policy for a term exceeding three (3) months;
(xviii) directly or indirectly (A) purchase or construct any vessel or enter into any Contract for the purchase or construction of any vessel, (B) sell or otherwise dispose of any Company IP Vessel or enter into any contract for the sale or disposal of any Company Vessel, (other than pursuant C) to non-exclusive licenses in the Ordinary Course extent that the Company shall have the right to consent to such action under the terms of Business);
(xi) make, change the Contracts between the Company and the service provider or revoke any material Tax election, fail to pay any income or other material Tax as manager of such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure applicationCompany Vessel, enter into any Tax allocationcontract for the bareboat or spot or time charter-out of any Company Vessel in excess of sixty (60) calendar days, sharing(D) change any manager of any Company Vessel, indemnification (E) defer scheduled maintenance of any Company Vessel, or other similar agreement (F) depart from any normal drydock and maintenance practices or arrangement discontinue replacement of spares in operating the Company Vessels; provided, that, to the extent that the Company shall have the right to consent to such action under the terms of the Contracts between the Company and the service provider or manager of such Company Vessel, and subject to actions permitted under clause (other than customary commercial contracts entered v) of this Section 6.1(b), the Company will not, and will cause its Subsidiaries not to enter into any Contract for the drydocking or repair of any Company Vessel where the estimated cost thereof is in excess of $200,000 unless, in the Ordinary Course case of Business the principal subject matter of which is not Taxesthis clause (F), request or consent such work cannot prudently be deferred and is required to any extension or waiver preserve the safety and seaworthiness of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months)such Company Vessel, or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvixix) agree, resolve authorize or commit enter into a Contract to do take any of the foregoingactions described in clauses (i) through (xviii) of this Section 6.1(b).
(c) Nothing contained in this Agreement shall give ParentNotwithstanding anything herein to the contrary, directly or indirectlyfrom and after the date hereof and until the Closing, the right to control or direct the operations each employee of the Company prior shall be permitted and is hereby authorized to remove the items listed in Section 6.1(c ) of the Company Disclosure Letter and any other property which such employee can establish is the personal property of such employee from the Company's premises at no cost, expense or liability to the Effective Time. Prior to the Effective TimeCompany, Parent, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 Surviving Corporation or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable LawsMerger Sub.
Appears in 2 contracts
Samples: Agreement and Plan of Merger (Euronav NV), Agreement and Plan of Merger (Euronav NV)
Operation of the Company’s Business. (a) Except The Company shall: (i) as set forth in Section 4.2(a) cause each of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, Acquired Companies to the extent reasonably necessary, conduct its businesses and operations (A) to protect in the health ordinary course consistent with past practices and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws Law and the requirements of all Specified Contracts; (ii) use all commercially reasonable efforts to ensure that each of the Acquired Companies preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its existing material relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with any of the Acquired Companies; (iii) keep in full force all insurance policies or comparable replacement or renewal policies; (iv) promptly notify Parent of any notice or other communication from any Person alleging that the Consent of such Person is or may be required in connection with any of the transactions contemplated by this Agreement, including, without limitation, in order to avoid having any material Contract terminated or amended, altered or modified to decrease any of the Acquired Company's rights, profits or any other benefits under such Contracts or increase any of the Acquired Company's liabilities or obligations under such Contracts, or grant any other Person any additional rights, profits or any other benefits under such Contracts or decrease any other Person's liabilities or obligations under such Contracts, as a result of the consummations of the transactions contemplated by the Agreement; (v) use its commercially reasonable best efforts to obtain any written Consent that constitute Company Material is or may be required in connection with any of the transactions contemplated by this Agreement, including, without limitation, in order to avoid having any material Contract terminated or amended, altered or modified to decrease any of the Acquired Company's rights, profits or any other benefits under such Contracts or increase any of the Acquired Company's liabilities or obligations under such Contracts, or grant any other Person any additional rights, profits or any other benefits under such Contracts or decrease any other Person's liabilities or obligations under such Contracts, as a result of the consummations of the transactions contemplated by the Agreement and (vi) file on a timely basis all material notices, reports, returns and other filings required to be reported to or filed with any Governmental Body, as well as applications and other EXECUTION VERSION documents necessary to maintain, renew or extend any Governmental Authorization for the continued operation of any of the Acquired Companies' business.
(b) Except The Company shall not (i) as expressly permitted by this Agreementwithout the prior written consent of Parent, (ii) such consent not to be unreasonably withheld, conditioned or delayed), and shall not permit any of the other Acquired Companies to, except as set forth in Section 4.2(b5.2(b) of to the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any of the followingLetter:
(i) (A) declare, accrue, set aside or pay any dividend on, or make any other distribution (whether in cash, securities or other property) in respect of, any of its outstanding capital stock (other than, with respect to a Subsidiary of the Company, to its corporate parent), (B) split, combine or reclassify any of its outstanding capital stock or other equity interests or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its outstanding capital stock or repurchaseother equity interests, or (C) purchase, redeem or otherwise reacquire, directly or indirectly, acquire any shares of its outstanding capital stock or any rights, warrants or options to acquire any such shares (other securities (except in connection with than the payment valid exercise of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting Company Options outstanding as of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber Encumber or authorize any or propose the sale, issuance, grant, or Encumbrance of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); security, (B) any option, call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of except that the Company may issue shares of Company Common Stock upon the valid exercise of (x) Company Options outstanding as of October 25, 2004 or any of its Subsidiaries(y) the Top-Up Options;
(iii) except as required to give effect to anything expressly contemplated elsewhere in contemplation of the Closingthis Agreement, amend or waive any of its rights under any provision of any of the Company's Stock Option Plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract, in each case with respect to the securities of the Company or the Acquired Companies;
(iv) amend or permit the adoption of any amendment to the Company Certificate or the Company Bylaws or other charter or organizational documents, except to the extent required to comply with its Subsidiaries’ Organizational Documentsobligations under this Agreement, or effect or be become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, division or subdivision of shares, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivv) form any Subsidiary or directly or indirectly acquire any equity interest or other interest in in, or make any other Entity investment in or enter into a joint venture with capital contribution to, any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”)Person;
(vi) incur or commit to any capital expenditures in excess of $500,000 individually, or in the aggregate, and in no event incur or commit any such expenditures other than as required by applicable Law or in a manner generally consistent with the terms of any Company Benefit Plan as in effect on the date of this Agreement: Company's existing capital expenditure plan; EXECUTION VERSION
(Avii) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or become bound by, or permit any of the material Assets owned or used by it to become bound by, any Contract, or amend or terminate, or waive or exercise any material right or remedy under, any material Contract, in each case other than in the ordinary course of business and consistent with past practices;
(viii) modify, amend or terminate, or waive, release or assign any material rights or claims with respect to any Specified Contract or any confidentiality agreement to which any Acquired Company Benefit Plan is a party;
(ix) acquire, lease or license any right or other material asset from any other Person or sell or otherwise dispose of, or lease or license, any material right or other material Asset, including without limitation, any Intellectual Property of the Acquired Companies to be amended any other Person, except in each case for Assets acquired, leased, licensed or disposed of by the Company in the ordinary course of business and consistent with past practices;
(x) lend or advance money to any Person, make any capital contribution to or investments in any material respect; Person, or incur or guarantee any Obligation, including without limitation, any additional borrowings under any existing lines of credit (Cexcept that the Company may , in the ordinary course of business and consistent with past practices, make line of credit borrowings under its existing credit facility and advancement of expenses);
(xi) except as set forth in Section 5.2(b)(xi) to the Company Disclosure Letter, and other than with respect to any applicable payroll Taxes, pay to any Person any bonuses, commissions, compensation, success fees or any other payments as a result of the consummation of the transactions contemplated herein or otherwise;
(xii) except as required to comply with applicable Law and under existing agreements disclosed to Parent, or to satisfy the requirements of Section 409A of the Code, establish, adopt or amend any Benefit Plan, pay, commit to pay or accelerate the payment of any bonus or make, commit to make or accelerate any profit-sharing or similar payment to, or increase or commit to increase the amount of the wages, salary, commissions, benefits fringe benefits, severance, insurance or other compensation or remuneration payable to, any of its directors, officers officers, employees or employeesconsultants, other than or enter into any new (or amend any existing) employment, severance or termination Contract with any current, prospective or former director, officer or employee, except that the Company may (A) make routine, reasonable salary increases in base salary and annual cash bonus opportunities and payments made connection with the Company's customary employee review process, in the Ordinary Course ordinary course of Business business and consistent with past practice practices, (B) make bonus payments, in the ordinary course of business consistent with past practices, to employees under the terms of existing agreements and plans disclosed to Parent and (C) enter into its standard employment/non-compete/confidentiality agreement with any employee hired pursuant to Section 5.2(b) (xiii) in the ordinary course of business consistent with past practices and which do would not exceedhave been required to be disclosed in the Disclosure Letter pursuant to clause (ii) or (iii) of the second sentence of Section 3.14(b); EXECUTION VERSION
(xiii) hire any new employee with an annual base salary in excess of $100,000; other than employees hired solely (A) to replace employees who are no longer with the Acquired Companies, (B) to fill vacancies created by employee promotions; provided that in each case of (A) and (B) the compensation of such new employees is at a level no higher than the lesser of (x) the compensation level of the former (or promoted) employee that such new employee is replacing and (y) $200,000 per year, or (C) new employees to support new business growth, provided that the compensation of such new employee does not exceed $200,000;
(xiv) make any change in any method of accounting or accounting practice or policy (including any method, practice or policy relating to Taxes), except as required by any changes in GAAP or as otherwise required by Law;
(xv) write up, write down or write off the book value of any assets, individually or in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change excess of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization500,000, except for depreciation and amortization in accordance with GAAP consistently applied or as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);Law
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xixvi) make, change revoke or revoke amend any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income claim or other material Tax liability or submit any voluntary disclosure applicationassessment with respect to Taxes, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request execute or consent to any extension or waiver waivers extending the statutory period of any limitation period limitations with respect to any claim the collection or assessment for of any income Taxes or amend any material Tax Returns;
(xvii) (A) commence any Proceeding, or (B) pay, discharge, satisfy any claims, liabilities or Obligations or settle any Proceeding other than the payment, discharge or satisfaction of claims, liabilities or Obligation that individually or in the aggregate less than $100,000 or (C) or settle any Proceeding seeking an injunction or any other equitable relief;
(xviii) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material Taxes (other than pursuant reorganization or any agreement relating to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of TaxesAcquisition Proposal;
(xiixix) enter intoplan, materially amend announce, implement or terminate effect any reduction in force, lay-off, early retirement program, severance program or other program or effort concerning the termination of employment of employees of the Company Material Contractor its Subsidiaries generally;
(xiiixx) other than as required by Law or GAAP, take any action to change accounting policies exempt or proceduresmake not subject to (A) the provisions of Section 203 of the DGCL or (B) any other state takeover Law or state Law that purports to limit or restrict business combinations or the ability to acquire or vote shares, any individual or entity (other than Parent, its Affiliates or the Company's Subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(xivxxi) initiate take any action or settle omit to take any Legal Proceeding
(xv) enter into or amend a Contract action that would could be reasonably be expected to prevent result in (A) any of the conditions to the Offer set forth in Annex I not being satisfied, (B) any representation or materially impedewarranty of the Company set forth in Section 4 becoming not true or not accurate in any material respect, interfere with, hinder or (C) the prevention or EXECUTION VERSION material delay or impediment to the consummation of the Contemplated Transactions; orOffer, the Merger or the transactions contemplated by this Agreement;
(xvixxii) agree, resolve permit or commit cause any Subsidiary of the Company to do any of the foregoing.; or
(cxxiii) Nothing contained agree or commit, whether or not in this Agreement shall give Parentwriting, directly or indirectly, the right to control or direct the operations take any of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions actions described in clauses "(i)" through "(xxii)" of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws5.2(b).
Appears in 2 contracts
Samples: Merger Agreement (Superior Consultant Holdings Corp), Merger Agreement (Affiliated Computer Services Inc)
Operation of the Company’s Business. (a) Except in each case (ix) as specifically required by any other provision of this Agreement or specifically set forth in Section 4.2(aPart 5.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (Cy) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19)Legal Requirement, or (vz) with the prior written consent of Parent, during the Pre-Closing Period: (i) the Company shall conduct its business and operations (A) in the ordinary course and in accordance with past practices and (B) in compliance, in all material respects, with all applicable Legal Requirements and the requirements of all Company Contracts that constitute Material Contracts; (ii) the Company shall use commercially reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and other employees and maintain its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, distributors, resellers, employees and other Persons having business relationships with the Company; (iii) the Company shall keep in full force all insurance policies referred to in Section 3.19 (other than any such policies that are immediately replaced with substantially similar policies); and (iv) the Company shall promptly notify Parent of (A) any written notice or other communication of which the Company has Knowledge from any Person alleging that the Consent of such Person is or may be required in connection with any of the Contemplated Transactions, and (B) any Legal Proceeding commenced, or, to the Knowledge of the Company, threatened against, relating to, involving or otherwise affecting the Company that relates to the consummation of the Offer or the Merger or any of the other Contemplated Transactions. Except in each case (x) as specifically required by any other provision of this Agreement, (y) as required by any applicable Legal Requirement, or (z) with the prior written consent of the Company, during the Pre-Closing Period, Parent shall promptly notify the Company of (A) any written notice or other communication of which Parent has Knowledge from any Person alleging that the Consent of such Person is or may be consented required in connection with any of the Contemplated Transactions, and (B) any Legal Proceeding commenced, or, to the Knowledge of Parent, threatened against, relating to, involving or otherwise affecting Parent or Acquisition Sub that relates to the consummation of the Offer or the Merger or any of the other Contemplated Transactions.
(b) Except in writing each case (x) as specifically required by Parent any other provision of this Agreement or specifically set forth in Part 5.2(b) of the Disclosure Schedule, (y) as required by any applicable Legal Requirement, or (z) with the prior written consent of Parent, during the Pre-Closing Period (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed, but only with respect to clauses “(xi), during the Pre-Closing Period: each of the Company ,” “(xvii),” “(xx),” “(xxi)” and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
“(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditionedxxii), at all times during the Pre-Closing Period” below), the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock, split, combine or reclassify any capital stock or repurchase, redeem or otherwise reacquire, directly or indirectly, any shares of its capital stock or other securities (except in connection with the payment securities, other than repurchases from employees of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting Company following termination of any award granted under the Company Plan in accordance with employment pursuant to the terms of such award in effect on the date of this Agreement)applicable pre-existing restricted stock agreements;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant deliver or authorize any of the foregoing with respect tosale, issuance, delivery or grant of: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options)security; (B) any option, call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that: (1) the Company may issue shares of Company Common Stock upon the valid exercise of Company Options or Company Warrants outstanding as of the date of this Agreement; and (2) the Company may, in the ordinary course of business and consistent with past practices, grant to any employee of the Company below the level of Vice President (x) options (having an exercise price equal to the fair market value of the Company Common Stock covered by such options determined as of the time of the grant of such options, containing no vesting acceleration provisions and containing the Company’s standard vesting schedule) or (y) restricted stock units or restricted stock awards (containing no vesting acceleration provisions and containing the Company’s standard vesting schedule) under the Company Equity Plans in connection with either the hiring of such employee during the Pre-Closing Period or the Company’s annual employee review process, provided that (I) any such award grants made to newly-hired employees of its Subsidiariesthe Company shall be made in accordance with the Company’s new hire guidelines set forth in Part 5.2(b)(ii)(I) of the Disclosure Schedule; and (II) any award grants made to Company employees in connection with the Company’s annual employee performance review process, shall be made in accordance with the guidelines set forth in Part 5.2(b)(ii)(I) of the Disclosure Schedule;
(iii) except as required to give effect to anything in contemplation of the Closing, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of the Company Equity Plans or any provision of any Contract evidencing any outstanding Company Option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, restricted stock units, warrant or other security or any related Contract, other than any acceleration of vesting that occurs in accordance with the terms of a Company Contract in effect as of the date of this Agreement and previously Made Available to Parent;
(iv) amend or permit the adoption of any amendment to any of its Subsidiaries’ Organizational Charter Documents, or effect or be become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, division or subdivision of shares, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(vi) make any capital expenditure (except that the Company may make any capital expenditure that: (A) does not exceed $250,000 individually; and (B) when added to all other capital expenditures made on behalf of the Company during the calendar month in which such capital expenditure is made, does not exceed $2,000,000 in the aggregate);
(vii) other than in the ordinary course of business consistent with past practices (A) enter into or become bound by, or permit any of the material assets owned or used by it to become bound by, any Material Contract or (B) amend or terminate, or waive or exercise any material right or remedy under, any Material Contract;
(viii) grant any exclusive license or right with respect to any Company IP, other than any grant of Company IP that occurs in accordance with the terms of a Company Contract in effect as of the date of this Agreement and previously Made Available to Parent;
(ix) enter into, renew or become bound by, or permit any of the material assets owned or used by it to become bound by, any Contract the effect of which would be to grant to any Person following the Merger any right or license to any Intellectual Property right owned as of the date of this Agreement by the Company or Parent;
(x) enter into, renew or become bound by, or permit any of the material assets owned or used by it to become bound by, any Contract containing, or otherwise subjecting the Company to, any non-competition, exclusivity or other material restriction on the operation of the business of the Company or Parent;
(xi) acquire, lease or license any right or other asset from any other Person or sell or otherwise dispose of, lease or license any right or other asset to any other Person (except in each case for assets (that are not material individually or in the aggregate) acquired, leased, licensed or disposed of by the Company in the ordinary course of business and consistent with past practices), or, other than in the ordinary course of business in connection with the collection of accounts receivable, waive or relinquish any material right;
(xii) other than in the ordinary course of business consistent with past practices, write off as uncollectible, or establish any extraordinary reserve with respect to, any receivable or other indebtedness;
(xiii) make any pledge of any of its material assets or (B) permit any of its material assets to become subject to any Encumbrances, except for Encumbrances that do not materially detract from the value of such assets or materially impair the operations of the Company;
(xiv) permit any cash, cash equivalents or short-term investments of the Company to become subject to any Encumbrance;
(xv) (A) lend money to any Person (except for the advancement of expenses to employeesPerson, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (Cincluding capital lease obligations) guarantee any debt securities of others, or (D) other than the incurrence or payment indebtedness for reimbursement of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth expenses made in the Company operating budget delivered to Parent concurrently with the execution ordinary course of this Agreement (the “Company Budget”);
(vibusiness) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish obtain or enter into any Company Benefit Plan; bond or letter of credit or any related Contract, in each case in excess of $50,000 individually or $250,000 in the aggregate, or (B) cause announce, offer, arrange, syndicate or permit issue any debt securities (including convertible securities) or announce, arrange or syndicate any bank financing;
(xvi) establish, adopt, enter into or amend any Company Benefit Employee Plan to be amended in any material respect; (C) or Company Employee Agreement, pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation (including equity-based compensation, whether payable in stock, cash or other property) or remuneration payable to, any of its directors, directors or any of its officers or employeesother employees (except that the Company: (A) may provide routine, other than reasonable salary increases in base salary and annual cash bonus opportunities and payments made to employees that are not at the Vice President level or above in the Ordinary Course ordinary course of Business business and in accordance with past practices in connection with the Company’s customary employee review process; (B) may amend the Company Employee Plans to the extent required by Section 409A of the Code and other applicable Legal Requirements; (C) may make customary bonus payments and profit sharing payments consistent with past practice practices in accordance with existing bonus and which do not exceed, profit sharing plans referred to in Part 3.16(b) of the aggregate, the amounts specifically budgeted therefore in the Company BudgetDisclosure Schedule); and (D) increase may comply with requirements set forth Company Employee Plans or Company Employee Agreements that are in existence as of the severance date of this Agreement or change are entered into in compliance with this Agreement, each of control benefits offered which was previously Made Available to any current or new employees, directors or consultants; Parent;
(Exvii) hire any employee (xA) officer at the director level with compensation that is inconsistent with the Company’s compensation guidelines or its past practices; (B) at the level of Vice President or above, or (yC) employee whose with an annual base salary is or is expected to be more than in excess of $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause150,000;
(viixviii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course ordinary course of Businessbusiness consistent with past practices, materially change any of its pricing policies, product return policies, product maintenance polices, service policies, product modification or upgrade policies, personnel policies or other business policies, or any of its methods of accounting or accounting practices (other than as required by GAAP) in any respect;
(ixxix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke make any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to amend any Tax Return, settle Return or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period file a claim for refund with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted described in the Ordinary Course first sentence of Business of not more than seven (7) monthsSection 3.16(j), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate compromise or settle any Legal Proceeding
(xv) Proceeding with respect to any Tax or Tax-related matter, enter into or amend a Contract obtain any Tax ruling or take any action that would could reasonably be expected to prevent or materially impede, interfere with, hinder or delay have a material and adverse impact on the consummation Tax liability of the Contemplated TransactionsCompany;
(xx) commence any Legal Proceeding, other than Legal Proceedings commenced for the routine collection of bills;
(xxi) settle any claim or Legal Proceeding, other than claims or Legal Proceedings against the Company that do not relate to Tax or Tax-related matters and with respect to which the settlement involves solely the payment by the Company of an amount less than $50,000 individually and less than $250,000 in the aggregate for all such claims and Legal Proceedings settled during the Pre-Closing Period;
(xxii) pay, discharge, settle or satisfy any claims (whether or not commenced prior to the date of this Agreement), except that the Company may pay, discharge, settle or satisfy any claim if the only obligation involved on the part of the Company will be payment of money in an amount not to exceed $50,000 individually and not to exceed $250,000 in the aggregate for all such claims during the Pre-Closing Period; or
(xvixxiii) agree, resolve agree or commit to do take any of the foregoingactions described in clauses “(i)” through “(xxii)” of this Section 5.2(b).
(c) Nothing contained Notwithstanding anything in this Agreement Section 5.2(a) or 5.2(b) to the contrary, if (i) the Parent Designees constitute a majority of the directors sitting on the board of directors of the Company and (ii) the board of directors of the Company expressly directs or authorizes the Company (of its officers) to act or not act in a certain manner, or expressly consents, in advance, to such action or inaction, then such action or inaction shall give Parentbe deemed not to constitute a breach of Section 5.2(a) or 5.2(b); provided, directly however, that such direction, authorization or indirectlyconsent, as applicable, of the board of directors of the Company shall be based on a resolution of the entire board of directors (and not the approval of merely the majority of the Continuing Directors, as contemplated by the Section 1.3(c)).
(d) During the Pre-Closing Period, the Company shall promptly notify Parent in writing if the Company has the right to control exercise any right or direct option to repurchase shares of its capital stock from any Company Associate or other Person upon termination of such Person Person’s service. The Company shall not exercise any such repurchase right except to the operations of the Company extent directed by Parent in writing.
(e) By not later than immediately prior to the Effective Time. Prior to the Effective Acceptance Time, the Company shall exerciseeither (i) renegotiate all existing equipment leases that have change in control provisions so that the lessor no longer has the right to either demand accelerated rent or repossess the equipment by reason of the consummation of the Offer or the Merger, consistent with or (ii) if the terms and conditions of this AgreementCompany shall have been unable to renegotiate all such leases in the manner described above, complete unilateral control and supervision over exercise its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required buyout option with respect to any matter set forth all of such leases that have not been renegotiated, with the result that the Company shall obtain fee ownership in this Section 4.2 or elsewhere all such equipment and the lessors’ rights with respect to such equipment shall be terminated. If the Company becomes obligated to exercise such buyout option, but determines in this Agreement good faith that it has inadequate funds to do so, then the Company shall promptly notify Parent of the amount of funds so required and provide Parent with reasonable documentary evidence supporting such calculation, and Parent shall thereafter either (A) make such funds available to the extent that Company (which the requirement Company shall use solely for the purpose of exercising such consent could violate any applicable Lawsbuyout option), or (B) waive the Company’s obligation to exercise such buyout option.
Appears in 2 contracts
Samples: Merger Agreement (Peets Coffee & Tea Inc), Merger Agreement (Diedrich Coffee Inc)
Operation of the Company’s Business. (a) Except During the Pre-Closing Period: (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, except (iiw) as expressly permitted by required under this Agreement or required in accordance this Agreement, (iii) as required by applicable LawLegal Requirements, (ivx) in connection with the COVID-19 pandemicwritten consent of Parent, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: each (y) for any actions taken reasonably and in good faith in response to COVID-19 or COVID-19 Measures and with prior written notice to Parent or (z) as set forth in Section 5.2 of the Company Disclosure Schedule, the Company shall, and shall cause its Subsidiaries shall to conduct its business their respective businesses and operations in all material respects in the Ordinary Course of Business ordinary course and in compliance in all material respects with all applicable Laws Legal Requirements; and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, (ii) as the Company shall promptly notify Parent of (y) any knowledge of the receipt of any notice from any Person alleging that the Consent of such Person is or may be required in connection with any of the Transactions and (z) any Legal Proceeding commenced, or, to its knowledge threatened in writing, relating to or involving the Company or any of its Subsidiaries that seeks to enjoin the consummation of the Transactions. The Company shall, and shall cause each of its Subsidiaries to, use their respective commercially reasonable efforts to (A) preserve intact, in all material respects, the material components of the Company’s and each such Subsidiary’s current business organization, including keeping available the services of current officers and key employees, (B) maintain in all material respects the Company’s and each such Subsidiary’s respective relations and goodwill with all material suppliers, material customers, Governmental Bodies and other material business relations and (C) take the actions set forth in Section 4.2(b5.2(a) of the Company Disclosure Schedule; provided, that no action by the Company or any of its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.2(b) shall be deemed a breach of this Section 5.2(a) unless such action would constitute a breach of such other provision.
(iiib) During the Pre-Closing Period, except (w) as required or otherwise contemplated under this Agreement or as required by applicable Law or Legal Requirements, (ivx) with the prior written consent of Parent (Parent, which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, (y) for any actions taken reasonably and in good faith in response to COVID-19 or COVID-19 Measures or (z) as set forth in Section 5.2(b) of the Company shall notDisclosure Schedule, neither Company nor shall it cause or permit any of its Subsidiaries to, do any of the followingshall:
(iA) establish a record date for, declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock (including the Company Common Stock) or (B) repurchase, redeem or otherwise reacquirereacquire any of its shares of capital stock (including any Share), directly or indirectlyany rights, warrants or options to acquire any shares of its capital stock, other than in connection with withholding to satisfy the exercise price and/or Tax obligations with respect to Company Stock Awards;
(ii) split, combine, subdivide or reclassify any shares of its capital stock (including the Shares) or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)equity interests;
(iiiii) sell, issue, grant, pledge or otherwise dispose of or deliver, pledge, transfer, encumber or authorize any the issuance, sale, delivery, pledge, transfer, encumbrance or grant by the Company of the foregoing with respect to: (A) any capital stock stock, Company Stock Award or other equity interest or other security of the Company, (B) any option, call, warrant, restricted securities or right to acquire any capital stock, equity interest or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock stock, equity interest or other security of the Company (except on the exercise or any vesting (as applicable) of its SubsidiariesCompany Options, Company RSUs or Company PSUs outstanding as of the date of this Agreement);
(iiiA) except as otherwise provided under the terms of this Agreement or required under the existing terms of an existing Employee Plan, establish, adopt, terminate or amend, or waive its rights under, any Employee Plan, or any employee benefit plan, policy, program or agreement that would have constituted an Employee Plan if it had been in effect on the date of this Agreement, (B) make or grant to give effect to anything in contemplation any employee of the ClosingCompany who receives total annual base salary that equals or exceeds $150,000 any increase in compensation, bonuses or other benefits; (C) grant or amend any cash, equity or equity-based award; (D) make or grant any severance, change in control, retention or termination payments to any Company Associate; (E) accelerate the vesting or payment of any compensation for the benefit of any Company Associate; (F) hire any Person with an annual base salary in excess of $150,000; or (H) terminate (other than for cause), or layoff (or give notice of any such actions to) any individual service provider of the Company or its Subsidiaries with an annual base salary in excess of $150,000;
(v) amend or permit the adoption of any amendment to its or its Subsidiaries’ Organizational Documents, certificate of incorporation or effect bylaws or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactionscorresponding governing documents;
(ivvi) form any Subsidiary or Subsidiary, acquire any equity interest or other interest in any other Entity or enter into a any joint venture with any other Entityventure, partnership, limited liability corporation or similar arrangement;
(vii) make or authorize any capital expenditure other than any capital expenditure that (A) lend money is provided for in the Company’s capital expense budget either delivered or made available to Parent or Parent’s Representatives prior to the date of this Agreement, which expenditures shall be in accordance with the categories set forth in such budget; or (B) when added to all other capital expenditures made on behalf of the Company since the date of this Agreement but not provided for in the Company’s capital expense budget either delivered or made available to Parent or Parent’s Representatives prior to the date of this Agreement, does not exceed $200,000 individually and $500,000 in the aggregate during any fiscal quarter;
(viii) acquire, lease, license, sublicense, pledge, sell or otherwise dispose of, divest or spin-off, abandon, waive, relinquish or fail to renew, permit to lapse (other than any Intellectual Property Right expiring at the end of its statutory term for which an extension or renewal cannot be obtained), transfer, assign, guarantee, exchange or swap, mortgage or otherwise encumber (including pursuant to a sale-leaseback transaction or securitization) or subject to any Person Encumbrance (except for the advancement of expenses to employeesother than Permitted Encumbrances) any material right or other material asset or property, directors and consultants including any material Intellectual Property Rights (except, in the Ordinary Course case of Businessany of the foregoing (A) in the ordinary course of business (including entering into non-exclusive license agreements and materials transfer agreements in the ordinary course of business), (B) incur pursuant to dispositions of obsolete, surplus or guarantee any indebtedness worn out assets that are no longer useful for borrowed money, the conduct of the business of the Company and (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure as provided for in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”Section 5.2(b)(viii);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire receive, collect, compile, use, store, process, share, safeguard, secure (technically, physically or administratively), dispose of, destroy, disclose, or transfer (including cross-border) any material asset Personal Information (or sellfail to do any of the foregoing, lease as applicable) in violation of any (A) applicable Privacy Laws, (B) privacy policies or otherwise irrevocably dispose notices of the Company or any of its assets Subsidiaries or properties, (C) any of the contractual obligations of the Company or grant any Encumbrance of its Subsidiaries with respect to such assets or properties, except in the Ordinary Course of Businessany Personal Information;
(x) selllend money or make capital contributions or advances to, assignor material investments in, transfer, license, sublicense or otherwise dispose of any Company IP Person (other than pursuant between the Company and its wholly owned Subsidiaries), or incur or guarantee any Indebtedness (except for (A) advances to non-exclusive licenses employees and consultants for travel and other business related expenses in the Ordinary Course ordinary course of Businessbusiness, (B) Indebtedness incurred under the Existing Credit Agreement and other credit facilities in existence as of the date hereof that will be paid off prior to, or substantially simultaneously with, the Closing and (C) Indebtedness between the Company and its Subsidiaries);
(xi) amend or modify in any material respect, waive any rights under, terminate, replace or release, settle or compromise any material claim, liability or obligation under any Material Contract or enter into any Contract which if entered into prior to the date hereof would have been a Material Contract, excluding any non-exclusive license agreements or services agreements entered into in the ordinary course of business or any statement of work under existing Material Contracts not in excess of $750,000 individually;
(xii) commence any Legal Proceeding, except with respect to (A) routine matters in the ordinary course of business, (B) in such cases where the Company reasonably determines in good faith that the failure to commence suit would result in a material impairment of a valuable aspect of its business (provided, that the Company consults with Parent and considers in good faith the views and comments of Parent with respect to any such Legal Proceeding prior to commencement thereof) or (C) in connection with a breach of this Agreement or any other agreements contemplated hereby;
(xiii) settle, release, waive or compromise any Legal Proceeding or other claim (or threatened Legal Proceeding or other claim), other than any Legal Proceeding relating to a breach of this Agreement or any other agreements contemplated hereby or pursuant to a settlement that does not relate to any of the Transactions and (A) that results solely in a monetary obligation involving only the payment of monies by the Company of not more than $500,000 in the aggregate, (B) that results solely in a monetary obligation that is funded by an indemnity obligation to, or an insurance policy of, the Company and the payment of monies by the Company that together with any settlement made under clause (A) are not more than $500,000 in the aggregate (not funded by an indemnity obligation or through insurance policies) or (C) that results solely in a monetary obligation involving payment by the Company of an amount not greater than the amount specifically reserved in accordance with GAAP with respect to such Legal Proceedings or claim on the Balance Sheet;
(xiv) enter into any collective bargaining agreement or other agreement with any labor organization (except to the extent required by applicable Legal Requirements);
(xv) adopt or implement any stockholder rights plan or similar arrangement;
(xvi) adopt a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company;
(xvii) enter into any new material line of business (it being understood that commencement of preclinical or clinical studies in compliance with Section 5.2(b)(xviii) shall not be deemed to constitute a new line of business) or enter into any Contract that materially limits or otherwise restricts the Company or any of its Affiliates (including following the Effective Time, Parent and its Affiliates (other than, in the case of Parent and its Affiliates, due to the operation of Parent’s or its Affiliates’ own Contracts)) following the Closing, from engaging or competing in any line of business or in any geographic area or otherwise enter into any Contracts imposing material restrictions on the Company’s assets, operations or business;
(A) commence any clinical study of which Parent has not been informed prior to the date of this Agreement, (B) unless mandated by any regulatory authority or Governmental Body, discontinue, terminate or suspend any ongoing clinical study or (C) except as required by applicable Legal Requirement, as determined in good faith by the Company, discontinue, terminate or suspend any ongoing IND-enabling preclinical study, in each case with respect to clauses (A) through (C), without first consulting with Parent in good faith;
(A) make, change or revoke rescind any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, (B) settle or compromise any income or other material Tax liability claim, (C) change (or submit request to change) any voluntary disclosure applicationmaterial method of accounting for Tax purposes, enter into (D) file any material amended Tax allocationReturn, sharing, indemnification (E) waive or other similar agreement extend any statute of limitations in respect of a period within which an assessment or arrangement reassessment of material Taxes may be issued (other than customary commercial contracts entered into in the Ordinary Course any such extension that arises solely as a result of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any a Tax Return granted obtained in the Ordinary Course ordinary course of Business of not more than seven (7) monthsbusiness), (F) surrender or adopt compromise any claim for a material refund of Taxes or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xvG) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation any “closing agreement” as described in Section 7121 of the Contemplated TransactionsCode (or any corresponding or similar provision of state, local, or non-U.S. Tax Legal Requirements) with any Governmental Body; or
(xvixx) agreeauthorize any of, resolve or agree or commit to do take, any of the foregoing.
actions described in clauses (ci) through (xix) of this Section 5.2(b). Nothing contained in this Agreement herein shall give Parentto Parent or Purchaser, directly or indirectly, the right rights to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with the terms and conditions of this Agreementhereof, complete unilateral control and supervision over of its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 2 contracts
Samples: Merger Agreement (Antares Pharma, Inc.), Merger Agreement (Antares Pharma, Inc.)
Operation of the Company’s Business. (a) Except During the Pre-Closing Period: (i) except (x) as required or otherwise contemplated under this Agreement, (y) with the written consent of Parent (not to be unreasonably withheld, conditioned or delayed), or (z) as set forth in Section 4.2(a) Part 5.3 of the Company Disclosure Schedule, the Company shall ensure that each of the Acquired Corporations conducts its business and operations (A) in the ordinary course and in substantially the same manner as previously conducted and (B) using its commercially reasonable efforts to maintain compliance with all applicable Legal Requirements and the requirements of all Material Contracts; and (ii) as expressly permitted by the Company shall promptly notify Parent of (A) any notice or other communication from any Person alleging that the Consent of such Person is or may be required in accordance connection with any of the transactions contemplated by this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) any Legal Proceeding commenced, or, to respond its knowledge threatened, relating to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, involving or otherwise related toaffecting any of the Acquired Corporations that relates to the consummation of the transactions contemplated by this Agreement. The Company shall use commercially reasonable efforts to preserve intact the components of its current business organization, including keeping available the COVID-19 pandemic services of current officers and use commercially reasonable efforts to maintain its relations and good will with its suppliers, Collaboration Partners, distributors, clinical trial managers, customers and other business associates and Governmental Bodies; provided, however, that the Acquired Corporations shall be under no obligation to put in place any new retention programs or include additional personnel in existing retention programs.
(including any response to COVID-19), or (vb) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned)Without limiting the generality of the foregoing, during the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
, except (b) Except (ix) as expressly permitted by required or otherwise contemplated under this Agreement, (iiy) with the written consent of Parent (not to be unreasonably withheld, conditioned or delayed), or (z) as set forth in Section 4.2(b) Part 5.3 of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall not, nor and shall it cause or not permit any of its Subsidiaries the other Acquired Corporations to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its the Company’s capital stock stock, or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its the Company’s capital stock or Convertible Senior Notes, other securities (except than dividends or distributions between or among any of the Acquired Corporations to the extent consistent with past practices, and other acquisitions of Shares in connection with the payment satisfaction by holders of Company Stock Awards, Company Restricted Shares or Company Options of the exercise price and/or withholding Taxes incurred upon the exercisetaxes or as a result of forfeiture, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)as applicable;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any the issuance or grant of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); security, (B) any option, warrant call, warrant, share of phantom stock or phantom stock right, stock purchase or stock appreciation right, restricted stock unit, performance stock unit or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that the Company may issue (1) Shares upon the valid exercise of Company Options or pursuant to other stock-based awards, in each case outstanding as of the date of this Agreement, (2) Shares issuable upon conversion of the Convertible Senior Notes, or (3) Company or any Options, Company RSUs and Company PSUs under the Company Equity Plans in satisfaction of its SubsidiariesPending Equity Grants consistent with past practice);
(iii) except as required to give effect to anything in contemplation split, combine or reclassify its outstanding shares of capital stock of the Closing, amend Company or enter into any agreement with respect to voting of any of its the capital stock of any of the Acquired Corporations or its Subsidiaries’ Organizational Documents, any securities convertible into or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, exchangeable for the avoidance of doubt, the Contemplated Transactionssuch capital stock;
(iv) except as contemplated by Section 6.2, to the extent required by applicable Legal Requirements or as required pursuant to an Employee Plan in effect prior to the date of this Agreement and set forth Part 3.17(d) of the Company Disclosure Schedule, (A) enter into, establish, adopt, modify, amend or terminate any Employee Plan or any employment, consulting, collective bargaining, bonus or other incentive compensation, health or other welfare, pension, retirement, severance, deferred compensation or other compensation or benefit plan with, for or in respect of any shareholder, director, officer, other employee or consultant that would constitute an Employee Plan had it been in effect as of the date of this Agreement, (B) grant any new awards under any Employee Plan other than additional ESPP Purchase Rights accrued under the ESPP in accordance with the terms thereof and grants in satisfaction of Pending Equity Grants, (C) take any action to amend, modify or waive any of its rights under, or accelerate the vesting criteria or vesting requirements of payment of any compensation or benefit under, any Employee Plan, (D) amend or modify any outstanding award under any Employee Plan, (E) increase in any manner the compensation, bonuses, severance pay, termination pay, pension or welfare benefits, fringe benefits or any other benefits of any current or former Company Associate, (F) pay any bonus to any current or former Company Associate, except for, to the extent unpaid as of the date of this Agreement, commissions and bonuses under field performance incentive plans, which shall be determined in accordance with the terms of the applicable Employee Plan in effect as of the date of this Agreement and determined in good faith in the ordinary course of business and consistent with past practice, (G) promote any employee other than the completion of promotions contemplated as of the date of this Agreement as set forth in Schedule 5.3(b)(iv), (H) hire any employee or engage any temporary employee or independent contractor (who is a natural person) other than (x) the commencement of employment of employees who have accepted offers of employment as of the date of this Agreement as set forth in Schedule 5.3(b)(iv) and (y) the engagement of temporary employees and independent contractors (who are natural persons) consistent with past practice and pursuant to arrangements that are terminable on no more than 30 days’ notice, (I) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Employee Plan, to the extent not already provided in any such Employee Plan, (J) change any actuarial or other assumptions used to calculate funding obligations with respect to any Employee Plan or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (K) issue or forgive any loans (other than routine travel advances issued in the ordinary course of business and the use of Acquired Corporation credit cards in accordance with the Acquired Corporation’s policy) to Company Associates; provided, however, that the Acquired Corporations: (a) may provide, as set forth in Schedule 5.3(b)(iv), routine, reasonable salary increases to non-executive officer employees in the ordinary course of business and consistent with past practices in connection with the Acquired Corporation’s customary employee review process, in amounts not to exceed 15% per individual and 4% in the aggregate; (b) may amend any Employee Plans to the extent required by applicable Legal Requirements and (c) may accelerate or pro-rate customary annual bonus payments for eligible Company Associates whose employment is terminated before payment of annual bonuses for the year of termination, in accordance with bonus plans existing on the date of this Agreement;
(v) communicate with employees of the Acquired Corporations regarding the compensation, benefits or other treatment they will receive in connection with the Offer or the Merger, unless any such communications are consistent with prior directives or documentation provided to the Acquired Corporations by Parent (in which case, the Acquired Corporations shall provide Parent with prior notice of and the opportunity to review and comment upon any such communications);
(vi) amend, modify, waive any provision of or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documents;
(vii) form any Subsidiary or Subsidiary, acquire any equity interest or other interest in any other Entity or enter into a any joint venture with any other Entityventure, partnership, limited liability corporation or similar arrangement;
(viii) incur any indebtedness for borrowed money or issue any debt securities or warrants or other rights to acquire debt securities of the Company or any of its Subsidiaries or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any other Person, in the case of any of the foregoing, involving an aggregate principal amount or potential guaranteed amount in excess of $250,000 individually or $500,000 in the aggregate, or otherwise incur or modify any material indebtedness or liability;
(ix) pre-pay any long-term debt or accelerate or delay any material payments or the collection of payment due to the Company, except in the ordinary course of business consistent with past practice;
(x) make any capital expenditure (except that the Acquired Corporations may make any capital expenditure that: (A) is provided for in the Company’s capital expense forecast attached as Part 5.3(b)(x) of the Company Disclosure Schedule; or (B) when added to all other capital expenditures made on behalf of all of the Acquired Corporations since the date of this Agreement but not provided for in the Company’s capital expense forecast attached as Part 5.3(b)(x) of the Company Disclosure Schedule, does not exceed $500,000 individually and $2,000,000 in the aggregate during any calendar quarter);
(xi) acquire, lease, license or sublicense any right or other asset, including Intellectual Property Rights, from any other Person or sell or otherwise dispose of, or lease, license or sublicense, any right or other asset, including Intellectual Property Rights, to any other Person (other than in the ordinary course of business and consistent with past practices), or waive or relinquish, abandon, allow to lapse or encumber (except for any Permitted Encumbrance) any right or asset, including Intellectual Property Rights, other than pursuant to transactions where the amount of consideration paid or transferred in connection with such transactions would not exceed $1,000,000 individually or $2,000,000 in the aggregate;
(xii) lend money or make capital contributions to or make investments in, any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course ordinary course of Business)business, (B) or incur or guarantee any indebtedness except for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth short-term borrowings incurred in the Company operating budget delivered to Parent concurrently with the execution ordinary course of this Agreement (the “Company Budget”)business;
(vixiii) other than as required by applicable Law enter into, modify, amend or terminate any Contract or waive, release or assign any rights or claims thereunder, which if so entered into, modified, amended, terminated, waived, released or assigned would be reasonably likely to (i) adversely affect the terms Company (or, following consummation of the Offer, the Merger, Parent or any Company Benefit Plan as in effect on the date Affiliate of this Agreement: (AParent) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (Cii) pay limit or restrict the Surviving Corporation, any bonus or make any profit-sharing or similar payment to, or increase the amount Affiliate of the wages, salary, commissions, benefits Surviving Corporation or other compensation or remuneration payable to, any of its directors, officers their successors and assigns from engaging or employees, other than increases competing in base salary and annual cash bonus opportunities and payments made any line of business or in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budgetany geographical area; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (yiii) employee whose annual base salary is or is expected to be more than if in effect as of the date hereof, would constitute a Material Contract (for this purpose replacing the dollar amount in Section 3.9(a)(viii) with $250,000 per year or (F500,000) terminate or give notice of termination to in any officer other than for causematerial respect;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viiixiv) enter into any material transaction other Contract providing for the distribution of Kyprolis outside of the U.S. that cannot be cancelled by the Company or any of its Subsidiaries without penalty or further payment without more than in the Ordinary Course of Businessthirty (30) days’ notice;
(ixxv) acquire any material asset except to the extent required by applicable Legal Requirements, make or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability liability, claim or submit assessment, change any voluntary disclosure applicationannual Tax accounting period, change or consent to any change in any Tax accounting method, take any material position on any material Tax Return filed on or after the date of this Agreement, file any amended material Tax Return, enter into any closing agreement, surrender any right to claim a material Tax allocationrefund, sharing, indemnification waive or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request extend or consent to any extension or waiver of the statute of limitations period applicable to any limitation period material Taxes, Tax claim or assessment, or incur any material liability for Tax outside the ordinary course of business;
(xvi) commence any Legal Proceeding, except with respect to: (A) routine matters in the ordinary course of business and consistent with past practices; (B) in such cases where the Company reasonably determines in good faith that the failure to commence suit would result in a material impairment of a valuable aspect of its business (provided that the Company consults with Parent and considers the views and comments of Parent with respect to such Legal Proceedings prior to commencement thereof); or (C) in connection with a breach of this Agreement or any claim or assessment for other agreements contemplated hereby;
(xvii) settle any income or other material Taxes (Legal Proceeding, other than pursuant to an extension of time to file any Tax Return granted a settlement: (A) that results solely in a monetary obligation involving payment by the Ordinary Course of Business Acquired Corporations of not more than seven the amount specifically reserved in accordance with GAAP with respect to such Legal Proceedings on the Balance Sheet; (7B) monthsthat results solely in a monetary obligation involving only the payment of monies by the Acquired Corporations of not more than $500,000 individually or $2,500,000 in the aggregate; or (C) results solely in a monetary obligation that is funded by an insurance policy of the Acquired Corporations and the payment of monies by the Acquired Corporations that together with any settlement made under subsection (B) are not more than $500,000 individually or $2,500,000 in the aggregate (not funded through insurance policies), or adopt or change any material accounting method in respect of Taxes;
(xiixviii) enter into, materially amend change any of its methods of accounting or terminate accounting practices in any Company Material Contractmaterial respect unless required by GAAP or applicable Legal Requirements;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xvxix) enter into any collective bargaining, agreement to form a work council or amend a Contract that would reasonably be expected other union or similar agreement or commit to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactionsenter into any such agreements; or
(xvixx) agree, resolve agree or commit to do take any of the actions described in clauses (i) through (xix) of this Section 5.3(b). Notwithstanding the foregoing.
(c) Nothing , nothing contained in this Agreement herein shall give Parentto Parent or Purchaser, directly or indirectly, the right rights to control or direct the operations of the Company Acquired Corporations prior to the Effective Offer Acceptance Time. Prior In addition, notwithstanding the foregoing, nothing in this Section 5.3 shall restrict the Acquired Corporations from, or require the consent of Parent, prior to engaging or entering into any transaction or agreement exclusively among the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary Acquired Corporations if such transaction or agreement is set forth in this Agreement, no consent Part 5.3 of Parent the Company Disclosure Schedule.
(c) The Company shall be required with respect to any matter take the actions set forth in this Section 4.2 or elsewhere in this Agreement to Part 5.3(c) of the extent that the requirement of such consent could violate any applicable LawsCompany Disclosure Schedule.
Appears in 2 contracts
Samples: Merger Agreement (Amgen Inc), Merger Agreement (Onyx Pharmaceuticals Inc)
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: each of , the Company shall, subject to the terms of this Agreement and its Subsidiaries shall conduct any Related Agreement, (i) use commercially reasonable efforts to cause the Company to carry on its business and operations in the Ordinary Course of Business ordinary course and in compliance a manner consistent with past practice, (ii) use commercially reasonable efforts to preserve substantially intact its present business organization and substantially maintain its assets in good working order, (iii) use commercially reasonable efforts to retain the services of its officers and key employees, (iv) use commercially reasonable efforts to cause the Company to preserve its material relationships with customers, suppliers, distributors, licensors, licensees and other third parties to the end that the Company’s goodwill and ongoing business shall not be substantially impaired, (v) comply in all material respects with all applicable Laws Legal Requirements and (vi) promptly notify Parent of: (A) any written notice or other communication received by an officer of the requirements Company or of all Contracts which any officer of the Company has Knowledge from any Person alleging that constitute Company Material Contracts.
(b) Except (i) as expressly permitted the Consent of such Person is or may be required in connection with any of the transactions contemplated by this Agreement; and (B) any Legal Proceeding against or involving the Company that is commenced, (ii) as set forth in Section 4.2(b) or, to the Company’s Knowledge, threatened. Notwithstanding the generality of the Company Disclosure Scheduleforegoing, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall not, nor shall it cause except as set forth in Part 4.3 of the Disclosure Schedule or permit as otherwise expressly contemplated by this Agreement, without the prior written consent of Parent:
(a) amend the Company Constituent Documents;
(b) split, combine, redeem or reclassify any of its Subsidiaries tocapital stock or issue or authorize the issuance of any other securities in respect of, do any in lieu of the following:or in substitution for shares of its capital stock;
(ic) declare, accrueset aside, set aside make or pay any dividend or make other distribution, payable in cash, stock, property or otherwise with respect to any of its capital stock;
(d) authorize cash payments in exchange for any options or other distribution in respect rights granted under any of such plans;
(e) issue any shares of its capital stock Company Common Stock or repurchaseCompany Preferred Stock or securities convertible into, redeem or otherwise reacquiresubscriptions, directly rights, warrants or indirectlyoptions to acquire, or enter into any other agreements or commitments of any character obligating it to issue any such shares or other convertible securities; provided, however, that the Company may (i) issue shares of its capital stock or other securities (except Company Common Stock in connection with the payment exercise of Company Options, (ii) the Company may issue shares of Company Common Stock in connection with the conversion of Company Preferred Stock and (iii) with the prior written consent of Parent, which is not to be unreasonably withheld, and subject to applicable laws and any restrictions or limitations in any Material Contracts, issue shares of Company Common Stock or Company Preferred Stock or securities convertible into Company Common Stock or Company Preferred Stock to one or more investors (who are not currently stockholders of the exercise price Company) in a transaction approved by the Company’s board of directors and stockholders (if necessary) which transaction is undertaken exclusively for the purposes of raising capital for the Company and/or withholding Taxes incurred Parent;
(f) incur, create, increase, assume or otherwise become liable for any indebtedness, or assume, guarantee, endorse or otherwise as an accommodation become responsible or liable for the material obligations of any Person;
(g) materially reduce or increase the amount of any insurance coverage provided by existing insurance policies other than upon the exercise, settlement or vesting expiration of any award granted under the Company Plan in accordance with the terms of such award policy or obtain additional material insurance coverage not in effect on as of the date hereof;
(h) enter into any agreement (that would be a Material Contract if it had been entered into prior to the date hereof) or modify any Material Contract that provides for, grants or pays any bonus, salary increase, severance or termination pay or other benefits to any director, officer, consultant or employee of the Company, or otherwise increase the compensation or benefits provided to any director, officer, consultant or employee, except in each case for payments and benefits made pursuant to agreements existing as of the date of this Agreement);
(iii) sellenter into or adopt any employee benefit plan, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect to: (A) any capital stock program or other security of the similar Contract or amend any Company Plan or any of its Subsidiaries (Employee Agreement except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiariesas may be required by applicable Legal Requirements;
(iiij) except as required acquire or agree to give effect to anything in contemplation consolidate or merge with, or purchase a substantial portion of the Closing, amend any of its stock or its Subsidiaries’ Organizational Documentsassets of, or effect or be a party to by any mergerother manner, consolidation, share exchangeany Person, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactionsany entity;
(ivk) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay change an annual accounting period, adopt or change any income or other material Tax as such Tax becomes due and payableaccounting method, file any amendment making any material change to any amended Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any closing agreement, settle any Tax allocationclaim or assessment, sharingsurrender any right to claim a refund of Taxes, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any the limitation period applicable to any Tax claim or assessment, or take any other similar action relating to the filing of any Tax Return or the payment of any Tax other than as provided in Section 5.7;
(l) waive, release or assign any rights or claims with respect to any claim Company IP;
(m) directly or assessment for indirectly sell, transfer, pledge or otherwise create any income or other material Taxes Encumbrance (other than pursuant to an extension a Permitted Encumbrance) on or otherwise dispose of time to file any Tax Return granted in of the Ordinary Course material assets of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxesthe Company;
(xiin) enter intosell, materially amend assign, license, abandon, allow to lapse, allow to be dedicated to the public domain, or terminate otherwise dispose of any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated TransactionsIP; or
(xvio) agree, resolve agree or commit to do take any of the foregoing.
actions described in clauses “(c) a)” through “(n)” of this Section 4.3. Nothing contained in this Agreement shall give Parentis intended to provide Parent or Merger Sub, directly or indirectly, the right rights to control or direct the Company’s operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with subject to the terms and conditions of this Agreement, complete unilateral control and supervision over of its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 2 contracts
Samples: Agreement and Plan of Merger and Reorganization (RHL Group, Inc.), Agreement and Plan of Merger and Reorganization (Favrille Inc)
Operation of the Company’s Business. (a) Except (i) as set forth in on Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly contemplated or permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s Law or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or unless Meerkat shall otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to consent in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws Law and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law Law, or (iv) with the prior written consent of Parent Meerkat (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock stock; or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock Company Capital Stock or other securities (except in connection with the payment for shares of Company Common Stock from terminated employees, directors or consultants of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this AgreementCompany);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iii) except as required to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iii) except in connection with the hiring of any new employees, sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing actions with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(v) (A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business)Person, (B) incur or guarantee any indebtedness for borrowed money, other than in the Ordinary Course of Business, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure or commitment in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”)$1,000,000;
(vi) other than as required by applicable Law or in the terms Ordinary Course of any Company Benefit Plan as in effect on the date of this AgreementBusiness: (A) adopt, terminate, establish or enter into any Company Benefit Employee Plan; (B) cause or permit any Company Benefit Employee Plan to be amended other than as required by law or in any material respectorder to make amendments for the purposes of Section 409A of the Code; or (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in outside the Ordinary Course of Business;
(ixviii) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(xix) sell, assign, transfer, license, sublicense or otherwise dispose of any material Company IP Rights (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xix) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, ; file any material amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xiixi) enter into, materially amend or terminate any Company Material Contract;
(xiiixii) (A) materially change pricing or royalties or other than as required payments set or charged by Law the Company or GAAP, take any action of its Subsidiaries to its customers or licensees or (B) agree to materially change accounting policies pricing or procedures;royalties or other payments set or charged by persons who have licensed Intellectual Property to the Company or any of its Subsidiaries; or
(xivxiii) initiate or settle any Legal ProceedingProceeding or other claim or dispute involving or against the Company or any Subsidiary of the Company.
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvixiv) agree, resolve or commit to do any of the foregoing.
(c) . Nothing contained in this Agreement shall give ParentMeerkat, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 2 contracts
Samples: Merger Agreement (Synlogic, Inc.), Merger Agreement (Mirna Therapeutics, Inc.)
Operation of the Company’s Business. (a) Except During the Pre-Closing Period, except for actions required to consummate the Merger: (i) as the Company shall ensure that each of the Acquired Corporations conducts its business and operations in the ordinary course and in accordance with past practices (including with respect to closing the Company’s books at the end of each calendar month); (ii) the Company shall use commercially reasonable efforts to ensure that each of the Acquired Corporations preserves intact its current business organization, keeps available the services of its current officers, other employees and agents and maintains its relations and goodwill with all suppliers, distributors, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Acquired Corporations and with all Governmental Bodies; (iii) the Company shall comply with the notice requirement contained in Section 3.05 of the indenture pursuant to which the Convertible Debt is outstanding; and (iv) the Company shall take the actions set forth in Section on Part 4.2(a) of the Company Disclosure Schedule, .
(iib) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with Without limiting the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety generality of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned)foregoing, during the Pre-Closing Period: each of , except for actions required to consummate the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, (ii) Merger or as set forth in Section on Part 4.2(b) of the Company Disclosure Schedule, the Company shall not (iii) as required by applicable Law or (iv) with without the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditionedParent), at all times during the Pre-Closing Period, and the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any ensure that each of the following:other Acquired Corporations does not (without the prior written consent of Parent):
(i) declare, accrue, set aside or pay any dividend or make any other distribution payable in cash, stock, property or otherwise, in respect of any shares of its capital stock share capital, or repurchase, redeem or otherwise reacquirereacquire any share capital or other securities, directly other than to repurchase, in full compliance with applicable Legal Requirements, restricted shares of Company Common Stock held by an employee upon the termination of such employee’s employment or indirectly, enter into any shares agreement with respect to the voting of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)stock;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any of the foregoing with respect tosale, issuance or grant of: (A) any share of capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options)security; (B) any option, call, warrant or right to acquire any share of capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any share of capital stock or other security (except that: (1) the Company may issue shares of Company Common Stock upon the valid exercise or vesting of Company Equity Awards that were outstanding as of the date of this Agreement; and (2) the Company may, in the ordinary course of business and consistent with past practices, grant Company Stock-Based Awards to purchase no more than 300,000 shares of Company Common Stock in the aggregate to newly-hired employees of the Company below the level of Senior Vice President, provided that such Company Stock-Based Awards: (x) shall not contain any “single-trigger,” “double-trigger” or other vesting acceleration provisions and shall not be subject to acceleration (in whole or in part) as a result of the Merger (whether alone or in combination with any termination of its Subsidiariesemployment or other event);
(iii) except as required to give effect to anything in contemplation of the Closing, amend or waive any of its or its Subsidiaries’ Organizational Documentsmaterial rights under, or accelerate the vesting under, any material provision of the Company Equity Plan or any material provision of any Contract evidencing any outstanding Company Equity Award or any material restricted stock purchase agreement, or otherwise modify any of the material terms of any outstanding option, warrant or other security or any related Contract, except as may be required by applicable Legal Requirements;
(iv) amend, terminate or grant any material waiver under the Company Rights Agreement;
(v) amend or permit the adoption of any amendment to the certificate of incorporation, bylaws or other organizational documents any of the Acquired Corporations;
(vi) (A) acquire any material equity interest or other interest in any other Entity; (B) form any Subsidiary; or (C) effect or be become a party to any merger, consolidation, plan of arrangement, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, issuance of bonus shares, division or subdivision of shares, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivvii) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts expenditures specifically set forth in the capital budgets set forth in Part 4.2(b)(vii) of the Company operating budget delivered Disclosure Schedule made in a manner consistent therewith, make or authorize any individual capital expenditure that exceeds $2,500,000 or that, when added to Parent concurrently with all other capital expenditures made on behalf of the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on Acquired Corporations since the date of this Agreement, exceeds $10,000,000;
(viii) except as set forth in Part 4.2(b)(viii) of the Company Disclosure Schedule: (A) adoptother than in the ordinary course of business consistent with past practice, terminate, establish or enter into any Company Benefit Plancontract that would have been a Significant Contract had it been entered into prior to this Agreement; or (B) cause other than in the ordinary course of business consistent with past practice (1) amend, modify or terminate any material provision of any Significant Contract, or (2) cancel, modify or waive any material debts or claims held by it or waive any material rights having in each case a value in excess of $7,500,000;
(ix) acquire, lease or license any right or other asset from any other Person or sell or otherwise dispose of, or lease or license any right or other asset to any other Person (except, in each case, for assets acquired, leased, licensed or disposed of by the Company in the ordinary course of business and consistent with past practices);
(x) make any pledge of any of its material assets or permit any Company Benefit Plan of its material assets to be amended become subject to any Encumbrances, except for Encumbrances that do not materially detract from the value of such assets or materially impair the operations of any of the Acquired Corporations;
(xi) make any loans, advances or capital contributions to or investments in any material respect; Person (Cother than in the ordinary course of business), or, except in the ordinary course of business and consistent with past practices, incur or guarantee any indebtedness;
(xii) establish, adopt, enter into or amend any Company Employee Plan or Company Employee Agreement, pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation (including equity-based compensation, whether payable in stock, cash or other property) or remuneration payable to, any of its directors, directors or any of its officers or employees, other employees (except that the Company: (A) may provide routine salary increases to employees in the ordinary course of business and in accordance with past practices in connection with the Company’s customary employee review process; (B) may amend the Company Employee Plans to the extent required by applicable Legal Requirements and for activities associated with the integration of certain employees of certain Acquired Corporations (other than increases in base salary employees of the Company or any Divested Businesses) into the Company Employee Plans; and annual cash (C) may make customary bonus opportunities payments and profit sharing payments made in the Ordinary Course of Business consistent with past practice practices in accordance with bonus and which do not exceed, in profit sharing plans existing as of the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change date of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditionedthis Agreement));
(viiixiii) enter into promote any material transaction other than employee to the level of Senior Vice President or above or change any employee’s title to Senior Vice President or above, except in order to fill a position vacated after the Ordinary Course date of Businessthis Agreement; or hire any employee with an annual base salary in excess of $300,000;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiiixiv) other than as required by Law concurrent changes in GAAP or GAAPSEC rules and regulations, take change any action to change of its methods of accounting policies or proceduresaccounting practices in any material respect;
(xiv) initiate or settle any Legal Proceeding
(xv) make any material Tax election;
(xvi) commence any material Legal Proceeding, except with respect to routine collection matters in the ordinary course of business and consistent with past practices;
(xvii) settle any material Legal Proceeding or other material claim, except pursuant to a settlement that does not involve any liability or obligation on the part of any Acquired Corporation or involves only the payment of monies by the Acquired Corporations of not more than $10,000,000 in the aggregate for all such settlements;
(xviii) enter into any material Contract covering any Company Associate, or, other than payments pursuant to contracts identified in Part 2.16(i) of the Company Disclosure Schedule, make any payment to any Company Associate, that, considered individually or amend a Contract that considered collectively with any other such Contracts or payments, will, or would reasonably be expected to prevent or materially impedeto, interfere with, hinder or delay be characterized as a “parachute payment” within the consummation meaning of Section 280G(b)(2) of the Contemplated TransactionsCode or give rise directly or indirectly to the payment of any amount that would not be deductible pursuant to Section 162(m) of the Code (or any comparable provision under U.S. state or local or non-U.S. Tax Legal Requirements);
(xix) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the merger set forth in Section 6 not being satisfied;
(xx) contribute any cash, make any payment or otherwise transfer any amount to any of the Divested Businesses, other than intercompany loans, payables/receivables or contributions of cash in an amount sufficient to fund working capital during the Pre-Closing Period in the ordinary course of business consistent with past practices; or
(xvixxi) agree, resolve agree or commit to do take any of the foregoing.
actions described in clauses “(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions i)” through “(xx)” of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws4.2(b).
Appears in 2 contracts
Samples: Merger Agreement (Ebay Inc), Merger Agreement (Gsi Commerce Inc)
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
, except (b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iiix) as required by this Agreement or as required by applicable Law or Legal Requirements, (ivy) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), at or (z) as set forth in Section 5.2 of the Company Disclosure Schedule:
(a) (i) the Company shall, and shall cause its Subsidiary to, conduct their respective businesses and operations in the ordinary course in all times during material respects and in compliance with all applicable Legal Requirements, and (ii) the Pre-Closing PeriodCompany shall, and shall cause its Subsidiary to, use their respective reasonable best efforts to (A) preserve intact, in all material respects, the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any material components of the followingCompany’s and its Subsidiary’s current business organization, including keeping available the services of current officers and key employees, (B) maintain in all material respects the Company’s and its Subsidiary’s respective relations and goodwill with all material suppliers, material customers, Governmental Bodies and other material business relations, and (C) preserve intact the material assets, properties and Contracts of the Company Entities; provided, however, that no action by the Company with respect to matters whose subject matter is specifically addressed by any provision of Section 5.2(b) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision; and
(b) neither the Company nor its Subsidiary shall:
(i) (1) establish a record date for, declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock (including the Shares), or (2) repurchase, redeem or otherwise reacquirereacquire any of the Shares, directly or indirectlyany rights, warrants or options to acquire any shares of its capital stock the Shares, other than: (A) repurchases of Shares outstanding as of the date hereof pursuant to the Company’s right (under written commitments in effect as of the date hereof and copies of which have been made available to Parent) to purchase Shares held by a Company Associate only upon termination of such Person’s employment or other securities engagement by the Company; (except B) repurchases or forfeitures of Company Options outstanding on the date hereof pursuant to the terms of any such Company Option (as in effect as of the date hereof) between the Company and a Company Associate or member of the Board of Directors or (C) in connection with withholding to satisfy the payment of the applicable exercise price and/or withholding Taxes incurred upon the exercise, settlement Tax requirements with respect to Company Options or vesting of any award granted under the Company Plan in accordance with Warrants pursuant to the terms of such award thereof (as in effect on as of the date of this Agreementhereof);
(ii) split, combine, subdivide or reclassify any Shares or other equity interests;
(iii) sell, issue, grant, pledge or otherwise dispose of or deliver, pledge, transfer, encumber or authorize any the sale, issuance, grant, delivery, pledge, transfer or encumbrance of the foregoing with respect to: (A) any capital stock stock, equity interest or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); security, (B) any option, warrant call, warrant, restricted securities or right to acquire any capital stock stock, equity interest or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock stock, equity interest or other security of (except (x) that the Company or any of its Subsidiaries;
(iii) except may issue Shares as required to give effect to anything in contemplation be issued upon the exercise of Company Options or Company Warrants outstanding as of the Closingdate of this Agreement pursuant to the terms thereof (as in effect as of the date hereof), amend or issuable to participants in the Company ESPP in accordance with the terms thereof or (y) with respect to sales, grants, pledges, transfers or encumbrances (or authorizations with respect any of its the foregoing) (1) constituting Permitted Encumbrances under clause (g) of the definition thereof or its Subsidiaries’ Organizational Documents, (2) constituting Encumbrances created or effect incurred in connection with any Indebtedness permitted to be established or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactionsincurred under Section 5.2(b)(ix));
(iv) form any Subsidiary except as contemplated by Section 2.8 or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of under any Company Benefit Employee Plan as in effect on the date of this Agreement, establish, adopt, terminate or materially amend any Employee Plan (or any plan, program, arrangement or agreement that would be an Employee Plan if it were in existence on the date hereof), or amend or waive any of its material rights under, or accelerate the vesting under, any provision of any of the Employee Plans (or any plan, program, arrangement or agreement that would be an Employee Plan if it were in existence on the date hereof) or grant any employee or director any increase in compensation, bonuses or other benefits (except that the Company may: (A) adoptprovide increases in salary, terminatewages or benefits to non-executive employees that do not exceed more than 3% of such employee’s current salary, establish wages or benefits; and (B) amend any Employee Plans to the extent required by applicable Legal Requirements;
(v) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documents;
(vi) form any Subsidiary, acquire any equity interest in any other Entity or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing joint venture, partnership or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for causearrangement;
(vii) recognize make or agree to make any labor union or labor organization, capital expenditures that would exceed the capital expenditure budget set forth on Section 5.2(b)(vii) of the Company Disclosure Schedule; except as otherwise required by applicable Law and after prior written consent for capital expenditures that are not individually in excess of Parent (which consent shall not be unreasonably withheld, delayed or conditioned)$250,000;
(viii) enter into acquire, lease, license, sublicense, pledge, sell or otherwise dispose of, divest or spin-off, abandon, waive, relinquish or permit to lapse (other than any Patent expiring at the end of its statutory term or abandonment of any application for registration of any Intellectual Property Right in the ordinary course of business and for which an extension or renewal cannot be obtained), transfer, assign, guarantee, exchange or swap, mortgage or otherwise encumber (including pursuant to a sale-leaseback transaction or securitization) or subject to any Encumbrance (other than Permitted Encumbrances) any material transaction right or other than material asset or property (except (A) pursuant to dispositions of obsolete, surplus or worn out assets that are no longer useful in the Ordinary Course conduct of Businessthe business of the Company, or (B) with respect to pledges, sales or other dispositions (x) constituting Permitted Encumbrances under clause (g) of the definition thereof or (y) constituting Encumbrances created or incurred in connection with any Indebtedness permitted to be established or incurred under Section 5.2(b)(ix));
(ix) acquire lend money or make capital contributions or advances to or make investments in, any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or propertiesPerson, or grant incur or guarantee any Encumbrance Indebtedness under clauses (i), (ii), (v), (vi) or (vii) of the definition of Indebtedness (in the case of clause (vii) of such definition, with respect to Indebtedness of the type referred to in clauses (i), (ii), (v) or (vi) of such assets or propertiesdefinition) (except for (A) advances to directors, except employees and consultants for travel and other business related expenses in the Ordinary Course ordinary course of Businessbusiness and in compliance with the Company’s policies related thereto, (B) advances of expenses as required under the Company’s certificate of incorporation or bylaws made available to Parent before the date of this Agreement, (C) Indebtedness under the Credit Agreement that will be paid off prior to, or substantially simultaneously with, the Closing, and (D) additional Indebtedness in an aggregate principal amount not to exceed $500,000) other than between the Company and its Subsidiary;
(x) sell(A) amend or modify in any material respect, assignor voluntarily terminate, transferwaive any rights under, licensereplace or release, sublicense settle or otherwise dispose compromise any material claim, liability or obligation under any Material Contract or (B) enter into any Contract which would have been a Material Contract if such Contract was outstanding as of the execution and delivery of this Agreement; provided, that any Company IP (repayment or other than pursuant modification of Indebtedness under the Credit Agreement, or any action necessary to non-exclusive licenses satisfy the requirements of Section 6.12, shall, in the Ordinary Course of Business)each case, be deemed not to violate this Section 5.2;
(xi) makeexcept as required by applicable Legal Requirements or GAAP or in the ordinary course of business, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making (A) make any material change to any accounting method or accounting period used for Tax purposes that has a material effect on Taxes; (B) make, rescind or change any material Tax election; (C) file a material amended Tax Return, settle or compromise ; (D) enter into a closing agreement with any income or other Governmental Body regarding any material Tax liability or submit any voluntary disclosure applicationassessment; (E) settle, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request compromise or consent to any extension material Tax claim or waiver assessment or surrender a right to a material Tax refund; or (F) waive or extend the statute of any limitation period limitations with respect to any claim material Tax or assessment for any income or other material Taxes (Tax Return, other than pursuant to an extension of time to file any Tax Return granted automatic waivers or extensions obtained in the Ordinary Course ordinary course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxesbusiness;
(xii) enter intosettle, materially amend release, waive or terminate compromise any Legal Proceeding or other claim (or threatened Legal Proceeding or other claim) against any Company Material ContractEntity, other than any settlement, release, waiver or compromise that results solely in monetary obligations involving only the payment of monies (without admission of wrongdoing) by the Company Entities of not more than $500,000 in the aggregate (excluding monetary obligations that are funded by an indemnity obligation to, or an insurance policy of, the Company) and provides for a complete release of the claims in the dispute giving rise to such settlement, release, waiver or compromise; provided that the settlement, release, waiver or compromise of any Legal Proceeding or claim brought by the stockholders of the Company against the Company and/or its directors relating to the Transactions or a breach of this Agreement or any other agreements contemplated hereby shall be subject to Section 2.7 or Section 6.6, as applicable;
(xiii) commence any Legal Proceeding, except (A) with respect to routine matters in the ordinary course of business, (B) in such cases where the Company reasonably determines in good faith that the failure to commence suit would result in a material impairment of a valuable aspect of its business (provided, that the Company consults with Parent and considers in good faith the views and comments of Parent with respect to any such Legal Proceeding prior to commencement thereof) or (C) in connection with a breach of this Agreement or any other than as required by Law or GAAP, take any action to change accounting policies or proceduresagreements contemplated hereby;
(xiv) initiate (A) enter into any collective bargaining agreement or settle other agreement with any labor organization (except to the extent required by applicable Legal ProceedingRequirements), (B) implement any facility closings or employee layoffs or reductions in force that would trigger the notice requirements under the WARN Act; or (C) terminate any employee with a title of senior vice president or above, other than a termination for “cause” or due to the employee’s death or disability, or hire any employee with a title of senior vice president or above;
(xv) adopt or implement any stockholder rights plan or similar arrangement;
(xvi) adopt a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any Company Entity;
(xvii) fail to maintain in full force and effect insurance policies covering the Company Entities and their material properties, business, assets and operations in a form and amount consistent with past practice in all material respects;
(xviii) enter into any new material line of business or amend a enter into any Contract that would reasonably be expected materially limits or otherwise restricts the Company or any of its Affiliates (including following the Effective Time, Parent and its Affiliates) following the Closing, from engaging or competing in any line of business or in any geographic area or otherwise enter into any Contracts imposing material restrictions on the Company’s assets, operations or business;
(xix) sell, assign, license, sublicense, abandon, allow to prevent lapse, transfer or materially impedeotherwise dispose of, interfere withcreate or incur any Encumbrance (other than a Permitted Encumbrance) on or otherwise fail to take any action necessary to maintain, hinder enforce or delay protect, any Company IP, except for the consummation grant of non-exclusive licenses to customers in the Contemplated Transactionsordinary course of business, or the lapse or abandonment of Company IP that is Registered IP at the end of its statutory, non-extendible term; or
(xvixx) agreeauthorize any of, resolve or agree or commit to do take, any of the actions described in the foregoing clauses (i) through (xix) of this Section 5.2(b). Notwithstanding the foregoing.
(c) Nothing , nothing contained in this Agreement herein shall give Parentto Parent or Purchaser, directly or indirectly, the right rights to control or direct the operations of the Company prior to the Effective Offer Acceptance Time. Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with the terms and conditions of this Agreementhereof, complete unilateral control and supervision over of its business and its, if applicable, Subsidiaries’ respective operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 2 contracts
Samples: Merger Agreement (Cti Biopharma Corp), Merger Agreement (Cti Biopharma Corp)
Operation of the Company’s Business. (a) Except During the period from the date of this Agreement through the Effective Time (the "PRE-CLOSING PERIOD"), the Company shall: (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: ensure that each of the Company and its Subsidiaries shall conduct Acquired Companies conducts its business and operations (A) in the Ordinary Course of Business ordinary course and in accordance with past practices, and (B) in compliance in all material respects with all applicable Laws Legal Requirements and the requirements of all Contracts that constitute Company Material Contracts; (ii) ensure that each of the Acquired Companies preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Acquired Companies; (iii) provide all notices, assurances and support required by any Contract relating to any Company Intellectual Property to ensure that no condition under such Contract occurs which could result in, or could increase the likelihood of any transfer or disclosure by any Acquired Company of any Company Intellectual Property; (iv) keep in full force and effect (with the same scope and limits of coverage) all insurance policies in effect as of the date of this Agreement covering all material assets of the Acquired Companies and (v) to the extent requested by Parent, cause its officers to report regularly to Parent concerning the status of the Acquired Companies' respective businesses.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth disclosed in Section 4.2(b) of the Company Disclosure ScheduleSchedules, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall notnot (without the prior written consent of Parent which consent, nor or refusal to consent, will not be unreasonably delayed), and shall it cause or not permit any of its Subsidiaries the other Acquired Companies to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (securities, except repurchases of unvested shares at cost in connection with the payment termination of the exercise price and/or withholding Taxes incurred upon the exercise, settlement employment or vesting of consulting relationship with any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)employee or consultant pursuant to stock option or purchase agreements;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any the issuance or grant of the foregoing with respect to: (Ai) any capital stock or other security of the Company or any of its Subsidiaries security, (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (Bii) any optionStock Rights, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (Ciii) any instrument convertible into or exchangeable for any capital stock or other security (except that the Company may issue Company Common Stock upon the valid exercise of Company Options outstanding as of the Company or any date of its Subsidiariesthis Agreement);
(iii) except as required to give effect to anything in contemplation of the Closing, amend or waive any of its rights under, or its Subsidiaries’ Organizational accelerate the vesting under, any provision of any Company Option Plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option or any related Contract;
(iv) amend or permit the adoption of any amendment to any of the Company Constituent Documents, or effect or be become a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(Avi) make any capital expenditure outside the ordinary course of business or make any single capital expenditure in excess of $200,000; provided however, that the maximum amount of all capital expenditures made on behalf of the Acquired Companies during the Pre-Closing Period shall not exceed $1,000,000 in the aggregate;
(vii) except in the ordinary course of business and consistent with past practice, enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any Material Contract, or amend or terminate, or waive or exercise any material right or remedy under, any Material Contract;
(viii) acquire, lease or license any right or other asset from any other Person or sell or otherwise dispose of, or lease or license, any right or other asset to any other Person (except in each case for assets acquired, leased, licensed or disposed of by any Acquired Company in the ordinary course of business and not having a value, or not requiring payments to be made or received, in excess of $50,000 individually, or $250,000 in the aggregate), or waive or relinquish any material right;
(ix) lend money to any Person (except for the advancement of expenses to employeesPerson, directors and consultants in the Ordinary Course of Business), (B) or incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”)indebtedness;
(vix) other than as establish, adopt or amend any Company Employee Plan, Company International Plan or collective bargaining agreement (unless required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adoptLegal Requirement), terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directorsdirectors or officers; provided, officers or employeeshowever, other than increases in base salary that the Acquired Companies may make regularly scheduled bonus payments and annual cash bonus opportunities and payments made increase the amount of wages paid to employees in the Ordinary Course ordinary course of Business business and consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business)practices;
(xi) makehire any new employee having an annual salary in excess of $100,000;
(xii) change any of its methods of accounting or accounting practices in any respect except as required by generally accepted accounting principles;
(xiii) make or change any election, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payablean annual accounting period, file any amendment making any material change to any amended Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any closing agreement, settle any Tax allocationclaim or assessment relating to any Acquired Company, sharingsurrender any right to claim a refund of Taxes, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any the limitation period with respect applicable to any Tax claim or assessment for relating to any income Acquired Company, or take any other material Taxes (other than pursuant similar action relating to an extension the filing of time to file any Tax Return granted in or the Ordinary Course payment of Business any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action could have the effect of not more than seven (7) months), increasing the Tax liability of any Acquired Company for any period ending after the Closing Date or adopt or change decreasing any material accounting method in respect Tax attribute of Taxes;
(xii) enter into, materially amend or terminate any Acquired Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or proceduresexisting on the Closing Date;
(xiv) initiate commence or settle any material Legal Proceeding;
(xv) enter into any material transaction or amend a Contract take any other material action outside the ordinary course of business and inconsistent with past practices;
(xvi) take or agree to take any action which could result in the failure to satisfy the condition provided for in Section 6.1 or 6.2;
(xvii) take any action allowed under the Company Constituent Documents that would reasonably be expected to prevent could have the effect of hindering or materially impede, interfere with, hinder or delay otherwise preventing the consummation of the Contemplated Transactionstransactions contemplated by this Agreement; or
(xvixviii) agree, resolve agree or commit to do take any of the foregoing.
actions described in clauses "(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions i)" through "(xvii)" of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws4.1(b).
Appears in 2 contracts
Samples: Merger Agreement (Lancer Corp /Tx/), Merger Agreement (Lancer Corp /Tx/)
Operation of the Company’s Business. (a) Except (i) During the Pre-Closing Period, except as set forth in Section 4.2(a) on Part 4.2 of the Company Disclosure Schedule, (ii) Schedule or as expressly permitted otherwise contemplated by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, Agreement to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), take place during the Pre-Closing Period: each of :
(a) the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business ordinary course and in compliance in all material respects with all applicable Laws substantially the same manner as such business and operations have been conducted prior to the requirements date of all Contracts that constitute Company Material Contracts.this Agreement;
(b) Except the Company shall use 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 good will with all suppliers, customers, landlords, creditors, employees and other Persons having business relationships with the Company;
(ic) as expressly permitted by this Agreement, (ii) as set forth the Company shall keep in Section 4.2(b) full force all insurance policies identified in Part 2.17 of the Company Disclosure Schedule, ;
(iiid) as required by applicable Law or the Company shall cause its Board of Directors to report regularly (ivbut in no event less frequently than weekly) with to Parent concerning any material development regarding the prior written consent of Parent Company’s business;
(which consent shall not be unreasonably withheld, delayed or conditioned), at all times during e) except for the Pre-Closing PeriodSeries A Dividend, the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any of the following:
(i) not declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock or stock, and shall not repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)securities;
(iif) the Company shall not sell, issue, grant, pledge or otherwise dispose of or encumber issue or authorize any the issuance of the foregoing with respect to: (Ai) any capital stock or other security of the Company or any of its Subsidiaries security, (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (Bii) any option, warrant option or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (Ciii) any instrument convertible into or exchangeable for any capital stock or other security (except that the Company shall be permitted (x) to issue Company Common Stock to employees upon the exercise of outstanding Company Options, and (y) to issue shares of Company Common Stock upon the conversion of shares of Company Preferred Stock);
(g) except as set forth in this Agreement, the Company shall not amend or waive any of its rights under, or permit the acceleration of vesting under, (i) any provision of the Company Option Plan, (ii) any provision of any agreement evidencing any outstanding Company Option, or (iii) any provision of its Subsidiariesany restricted stock purchase agreement;
(iiih) except as required the Company shall not amend or permit the adoption of any amendment to give effect to anything in contemplation the Company’s certificate of the Closing, amend any of its incorporation or its Subsidiaries’ Organizational Documentsbylaws, or effect or be permit the Company to become a party to any merger, consolidation, share exchange, business combinationAcquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivi) the Company shall not form any Subsidiary subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(Aj) the Company shall not make any capital 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 $35,000 in the aggregate;
(k) the Company shall 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, or (ii) amend or prematurely terminate, or waive any material right or remedy under, any such Contract;
(l) the Company shall not (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 (iii) waive or relinquish any right, except for assets acquired, leased, licensed or disposed of by the Company pursuant to Contracts that are not Material Contracts;
(m) the Company shall not (i) lend money to any Person (except for that the advancement of expenses Company may make routine advances to employees, directors and consultants employees in the Ordinary Course ordinary course of Businessbusiness), or (Bii) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vin) other than as required by applicable Law the Company shall not (i) establish, adopt or the terms of amend any Company Benefit Plan as in effect on the date of this Agreement: Employee Plan, (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (Cii) pay any bonus or make any profit-sharing payment, cash incentive payment or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; or (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (Eiii) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for causenew employee;
(viio) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent the Company shall not be unreasonably withheld, delayed change any of their methods of accounting or conditioned)accounting practices in any material respect;
(viiip) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, shall not make change or revoke rescind any material Tax election, fail to pay adopt or change any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure applicationaccounting method in respect of Taxes, enter into any Tax allocationagreement in respect of Taxes, sharingsettle any claim or assessment in respect of Taxes, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect applicable to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes, enter into any Tax sharing or similar agreement or arrangement, amend any Tax Return or take any position on any Tax Return, take any action, omit to take any action or enter into any transaction that would have the effect of increasing the Tax liability or reducing any Tax asset of Parent or any of its Affiliate (including the Interim Surviving Corporation or the Surviving Company) in respect of any Tax period or portion thereof that begins after the Closing Date;
(xiiq) enter into, materially amend or terminate any the Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate shall not commence or settle any Legal Proceeding; and
(xvr) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvi) agree, resolve Company shall not agree or commit to do take any of the actions described in clauses “(e)” through “(q)” above. Notwithstanding the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over may take any action described in clauses “(e)” through “(q)” above if Parent gives its business operations. Notwithstanding anything prior written consent to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement taking of such consent could violate any applicable Lawsaction by the Company.
Appears in 2 contracts
Samples: Merger Agreement (Poseida Therapeutics, Inc.), Merger Agreement (Poseida Therapeutics, Inc.)
Operation of the Company’s Business. (a) Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 4.2(aSection 6.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this AgreementLetter, (iii) as required by applicable Law, Law or (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or unless Parent shall otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to consent in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: each of Period the Company shall, and shall cause its Subsidiaries shall to, use commercially reasonable efforts to conduct its business and operations in the Ordinary Course of Business and in material compliance in all material respects with all applicable Laws Law and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 4.2(bSection 6.2(b) of the Company Disclosure ScheduleLetter, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock stock; or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock of the Company or other securities (except in connection with the payment for repurchase or redemption of shares of Company Common Stock from terminated employees, directors or consultants of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this AgreementCompany);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iii) except as required to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational Documentsorganizational documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransactions contemplated by this Agreement;
(iii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing actions with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of Company Common Stock issued upon the valid exercise of Company Options or Company Warrants issued and outstanding as of the date of this Agreement or issued in accordance with this Section 6.2), (B) any option, warrant or right to acquire any capital stock or any other security or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity Person or enter into a joint venture with any other EntityPerson;
(v) (A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business)Person, (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, others or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure or commitment in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”)$100,000;
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
: (ixA) acquire any material asset adopt, establish or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocationemployee plan, sharingincluding, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in for the Ordinary Course avoidance of Business the principal subject matter of which is not Taxes)doubt, request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvi) agree, resolve or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.equity awards plans,
Appears in 2 contracts
Samples: Merger Agreement (Kintara Therapeutics, Inc.), Merger Agreement (Kintara Therapeutics, Inc.)
Operation of the Company’s Business. (a) Except (i) as set forth in on Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s Law or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or unless Parent shall otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to consent in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock stock; or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except in connection with the payment for shares of Company Common Stock from terminated employees, directors or consultants of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this AgreementCompany);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company OptionsOptions that are outstanding as of immediately prior to the date of this Agreement); provided, however, that the Company may sell up to $25 million in the aggregate of capital stock or other securities of the Company in a bona fide equity financing with a third party (it being agreed that any such stock issuance shall increase the Company Valuation by an amount equal to 60% of the aggregate amount of such equity financing and the Parent Valuation by an amount equal to 40% of the aggregate amount of such equity financing); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iii) except as required to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(v) (A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business)Person, (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure or commitment in excess of the budgeted capital expenditure and commitment amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budgetpractice; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; consultants or (E) hire hire, terminate or give notice of termination to any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 125,000 per year or (F) terminate or give notice of termination to any officer other than for causeyear;
(vii) recognize any labor union or union, labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned)similar Person;
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any material Company IP Rights (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure applicationliability, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an in connection with any extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) monthsReturn), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) except as otherwise set forth in the Company Budget, make any expenditures, incur any Liabilities or discharge or satisfy any Liabilities, in each case, in amounts that exceed the aggregate amount of the Company Budget by $300,000;
(xiv) other than as required by Law or GAAP, take any action to materially change its accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvixv) agree, resolve or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 2 contracts
Samples: Agreement and Plan of Merger and Reorganization, Merger Agreement (Aviragen Therapeutics, Inc.)
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (Cii) as expressly required or permitted by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19)this Agreement, or (viii) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed withheld or conditioneddelayed), during the Pre-Closing Period: each Company covenants and agrees as to itself and its Subsidiaries that, from the date hereof until the earlier of the Effective Time or the termination of this Agreement in accordance with Article VIII, the business of the Company and its Subsidiaries shall conduct its business and operations be conducted in the Ordinary Course of Business and in compliance ordinary course in all material respects with all applicable Laws and the requirements Company and its Subsidiaries shall use their respective reasonable efforts to preserve their business organizations substantially intact and maintain its existing relations and goodwill with Governmental Entities, key customers, suppliers, and other Persons with whom the Company or any Subsidiary of all Contracts that constitute the Company Material Contracts.
has material business relations. Without limiting the generality of, and in furtherance of, the foregoing, from the date hereof until the earlier of the Effective Time or the termination of this Agreement in accordance with Article VIII, except (b) Except (iA) as otherwise expressly required or permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) Agreement or as required by applicable Law Law; or (ivB) with the prior written consent of as Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Periodmay approve in advance in writing, the Company shall not, nor shall it cause or will not and will not permit any of its Subsidiaries to, do any of the followingdirectly or indirectly:
(i) declare, accrue, set aside adopt or pay propose any dividend or make any other distribution in respect of any shares of its capital stock or repurchase, redeem or otherwise reacquire, directly or indirectly, any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers change in the Ordinary Course memorandum and articles of Business which are included in the calculation of the Company Outstanding Shares; association or (C) any instrument convertible into or exchangeable for any capital stock or other security equivalent organizational documents of the Company or any of its Subsidiaries;
(iiiii) except as required to give effect to anything in contemplation any scheme of arrangement, merge or consolidate the Closing, amend Company or any of its Subsidiaries with any other Person, restructure, or reorganize or completely or partially liquidate or otherwise enter into any Contracts imposing material changes or material restrictions on assets, operations or businesses of the Company and its Subsidiaries’ Organizational Documents;
(iii) acquire, or effect or be a party to any whether by purchase, merger, consolidation, share exchangescheme of arrangement or acquisition of stock or assets or otherwise, business combinationany assets, recapitalizationsecurities, reclassification properties, interests, or businesses or make any investment (whether by purchase of sharesstock or securities, stock splitcontributions to capital, reverse stock split loans to, or similar transaction exceptproperty transfers), in each case, other than (A) in the ordinary course of business, (it being understood and agreed that the acquisition of all or substantially all of the assets or outstanding shares or other equity securities of any Person is not in the ordinary course of business), or (B) if not in the ordinary course of business, with a value or purchase price (including the value of assumed liabilities) not in excess of US$500,000 (or an equivalent amount in RMB) individually or US$500,000 (or an equivalent amount in RMB) in the aggregate for all such transactions by the avoidance of doubt, the Contemplated TransactionsCompany and its Subsidiaries;
(iv) form issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, or redeem, purchase or otherwise acquire, any share capital of the Company or any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any share capital, or any options, warrants or other rights of any kind to acquire any share capital or such convertible or exchangeable securities, other than pursuant to Contracts in effect as of the date hereof or granted in compliance with Section 6.1(xix);
(v) create or incur (A) any Lien on any Company IP owned by the Company or any of its Subsidiaries outside the ordinary course of business or (B) any Lien on any other assets of the Company or any of its Subsidiaries, which assets have a value in excess of US$500,000, in each case, other than Permitted Liens;
(vi) make any loans or capital contributions to or investments in any Person (other than the Company or any direct or indirect Wholly Owned Subsidiary of the Company) in excess of US$500,000, except pursuant to Contracts in effect as of the date hereof which have been filed as exhibits to the Company Reports filed with the SEC;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its share capital (except for dividends paid by any Subsidiary to the Company or acquire any equity interest or other interest in to any other Entity Subsidiary and periodic dividends and other periodic distributions by Non-Wholly Owned Subsidiaries in the ordinary course consistent with past practices), or enter into a joint venture any Contract with any other Entityrespect to the voting of its share capital;
(Aviii) lend money to reclassify, split, combine, subdivide, directly or indirectly, any Person of its share capital or securities convertible or exchangeable into or exercisable for any of its share capital;
(except for the advancement of expenses to employeesix) incur, directors and consultants in the Ordinary Course of Business)alter, (B) incur amend or guarantee modify, any indebtedness for borrowed moneymoney or guarantee such indebtedness of another Person, (C) or permit any Subsidiary of the Company to guarantee any debt securities indebtedness of othersthe Company, or (D) other than the incurrence or payment guarantee of indebtedness in the ordinary course of business not to exceed US$1,000,000 in the aggregate, including any Transaction Expensesborrowings under the existing credit facilities of the Company and its Subsidiaries to fund working capital needs, and such other actions taken in the ordinary course of business consistent with past practice;
(x) make or authorize any capital expenditure in excess of the budgeted capital expenditure amounts set forth US$500,000 per project or related series of projects of US$500,000 in the aggregate, other than expenditures necessary to maintain existing assets in good repair, consistent with past practice;
(xi) make any changes with respect to accounting policies or procedures materially affecting the reported consolidated assets, liabilities or results of operations of the Company operating budget delivered and its Subsidiaries, except as required by changes in applicable generally accepted accounting principles or Law;
(xii) settle any Action before a Governmental Entity by or against the Company or any of its Subsidiaries or relating to Parent concurrently with any of their business, properties or assets, other than settlements (A) requiring of the execution Company and its Subsidiaries only the payment of this Agreement monetary damages not exceeding US$500,000 and (B) not involving the “admission of any wrongdoing by the Company Budget”or any of its Subsidiaries;
(xiii) engage in the conduct of any new line of business material to the Company and its Subsidiaries, taken as a whole;
(xiv) enter into, amend or modify, in any material respect, or terminate, or waive any material rights under, any Material Contract (or Contract that would be a Material Contract if such Contract had been entered into prior to the date hereof);
(vixv) other than make or change any material Tax election, materially amend any Tax Return (except as required by applicable Law Law), enter into any material closing agreement with respect to Taxes, surrender any right to claim a material refund of Taxes, settle or the terms finally resolve any material controversy with respect to Taxes or materially change any method of any Company Benefit Plan as in effect on the date of this Agreement: Tax accounting;
(xvi) (A) adoptwith regard to material Intellectual Property owned by the Company or any of its Subsidiaries, terminatetransfer, establish sell, license, mortgage, surrender, encumber, divest, cancel, abandon or enter into allow to lapse or expire or otherwise dispose of any Company Benefit Plansuch material Intellectual Property, other than licenses or other Contracts granted in the ordinary course of business, or cancellation, abandonment, allowing to lapse or expire such Intellectual Property that is no longer used or useful in any of the Company’s or its Subsidiaries’ respective businesses or pursuant to Contracts in effect prior to the date hereof; and (B) cause with regard to other assets, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or permit any Company Benefit Plan allow to be amended in lapse or expire or otherwise dispose of any material respect; (C) pay any bonus assets, licenses, operations, rights, product lines, businesses or make any profit-sharing or similar payment to, or increase the amount interests therein of the wagesCompany or its Subsidiaries, salary, commissions, benefits or other compensation or remuneration payable to, including capital stock of any of its directorsSubsidiaries, officers or employees, other than increases except in base salary and annual cash bonus opportunities and payments made connection with services provided in the Ordinary Course ordinary course of Business consistent business, sales of products in the ordinary course of business and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with past practice and which do a fair market value not exceed, in excess of US$500,000 in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employeeseach case, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for causepursuant to Contracts in effect as of the date hereof;
(viixvii) recognize any labor union except as required pursuant to existing written plans or labor organizationContracts in effect as of the date hereof, except as otherwise required by applicable Law and after prior written consent or in the ordinary course of Parent business consistent with past practice, (which consent shall not be unreasonably withheld, delayed or conditioned);
(viiiA) enter into any material transaction other than in new employment or compensatory agreements (including the Ordinary Course renewal of Business;
(ixany consulting agreement) acquire with any material asset employee, consultant or sell, lease director of the Company or otherwise irrevocably dispose of any of its assets Subsidiaries except employment agreements with newly hired employees in the ordinary course of business consistent with past practice and not providing any severance, (B) grant or propertiesprovide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or grant make any Encumbrance with respect new equity awards to such assets any director, officer or propertiesemployee of the Company or any of its Subsidiaries, in each case, except increases in compensation and bonus in the Ordinary Course ordinary course of Business;
business consistent with past practice, (xD) sellestablish, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter intoadopt, materially amend or terminate any Company Material Contract;
Benefit Plan (xiii) other than except as required by Law Law) or GAAPamend the terms of any outstanding equity-based awards, (E) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, to the extent not already required in any such Company Benefit Plan, (F) materially change accounting policies any actuarial or procedures;
other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, or (xivG) initiate forgive any loans to directors, officers or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation employees of the Contemplated TransactionsCompany or any of its Subsidiaries; or
(xvixviii) agree, resolve authorize or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 2 contracts
Samples: Merger Agreement (Newater Technology, Inc.), Merger Agreement
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: :
(i) the Company shall ensure that each of the Company and its Subsidiaries shall conduct Entities conducts its business and operations operations: (A) in the Ordinary Course of Business ordinary course and consistent with past practice; and (B) in compliance in all material respects with all applicable Laws and with the requirements of all Contracts of the Company Entities;
(ii) the Company shall use commercially reasonable efforts to ensure that constitute each of the Company Material ContractsEntities preserves intact its current business organization, keeps available the services of its current officers and other key Company Associates and maintains its relations and goodwill with all suppliers, customers, vendors, landlords, creditors, licensors, licensees, distributors, resellers, employees and other Persons having material business relationships with the respective Company Entities;
(iii) the Company shall promptly notify Parent in writing of (A) any notice from any Person alleging that the Consent of such Person is or may be required in connection with any of the Transactions and (B) any Legal Proceeding commenced, or, to the Knowledge of the Company, threatened against, relating to, involving or otherwise affecting any of the Company Entities that relates to the Merger or any of the other Transactions;
(iv) use commercially reasonable efforts to keep in full force all insurance policies referred to in Section 3.25 (other than any such policies that are immediately replaced with substantially similar policies); and
(v) the Company shall (to the extent requested by Parent and permitted under applicable Law) cause the officers and other employees of the Company Entities to promptly update Parent regarding the Company Entities' results of operations and material developments.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during During the Pre-Closing Period, except as set forth in Part 5.2(b) of the Disclosure Letter or with Parent's prior written consent and except as permitted by Section 5.3(e), the Company (A) shall not, nor and (B) shall it cause or not permit any of its Subsidiaries the other Company Entities to, do any of the following:
(i) amend its certificate of incorporation or bylaws or comparable organizational documents or create any new Subsidiaries;
(ii) issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase, convertible securities or otherwise) any security of any Company Entity (including Company Securities), except for the issuance and sale of shares of Company Common Stock pursuant to Company Equity Awards outstanding as of the date of this Agreement upon the exercise or vesting thereof in accordance with the terms of such Company Equity Awards, as applicable;
(iii) directly or indirectly acquire, repurchase or redeem any security of any Company Entity, except in connection with Tax withholdings and exercise price settlements upon the exercise, vesting or issuance of shares under Company Equity Awards, so long as such is done in accordance with the terms of such Company Equity Awards in existence on the date hereof;
(iv) (A) split, combine, subdivide or reclassify any shares of capital stock, or (B) declare, accrue, set aside or pay any dividend or make any other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or one of its capital stock wholly owned Subsidiaries;
(v) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any Company Entity, except for this Agreement and the Transactions;
(vi) (A) redeem, repurchase, redeem prepay, defease, cancel, incur, create, assume, drawdown or otherwise reacquireacquire or modify in any material respect any long-term or short-term debt for borrowed monies or issue or sell any debt securities or calls, directly or indirectlyoptions, any shares of its capital stock warrants or other rights to acquire any debt securities (except in connection with of any Company Entity or enter into any agreement having the payment economic effect of any of the exercise price and/or withholding Taxes incurred upon foregoing, except for (1) loans or advances between the exerciseCompany and any direct or indirect Subsidiaries, settlement or vesting between any direct or indirect Subsidiaries of the Company. in the ordinary course of business consistent with past practice, and (2) the issuance of credit to new customers for the purchase of products or services of the Company Entities in the ordinary course of business consistent with past practice, (B) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any award granted under other Person, except with respect to obligations of direct or indirect wholly owned Subsidiaries of the Company Plan in accordance with the terms of such award in effect place on the date of this Agreement);
, (iiC) sellmake any loans, issue, grant, pledge advances (other than any retainer for legal services) or otherwise dispose of capital contributions to or encumber or authorize investments in any of the foregoing with respect to: other Person (A) any capital stock or other security of than the Company or any of its Subsidiaries (direct or indirect wholly owned Subsidiaries), except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant travel advances or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers business expenses in the Ordinary Course ordinary course of Business which are included in the calculation business consistent with past practice to any employees of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iii) except as required to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of othersEntities, or (D) mortgage or pledge any asset owned or used by any Company Entity, or create or suffer to exist any Encumbrance thereupon (other than Permitted Encumbrances), except pursuant to the incurrence or payment terms of any Transaction Expensesletters of credit, make any capital expenditure lines of credit or other credit facilities or arrangements in excess of effect on the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”)date hereof;
(vivii) other than except as may be required by applicable Law or the terms of this Agreement or of any Company Benefit Employee Plan as in effect on the date of this Agreement: , (A) enter into, adopt, terminateamend, establish modify or enter into terminate any Company Benefit Plan; Employee Plan (or any plan, program, agreement or arrangement that would constitute a Company Employee Plan if in effect on the date hereof), (B) cause (1) grant or permit increase the compensation payable or to become payable to any Company Benefit Associate, (2) pay or agree to pay any special bonus or special remuneration to any Company Associate, or (3) pay or agree to pay any benefit not required by any Company Employee Plan as in effect as of the date hereof, except, (w) in each case in the ordinary course of business consistent with past practice, (x) in connection with the hiring of new employees who are not directors or executive officers, (y) in connection with the promotion of employees who are not directors or executive officers (and who will not be directors or executive officers after such promotion), or (z) in connection with annual performance-based compensation paid pursuant to be amended in any material respectCompany Employee Plan; (C) pay hire or terminate the employment of any bonus employee with an annual base salary in excess of $150,000.00, except in the ordinary course of business consistent with past practice, (D) grant or make increase any profit-sharing severance, change in control, termination or similar compensation or benefits payable to any Company Associate or (E) accelerate the time of payment or vesting of, or the lapsing of restrictions with respect to, or increase fund or in any other way secure the amount of the wagespayment of, salary, commissions, benefits or other any compensation or remuneration payable to, benefits under any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned)Employee Plan;
(viii) enter into commence any material transaction Legal Proceeding or settle any pending or threatened Legal Proceeding, except for the settlement of any Legal Proceeding solely for money damages and so long as (A) such settlement or compromise does not result in any other than Liability of the Company Entities, (B) includes a complete and unconditional release of the Company Entities related to the matters underlying such claim and (C) the Company has, at such time of settlement or compromise, sufficient cash on hand to make such payment to be paid by the applicable Company Entity prior to Closing, and (D) the amount does not exceed $50,000.00 individually for each such settlement or compromise and $150,000.00 in the Ordinary Course of Businessaggregate for all such settlements and compromises;
(ix) acquire except as may be required as a result of a change in applicable Law or in GAAP, make any material asset or sell, lease or otherwise irrevocably dispose of change in any of its assets the accounting methods, principles or properties, practices used by it or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Businesschange an annual accounting period;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xiA) make, rescind or change or revoke any material Tax election, fail to pay (B) settle or compromise any federal, state, local or foreign income or other material Tax as such Tax becomes due and payableliability, file any amendment making any material change to any Tax Return, settle claim or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement assessment (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or C) consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes Taxes, (other than pursuant to an extension D) change any annual Tax accounting period or method of time to Tax accounting, (E) file any income or other material Tax Return granted or any amended Tax Return, (F) enter into any closing agreement with respect to any Tax, (G) surrender any right to claim a material Tax refund or (H) grant any power of attorney with respect to any Taxes;
(xi) (A) transfer or assign any Company Intellectual Property Rights to any third Person, (B) exclusively license any Company Intellectual Property Rights to any third Person, (C) except in the Ordinary Course ordinary course of Business business consistent with past practices in connection with the commercialization of not more than seven (7) months)Company Products or services, non-exclusively license any Company Intellectual Property Rights to any third Person, or adopt (D) modify the Company's standard warranty terms for Company Products or change services or amend or modify any material accounting method in respect of Taxesproduct or service warranty;
(xii) (A) acquire (by merger, consolidation or acquisition of stock or assets or otherwise) any other Entity or any equity interest therein, (B) sell or otherwise dispose of or lease, license or sublicense any properties or assets of any Company Entity, except for sales of inventory, personal property and excess of obsolete assets in the ordinary course of business consistent with past practice, (C) acquire, lease or license any right or other asset from any Person, except, in the case of this clause (C), in the ordinary course of business consistent with past practice and where the applicable right or other asset is immaterial;
(xiii) make any capital expenditures in excess of $250,000.00 individually or in excess of $1,000,000.00 in the aggregate;
(xiv) make any material changes or modifications to any investment or risk management policy or other similar policies (including with respect to hedging), or any cash management policy;
(xv) other than in the ordinary course of business consistent with past practice, enter into, materially or amend in any material respect, terminate or terminate fail to renew, any Company Material Contract;
(xiiixvi) change any of its product return policies, product maintenance polices, service policies, product modification or upgrade policies in any material respect;
(xvii) enter into any transaction with any of its shareholders or any of its Affiliates (other than a Company Entity), excluding any employment, compensation or similar arrangements otherwise expressly permitted pursuant to this Section 5.2(b);
(xviii) abandon or permit to lapse any right to any material Intellectual Property;
(xix) amend, terminate or allow to lapse any material Governmental Authorization relating to any of the Company Entities other than (A) as required by applicable Law or GAAP, take (B) any such action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that in the ordinary course of business but only where such action would not reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation be material and adverse to any of the Contemplated TransactionsCompany Entities;
(xx) pay, repurchase, discharge or satisfy any of its material claims, Liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business consistent with past practice, or pursuant to contractual requirements of claims, Liabilities or obligations reflected or reserved against in, or contemplated by, the interim Company Financial Statements; or
(xvixxi) agree, resolve agree or commit to do take any of the foregoingactions described in clauses above in this Section 5.2(b).
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, During the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective TimePre-Closing Period, the Company shall exercisepromptly notify Parent in writing of any event, consistent with condition, fact or circumstance that would make the terms and timely satisfaction of any of the conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this AgreementARTICLE VII impossible or unlikely or that has had or could reasonably be expected to have or result in a Material Adverse Effect. Without limiting the generality of the foregoing, no consent the Company shall promptly advise Parent in writing of Parent shall be required any Legal Proceeding or material claim commenced or, to the Knowledge of the Company, threatened against or with respect to any matter of the Company Entities. No notification given to Parent pursuant to this Section 5.2(c) or any information or knowledge obtained pursuant to Section 5.1 shall (A) affect the determination of (I) whether the satisfaction of the Closing conditions set forth in this Section 4.2 ARTICLE VII have been satisfied or elsewhere waived or (II) whether a right of termination exists under ARTICLE IX or (B) otherwise limit or affect the rights and remedies available hereunder to Parent and Merger Sub.
(d) During the Pre-Closing Period, the Company shall promptly notify Parent in this Agreement writing if the Company has the right to exercise any right or option to repurchase shares of its capital stock from any Company Associate or other Person upon termination of such Person's service to any of the Company Entities. The Company shall not exercise any such repurchase right except to the extent that the requirement of such consent could violate any applicable Lawsdirected by Parent in writing.
Appears in 2 contracts
Samples: Merger Agreement (Evans Hugh D), Merger Agreement (Anaren Inc)
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: (i) the Company shall ensure that each of the Company and its Subsidiaries shall conduct Acquired Corporations conducts its business and operations operations: (A) in the Ordinary Course of Business ordinary course and in accordance with past practices; and (B) in compliance in all material respects with all applicable Laws Legal Requirements and the requirements of all Company Contracts that constitute Company Material Contracts; (ii) the Company shall use its reasonable best efforts to ensure that each of the Acquired Corporations preserves intact its current business organization, keeps available the services of its current officers and other employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, distributors, resellers, employees and other Persons having business relationships with the respective Acquired Corporations; (iii) the Company shall keep in full force all insurance policies referred to in Section 2.18 (other than any such policies that are immediately replaced with substantially similar policies); (iv) the Company shall cause to be provided all notices, assurances and support required by any Company Contract relating to any Intellectual Property or Intellectual Property Right in order to ensure that no condition under such Company Contract occurs that would reasonably be expected to result in (A) any transfer or disclosure by any Acquired Corporation of any source code for any Company Product Software or (B) a release from any escrow of any source code for any Company Product Software that has been deposited or is required to be deposited in escrow under the terms of such Company Contract; and (v) the Company shall promptly notify Parent of (A) any written notice or other overt communication of which the Company has Knowledge from any Person alleging that the Consent of such Person is or may be required in connection with any of the transactions contemplated by this Agreement, and (B) any Legal Proceeding commenced, or, to the Knowledge of the Company, threatened against, relating to, involving or otherwise affecting any of the Acquired Corporations that relates to the consummation of the Merger or any of the other transactions contemplated by this Agreement.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during During the Pre-Closing Period, except as set forth in Part 4.2(b) of the Disclosure Schedule, the Company shall notnot (without the prior written consent of Parent, nor which shall it cause or not be unreasonably withheld with respect to the matters described in clauses “(vi),” “(vii),” “(ix),” “(xi),” “(xii),” “(xix),” “(xx),” “(xxiv)” and “(xxv)” of this sentence), and the Company shall ensure that each of the other Acquired Corporations does not (without the prior written consent of Parent, which shall not be unreasonably withheld with respect to the matters described in clauses “(vi),” “(vii),” “(ix),” “(xi),” “(xii),” “(xix),” “(xx),” “(xxiv)” and “(xxv)” of this sentence) permit any of its Subsidiaries the other Acquired Corporations to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock, split, combine or reclassify any capital stock or repurchase, redeem or otherwise reacquire, directly or indirectly, any shares of its capital stock or other securities (except in connection with the payment securities, other than repurchases from employees of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting Company following termination of any award granted under the Company Plan in accordance with employment pursuant to the terms of such award in effect on the date of this Agreement)applicable pre-existing restricted stock agreements;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant deliver or authorize any of the foregoing with respect tosale, issuance, delivery or grant of: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options)security; (B) any option, call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that: (1) the Company may issue shares of Company Common Stock (x) upon the valid exercise of Company Options outstanding as of the date of this Agreement or upon the vesting of Company Stock-Based Awards outstanding as of the date of this Agreement, and (y) pursuant to the Company ESPP; and (2) the Company may, in the ordinary course of business and consistent with past practices, grant to any employee of the Company below the level of Vice President (x) options (having an exercise price equal to the fair market value of the Company Common Stock covered by such options determined as of the time of the grant of such options, containing no vesting acceleration provisions and containing the Company’s standard vesting schedule) or (y) restricted stock units or restricted stock awards (containing no vesting acceleration provisions and containing the Company’s standard vesting schedule) under the Company Equity Plans in connection with either the hiring of such employee during the Pre-Closing Period or the Company’s annual employee review process, provided that (I) any such award grants made to newly-hired employees of its Subsidiariesthe Company shall be made in accordance with the Company’s new hire guidelines set forth in Part 4.2(b)(ii)(I) of the Disclosure Schedule; and (II) any award grants made to Company employees in connection with the Company’s annual employee performance review process, shall be made in accordance with the guidelines set forth in Part 4.2(b)(ii)(I) of the Disclosure Schedule;
(iii) except as required to give effect to anything in contemplation of the Closing, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of the Company Equity Plans or any provision of any Contract evidencing any outstanding Company Equity Award or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, restricted stock units, warrant or other security or any related Contract, other than any acceleration of vesting that occurs in accordance with the terms of a Company Contract in effect as of the date of this Agreement;
(iv) amend or permit the adoption of any amendment to any of its Subsidiaries’ Organizational Charter Documents, or effect or be become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, division or subdivision of shares, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or Entity;
(vi) make any capital expenditure that, when added to all other capital expenditures made by the Acquired Corporations during a particular fiscal quarter, exceeds the total amount budgeted for such fiscal quarter as set forth in Exhibit 4.2(b)(vi) to the Disclosure Schedule under the heading “Implied Capex”;
(vii) other than in the ordinary course of business consistent with past practices (A) enter into a joint venture or become bound by, or permit any of the assets owned or used by it to become bound by, any Material Contract or (B) amend or terminate, or waive or exercise any material right or remedy under, any Material Contract;
(viii) grant any exclusive license or right with respect to any Company IP;
(ix) other than in the ordinary course of business consistent with part practices. enter into, renew or become bound by, or permit any of the assets owned or used by it to become bound by, any Contract the effect of which would be to grant to any Person following the Merger any actual or potential right or license to any Intellectual Property Right owned as of the date of this Agreement by any Acquired Corporation or Parent;
(x) enter into, renew or become bound by, or permit any of the assets owned or used by it to become bound by, any Contract containing, or otherwise subjecting any Acquired Corporation to, any non-competition, exclusivity or other material restriction on the operation of the business of any Acquired Corporation or Parent;
(xi) other than on the ordinary course of business consistent with past practices, enter into, renew or become bound by, or permit any of the assets owned or used by it to become bound by, any Contract providing for future purchases of components, supplies or finished goods from any Person providing contract manufacturing or other component manufacturing or aggregation services;
(xii) acquire, lease or license any right or other asset from any other EntityPerson or sell or otherwise dispose of, lease or license any right or other asset to any other Person (except in each case for assets (that are not material individually or in the aggregate) acquired, leased, licensed or disposed of by the Company in the ordinary course of business and consistent with past practices), or, other than in the ordinary course of business in connection with the collection of accounts receivable, waive or relinquish any material right;
(xiii) other than in the ordinary course of business consistent with past practices, write off as uncollectible, or establish any extraordinary reserve with respect to, any receivable or other indebtedness;
(A) make any pledge of any of its material assets or (B) permit any of its material assets to become subject to any Encumbrances, except for Encumbrances that do not materially detract from the value of such assets or materially impair the operations of any of the Acquired Corporations;
(xv) permit any cash, cash equivalents or short-term investments of the Acquired Corporations to become subject to any Encumbrance;
(xvi) lend money to any Person (except for the advancement of expenses to employeesPerson, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (Cincluding capital lease obligations) guarantee any debt securities of others, or (D) other than the incurrence or payment indebtedness for reimbursement of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth expenses made in the Company operating budget delivered to Parent concurrently with the execution ordinary course of this Agreement (the “Company Budget”);
(vibusiness) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish obtain or enter into any Company Benefit Plan; bond or letter of credit or any related Contract;
(Bxvii) cause establish, adopt, enter into or permit amend any Company Benefit Employee Plan to be amended in any material respect; (C) or Company Employee Agreement, pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation (including equity-based compensation, whether payable in stock, cash or other property) or remuneration payable to, any of its directors, directors or any of its officers or employeesother employees (except that the Company: (A) may provide routine, other than reasonable salary increases in base salary and annual cash bonus opportunities and payments made to employees that are not at the Vice President level or above in the Ordinary Course ordinary course of Business business and in accordance with past practices in connection with the Company’s customary employee review process; (B) may amend the Company Employee Plans to the extent required by Section 409A of the Code and other applicable Legal Requirements; and (C) may make customary bonus payments and profit sharing payments consistent with past practice practices in accordance with existing bonus and which do not exceed, profit sharing plans referred to in Part 2.16(b) of the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditionedDisclosure Schedule);
(viiixviii) enter into hire any material transaction employee (A) at the director level with compensation that is inconsistent with the Company’s compensation guidelines or its past practices; or (B) at the level of Vice President or above;
(xix) promote any employee except in order to fill a position below the level of Vice President that is vacated after the date of this Agreement;
(xx) other than in the Ordinary Course ordinary course of Businessbusiness consistent with past practices, materially change any of its pricing policies, product return policies, product maintenance polices, service policies, product modification or upgrade policies, personnel policies or other business policies, or any of its methods of accounting or accounting practices (other than as required by GAAP) in any respect;
(ixxxi) acquire establish, adopt or amend any material asset investment policy of the Acquired Corporations, make any investment that is inconsistent with any investment policy of the Acquired Corporations or sell, lease or otherwise irrevocably dispose of make any of its assets or properties, or grant investment in any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Businessmortgage-backed securities;
(xxxii) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke make any material Tax election, fail to pay any income amend or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period a claim for refund with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted described in the Ordinary Course of Business of not more than seven (7) monthsSection 2.15(i), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate compromise or settle any Legal Proceeding
(xv) Proceeding with respect to any Tax or Tax-related matter, enter into or amend a Contract obtain any Tax ruling or take any action that would reasonably be expected to prevent have a material and adverse impact on the Tax liability of any Acquired Corporation, except as required under applicable Legal Requirements;
(xxiii) commence any Legal Proceeding other than Legal Proceedings commenced for the routine collection of bills;
(xxiv) settle any claim or materially impede, interfere with, hinder Legal Proceeding other than claims or delay Legal Proceedings against the consummation Acquired Corporations that do not relate to Tax or Tax-related matters and with respect to which the settlement involves solely the payment by the Acquired Corporations of an amount less than $500,000 individually and less than $1,000,000 in the Contemplated Transactionsaggregate for all such claims and Legal Proceedings settled during the Pre-Closing Period; or
(xvixxv) agree, resolve agree or commit to do take any of the foregoing.
actions described in clauses “(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions i)” through “(xxiv)“ of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws4.2(b).
Appears in 2 contracts
Samples: Merger Agreement (Foundry Networks Inc), Merger Agreement (Foundry Networks Inc)
Operation of the Company’s Business. (a) Except (i) as set forth in Section on Schedule 4.2(a) of the Company Disclosure Schedulehereto, (ii) as expressly permitted required by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemicprior written consent of Parent (such consent not to be unreasonably withheld, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s conditioned or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19delayed), or (v) as may be consented set forth in the Company’s operating budget delivered to in writing by Parent concurrently with the execution of this Agreement (which consent shall not be unreasonably withheld, delayed or conditionedthe “Company Budget”), at all times during the Pre-Closing Period: each of the Company and its Subsidiaries shall (A) conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material ContractsContracts and (B) continue to pay material outstanding accounts payable and other material current Liabilities (including payroll) when due and payable in the Ordinary Course of Business and (C) use commercially reasonable efforts to preserve intact in all material respects its assets, properties and material relationships with suppliers, commercial parties, licensees, licensors, employees and contractors.
(b) Except (i) as expressly permitted by this Agreementset forth on Schedule 4.2(b) hereto, (ii) as set forth in Section 4.2(b) of the Company Disclosure Scheduleexpressly required by this Agreement, (iii) as required by applicable Law or Law, (iv) with the prior written consent of Parent (which such consent shall not to be unreasonably withheld, delayed conditioned or conditioned)delayed) or (v) as set forth in the Company Budget, at all times during the Pre-Closing Period, the Company shall not, nor shall it cause or permit any of its Subsidiaries to, not do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except repurchases of shares of Company Common Stock from terminated employees, directors or consultants of Parent or in connection with the payment of the exercise price and/or or withholding Taxes incurred upon the exercise, settlement or vesting of any award or purchase rights granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of outstanding Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or an aggregate of 1,149,709 Company Options and/or restricted stock unit awards (1) granted to directors, employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Sharesand (2) granted to any newly hired officers or employees or any newly engaged independent contractor; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its SubsidiariesCompany;
(iii) accelerate the vesting or settlement of any outstanding Company Options or any other instrument convertible into or exchangeable for any capital stock or other security of the Company (except in accordance with the terms of any existing Company Contract);
(iv) except as required to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(ivv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(vi) (A) lend money to any Person (except for the advancement of reasonable and customary expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of othersother Persons, or (D) other than except for capital expenditures incurred in furtherance of the incurrence or payment development of any Transaction Expensesthe Company’s product candidates as of the date of this Agreement, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth $75,000 individually and $250,000 in the Company operating budget delivered aggregate or (E) forgive any loans to Parent concurrently with any Persons, including the execution of this Agreement (the “Company Budget”)Company’s employees, officers, directors or Affiliates;
(vivii) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or bonus or other compensation or remuneration payable to, any of its directors, officers officers, consultants or employees, other than (1) increases in base salary and annual cash bonus opportunities and payments made made, in each case, in the Ordinary Course of Business consistent and (2) prorated bonuses paid to terminated employees in accordance with past practice and which do not exceedthe terms of any existing Company Contract, in each case, which has been made available to Parent prior to the aggregate, the amounts specifically budgeted therefore in the Company Budgetdate hereof; or (DB) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(viiviii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its material assets or properties, properties or grant any Encumbrance with respect to such assets or properties, except except, in each case of the foregoing cases, in the Ordinary Course of BusinessBusiness or in furtherance of the development of the Company’s existing product candidates as of the date of this Agreement;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP or any Company In-Licensed IP (other than pursuant to material transfer agreements, clinical trial agreements, services agreements, non-exclusive disclosure agreements, commercially available Software-as-a-Service offerings, off-the-shelf software licenses or generally available patent license agreements, in each case entered into in the Ordinary Course of BusinessBusiness on a non-exclusive basis and that do not grant any commercial rights to any products or services of the Company);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
Contract (xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would be deemed a Company Material Contract if entered into prior to the date hereof), in each case, if such entry, amendment or termination would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions;
(xiii) other than as required by Law or GAAP, take any action to change in any material respect accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding or other claim or dispute involving or against the Company; or
(xv) (A) fail to maintain any material insurance policies in full force and effect prior to the renewal period of any such material insurance policies or (B) fail to use commercially reasonable efforts to renew any such material insurance policies following the applicable expiration or acquire substantially similar insurance policies;
(xvi) enter into a new line of business or start to conduct a line of business in a new geographic area where it was not previously conducted; or
(xvii) agree, resolve or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 2 contracts
Samples: Agreement and Plan of Merger (MorphImmune Inc.), Merger Agreement (Immunome Inc.)
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedulerequired by applicable Law or, (ii) as expressly required or permitted by or required in accordance this Agreement, or (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), during the Pre-Closing Period: each Company covenants and agrees as to itself and its Subsidiaries that, from the date hereof until the earlier of the Effective Time or the termination of this Agreement in accordance with Article VIII, the business of the Company and its Subsidiaries shall conduct its business and operations be conducted in the Ordinary Course of Business and in compliance ordinary course in all material respects with all applicable Laws and the requirements Company and its Subsidiaries shall use their respective reasonable efforts to preserve their business organizations substantially intact and maintain its existing relations and goodwill with Governmental Entities, key customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and other Persons with whom the Company or any Subsidiary of all Contracts that constitute the Company Material Contracts.
has material business relations. Without limiting the generality of, and in furtherance of, the foregoing, from the date hereof until the earlier of the Effective Time or the termination of this Agreement in accordance with Article VIII, except (b) Except (iA) as otherwise expressly required or permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) Agreement or as required by applicable Law Law; or (ivB) with the prior written consent of as Parent may approve in advance in writing (which consent approval shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), at all times during the Pre-Closing Period, the Company shall not, nor shall it cause or will not and will not permit any of its Subsidiaries to, do any of the followingdirectly or indirectly:
(i) declare, accrue, set aside adopt or pay propose any dividend change in the memorandum and articles of association or make any other distribution in respect of any shares of its capital stock or repurchase, redeem or otherwise reacquire, directly or indirectly, any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect to: (A) any capital stock or other security equivalent organizational documents of the Company or any of its Subsidiaries;
(ii) effect any scheme of arrangement, merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among Wholly Owned Subsidiaries of the Company that are not obligors or guarantors of Third Party indebtedness, or other than in the ordinary course, restructure, reorganize or completely or partially liquidate or otherwise enter into any Contracts imposing material changes or material restrictions on assets, operations or businesses of the Company and its Subsidiaries;
(iii) acquire, whether by purchase, merger, consolidation, scheme of arrangement or acquisition of stock or assets or otherwise, any assets, securities, properties, interests, or businesses or make any investment (whether by purchase of stock or securities, contributions to capital, loans to, or property transfers), in each case, other than in the ordinary course of business (it being understood and agreed that the acquisition of all or substantially all of the assets or outstanding shares or other equity securities of any Person is not in the ordinary course of business);
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, or redeem, purchase or otherwise acquire, any share capital of the Company or any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any share capital, or any options, warrants or other rights of any kind to acquire any share capital or such convertible or exchangeable securities;
(v) create or incur (x) any lien or other security interest on any Company IP owned or exclusively licensed or that is material and non-exclusively licensed by the Company or any of its Subsidiaries outside the ordinary course of business or (y) any Lien on any other material assets of the Company or any of its Subsidiaries, in each case, other than Permitted Liens and Liens incurred in the ordinary course of business;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than the Company or any direct or indirect Wholly Owned Subsidiary of the Company), except pursuant to Contracts in effect as of the date hereof which have been filed as exhibits to the Company Reports filed with the SEC;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its share capital (except for shares dividends paid by any Subsidiary to the Company or to any other Subsidiary and periodic dividends and other periodic distributions by Non-Wholly Owned Subsidiaries in the ordinary course consistent with past practices), or enter into any Contract with respect to the voting of outstanding its share capital;
(viii) reclassify, split, combine, subdivide, directly or indirectly, any of its share capital or securities convertible or exchangeable into or exercisable for any of its share capital;
(ix) incur, alter, amend or modify any indebtedness for borrowed money or guarantee such indebtedness of another Person, or permit any Subsidiary of the Company Common Stock issued upon to guarantee any indebtedness of the valid exercise Company, other than the incurrence or guarantee of indebtedness in the ordinary course of business not to exceed US$3,500,000 in the aggregate, including any borrowings under the existing credit facilities of the Company Options); and its Subsidiaries to fund working capital needs, and such other actions taken in the ordinary course of business consistent with past practice;
(Bx) issue or sell any option, warrant debt securities or right warrants or other rights to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other debt security of the Company or any of its Subsidiaries;
(iiixi) except as required to give effect to anything in contemplation of the Closing, amend any of its make or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make authorize any capital expenditure in excess of the budgeted capital expenditure amounts set forth US$1,000,000 per project or related series of projects of US$2,000,000 in the aggregate, other than expenditures necessary to maintain existing assets in good repair, consistent with past practice;
(xii) make any changes with respect to accounting policies or procedures materially affecting the reported consolidated assets, liabilities or results of operations of the Company operating budget delivered and its Subsidiaries, except as required by changes in applicable generally accepted accounting principles or Law;
(xiii) settle any Action before a Governmental Entity by or against the Company or any of its Subsidiaries or relating to Parent concurrently any of their business, properties or assets, other than settlements (A) entered into in the ordinary course of business consistent with past practice, (B) requiring of the execution Company and its Subsidiaries only the payment of this Agreement monetary damages not exceeding US$1,000,000 and (C) not involving the “admission of any wrongdoing by the Company Budget”or any of its Subsidiaries;
(xiv) engage in the conduct of any new line of business material to the Company and its Subsidiaries, taken as a whole;
(xv) create any new Subsidiaries;
(xvi) enter into, amend or modify, in any material respect, or terminate, or waive any material rights under, any Material Contract (or Contract that would be a Material Contract if such Contract had been entered into prior to the date hereof);
(vixvii) other than make or change any material Tax election, materially amend any Tax Return (except as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adoptLaw), terminate, establish or enter into any Company Benefit Plan; (B) cause material closing agreement with respect to Taxes, surrender any right to claim a material refund of Taxes, settle or permit any Company Benefit Plan to be amended in finally resolve any material respect; controversy with respect to Taxes or materially change any method of Tax accounting;
(Cxviii) pay any bonus with regard to material Intellectual Property owned by the Company or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directorsSubsidiaries, officers transfer, sell, license, mortgage, surrender, encumber, divest, cancel, abandon or employeesallow to lapse or expire or otherwise dispose of any such material Intellectual Property, other than increases in base salary and annual cash bonus opportunities and payments made licenses or other Contracts granted in the Ordinary Course ordinary course of Business consistent business, or cancellation, abandonment, allowing to lapse or expire such Intellectual Property that is no longer used or useful in any of the Company’s or its Subsidiaries’ respective businesses or pursuant to Contracts in effect prior to the date hereof; and with past practice regard to other assets, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except in connection with services provided in the ordinary course of business, sales of products in the ordinary course of business and which do sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not exceed, in excess of US$300,000 in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employeeseach case, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for causepursuant to Contracts in effect as of the date hereof;
(viixix) recognize any labor union except as required pursuant to existing written plans or labor organization, except Contracts in effect as of the date hereof or as otherwise required by applicable Law and after prior written consent or in the ordinary course of Parent business, (which consent shall not be unreasonably withheld, delayed or conditioned);
(viiiA) enter into any material transaction other than in new employment or compensatory agreements (including the Ordinary Course renewal of Business;
(ixany consulting agreement) acquire with any material asset employee, consultant or sell, lease director of the Company or otherwise irrevocably dispose of any of its assets Subsidiaries, except employment agreements with newly hired employees in the ordinary course of business consistent with past practice, (B) grant or propertiesprovide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or grant make any Encumbrance with respect new equity awards to such assets any director, officer or propertiesemployee of the Company or any of its Subsidiaries, in each case, except increases in compensation and bonus in the Ordinary Course ordinary course of Business;
business consistent with past practice, (xD) sellestablish, assignadopt, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
Benefit Plan (xiii) other than except as required by Law Law) or GAAPamend the terms of any outstanding equity-based awards, (E) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, to the extent not already required in any such Company Benefit Plan, (F) materially change accounting policies any actuarial or procedures;
other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, or (xivG) initiate forgive any loans to directors, officers or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation employees of the Contemplated TransactionsCompany or any of its Subsidiaries; or
(xvixx) agree, resolve authorize or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 2 contracts
Samples: Merger Agreement (New Horizon Capital Iii, L.P.), Merger Agreement (Exceed Co Ltd.)
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a4.3(a) of the Company Disclosure ScheduleSchedule of Exceptions, (ii) as expressly permitted contemplated by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) Law or unless Innovate shall otherwise consent in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned)writing, during the Pre-Closing Period: (i) the Company and each Subsidiary of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business Business; (ii) the Company and in compliance in all material respects each Subsidiary of the Company shall use commercially reasonable efforts to preserve intact its current business organization, use commercially reasonable efforts to keep available the services of its current key employees, officers and other employees and maintain its relations and goodwill with all applicable Laws suppliers, customers, landlords, creditors, licensors, licensees, employees, regulators and other Persons having business relationships with the requirements Company or its Subsidiaries; and (iii) the Company shall promptly notify Innovate of all Contracts that constitute Company Material Contractsany Legal Proceeding against, relating to, involving or otherwise affecting this Agreement or the Contemplated Transactions.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during During the Pre-Closing Period, the Company shall notpromptly notify Innovate in writing, nor shall it cause or permit any of its Subsidiaries to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock event, condition, fact or repurchase, redeem or otherwise reacquire, directly or indirectly, any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iii) except as required to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract circumstance that would could reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation satisfaction of the Contemplated Transactions; or
(xvi) agree, resolve or commit to do any of the foregoing.
(cconditions set forth in Section 6, Section 7 and Section 8 on or before the Drop Dead Date. No notification given to Innovate pursuant to this Section 4.3(b) Nothing shall change, limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company Schedule of Exceptions for purposes of Section 7.1 or any other provision of this Agreement; provided, however, that to the extent that any such notice refers to any matter arising after the date of this Agreement and prior to the Effective Time. Prior , and Innovate proceeds with the Closing, then such notice will be deemed to have amended the Effective Time, applicable Sections of the Company shall exerciseSchedule of Exceptions, consistent with to have qualified the terms representations and conditions warranties contained in Section 2, and to have cured any misrepresentation or breach of this Agreementwarranty that otherwise might have existed hereunder by reason of the development, complete unilateral control and supervision over its business operations. Notwithstanding anything no Innovate Indemnified Party will have any right to the contrary set forth indemnification hereunder in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Lawsnotified matter.
Appears in 2 contracts
Samples: Merger Agreement (Innovate Biopharmaceuticals, Inc.), Merger Agreement (Innovate Biopharmaceuticals, Inc.)
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
, except (b) Except (iw) as expressly permitted by required under this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (ivx) with the prior written consent of Parent (which consent shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed), at (y) as required by applicable Law or (z) as expressly set forth in Schedule 5.2(a) as of the date of this Agreement, the Company shall conduct, and shall ensure that each of the other Acquired Corporations conducts, its business and operations only in the ordinary course consistent with past practice and shall use commercially reasonable efforts to (A) preserve intact the business organization and material assets of the Acquired Corporations, (B) keep available the services of the officers and employees of the Acquired Corporations, (C) maintain in effect all times of the Governmental Authorizations of the Acquired Corporations and (D) maintain satisfactory relationships with customers, lenders, suppliers, licensors, licensees, distributors and others having material business relationships with the Acquired Corporations. Without limiting the generality of the foregoing, during the Pre-Closing Period, except (1) as expressly required under this Agreement, (2) with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), (3) as required by applicable Law or (4) as set expressly forth in Schedule 5.2(a) as of the date of this Agreement, the Company shall not, nor not and shall it cause or not permit any of its Subsidiaries the other Acquired Corporations to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution (whether in cash, stock, property or otherwise) in respect of any shares of its capital stock or other securities, other than dividends or distributions between or among any of the Acquired Corporations to the extent in the ordinary course of business consistent with past practices and the Company’s regular quarterly dividends, not to exceed $0.21 per share per quarter, payable in cash and declared and paid consistent with past practice;
(ii) directly or indirectly repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercisesecurities, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) including any option, warrant call, warrant, share of phantom stock or phantom stock right, stock purchase or stock appreciation right, restricted stock unit, performance stock unit or right to acquire any capital stock or any other security, other than option grants acquisitions by the Company of Shares in satisfaction by holders of Company Options, Company Restricted Shares or Company Stock Awards of the exercise price and/or withholding taxes or as a result of forfeiture, as applicable;
(iii) sell, issue, grant or authorize the issuance or grant of any capital stock or other security of any Acquired Corporation, including (A) any option, call, warrant, share of phantom stock or phantom stock right, stock purchase or stock appreciation right, restricted stock unit, performance stock unit awards granted or right to employees acquire any capital stock or other security of Acquired Corporation and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (CB) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iii) except as required to give effect to anything Acquired Corporation, in contemplation of the Closingeach case, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than (x) the incurrence or payment issuance of any Transaction Expenses, make any capital expenditure in excess Shares upon the exercise of Company Options pursuant to the budgeted capital expenditure amounts set forth in terms of Company Stock Awards that are outstanding on the Company operating budget delivered to Parent concurrently with the execution date of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or in accordance with the terms of any Company Benefit Plan the ESPP as in effect on the date of this Agreement: , in each case, in accordance with the applicable equity award’s terms as in effect on the date of this Agreement (Aor as may be amended or granted or awarded not in violation of this Agreement) adoptand (y) grants or awards of Shares (including Company Restricted Shares) or Company Options required to be made under the ESPP as in effect on the date of this Agreement or pursuant to the express terms of any existing written employment or other compensation Contract in effect as of the date of this Agreement (or as may be amended or entered into not in violation of this Agreement);
(iv) split, terminatesubdivide, establish combine or reclassify the outstanding shares of capital stock of the Company or enter into any Company Benefit Plan; (B) cause or permit agreement with respect to voting of any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits capital stock or other compensation or remuneration payable to, securities of any of its directors, officers the Acquired Corporations or employees, any securities convertible into or exchangeable for any of the capital stock or other than increases in base salary and annual cash bonus opportunities and payments made in securities of any of the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for causeAcquired Corporations;
(viiv) recognize any labor union or labor organization, except as otherwise contemplated by Section 6.2 or Section 6.3, to the extent required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than required pursuant to an extension Employee Plan in effect prior to the date of time to file any Tax Return granted this Agreement and set forth in Part 3.16(a) of the Ordinary Course Company Disclosure Schedule (or as may be implemented or amended not in violation of Business of not more than seven (7) monthsthis Agreement), or adopt or change any material accounting method in respect of Taxes;
(xiiA) enter into, establish, adopt, modify, materially amend or terminate any collective bargaining agreement, any Employee Plan or any other compensation or benefit plan with, for or in respect of any stockholder, director, officer, other current or former employee or consultant that would constitute an Employee Plan had it been in effect as of the date of this Agreement, (B) take any action to materially amend, modify or waive any of its rights under, or accelerate the vesting criteria or vesting requirements of payment of any compensation or benefit under, any collective bargaining agreement or any Employee Plan (except as expressly required by the terms of such Employee Plans as of the date of this Agreement), (C) increase in any manner the compensation of any current or former Company Associate (except for (i) increases required to be made pursuant to the express terms of an Employee Plan in effect prior to the date of this Agreement and set forth in Part 3.16(a) of the Company Disclosure Schedule (or as may be implemented or amended not in violation of this Agreement), (ii) increases in cash compensation made or bonuses determined and paid in the ordinary course of business and consistent with past practice to employees who are not officers which are approved in writing by the Chief Executive Officer of the Company, (iii) changes to welfare benefits which are not, in the aggregate, material and (iv) increases required under any applicable Law), (D) hire, elect or appoint any officer, (E) issue or forgive any loans (other than routine travel advances or similar business expense advances issued in the ordinary course of business and consistent with past practice, and the use of Acquired Corporation credit cards in accordance with the express terms of the Acquired Corporation’s written policy with respect thereto in effect prior to the date of this Agreement) to Company Associates, (F) except as expressly required by the terms of an Employee Plan, accelerate any payment or benefit payable or to become payable, or the funding of any benefit or payment, to any Company Associate, (G) waive, release or condition any non-compete, non-solicit, non-disclosure, confidentiality or other restrictive covenant owed to any Acquired Corporation, (H) hire any employee or individual independent contractor whose base salary exceeds $150,000 per year; (I) terminate, other than for cause, the employment or engagement of any Company Associate whose base salary or wages exceeds $150,000 per year; or (J) withdraw from any Multiemployer Plan;
(vi) amend, modify or waive any provision of, or permit the adoption of any amendment to, the Company Charter Documents or any of the organizational or charter documents of any Acquired Corporation;
(vii) incur or assume any Indebtedness except (x) for borrowings under the Credit Facility in the ordinary course of business consistent with past practice or (y) in respect of Indebtedness owing by any wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company up to a maximum of $60,000,000;
(viii) make any capital expenditures in an amount in excess of $2,500,000 individually or $5,000,000 in the aggregate;
(ix) (A) acquire, lease, license or sublicense any right or other asset, including Intellectual Property Rights, from any other Person or sell or otherwise dispose of, or lease, license or sublicense, any right or other asset, including Intellectual Property Rights, to any other Person (in each case, other than in the ordinary course of business and consistent with past practices), (B) waive or relinquish, abandon, allow to lapse or encumber (except for any Permitted Encumbrance) any right or other asset, including Intellectual Property Rights, (C) enter into any new line of business or (D) form any Subsidiary, other than, in the case of clauses (A) and (B), pursuant to transactions where the amount of consideration paid or transferred in connection with such transaction would not exceed $250,000 individually or $500,000 in the aggregate;
(A) enter into any Material ContractContract of the type described in clauses (i), (v), (vi), (viii) or (ix) of Section 3.9(a) or any Lease Agreement (collectively, the “Restrictive Contracts”), (B) amend or waive any rights under any Restrictive Contract or the Credit Facility or (C) terminate any Restrictive Contract or the Credit Facility;
(xi) (A) enter into any Material Contract that is not a Restrictive Contract if the existence or performance of such Material Contract could adversely affect the synergies available to, or the actions contemplated by the integration plans of, Parent and its Subsidiaries in connection with the transactions contemplated by this Agreement, (B) amend or waive any rights under any Material Contract that is not a Restrictive Contract if such amendment could adversely affect the synergies available to, or the actions contemplated by the integration plans of, Parent and its Subsidiaries in connection with the transactions contemplated by this Agreement or (C) terminate any Material Contract that is not a Restrictive Contract if such termination could adversely affect the synergies available to, or the actions contemplated by the integration plans of, Parent and its Subsidiaries in connection with the transactions contemplated by this Agreement;
(xii) materially change any of its accounting methods, policies or procedures unless required by GAAP or applicable Law or make any material Tax election or change any material Tax election already made, adopt or change any material Tax accounting method, amend any material Tax Return, enter into any material closing agreement or settle any claim or assessment relating to material Taxes or consent to any claim or assessment relating to material Taxes or any waiver of the statute of limitations for any such claim or assessment;
(xiii) settle or compromise any Legal Proceedings other than as required by Law settlements in the ordinary course of business consistent with past practice involving the payment of an amount less than $500,000 in the aggregate and that would not reasonably be expected to have a material on-going effect on the business or GAAP, take operations of any action to change accounting policies or proceduresAcquired Corporation;
(xiv) initiate adopt a plan of complete or settle partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any Legal ProceedingAcquired Corporation (other than the Mergers);
(xv) enter into acquire or amend a Contract that would reasonably be expected to prevent transfer any right or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactionsinterest in any real property; or
(xvi) agree, resolve agree or commit to do take any of the foregoing.
foregoing actions described in clauses (ci) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions through (xv) of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws5.2(a).
Appears in 2 contracts
Samples: Merger Agreement (Quad/Graphics, Inc.), Merger Agreement (COURIER Corp)
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b7.1(a) of the Company Disclosure Schedule, (iii) as required expressly contemplated by applicable Law this Agreement or (iv) with the prior written consent of Parent or Merger Sub, the Company covenants and agrees as to itself and its Subsidiaries that, from the date hereof until the earlier of the Effective Time or the termination of this Agreement in accordance with Article IX, the business of it and its Subsidiaries shall be conducted only in the ordinary course and, to the extent consistent therewith, the Company and its Subsidiaries shall use their respective reasonable best efforts to preserve their business organizations substantially intact and maintain its existing relations and goodwill with Governmental Entities, key customers, suppliers, distributors, employees and other Persons with whom the Company has material business relationships. Without limiting the generality of, and in furtherance of, the foregoing, from the date hereof until the earlier of the Effective Time or the termination of this Agreement in accordance with Article IX, except (A) as otherwise expressly required or permitted by this Agreement or as required by Law; (B) as set forth in Section 7.1(a) of the Company Disclosure Schedule, or (C) as Parent may approve in advance in writing (which consent approval shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), at all times during the Pre-Closing Period, the Company shall not, nor shall it cause or will not and will not permit any of its Subsidiaries (except where specifically described otherwise) to, do any of the following:
(i) declare, accrue, set aside adopt or pay propose any dividend or make any other distribution change in respect the memorandum and articles of any shares of its capital stock or repurchase, redeem or otherwise reacquire, directly or indirectly, any shares of its capital stock association or other securities (except in connection with the payment applicable governing instruments of the exercise price and/or withholding Taxes incurred upon Company or its Subsidiaries (other than Subsidiaries incorporated in the exercise, settlement or vesting of any award granted under the PRC except for Shenzhen GrenTech Company Plan in accordance with the terms of such award in effect on the date of this AgreementLimited);
(ii) effect any scheme of arrangement, merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among Wholly Owned Subsidiaries of the Company that are not obligors or guarantors of third party indebtedness, or other than in the ordinary course, restructure, reorganize or completely or partially liquidate or otherwise enter into any Contracts imposing changes or restrictions on its assets, operations or businesses that are material to the Company and the Subsidiaries taken as a whole;
(iii) acquire, directly or indirectly, whether by purchase, merger, consolidation, scheme of arrangement or acquisition of stock or assets or otherwise, any assets, securities, properties, interests, or businesses or make any investment (whether by purchase of stock or securities, contributions to capital, loans to, or property transfers), in each case, other than (A) in the ordinary course of business, (it being understood and agreed that the acquisition of all or substantially all of the assets or outstanding shares or other equity securities of any Person is not in the ordinary course of business), or (B) if not in the ordinary course of business, with a value or purchase price (including the value of assumed liabilities) not in excess of US$5,000,000 in any transaction or related series of transactions or acquisitions;
(iv) issue, sell, issuepledge, dispose of, grant, pledge transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, or redeem, purchase or otherwise dispose acquire, any share capital of the Company or encumber or authorize any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any share capital, or any options, warrants or other rights of any kind to acquire any share capital or such convertible or exchangeable securities, other than in connection with (A) the foregoing issuance of Company securities as required to comply with respect to: any Company Benefit Plan or employment agreement as in effect on the date hereof, or (B) pursuant to Contracts in effect as of the date hereof;
(v) create or incur (A) any capital stock lien or other security interest on any Company IP owned or exclusively licensed or that is material and non-exclusively licensed by the Company or any of its Subsidiaries outside the ordinary course of business or (B) any Lien on any other assets of the Company or any of its Subsidiaries which assets have a value in excess of US$5,000,000, in each case, other than Permitted Liens;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than the Company or any direct or indirect Wholly Owned Subsidiary of the Company) except pursuant to Contracts in effect as of the date hereof which have identified in Section 6.1(k) of the Company Disclosure Schedule;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its share capital (except for shares dividends paid by any Subsidiary to the Company or to any other Subsidiary and periodic dividends and other periodic distributions by Non-Wholly-Owned Subsidiaries in the ordinary course consistent with past practices), or enter into any Contract with respect to the voting of outstanding its share capital;
(viii) reclassify, split, combine, subdivide, directly or indirectly, any of its share capital or securities convertible or exchangeable into or exercisable for any of its share capital;
(ix) incur, alter, amend or modify, any indebtedness for borrowed money or guarantee such indebtedness of another Person, or permit any Subsidiary of the Company Common Stock issued upon to guarantee any indebtedness of the valid exercise Company, other than the incurrence or guarantee of indebtedness in the ordinary course of business not to exceed US$5,000,000 in the aggregate, including any borrowings under the existing credit facilities of the Company Options); and its Subsidiaries to fund working capital needs, and such other actions taken in the ordinary course of business consistent with past practice;
(Bx) issue or sell any option, warrant debt securities or right warrants or other rights to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other debt security of the Company or any of its Subsidiaries;
(iiixi) except as required to give effect to anything in contemplation of the Closing, amend any of its make or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make authorize any capital expenditure in excess of the budgeted capital expenditure amounts set forth US$50,000,000, other than expenditures necessary to maintain existing assets in the Company operating budget delivered to Parent concurrently good repair, consistent with the execution of this Agreement (the “Company Budget”)past practice;
(vixii) make any material changes with respect to accounting policies or procedures materially affecting the reported consolidated assets, liabilities or results of operations of the Company and its Subsidiaries, except as required by changes in applicable generally accepted accounting principles or Law;
(xiii) settle any Action before a Governmental Entity by or against the Company or any of its Subsidiaries or relating to any of their business, properties or assets, other than settlements (A) entered into in the ordinary course of business consistent with past practice, (B) requiring of the Company and its Subsidiaries only the payment of monetary damages not exceeding US$5,000,000 and (C) not involving the admission of any wrongdoing by the Company or any of its Subsidiaries;
(xiv) engage in the conduct of any new line of business material to the Company and its Subsidiaries, taken as a whole;
(xv) create any new Subsidiaries;
(xvi) enter into, amend or modify, in any material respect, or terminate, or waive any material rights under, any Material Contract (or Contract that would be a Material Contract if such Contract had been entered into prior to the date hereof) that is, individually or aggregate, reasonably likely to result in a Material Adverse Effect;
(xvii) make or change any material Tax election, materially amend any Tax Return (except as required by applicable Law Law), enter into any material closing agreement with respect to Taxes, surrender any right to claim a material refund of Taxes, settle or the terms finally resolve any material controversy with respect to Taxes or materially change any method of any Company Benefit Plan as in effect on the date of this Agreement: Tax accounting;
(xviii) (A) adoptwith regard to material Intellectual Property owned or licensed by the Company or any of its Subsidiaries, terminatetransfer, establish sell, license, mortgage, surrender, encumber, divest, cancel, abandon or enter into allow to lapse or expire or otherwise dispose of any Company Benefit Planmaterial Intellectual Property, other than licenses or other Contracts granted in the ordinary course of business, or cancellation, abandonment, allowing to lapse or expire such Intellectual Property that is no longer used or useful in any of the Company’s or its Subsidiaries’ respective businesses or pursuant to Contracts in effect prior to the date hereof; and (B) cause with regard to other assets, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or permit any Company Benefit Plan allow to be amended in lapse or expire or otherwise dispose of any material respect; (C) pay any bonus assets, licenses, operations, rights, product lines, businesses or make any profit-sharing or similar payment to, or increase the amount interests therein of the wagesCompany or its Subsidiaries, salary, commissions, benefits or other compensation or remuneration payable to, including capital stock of any of its directorsSubsidiaries, officers or employees, other than increases except in base salary and annual cash bonus opportunities and payments made connection with services provided in the Ordinary Course ordinary course of Business consistent business, sales of products in the ordinary course of business and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with past practice and which do a fair market value not exceed, in excess of US$2,000,000 in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for causepursuant to Contracts in effect as of the date hereof;
(viixix) recognize any labor union except as required pursuant to existing written plans or labor organization, except Contracts in effect as of the date hereof or as set forth in Section 6.1(i) of the Company Disclosure Schedule or as otherwise required by applicable Law and after prior written consent or carried out in the ordinary course of Parent business consistent with past practice, (which consent shall not be unreasonably withheld, delayed or conditioned);
(viiiA) enter into any material transaction other than in new employment or compensatory agreements (including the Ordinary Course renewal of Business;
(ixany consulting agreement) acquire with any material asset employee, consultant or sell, lease director of the Company or otherwise irrevocably dispose of any of its assets Subsidiaries, (B) grant or propertiesprovide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or grant make any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change new equity awards to any Tax Returndirector, settle officer or compromise employee of the Company or any income or other material Tax liability or submit any voluntary disclosure applicationof its Subsidiaries, enter into any Tax allocationin each case, sharing(D) establish, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes)adopt, request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
Benefit Plan (xiii) other than except as required by Law Law) or GAAPamend the terms of any outstanding equity-based awards, (E) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, to the extent not already required in any such Company Benefit Plan, (F) materially change accounting policies any actuarial or procedures;
other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, or (xivG) initiate forgive any loans to directors, officers or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation employees of the Contemplated TransactionsCompany or any of its Subsidiaries; or
(xvixx) agree, resolve authorize or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 2 contracts
Samples: Agreement and Plan of Merger (China GrenTech CORP LTD), Merger Agreement (China GrenTech CORP LTD)
Operation of the Company’s Business. (a) Except During the Interim Period, except: (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by contemplated under this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed), at (iii) as required by Applicable Law or (iv) as set forth in Schedule 5.2, the Company shall ensure that it and each of its Subsidiaries conducts its business and operations in the ordinary course, consistent with past practice and use its commercially reasonable efforts to: (A) preserve intact its business organization and material assets, (B) keep available the services of its officers and employees who are integral to the operation of the business as presently conducted, (C) maintain in effect all times of its Governmental Authorizations, and (D) maintain satisfactory relationships with customers, lenders, suppliers, licensors, licensees, distributors and others having material business relationships with the Company. Without limiting the generality of the foregoing, during the Pre-Closing Interim Period, except: (1) as required or otherwise contemplated under this Agreement, (2) with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), (3) as required by Applicable Law or (4) as set forth in Schedule 5.2, the Company shall not, nor and shall it cause or not permit any of its Subsidiaries to, do any of the following:
(ia) declare, accrue, set aside or pay any dividend or make any other distribution (whether in cash, stock or property) in respect of any shares of its the Company’s capital stock stock, or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its the Company’s capital stock stock, other than (i) dividends or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement distributions between or vesting of any award granted under among the Company Plan in accordance and its Subsidiaries to the extent consistent with past practices and (ii) other acquisitions or distributions of Shares resulting from the terms forfeiture, vesting or settlement (including tax withholding) or exercise of such award in effect Company Options, Company RSUs or Company Restricted Shares, as applicable, outstanding on the date of this Agreement)hereof;
(iib) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any the issuance or grant of the foregoing with respect to: (Ai) any capital stock or other security of the Company or any of its Subsidiaries Company, (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (Bii) any option, warrant call, warrant, share of phantom stock or phantom stock right, stock purchase or stock appreciation right, restricted stock unit, performance stock unit or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation security of the Company Outstanding Shares; Company, or (Ciii) any instrument convertible into or exchangeable for any capital stock or other security of the Company, in each of clauses (i) through (iii) other than: (A) the issuance of Shares upon the exercise or settlement of Company Options or Company RSUs, or pursuant to the terms of the Company Restricted Stock Awards that are outstanding on the date hereof, in each case in accordance with the applicable equity award’s terms as in effect on the date hereof (or as may be amended, or granted or awarded not in violation of this Agreement) and (B) grants or awards of Shares (including Company Restricted Shares) or Company Options or Company RSUs required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements (including new hire offer letters) in effect as of the date hereof (or as may be amended or entered into not in violation of this Agreement);
(c) split, combine or reclassify its outstanding shares of capital stock of the Company or enter into any agreement with respect to voting of any of the capital stock of any of the Company or any of its Subsidiariessecurities convertible into or exchangeable for such capital stock;
(iiid) increase the salary, wages, benefits, bonuses or other compensation payable or to become payable to the Company’s current or former directors or executive officers, except as for (i) increases required to give be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect to anything in contemplation as of the Closing, amend date hereof (or as may be amended or entered into not in violation of this Agreement) or (ii) increases required under any of its Employee Plan or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, under Applicable Law (for the avoidance of doubt, the Contemplated Transactions;
Company shall be permitted to pay its employees (ivor those of its Subsidiaries) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except bonuses earned for the advancement of expenses to employeesfiscal year ended December 31, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”2015);
(vie) other than as except to the extent required by applicable (i) Applicable Law (including Section 409A of the Code), or (ii) any Employee Plan in effect as of the date hereof, accelerate the vesting of, or the lapsing of restrictions with respect to, any Company Options or other Company stock-based compensation prior to the times set forth in Section 2.4;
(f) amend or modify, or authorize or formally propose to amend or modify, any of the Company Charter Documents;
(g) incur, or assume or otherwise become liable for any long-term or short-term Indebtedness except (i) for borrowings under the Company’s current credit facilities in the ordinary course of business consistent with past practice or (ii) in respect of Indebtedness owing by any wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary of the Company;
(h) incur or commit to incur any capital expenditures in an amount in excess of $500,000 individually or $1,500,000 in the aggregate in any three (3) month period;
(i) sell, lease, license, pledge, transfer, subject to any Encumbrance or otherwise abandon, cease to prosecute, or dispose of any Intellectual Property Assets, or other material assets or properties except (i) pursuant to existing contracts or commitments, (ii) non-exclusive licenses of Company Intellectual Property Assets to its customers, contractors, partners or suppliers in the ordinary course of business consistent with past practice, (iii) sales of inventory or used equipment in the ordinary course of business consistent with past practice, (iv) Permitted Encumbrances incurred in the ordinary course of business consistent with past practice, or (v) abandonment or cessation of prosecution of Intellectual Property Assets no longer used in the Business, where the Company has determined in its reasonable business judgment that such abandonment or cessation is desired;
(j) change any of its methods of accounting or accounting practices in any material respect unless required by GAAP or Applicable Law or as otherwise specifically disclosed in the terms Company SEC Documents;
(k) enter into any collective bargaining, agreement to form a work council or other union or similar agreement or commit to enter into any such agreements;
(1) modify or amend in any material respect, or terminate or cancel (excluding terminations or cancellations upon expiration of the term thereof in accordance with their terms) or extend any Company Benefit Plan as Material Contract, except in the ordinary course of business consistent with past practice or (2) enter into any Contract that if in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to hereof would be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company a Material Contract;
(xiiim) other than as required by Law or GAAP, take enter into any action to change accounting policies or proceduresnew line of business outside of the ordinary course of business;
(xivn) initiate settle, pay or settle discharge any Legal Proceedinglitigation, investigation, or arbitration, other than the settlement, payment, discharge or satisfaction in the ordinary course of business consistent with past practice;
(xvo) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay any agreement providing for the consummation divestiture of the Contemplated TransactionsCompany’s interest in the entity identified on Schedule 5.2(p) or, other than in the ordinary course of business, the sale of any material assets or properties of such entity;
(p) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization; or
(xviq) authorize, or agree, resolve or commit to do take, any of the foregoing actions. Notwithstanding the foregoing.
(c) Nothing , nothing contained in this Agreement shall give Parentto Parent or Purchaser, directly or indirectly, the right rights to control or direct the operations of the Company and its Subsidiaries prior to the Effective Time. Prior to In addition, notwithstanding the Effective Timeforegoing, nothing in this Section 5.2 shall restrict the Company shall exerciseand its wholly-owned Subsidiaries from, consistent with or require the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to prior to, engaging in any matter set forth in this Section 4.2 transaction or elsewhere in this Agreement to entering into any agreement exclusively among the extent that the requirement of such consent could violate any applicable LawsCompany and its wholly-owned Subsidiaries.
Appears in 2 contracts
Samples: Merger Agreement (CalAmp Corp.), Merger Agreement (Lojack Corp)
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Control Period, except: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (ivw) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed); (x) as required by applicable Legal Requirements; (y) as required by this Agreement; or (z) as disclosed in Part 5.2(a) of the Disclosure Schedule, at the Company shall ensure that each of the Acquired Corporations (i) conducts its business and operations in all times material respects in the ordinary course of business consistent with past practices; and (ii) uses commercially reasonable efforts to preserve substantially intact its business organizations, to keep available the services of its current officers and key employees and to preserve the current beneficial relationships and goodwill of each of the Acquired Corporations with material customers, suppliers, distributors and other Persons with which the Acquired Corporations (taken as a whole) have material business relations.
(b) Without limiting the generality of the foregoing, during the Pre-Closing Control Period, except: (w) with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed); (x) as required by applicable Legal Requirements; (y) as required by this Agreement; or (z) as disclosed in Part 5.2(b) of the Disclosure Schedule, the Company shall not, nor and shall it cause or not permit any of its Subsidiaries the other Acquired Corporations to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution (whether in cash, stock or otherwise) in respect of any shares of its capital stock stock, or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities or rights, warrants or options to acquire any such shares or securities, other than: (except A) the acquisition by the Company of shares of Company Common Stock in connection with the payment surrender of shares of Company Common Stock by holders of Company Options in order to pay the exercise price and/or of the Company Options; (B) the withholding Taxes incurred upon of shares of Company Common Stock to satisfy Tax obligations with respect to awards granted pursuant to the exerciseCompany Plans; and (C) the acquisition by the Company of Company Options, settlement the Company Restricted Stock Units or vesting of any award granted purchase rights under the Company Plan ESPP in accordance with the their terms of such award in effect on as of the date of this Agreement)Agreement in connection with the forfeiture of such awards;
(ii) sell, issue, grantencumber, pledge or otherwise dispose of or encumber grant or authorize any of the foregoing with respect toissuance or grant of, or materially amend the terms of: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options)security; (B) any option, restricted stock unit, restricted stock award or other equity-based compensation award (whether payable in cash, stock or otherwise), call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit except that the Acquired Corporations may grant new equity-based compensation awards granted to employees and service providers of the Acquired Corporations in the Ordinary Course ordinary course of Business which are included in the calculation of the Company Outstanding Sharesbusiness consistent with past practices, including to new hires; or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that the Company may issue shares of Company Common Stock: (1) upon the valid exercise of Company Options outstanding as of the date of this Agreement and upon the exercise of the Top-Up Option; and (2) as a result of the vesting of Company or any Restricted Stock Units outstanding as of its Subsidiariesthe date of this Agreement);
(iii) except as required to give effect to anything in contemplation of the Closingsplit, amend divide, subdivide, combine, consolidate or reclassify any of its capital stock or issue or authorize the issuance of any securities in lieu of or in substitution for shares of its Subsidiaries’ Organizational Documentscapital stock;
(iv) amend or otherwise modify any of the terms of any outstanding equity-based compensation award or other security or any related Contract, other than with respect to the transactions contemplated by Section 2.8 of this Agreement;
(v) adopt, approve or implement any “poison pill” or similar rights plan that could adversely affect the timely consummation of the Offer, the Merger or any of the other Contemplated Transactions;
(vi) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documents, or effect or be become a party to any merger, consolidation, share exchange, business combination, recapitalizationamalgamation, reclassification of shares, stock split, reverse stock split recapitalization or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivvii) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entityventure, partnership or similar Contract;
(viii) other than in the ordinary course of business consistent with past practices, enter into any Contract with a term of greater than six months or involving obligations on the part of the Acquired Corporation in excess of $750,000;
(ix) except to the extent addressed in, and not otherwise prohibited by, Section 5.2(b)(vii): (A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants other than in the Ordinary Course ordinary course of Business)business consistent with past practices, acquire, lease or license any material right or asset, including Intellectual Property Rights, from any other Person; (B) sell or otherwise dispose of, or lease or license any material right or asset, including material Intellectual Property Rights, to any other Person; or (C) waive or relinquish any material right, including material Intellectual Property Rights;
(x) enter into any Contract to purchase lease or otherwise acquire any interest in real property;
(xi) other than in the ordinary course of business consistent with past practices, enter into any Contract regarding the Company’s acquisition or sale of Intellectual Property Rights, or by which the Company would become a licensee or licensor of Intellectual Property Rights, except for non-exclusive license of generally commercially available software;
(xii) except for short-term borrowings under existing lines of credit incurred in the ordinary course of business consistent with past practices, incur or guarantee any indebtedness for borrowed money, (C) guarantee issue or sell any debt securities or rights to acquire any debt securities of others, the Company or such Acquired Corporation or guarantee any such indebtedness or any debt securities of another Person;
(Dxiii) other than the incurrence commence or payment of settle any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth Legal Proceeding (except with respect to non-material disputes as may arise from time to time in the Company operating budget delivered to Parent concurrently with the execution Company’s ordinary course of this Agreement (the “Company Budget”business);
(vixiv) change any financial accounting methods, principles or practices, except as required by Legal Requirements or GAAP;
(xv) (A) increase the amount of or accelerate the vesting or payment of the compensation, bonus or other benefits (including the severance pay) payable to any current or former Company Associate other than increases in salaries of employees (other than executive officers and directors) made in the ordinary course of business consistent with past practices so long as such increases made following the date of this Agreement, in the aggregate, do not exceed 2% of payroll in any calendar year, (B) hire any employee, or enter into any consultant or independent contractor Contract, other than in the ordinary course of business consistent with past practices, (C) except as required by Legal Requirements, enter into, establish, amend or terminate any Company Employee Plan (or any plan, program or Contract that would be a Company Employee Plan if it were in effect as of the date hereof), (D) except as required by Legal Requirements, enter into or amend in any material respect any collective bargaining agreement or other Contract with any labor organization or works’ council, or similar employee representative body, in each case, other than as required by applicable Law or the terms of any Legal Requirements, pursuant to a Company Benefit Employee Plan as in effect on as of the date of this Agreement: (Ahereof and disclosed on Part 5.2(b)(xv) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits Disclosure Schedule or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in as the Company Budget; (D) increase the severance deems necessary or change of control benefits offered appropriate to any avoid adverse Tax consequences to itself or its current or new employees, directors or consultants; former Company Associates (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent it being understood that the Company shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies avoid such adverse Tax consequences that would result in a material increase in the costs to Parent as a result of the Contemplated Transactions or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend that would result in a Contract material diminution of the benefits that would reasonably be expected to prevent accrue to Parent from the Offer, the Merger or materially impede, interfere with, hinder or delay the consummation any of the other Contemplated Transactions; or);
(xvi) agreeexcept in the ordinary course of business consistent with past practices: (A) change or rescind any material Tax election, resolve relating to Taxes or any material Tax accounting method; (B) amend any Tax Return; (C) settle or compromise any liability for Taxes; (D) surrender or settle any claim relating to Taxes; or (E) enter into any closing agreement relating to any Tax;
(xvii) incur or commit to do any capital expenditures or any obligations or liabilities in connection therewith in excess of $750,000 per three-month period (except, for the avoidance of doubt, pursuant to Contracts that are in effect as of the date of this Agreement);
(xviii) enter into any Contract that (A) limits or otherwise restricts the Acquired Corporations, or that would, after the Effective Time, limit or restrict, any of Acquired Corporations, the Surviving Corporation, Parent or any of their respective Affiliates, from engaging or competing in any line of business, in any location or with any Person or (B) would be breached by, or require the Consent of any third party in order to continue in full force following, consummation of the Offer, the Merger or any of the foregoingother Contemplated Transactions;
(xix) (A) enter into, terminate or materially amend any Material Contract or Specified Contract or any other Contract that would have been required to be set forth on Part 3.10 or Part 3.10(c) of the Disclosure Schedule if entered into prior to the date hereof, other than in the ordinary course of business consistent with past practices, (ii) amend or modify the engagement letter with Xxxxxxx Xxxxx & Co. to increase compensation or modify the circumstances under which such compensation is payable thereunder or (iii) pay any success or similar fee to any of the Acquired Corporation’s advisors (other than engagement letter with Xxxxxxx Sachs & Co. in accordance with the engagement letter in the form as of the date hereof) , accountants or attorneys;
(xx) agree or commit to take any of the actions described in clauses “(i)” through “(xix)” of this Section 5.2(b).
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of Company’s or the Company Subsidiaries’ operations prior to the Effective Acceptance Time. Prior to the Effective Acceptance Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business and the Company Subsidiaries’ respective operations. Notwithstanding anything to .
(d) During the contrary set forth Pre-Control Period:
(i) the Company shall promptly, after it becomes aware of any of the following, notify Parent, orally and in this Agreementwriting of: (A) the occurrence or non-occurrence of any event, no consent of Parent shall be required with respect to condition, fact or circumstance that has caused: (1) any matter set forth in this Section 4.2 representation or elsewhere warranty made by the Acquired Corporations in this Agreement to be untrue or inaccurate in any material respect at any time during such period; or (2) any of the extent conditions set forth in Exhibit B or in Section 7 not to be satisfied; (B) the failure by the Company to comply with or satisfy in any material respect any covenant, condition or agreement to be satisfied by it pursuant to this Agreement; (C)
(1) any notice or other communication from any Person alleging that the requirement Consent of such consent could violate Person is or may be required in connection with any applicable Lawsof the Contemplated Transactions; and (2) any Legal Proceeding commenced against any of the Acquired Corporations that relates to any of the Contemplated Transactions; or (D) any effect, change, development, event or circumstance, condition or statement of fact that constitutes a Company Material Adverse Effect. No notification given to Parent pursuant to this Section 5.2(d)(i) shall limit or otherwise affect any of the representations, warranties or covenants of the Company contained in this Agreement or any of the remedies available to Parent hereunder; and
(ii) Parent shall promptly, after it becomes aware of any of the following, notify the Company, orally and in writing of: (A) the occurrence or non-occurrence of any event, condition, fact or circumstance that has caused: (1) any representation or warranty made by the Parent or Acquisition Sub in this Agreement to be untrue or inaccurate in any material respect at any time during such period; or (2) any of the conditions set forth in Exhibit B not to be satisfied; (B) the failure by Parent or Acquisition Sub to comply with or satisfy in any material respect any covenant, condition or agreement to be satisfied by it pursuant to this Agreement; (C)
(1) any notice or other communication from any Person alleging that the Consent of such Person is or may be required in connection with any of the Contemplated Transactions; and (2) any Legal Proceeding commenced against Parent or Acquisition Sub that relates to any of the Contemplated Transactions; or (D) any effect, change, development, event or circumstance, condition or statement of fact that would, individually or in the aggregate, reasonably be expected to otherwise prevent, materially impede or materially delay the consummation of any of the Contemplated Transactions. No notification given to the Company pursuant to this Section 5.2(d)(ii) shall limit or otherwise affect any of the representations, warranties or covenants of Parent or Acquisition Sub contained in this Agreement or any of the remedies available to the Company hereunder.
(e) The Company shall timely exercise in full any right or option it may have to repurchase shares of its capital stock which is or becomes exercisable during the Pre-Closing Period from any current or former employee, consultant, officer, member of the board of directors or other Person upon termination of such Person’s service to any of the Acquired Corporations where the repurchase price per share is less than the Offer Price; provided, however, that the Company shall use commercially reasonable efforts to notify Parent in writing concurrently with any such repurchase and, notwithstanding the above, Parent hereby expressly consents to the foregoing actions to be taken by the Company.
Appears in 2 contracts
Samples: Merger Agreement (Maxim Integrated Products Inc), Agreement and Plan of Merger (Volterra Semiconductor Corp)
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted for matters contemplated by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: :
(i) the Company shall ensure that each of the Company and its Subsidiaries shall conduct Acquired Corporations conducts its business and operations operations: (A) in the Ordinary Course ordinary course of Business business in all material respects consistent with past practices and (B) in compliance in all material respects with all applicable Laws Legal Requirements;
(ii) the Company shall use all reasonable efforts to ensure that each of the Acquired Corporations preserves intact its current business organization, keeps available the services of its current officers and other employees and maintains its relationships and goodwill with its material customers, partners, suppliers, licensors, licensees, distributors and others having material business relationships with it;
(iii) the requirements Company shall keep in full force all material insurance policies referred to in Section 2.18 (other than any such policies that are immediately replaced with substantially similar policies);
(iv) the Company shall cause to be provided all notices, assurances and support required by any Company IP Contract as would be reasonably expected to decrease the likelihood of: (A) any transfer or disclosure by any Acquired Corporation of any Company Software source code owned by the Acquired Corporations to any other Person; or (B) a release from any escrow to any other Person of any Company Software source code owned by the Acquired Corporations that has been deposited or is required to be deposited in escrow under the terms of such Company Contract;
(v) the Company shall use all Contracts reasonable efforts to ensure that, except as may be prohibited by applicable Legal Requirement, stock certificates representing all shares of capital stock of any Subsidiary of the Company owned or held by any Person other than the Company or another Subsidiary of the Company are delivered to Parent or its designees at or prior to the Effective Time, endorsed in blank or accompanied by duly executed assignment documents, in form satisfactory to Parent; and
(vi) the Company shall promptly notify Parent of: (A) any notice or other communication from any Person alleging that constitute Company Material Contractsthe Consent of such Person is or may be required in connection with any of the Contemplated Transactions; and (B) any Legal Proceeding against, relating to, involving or otherwise affecting any of the Acquired Corporations that is commenced, or, to the Knowledge of the Company, threatened against, any of the Acquired Corporations.
(b) Except (i) as expressly permitted for matters contemplated by this Agreement, (ii) as set forth in Section on Schedule 4.2(b) of the Company Disclosure Schedule, (iii) as or required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheldLegal Requirements, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall notnot (without the prior written consent of Parent), nor and shall it cause or not (without the prior written consent of Parent) permit any of its Subsidiaries the other Acquired Corporations to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock stock, or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except in connection with the payment securities, other than dividends and distributions by a direct or indirect wholly-owned Subsidiary of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)to its parent;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any of the foregoing with respect tosale, issuance or grant of: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options)security; (B) any option, call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security security, except that the Company may issue shares of Company Common Stock: (1) upon the valid exercise of Company Options outstanding as of the Company or any date of its Subsidiariesthis Agreement; and (2) pursuant to the ESPP;
(iii) except as required to give effect to anything in contemplation of the Closing, amend or waive any of its rights under, or increase the benefits, including permitting the acceleration of the vesting under, any provision of: (A) any of the Company’s stock option plans; (B) any Company Option or any agreement evidencing or relating to any outstanding stock option; (C) any restricted stock purchase agreement; or (D) any other Contract evidencing or relating to any equity award (whether payable in cash or stock); provided, however, that this subsection will not restrict any acceleration of vesting which would occur pursuant to the existing terms of any such plan, agreement or Contract as of the date hereof;
(iv) amend or permit the adoption of any amendment to its Subsidiaries’ Organizational Documentscertificate of incorporation or bylaws or other charter or organizational documents, or effect or be become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, division or subdivision of shares, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(vi) incur any material capital expenditures or any obligations or liabilities in respect thereof not in the ordinary course of business;
(vii) make any capital expenditure (except a capital expenditure that: (A) is in the ordinary course of business and consistent with past practices; (B) does not exceed $50,000 individually; and (C) when added to all other capital expenditures made by or on behalf of the Acquired Corporations since the date of this Agreement, does not exceed $100,000 in the aggregate);
(viii) other than in the ordinary course of business consistent with past practices, enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any Material Contract, or amend or terminate, or waive or exercise any material right or remedy under, any Material Contract;
(ix) sell, lease, license, pledge, transfer, subject to any Encumbrance or otherwise dispose of any of its material assets or properties except (A) sales of inventory or used equipment in the ordinary course of business, (B) any Permitted Encumbrance, (C) any non-exclusive license of Company IP in the ordinary course of business and (D) pursuant to existing Contracts;
(x) make any pledge of any of its material assets or permit any of its material assets to become subject to any Encumbrances, except for Permitted Encumbrances;
(xi) lend money to any Person (except for the advancement of expenses other than ordinary course expense advances to employees, directors employees and consultants in the Ordinary Course of Business), (B) or incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vixii) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) establish, adopt, terminate, establish or enter into or amend any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) , pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation (including equity-based compensation, whether payable in stock, cash or other property) or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; any of its officers (E) hire any (x) officer or (y) employee whose annual base salary other employees to the extent that such establishment, adoption, amendment, payment or increase is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditionedmaterial);
(viiixiii) enter into hire or promote any material transaction employee except in order to fill a position vacated after the date of this Agreement;
(xiv) make (other than in the Ordinary Course ordinary course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Businessbusiness);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, ; settle or compromise any income claim, notice, audit report or assessment in respect of material Taxes; change any annual Tax accounting period; adopt any Material method of Tax accounting (other than in the ordinary course of business) or change any method of Tax accounting; file any amended material Tax liability or submit any voluntary disclosure application, Return; enter into any Tax allocationallocation agreement, sharingTax sharing agreement, indemnification or other similar Tax indemnity agreement or arrangement (similar Contract relating to any Tax, other than customary commercial contracts entered into in any such agreement among or between the Ordinary Course of Business the principal subject matter of which is not Taxes), request Acquired Corporations; surrender any right to claim a material Tax refund; or consent to any extension or waiver of any limitation the statute of limitations period with respect applicable to any material Tax claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxesassessment;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into institute, settle, or amend a Contract that would reasonably be expected agree to prevent settle any material Legal Proceeding pending or materially impedethreatened before any arbitrator, interfere with, hinder court or delay the consummation of the Contemplated Transactionsother Governmental Body; or
(xvi) agree, resolve agree or commit to do take any of the foregoingactions described in clauses ”(i)” through “(xv)” of this Section 4.2(b).
(c) Nothing During the Pre-Closing Period, each of the Company and Parent shall promptly notify the other in writing if it obtains knowledge of any of the following: (i) any material inaccuracy of any representation or warranty contained in this Agreement shall give Parent, directly or indirectly, at any time during the right to control or direct term hereof; and (ii) any material breach by the operations Company of any covenant contained in this Agreement at any time during the term hereof. Without limiting the generality of the Company prior to the Effective Time. Prior to the Effective Timeforegoing, the Company shall exercisepromptly advise Parent in writing of any Legal Proceeding or material claim threatened, consistent commenced or asserted in writing against or with respect to, or otherwise affecting, any of the terms and conditions Acquired Corporations that would have been required to have been disclosed pursuant to Article 2 of this Agreement. No notification given to Parent pursuant to this Section 4.2(c) shall limit or otherwise affect any of the representations, complete unilateral control and supervision over its business operations. Notwithstanding anything to warranties, covenants or obligations of the contrary set forth Company contained in this Agreement, no consent of Parent .
(d) The Company shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement (to the extent that directed by Parent in writing) timely exercise in full any right or option it may have to repurchase shares of its capital stock which is or becomes exercisable during the requirement Pre-Closing Period. The Company shall use reasonable efforts to notify Parent in writing at least ten (10) days in advance of any such consent could violate any applicable Lawsrepurchase right or option becoming exercisable.
Appears in 2 contracts
Samples: Merger Agreement (Ixys Corp /De/), Merger Agreement (Zilog Inc)
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of Unless the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with obtains the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety prior written consent of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned)Parent, during the Pre-Closing Period: each of the Company and its Subsidiaries Acquired Corporations shall conduct its business and operations in the Ordinary Course of Business ordinary course and in compliance in all material respects substantially the same manner as such business and operations have been conducted prior to the date of this Agreement; each of the Acquired Corporations shall use reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and maintain its relations and good will with all applicable Laws suppliers, customers, landlords, creditors, employees and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) other Persons having business relationships with such Acquired Corporation; none of the Company Acquired Corporations shall cancel any of its respective insurance policies identified in Part 2.18 of the Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, ; the Company shall not, nor shall it cause or permit any its Chief Executive Officer to report regularly (but in no event less frequently than weekly) to the Executive Vice President of its Subsidiaries to, do any Parent concerning the status of the following:
(iCompany's business other than with respect to potential customer contracts, and the Company shall consult on an ongoing basis with Parent concerning the Consents contemplated by Section 6.4 and the terminations contemplated by Section 6.6(e) and obtain Parent's consent to the form of the Consents and other documents to be entered into by the Company or signed by any other Person in connection with the matters contemplated by Sections 6.4 and 6.6(e); none of the Acquired Corporations shall declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock or stock, nor repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities, other than from former employees, directors and consultants pursuant to restricted stock purchase agreements and stock option agreements providing for the repurchase of such securities (except in connection with the payment their termination of service to any Acquired Corporation; none of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement);
(ii) Acquired Corporations shall sell, issue, grant, pledge or otherwise dispose of or encumber issue or authorize any of the foregoing with respect toissuance of: (Ai) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options)security; (Bii) any option, warrant option or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted security (except that the Company shall be permitted to issue Company Options to its employees and service providers in the Ordinary Course ordinary course of Business which are included in the calculation of the Company Outstanding Sharesbusiness consistent with past practice); or (Ciii) any instrument convertible into or exchangeable for any capital stock or other security of (except that the Company shall be permitted to issue Company Common Stock to employees upon the exercise of outstanding Company Options); the Company shall not amend or waive any of its Subsidiaries;
rights under, or permit the acceleration of vesting under: (i) any provision of any Company Option Plan, other than as a result of Parent's failure to assume the Company Options in the Merger; (ii) any provision of any agreement evidencing any outstanding Company Option, other than as a result of Parent's failure to assume the Company Options in the Merger; or (iii) except as required to give effect to anything in contemplation any provision of any restricted stock purchase agreement; none of the Closing, Acquired Corporations shall amend or permit the adoption of any of its or its Subsidiaries’ Organizational amendment to such Acquired Corporation's Incorporation Documents, or effect or be permit such Acquired Corporation to become a party to any merger, consolidation, share exchange, business combinationAcquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction excepttransaction; provided, for however, that, after the avoidance of doubtdate hereof and prior to the Closing, the Contemplated Transactions;
Company may file the Amendment (ivas defined in Section 4.9) in accordance with Section 4.9; none of the Acquired Corporations shall form any Subsidiary subsidiary or acquire any equity interest or other interest in any other Entity Entity; none of the Acquired Corporations shall make any capital expenditure, except for capital expenditures that, when added to all other capital expenditures made on behalf of such Acquired Corporation during the Pre-Closing Period, do not exceed $15,000 per month; none of the Acquired Corporations shall: (i) enter into, or enter into permit any of the assets owned or used by it to become bound by, any Contract that is or would constitute a joint venture with Material Contract; or (ii) amend or prematurely terminate, or waive any material right or remedy under, any such Contract; none of the Acquired Corporations shall create, establish or use any new standard form Contract or amend any standard form Contract that any of the Acquired Corporations has created, established, used or executed either prior to or after the date of this Agreement; none of the Acquired Corporations shall: (i) acquire, lease or license any right or other asset from any other Entity;
Person for an aggregate value in excess of $15,000; (Aii) sell or otherwise dispose of, or lease or license, any right or other asset to any other Person; or (iii) waive or relinquish any right, except for assets acquired, leased, licensed or disposed of by such Acquired Corporation pursuant to Contracts that are not Material Contracts; none of the Acquired Corporations shall: (i) lend money to any Person (except for that each of the advancement Acquired Corporations may make routine travel advances to current employees of expenses to employees, directors and consultants such Acquired Corporation in the Ordinary Course ordinary course of Businessbusiness; provided that such advances individually do not exceed $2,000), ; or (Bii) incur or guarantee any indebtedness for borrowed moneymoney in excess of $5,000 in the aggregate; none of the Acquired Corporations shall: (i) establish, adopt or amend any employee benefit plan; (C) guarantee any debt securities of others, or (Dii) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered pursuant to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan commission plans, bonus plans, variable compensation plans and employment agreements that are in place as in effect on of the date of this AgreementAgreement and identified in Part 2.16(a) of the Disclosure Schedule, make any individual payment in excess of $2,000 in order to: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing payment, cash incentive payment or similar payment payment, other than commissions paid in the ordinary course of business and consistent with past practices, and except that payments up to $5,000 may be made pursuant to existing plans or arrangements, to, or (B) increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; or (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (Eiii) hire any (x) officer or (y) new employee whose aggregate annual base salary is or compensation is expected to be more than exceed $250,000 per year or (F) terminate or give notice 75,000; none of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent the Acquired Corporations shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of change any of its assets methods of accounting or properties, or grant any Encumbrance with respect to such assets or properties, except accounting practices in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material respect; none of the Acquired Corporations shall make any Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in ; none of the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate Acquired Corporations shall commence or settle any material Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation ; and none of the Contemplated Transactions; or
(xvi) agree, resolve Acquired Corporation shall agree or commit to do take any of the foregoingactions described in clauses "(e)" through "(r)" above.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 2 contracts
Samples: Merger Agreement (Siebel Systems Inc), Merger Agreement (Siebel Systems Inc)
Operation of the Company’s Business. (a) Except During the Pre-Closing Period: (i) except (x) as required under this Agreement or as required by applicable Legal Requirements, (y) with the written consent of Parent, or (z) as set forth in Section 4.2(a) Part 5.2 of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: each of the Company and its Subsidiaries shall will conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects in the ordinary course of business consistent with past practice; and (ii) the Company shall promptly notify Parent of (A) any knowledge of any notice from any Person alleging that the Consent of such Person is or may be required in connection with any of the Transactions, and (B) any Legal Proceeding commenced, or, to its knowledge threatened, relating to or involving the Company that relates to the consummation of the Transactions. The Company shall use commercially reasonable efforts to preserve intact the material components of its current business organization, including keeping available the services of current officers and key employees, and use commercially reasonable efforts to maintain its relations and good will with all applicable Laws material suppliers, material customers, Governmental Bodies and other material business relations; provided, however, that except as set forth in Section 6.4, the requirements of all Contracts that constitute Company Material Contractsshall be under no obligation to put in place any new retention programs or include additional personnel in existing retention programs.
(b) Except During the Pre-Closing Period, except (ix) as expressly permitted by required under this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) Agreement or as required by applicable Law or Legal Requirements, (ivy) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during or (z) as set forth in Part 5.2 of the Pre-Closing PeriodCompany Disclosure Schedule, the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any of the following:
(i) (1) establish a record date for, declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock (including the Company Common Stock), or (2) repurchase, redeem or otherwise reacquirereacquire any of its shares of capital stock (including any Company Common Stock), directly or indirectlyany rights, warrants or options to acquire any shares of its capital stock, other than: (A) repurchases of shares of Company Common Stock outstanding as of the date hereof pursuant to the Company’s right (under written commitments in effect as of the date hereof) to purchase shares of Company Common Stock held by a Company Associate only upon termination of such associate’s employment or engagement by the Company; (B) repurchases of Company Warrants or Company Options (or shares of capital stock issued upon the exercise or vesting thereof) outstanding on the date hereof (in cancellation thereof) pursuant to the terms of any such Company Warrant or Company Option (in effect as of the date hereof) between the Company and an employee, consultant or member of the Board of Directors of the Company only upon termination of such Person’s employment or engagement by the Company; or (C) in connection with withholding to satisfy the Tax obligations with respect to Company Options or Company Warrants;
(ii) split, combine, subdivide or reclassify any shares of its capital stock (including the Company Common Stock) or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)equity interests;
(iiiii) sell, issue, grant, pledge or otherwise dispose of or deliver, pledge, transfer, encumber or authorize any the issuance, sale, delivery, pledge, transfer, encumbrance or grant of the foregoing with respect to: (A) any capital stock stock, equity interest or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); security, (B) any option, warrant call, warrant, restricted securities or right to acquire any capital stock stock, equity interest or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock stock, equity interest or other security (except that the Company may issue shares of the Company or any of its Subsidiaries;
(iii) except Common Stock as required to give effect to anything in contemplation be issued upon the exercise of Company Options or Company Warrants outstanding as of the Closing, amend any date of its this Agreement or its Subsidiaries’ Organizational Documents, or effect or be a party pursuant to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated TransactionsESPP);
(iv) form except as contemplated by Section 6.3, establish, adopt, terminate or amend any Subsidiary Employee Plan (or acquire any equity interest plan, program, arrangement, practice or agreement that would be a Employee Plan if it were in existence on the date hereof), or amend or waive any of its rights under, or accelerate the vesting under, any provision of any of the Employee Plans (or any plan, program, arrangement, practice or agreement that would be a Employee Plan if it were in existence on the date hereof) or grant any employee or director any increase in compensation, bonuses or other interest in any other Entity or enter into a joint venture with any other Entity;
benefits (except that the Company: (A) lend money may provide increases in salary, wages or benefits to non-executive officer employees in the ordinary course of business consistent with past practice; (B) may amend any Person Employee Plans to the extent required by applicable Legal Requirements; (except for C) may make usual and customary annual or quarterly bonus payments, commission payments and profit sharing payments in the advancement ordinary course of expenses to employeesbusiness consistent with past practice in accordance with the bonus, directors commission and profit sharing plans existing on the date of this Agreement and disclosed on Part 5.2(iv) of the Company Disclosure Schedule; and (D) enter into agreements with consultants in the Ordinary Course ordinary course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently business consistent with the execution of this Agreement (the “Company Budget”past practices);
(viv) make any contribution to the Company’s 401(k) plan other than as required by applicable Law or under the terms of any Company Benefit Plan such plan as in effect on the date of this Agreement: , or make any required contribution to the Company’s 401(k) plan in Shares;
(vi) except as contemplated by Section 6.3, (A) adopt, terminate, establish or enter into or amend (x) any Company Benefit Plan; change-in-control or similar agreement with any executive officer, employee, director or independent contractor, (B) cause enter into or permit amend (aa) any Company Benefit Plan to be amended in employment, severance or other material agreement with any executive officer or director or (bb) any employment, severance or other material respect; agreement with any non-executive officer employee with an annual base salary greater than $200,000 or any consulting agreement with an independent contractors with an annual compensation greater than $200,000 or (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose with an annual base salary is or is expected to be more than in excess of $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause200,000;
(vii) recognize amend or permit the adoption of any labor union amendment to its Certificate of Incorporation or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed bylaws or conditioned)other charter or organizational documents;
(viii) form any Subsidiary, acquire any equity interest in any other Entity or enter into any material transaction other than in the Ordinary Course of Businessjoint venture, partnership, limited liability corporation or similar arrangement;
(ix) acquire make or authorize any material asset or sell, lease or otherwise irrevocably dispose of capital expenditure (except that the Company may make any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except capital expenditure that: (A) is provided for in the Ordinary Course Company’s capital expense budget either delivered or made available to Parent or Parent’s Representatives prior to the date of Businessthis Agreement, which expenditures shall be in accordance with the categories set forth in such budget; or (B) when added to all other capital expenditures made on behalf of the Company since the date of this Agreement but not provided for in the Company’s capital expense budget either delivered or made available to Parent or Parent’s Representatives prior to the date of this Agreement, does not exceed $200,000 individually and $500,000 in the aggregate);
(x) sellacquire, assignlease, license, sublicense, pledge, sell or otherwise dispose of, divest or spin-off, abandon, waive, relinquish or permit to lapse (other than any patent expiring at the end of its statutory term), transfer, licenseassign guarantee, sublicense exchange or swap, mortgage or otherwise dispose of encumber (including pursuant to a sale-leaseback transaction or securitization) or subject to any Company IP material Encumbrance (other than Permitted Encumbrances) any material right or other material asset or property (except, in the case of any of the foregoing (A) in the ordinary course of business consistent with past practice (including entering into clinical trial agreements and material transfer agreements in the ordinary course of business consistent with past practice), (B) pursuant to non-exclusive licenses dispositions of obsolete, surplus or worn out assets that are no longer useful in the Ordinary Course conduct of Businessthe business of the Company and (C) as provided for in the Company’s capital expense budget delivered or made available to Parent or Parent’s Representatives prior to the date of this Agreement or when added to all other capital expenditures made on behalf of the Company since the date of this Agreement but not provided for in the Company’s capital expense budget either delivered or made available to Parent or Parent’s Representatives prior to the date of this Agreement, does not exceed $200,000 individually and $500,000 in the aggregate);
(xi) makelend money or make capital contributions or advances to or make investments in, change any Person, or revoke incur or guarantee any Indebtedness (except for short-term borrowings, of not more than $250,000 in the aggregate, incurred in the ordinary course of business consistent with past practice, advances to employees and consultants for travel and other business related expenses in the ordinary course of business consistent with past practice and in compliance with the Company’s policies related thereto);
(xii) amend or modify in any material Tax electionrespect, fail waive any rights under, terminate, replace or release, settle or compromise any material claim, liability or obligation under any Material Contract or enter into any Contract which if entered into prior to pay the date hereof would have been a Material Contract, excluding any income or other clinical trial agreements and material Tax transfer agreements entered into in the ordinary course of business consistent with past practice;
(xiii) except as such Tax becomes due and payablerequired by applicable Legal Requirement, file any amendment making (a) make any material change to any accounting method or accounting period used for Tax purposes (or request such a change); (b) make any material Tax election (other a Tax election that is consistent with a Tax election made in a previous period); (c) rescind or change any material Tax election; (d) file an amended Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, ; (e) enter into a closing agreement with any Tax allocationGovernmental Body regarding any Tax; (f) settle, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request compromise or consent to any extension Tax claim or waiver assessment or surrender a right to a Tax refund; or (g) waive or extend the statute of any limitation period limitations with respect to any claim or assessment for any income or other material Taxes (Tax other than (1) pursuant to extensions of time to file a Tax Return obtained in the ordinary course of business or (2) pursuant to an extension of time to file any Tax Return granted in the Ordinary Course ordinary course of Business business in connection with an audit of not more than seven (7) months)federal, state or adopt local Taxes to prevent the assessment or change any material accounting method in respect collection of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or proceduresa Tax;
(xiv) initiate or settle commence any Legal Proceeding, except in such cases where the Company reasonably determines in good faith that the failure to commence suit would result in a material impairment of a valuable aspect of its business (provided that the Company consults with Parent and considers the views and comments of Parent with respect to such Legal Proceedings prior to commencement thereof); or in connection with a breach of this Agreement or any other agreements contemplated hereby;
(xv) settle, release, waive or compromise any Legal Proceeding or other claim (or threatened Legal Proceeding or other claim), other than (I) any Legal Proceeding relating to a breach of this Agreement or (II) pursuant to a settlement that does not relate to any of the Transactions and in the case of (II): (A) that results solely in a monetary obligation involving only the payment of monies by the Company of not more than $250,000 in the aggregate; or (B) that results solely in a monetary obligation that is funded by an indemnity obligation to or, an insurance policy of, the Company and the payment of monies by the Company that together with any settlement made under subsection “(A)” are not more than $250,000 in the aggregate (not funded by an indemnity obligation or through insurance policies);
(xvi) enter into any collective bargaining agreement or amend other agreement with any labor organization;
(xvii) adopt or implement any stockholder rights plan or similar arrangement;
(xviii) adopt a Contract that would reasonably be expected to prevent plan or materially impedeagreement of complete or partial liquidation or dissolution, interfere withmerger, hinder consolidation, restructuring, recapitalization or delay the consummation other reorganization of the Contemplated TransactionsCompany;
(xix) (A) in the case of any material provisional patent application owned or licensed by the Company, allow such provisional patent application to expire during the Pre-Closing Period without filing at least a patent application under the Patent Cooperation Treaty (“PCT”) designating all countries, and (B) in the case of any material PCT patent application owned or licensed by the Company, allow such PCT patent application to expire during the Pre-Closing Period without minimally nationalizing the PCT patent application in the United States, Australia, Canada, Europe (designating all states) and Japan, and contacting Purchaser to discuss additional countries; or
(xvixx) agreeauthorize any of, resolve or agree or commit to do take, any of the actions described in clauses “(i)” through “(xix)” of this Section 5.2(b). Notwithstanding the foregoing.
(c) Nothing , nothing contained in this Agreement herein shall give Parentto Parent or Purchaser, directly or indirectly, the right rights to control or direct the operations of the Company prior to the Effective TimeOffer Acceptance Time and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations. Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with the terms and conditions of this Agreementhereof, complete unilateral control and supervision over of its business and its, if applicable, Subsidiaries’ respective operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 2 contracts
Samples: Merger Agreement (Trius Therapeutics Inc), Merger Agreement (Cubist Pharmaceuticals Inc)
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, except (iiA) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) required or expressly contemplated under this Agreement or as required by applicable Law Laws, (B) for any action reasonably taken, or omitted to be taken, as required by or to comply with COVID-19 Measures, (ivC) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed) or (D) as set forth in Section 6.2 of the Company Disclosure Schedule, the Acquired Companies shall use commercially reasonable efforts to (i) conduct in all material respects its business and operations in the ordinary course and (ii) preserve intact the material components of the Company’s current business organization, including by maintaining its relations and goodwill with all material suppliers, material customers, Governmental Bodies and other material business relations (it being understood that with respect to the matters specifically addressed by any provision of Section 6.2(b), at all times during such specific provisions shall govern over the more general provision of this Section 6.2(a)).
(b) During the Pre-Closing Period, except (i) as required or expressly contemplated under this Agreement or as required by applicable Laws, (ii) any action reasonably taken, or omitted to be taken, as required by or to comply with COVID-19 Measures, (iii) with the written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed) or (iv) as set forth in Section 6.2 of the Company Disclosure Schedule, the Acquired Companies shall not, nor shall it cause or permit any of its Subsidiaries to, do any of the following:
(i) amend or permit the adoption of any amendment to its certificate of incorporation and bylaws or other organizational documents;
(ii) (A) establish a record date for, declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock (including the Company Common Stock) or (B) repurchase, redeem or otherwise reacquirereacquire any of its shares of capital stock (including any Company Common Stock), directly or indirectlyany rights, warrants or options to acquire any shares of its capital stock, other than: (1) repurchases or reacquisitions of Shares outstanding as of the Agreement Date pursuant to the Company’s right (under written commitments in effect as of the Agreement Date) to purchase or reacquire Shares held by a Company Associate only upon termination of such associate’s employment or engagement by the Company; (2) repurchases of Company Stock Awards (or shares of capital stock issued upon the exercise or other securities vesting thereof) outstanding on the Agreement Date (except in cancellation thereof) pursuant to the terms of any such Company Stock Award (in effect as of the Agreement Date) between the Company and a Company Associate only upon termination of such Person’s employment or engagement by the Company; (3) in connection with the payment of withholding to satisfy the exercise price and/or withholding Taxes incurred upon the exercise, or Tax obligations with respect to Company Stock Awards; or (4) settlement or vesting conversion of any award granted under of the Company Plan in accordance with Convertible Notes pursuant to the terms of such award in effect on the date of this Agreement)Indenture;
(iiiii) split, combine, subdivide or reclassify any Shares or other equity interests;
(iv) issue, sell, issue, grant, pledge or otherwise dispose of or deliver, pledge, transfer, encumber or authorize any the issuance, sale, grant delivery, pledge, transfer or encumbrance (other than pursuant to agreements in effect as of the foregoing with respect to: Agreement Date) of (A) any capital stock stock, equity interest or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); Acquired Company, (B) any subscription, option, warrant call, warrant, restricted securities or right or obligation to acquire any capital stock stock, equity interest or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation security of the Company Outstanding Shares; Acquired Company, or (C) any instrument convertible into or exchangeable for any capital stock stock, equity interest or other security of the Acquired Company (except that (1) the Company may issue Shares as required to be issued upon the exercise of Company Options or the vesting of Company Stock Awards, (2) the Company may issue Company Stock Awards to new employees who were offered Company Stock Awards as part of offer letters that were executed prior to the Agreement Date; and (3) the Company may issue Shares upon conversion of the Company Convertible Notes pursuant to the terms of the Indenture);
(v) except as contemplated by Section 3.8 or Section 6.2(b)(vi) or as set forth in Section 6.2(b)(vi) of the Company Disclosure Schedule, establish, adopt, terminate or amend any Employee Plan (or any plan, program, arrangement, practice or agreement that would be an Employee Plan if it were in existence on the Agreement Date), or amend or waive any of its Subsidiariesrights under, or accelerate the vesting under, any provision of any of the Employee Plans (or any plan, program, arrangement, practice or agreement that would be an Employee Plan if it were in existence on the Agreement Date) or grant any employee or director any increase in compensation, bonuses or other benefits, except that the Acquired Company may (A) change the title of its employees, provided such changes in title do not involve increases in the applicable employee’s compensation except as otherwise provided for under this Section 6.2(b)(v); (B) provide increases in salary, wages, bonuses or benefits to employees in the ordinary course of business or as required under a Company Employee Agreement, which shall include promotions in the ordinary course of business; (C) amend any Employee Plans to the extent required by applicable Laws; and (D) make annual or quarterly bonus or commission payments in the ordinary course of business in accordance with the bonus or commission plans existing on the Agreement Date;
(iiivi) except as required to give effect to anything (A) enter into (1) any change-of-control agreement with any executive officer, employee, director or independent contractor or (2) any retention, employment, severance or other material agreement with any executive officer or director, (B) enter into any employment or severance agreement with any non-executive officer employee with an annual base salary greater than $100,000 or any consulting agreement with an independent contractor with an annual base compensation greater than $100,000 or (C) hire any employee with an annual base salary in contemplation excess of the Closing, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions$100,000;
(ivvii) form any Subsidiary or Subsidiary, acquire any equity interest or other interest in any other Entity or enter into a any joint venture with any other Entityventure, partnership, collaboration or similar profit-sharing arrangement;
(viii) make or authorize any capital expenditure, except that the Acquired Company may make any capital expenditure that: (A) lend money is provided for in the Company’s capital expense budget either delivered or made available to Parent prior to the Agreement Date, which expenditures shall be in accordance with the categories set forth in such budget; or (B) when added to all other capital expenditures made on behalf of the Acquired Company since the Agreement Date but not provided for in the Company’s capital expense budget either delivered or made available to Parent prior to the Agreement Date, does not exceed $500,000 individually and $2,000,000 in the aggregate during any fiscal quarter;
(ix) acquire, lease, license, sublicense, pledge, sell or otherwise dispose of, divest or spin-off, abandon, waive, relinquish or permit to lapse (other than any patent expiring at the end of its statutory term), transfer, assign, guarantee, mortgage or otherwise subject to any Person material Encumbrance (except for the advancement of expenses to employeesother than Permitted Encumbrances) any material right or other material asset or property, directors and consultants except, in the Ordinary Course case of Businessany of the foregoing (A) in the ordinary course of business consistent with past practice (including entering into non-exclusive license agreements in the ordinary course of business that are not material to the Acquired Companies), (B) pursuant to dispositions of obsolete, surplus or worn out assets that are no longer useful in the conduct of the business of the Acquired Company, or (C) as provided for in the Company’s capital expense budget delivered or made available to Parent prior to the Agreement Date;
(x) lend money or make capital contributions or advances to or make investments in, any Person, or incur or guarantee any indebtedness Indebtedness, including incurring any Indebtedness under existing credit facilities, except for borrowed money(A) short-term borrowings, of not more than $500,000 in the aggregate, incurred in the ordinary course of business, (B) advances to employees and consultants for travel and other business related expenses in the ordinary course of business, (C) guarantee any debt securities of othersintercompany loans and capital contributions, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments sales commission advances made in the Ordinary Course ordinary course of Business business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business)practice;
(xi) makemake or change any material income or other material Tax election, change or revoke any income or other material method of Tax accounting, consent to the extension or waiver of the statutory period of limitations applicable to any Tax claim or assessment (other than in connection with automatic extensions of the due date for filing a Tax Return), settle or compromise any material Tax electionliability, file any amended income or other material Tax Return, enter into any closing agreement with respect to Taxes, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise prepare any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into Return in the Ordinary Course of Business the principal subject matter of a manner which is not Taxes), request or consent to any extension or waiver materially inconsistent with past practices of any limitation period such Acquired Company with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension the treatment of time to file any equivalent items on prior Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of TaxesReturns;
(xii) enter intosettle, materially amend release, waive or terminate compromise any Legal Proceeding, other than (A) any Legal Proceeding relating to a breach of this Agreement or (B) any Legal Proceeding (1) that results solely in an obligation involving only the payment of monies by the Acquired Company Material Contractof not more than $250,000 individually and $1,000,000 in the aggregate and (2) does not involve the admission of wrongdoing by the Acquired Company;
(xiii) enter into any collective bargaining agreement or other agreement with any labor organization (except to the extent required by applicable Laws);
(xiv) adopt or implement any stockholder rights plan or similar arrangement;
(xv) adopt a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(xvi) make any material change in financial accounting policies, practices, principles, methods or procedures, other than as required by Law GAAP or GAAP, take any action to change accounting policies Regulation S-X under the Exchange Act or proceduresother applicable Law;
(xivxvii) initiate amend, modify or settle waive any Legal Proceedingmaterial rights or obligations under any Material Contract or enter into any Contract which if entered into prior to the Agreement Date would have been of the types referred to in Section 4.10;
(xvxviii) terminate, fail to renew, abandon, allow to enter into the public domain, cancel, let lapse, fail to continue to prosecute or amend a Contract defend, encumber, license (including through covenants not to sxx, non-assertion provisions or releases, immunities from suit that would reasonably be expected relate to prevent Intellectual Property Rights or materially impede, interfere with, hinder or delay the consummation any option to any of the Contemplated Transactionsforegoing, but excluding any non-material non-exclusive licenses of Company IP that have been entered into in the ordinary course of business consistent with past practice), sell, assign, transfer or otherwise dispose of any material Intellectual Property Rights; or
(xvixix) agreeauthorize any of, resolve or agree or commit to do take, any of the foregoingactions described in clauses (i) through (xix) of this Section 6.2(b).
(c) Nothing Notwithstanding the foregoing, nothing contained in this Agreement herein shall give Parentto Parent or Purchaser, directly or indirectly, the right rights to control or direct the operations of the Company prior to the Effective Time, and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations. Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with the terms and conditions of this Agreementhereof, complete unilateral control and supervision over of its business and its Subsidiaries’ respective operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 2 contracts
Samples: Merger Agreement (Flexion Therapeutics Inc), Merger Agreement (Pacira BioSciences, Inc.)
Operation of the Company’s Business. (a) Except During the Pre-Closing Period, except: (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable LawLegal Requirements; or (ii) as disclosed in Part 5.2(a) of the Disclosure Schedule, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, Company shall: (A) to protect the health and safety ensure that each of the Company’s or any of Acquired Corporations conducts its Subsidiaries’ employees, business and operations in all material respects in the ordinary course and in accordance with past practices; and (B) use commercially reasonable efforts to respond to third party supply ensure that each Acquired Corporation preserves substantially intact its current business organization, keeps available the services of its current officers and employees at the level of Vice President or service disruptions caused by above, and maintains its beneficial business relations and goodwill with all material suppliers, customers, strategic partners, landlords, creditors, licensors, licensees, employees and other Persons having material business relationships with the COVID-19 pandemic or Acquired Corporations, taken as a whole.
(Cb) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, Without limiting the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned)generality of the foregoing, during the Pre-Closing Period, except: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (ivx) with the prior written consent of Parent (which consent which, with respect to clauses “(viii),” “(ix),” “(x),” “(xi),” “(xiii),” and “(xvi),” shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), at all times during ; (y) as required by applicable Legal Requirements; or (z) as disclosed in Part 5.2(b) of the Pre-Closing PeriodDisclosure Schedule, the Company shall not, nor and shall it cause or not permit any of its Subsidiaries the other Acquired Corporations to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution (whether in cash, stock or otherwise) in respect of any shares of its capital stock stock, or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities or rights, warrants or options to acquire any such shares or securities, other than: (except A) the acquisition by the Company of shares of Company Common Stock in connection with the payment surrender of shares of Company Common Stock by holders of Company Options in order to pay the exercise price and/or of the Company Options; (B) the withholding Taxes incurred upon of shares of Company Common Stock to satisfy Tax obligations with respect to awards granted pursuant to the exerciseCompany Option Plans; and (C) the acquisition by the Company of Company Options, settlement or vesting of any award granted purchase rights under the ESPP or Company Plan Restricted Stock in accordance with the their terms of such award in effect on as of the date of this Agreement)Agreement in connection with the forfeiture of such awards;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any of the foregoing with respect toissuance or grant of, or materially amend the terms of: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options)security; (B) any option, restricted stock unit, restricted stock award or other equity-based compensation award (whether payable in cash, stock or otherwise), call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that the Company may issue shares of Company Common Stock: (1) upon the valid exercise of Company Options outstanding as of the date of this Agreement and upon the exercise of the Top-Up Option; (2) as a result of the vesting of Company or any Restricted Stock Units outstanding as of its Subsidiariesthe date of this Agreement; and (3) upon the exercise of options outstanding as of the date hereof under the ESPP);
(iii) except as required to give effect to anything in contemplation of the Closingsplit, amend divide, subdivide, combine, consolidate or reclassify any of its capital stock or issue or authorize the issuance of any securities in lieu of or in substitution for shares of its Subsidiaries’ Organizational Documentscapital stock;
(iv) amend or waive any of its rights under, or accelerate the vesting under, any provision of any of the Company’s Option Plans, any provision of any agreement evidencing any Company Option, any outstanding Company Restricted Stock Agreement, any outstanding Company Restricted Stock Unit or otherwise modify any of the terms of any outstanding equity-based compensation award or other security or any related Contract;
(v) adopt, approve or implement any “poison pill” or similar rights plan that could adversely affect the timely consummation of the Offer, the Merger or any of the other Contemplated Transactions;
(vi) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documents, or effect or be become a party to any merger, consolidation, share exchange, business combination, recapitalizationamalgamation, reclassification of shares, stock split, reverse stock split recapitalization or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivvii) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(viii) make any capital expenditure (except capital expenditures that, when added to all other capital expenditures made on behalf of the Acquired Corporations during the Pre-Closing Period, do not exceed $2,500,000 in the aggregate);
(ix) other than in the ordinary course of business consistent with past practices, enter into or become bound by any Contract with a term of greater than six months or involving obligations on the part of the Acquired Corporation in excess of $250,000, or amend, terminate, or waive any material right or remedy under, any Material Contract, other than with respect to any Material Contract that automatically renews or terminates by its terms without any action of the Acquired Corporations, in each case, as in effect as of the date of this Agreement;
(x) except to the extent addressed in, and not otherwise prohibited by, Section 5.2(b)(viii) or Section 5.2(b)(ix): (A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants other than in the Ordinary Course ordinary course of Business)business consistent with past practices, acquire, lease or license any material right or asset from any other Person; (B) sell or otherwise dispose of, or lease or license any material right or asset to any other Person; or (C) waive or relinquish any material right;
(xi) enter into any Contract to purchase any interest in real property, grant any security interest in any real or personal property, enter into any lease, sublease, license or other occupancy agreement with respect to any real property or alter, amend, modify, violate or terminate any of the terms of any Company Lease;
(xii) (A) incur or guarantee any indebtedness for borrowed money, (C) guarantee issue or sell any debt securities or rights to acquire any debt securities of othersthe Company or such Acquired Corporation, guarantee any such indebtedness or any debt securities of another Person or enter into any “keep well” or other agreement to maintain any financial statement condition of another Person, other than: (D1) other than trade payables and similar obligations incurred in the incurrence ordinary course of business and consistent with past practice; (2) any such indebtedness incurred, assumed or payment otherwise entered into in the ordinary course of business and in accordance with past practices (including any Transaction Expenses, make any capital expenditure borrowings under the Company’s existing credit facilities and in respect of letters of credit) for additional amounts after the date hereof not in excess of the budgeted capital expenditure amounts set forth $500,000 in the Company operating budget delivered to Parent concurrently aggregate; and (3) any such indebtedness incurred in connection with the execution refinancing of any indebtedness existing on the date of this Agreement or permitted to be incurred, assumed or otherwise entered into hereunder; or (B) make any loans to any Person, other than for: (y) accounts receivable and similar arrangements extended in the “Company Budget”)ordinary course of business; or (z) indebtedness for reimbursement of expenses made in the ordinary course of business consistent with past practice not exceeding $20,000 individually;
(vixiii) other than except: (w) for immigrations sponsorships made in the ordinary course consistent with past practices; (x) as otherwise required pursuant to this Agreement; (y) as necessary to maintain Tax-qualified status or Tax-favored treatment; or (z) as required by applicable Law or the terms provisions of any a Company Benefit Employee Plan as in effect on the date of this Agreement: (A) , establish, adopt, terminateterminate or amend any Employee Plan or any plan, establish practice, agreement, arrangement or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit policy that would be an Employee Plan to be amended if it was in any material respect; (C) existence on the date of this Agreement, pay any bonus or make any profit-sharing or similar payment toto or for the benefit of, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its current or former directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; ;
(D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (EA) hire any employee at the level of Vice President or above; (xB) officer or (y) hire any employee whose with an annual base salary is or is expected to be more than in excess of $250,000 per year 150,000; or (FC) terminate promote any employee to the level of Vice President or give notice above, in each case, except in order to fill a position vacated after the date of termination to any officer other than for causethis Agreement;
(viixv) recognize change in any labor union material respect any of its pricing policies, product return policies, product maintenance polices, service policies, product modification or labor organizationupgrade policies, except as otherwise required by applicable Law and after prior written consent personnel policies or other business policies, or any of Parent (which consent shall not be unreasonably withheld, delayed its methods of accounting or conditioned)accounting practices in any material respect;
(viiixvi) enter into any material transaction other than in the Ordinary Course of Business;
(ixA) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sellordinary course and consistent with the Company’s past business practices, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, ; (B) settle or compromise any income or other material Tax liability claim or submit liability; (C) change (or make a request to any voluntary disclosure application, enter into Governmental Body to change) any material aspect of its method of accounting for Tax allocation, sharing, indemnification purposes; (D) file any amended material Tax Return; (E) surrender any claim for a refund of a material amount of Taxes; or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or F) consent to any extension or waiver of any the limitation period applicable to any material Tax claim or assessment;
(xvii) commence or settle any Legal Proceeding (except with respect to non-material disputes as may arise from time to time in the Company’s ordinary course of business);
(xviii) enter into any material transaction with any of its Affiliates (other than the Company and any Company Subsidiary) other than pursuant to written arrangements in effect on the date of this Agreement and excluding any employment, compensation or similar arrangements otherwise permitted pursuant to this Section 5.2(b);
(xix) agree or commit to: (A) pay any fee, “profit sharing” payment or other consideration (including any increased rent payments or any other penalty), whether in cash or in any other form of consideration, in connection with obtaining any Consent from any Person relating to any Contract; or (B) provide additional security (including a guaranty, security interest or otherwise) with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvixx) agree, resolve agree or commit to do take any of the foregoingactions described in clauses “(i)” through “(xix)” of this Section 5.2(b).
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of Company’s or the Company Subsidiaries’ operations prior to the Effective Acceptance Time. Prior to the Effective Acceptance Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business and the Company Subsidiaries’ respective operations. Notwithstanding anything .
(d) During the Pre-Closing Period:
(i) the Company shall promptly, after it becomes aware of any of the following, notify Parent, orally and in writing of: (A) the occurrence or non-occurrence of any event, condition, fact or circumstance that would be reasonably likely to cause: (1) any representation or warranty made by the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere Acquired Corporations in this Agreement to be untrue or inaccurate in any material respect at any time during such period; or (2) any of the conditions set forth in Exhibit B or in Section 7 not to be satisfied; (B) the failure by the Company to comply with or satisfy in any material respect any covenant, condition or agreement to be satisfied by it pursuant to this Agreement; (C)
(1) any notice or other communication from any Person alleging that the Consent of such Person is or may be required in connection with any of the Contemplated Transactions; and (2) any Legal Proceeding commenced against any of the Acquired Corporations that relates to any of the Contemplated Transactions; or (D) any event, condition, fact or circumstance that has had or would reasonably be expected to have or result in a Company Material Adverse Effect. No notification given to Parent pursuant to this Section 5.2(d)(i) shall limit or otherwise affect any of the representations, warranties or covenants of the Company contained in this Agreement or any of the remedies available to Parent hereunder; and
(ii) Parent shall promptly, after it becomes aware of any of the following, notify the Company, orally and in writing of: (A) the occurrence or non-occurrence of any event, condition, fact or circumstance that would be reasonably likely to cause: (1) any representation or warranty made by the Parent or Acquisition Sub in this Agreement to be untrue or inaccurate in any material respect at any time during such period; or (2) any of the conditions set forth in Exhibit B not to be satisfied; (B) the failure by Parent or Acquisition Sub to comply with or satisfy in any material respect any covenant, condition or agreement to be satisfied by it pursuant to this Agreement; (C)
(1) any notice or other communication from any Person alleging that the Consent of such Person is or may be required in connection with any of the Contemplated Transactions; and (2) any Legal Proceeding commenced against Parent or Acquisition Sub that relates to any of the Contemplated Transactions; or (D) any event, condition, fact or circumstance that has had or would reasonably be expected to have or result in a Parent Material Adverse Effect. No notification given to the Company pursuant to this Section 5.2(d)(ii) shall limit or otherwise affect any of the representations, warranties or covenants of Parent or Acquisition Sub contained in this Agreement or any of the remedies available to the Company hereunder.
(e) The Company shall timely exercise in full any right or option it may have to repurchase shares of its capital stock which is or becomes exercisable during the Pre-Closing Period from any current or former employee, consultant, officer, member of the board of directors or other Person upon termination of such Person’s service to any of the Acquired Corporations where the repurchase price per share is less than the Offer Price; provided, however, that the Company shall use reasonable efforts to notify Parent in writing at least five days in advance of any such repurchase and, notwithstanding the above, shall only exercise any such repurchase right to the extent that the requirement of such consent could violate any applicable Lawsdirected by Parent in writing.
Appears in 2 contracts
Samples: Merger Agreement (Riverbed Technology, Inc.), Merger Agreement (Opnet Technologies Inc)
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Scheduleexpressly contemplated, (ii) as expressly required or permitted by or required in accordance this Agreement, (iiiii) as required by applicable Law, (iii) as set forth in Section 6.2(a) or Section 6.2(b) of the Company Disclosure Letter, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which such consent shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed) or (v) for any actions taken reasonably and in good faith in response to any COVID-19 Measure or COVID-19 (provided, that, with respect to actions taken or omitted to be taken in reliance on this clause (v), the Company shall provide prior notice to and consult in good faith with Parent prior to taking such action), during the Pre-Closing Interim Period: each of , the Company shall and shall cause the Company Subsidiaries to: (A) ensure that it conducts its Subsidiaries shall conduct its business and operations their respective businesses in the Ordinary Course of Business ordinary course in all material respects and in compliance in all material respects with all applicable Laws Laws; (B) use commercially reasonable efforts to preserve intact its and their respective current business organizations, keep available the requirements services of its and their respective current officers and employees and maintain its and their respective relations and goodwill with material customers, suppliers, landlords, Governmental Authorities and other Persons having material business relationships with the Company or the Company Subsidiaries; and (C) keep in full force and effect all Contracts that constitute Company Material Contractsappropriate Insurance Policies covering all material assets of the Company.
(b) Except (ix) as expressly contemplated, required or permitted by this Agreement, (iiw) as required by applicable Law, (y) as set forth in Section 4.2(b6.2(a) or Section 6.2(b) of the Company Disclosure Schedule, Letter or (iiiz) as required consented to in writing by applicable Law or (iv) with the prior written consent of Parent (which such consent shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed, other than with respect to clauses (i), at all times (ii), (iii), (iv) (solely as it relates to the Company Charter Documents), (xviii), (xix) and (xx) (to the extent related to the foregoing), with respect to which Parent may withhold, condition or delay the consent in its sole discretion), during the Pre-Closing Interim Period, the Company shall not, nor not and shall it cause or permit any of its the Company Subsidiaries not to, do any of the following:
(i) establish a record date for, declare, accrue, set aside or pay any dividend, make or pay any dividend or make any other distribution (whether in cash, stock, property or otherwise) in respect of any shares of its capital stock or repurchaseany other Company or Company Subsidiaries securities (other than dividends or distributions paid in cash from a direct or indirect wholly owned Company Subsidiary to the Company or another direct or indirect wholly owned Company Subsidiary); adjust, split, combine or reclassify any capital stock or otherwise amend the terms of any Company or Company Subsidiary securities; or acquire, redeem or otherwise reacquirereacquire or offer to acquire, directly redeem or indirectly, otherwise reacquire any shares of its capital stock or other securities securities, other than (except 1) the withholding or retirement of shares of Company Common Stock to satisfy Tax obligations with respect to Company Equity Awards outstanding on the Agreement Date and (2) the acquisition by the Company of shares of Company Common Stock in connection with the payment surrender of shares of Company Common Stock by holders of Company Options outstanding on the Agreement Date to pay the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement);thereof.
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize the sale, issuance, or grant of any of the foregoing with respect to: Equity Interests (A) any capital stock or other security of including Company Equity Awards), except that the Company or any of its Subsidiaries (except for may issue shares of outstanding Company Common Stock issued upon pursuant to the valid exercise or settlement of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its SubsidiariesEquity Awards;
(iii) except as otherwise expressly required to give effect to anything in contemplation by Section 2.5 amend or otherwise modify any of the Closing, material terms of any Company Equity Award;
(iv) amend or permit the adoption of any amendment to the Company Charter Documents or the articles or certificate of incorporation and bylaws (or other similar organizational documents) of any of its the Company Subsidiaries;
(v) acquire, by means of a merger, consolidation, recapitalization or its Subsidiaries’ Organizational Documentsotherwise, (1) any Equity Interest of any other Person or (2) any material assets (other than (x) purchases pursuant to commitments under Contracts of the Company or any Company Subsidiary as in effect on the date of this Agreement and made available to Parent or be (y) acquisitions of raw materials or supplies in the ordinary course of business) or otherwise effect, propose, become a party to or adopt a plan with respect to any merger, liquidation or partial liquidation, dissolution, restructuring, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, division or subdivision of shares, consolidation of shares, reorganization of the Company or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivvi) form any Company Subsidiary or acquire any equity interest or other interest in any other Entity or enter into any joint venture, partnership, limited liability corporation or similar arrangement;
(vii) make or authorize any capital expenditure other than any capital expenditure that (A) is provided for in the Company’s 2023 Budget delivered to Parent prior to the date of this Agreement, which expenditures shall be in accordance with the categories set forth in such 2023 Budget, or (B) in an amount, in the aggregate, of less than $250,000;
(viii) (A) amend or modify in any material respect, waive any rights (including any rights to renew) under, terminate, replace or release, settle or compromise any material claim, liability or obligation under any Company Material Contracts or (B) enter into any Contract which if entered into prior to the date hereof would have been a joint venture with Company Material Contract;
(ix) sell, assign, transfer or otherwise dispose of, lease or license or grant any right to, assets or property material to the Company and the Company Subsidiaries, taken as a whole, to any other EntityPerson, except for dispositions of inventory in the ordinary course of business;
(A) lend money to sell, lease, sublease, license, sublicense, assign or otherwise grant rights under any Person material Company Intellectual Property (except for the advancement of expenses non-exclusive licenses granted to employees, directors and consultants third-parties in the Ordinary Course ordinary course of Businessbusiness) or waive, transfer, cancel, abandon or fail to renew, maintain or diligently pursue applications for or otherwise dispose of any material Company Intellectual Property (other than non-exclusive licenses granted to third-parties in the ordinary course of business), (B) incur or guarantee disclose any indebtedness for borrowed moneyTrade Secrets to any third person who is not subject to an agreement sufficient to maintain the confidentiality thereof, and (C) subject any Software owned by the Company or Company Intellectual Property to Copyleft Terms;
(xi) (A) lend money to, or make any advances to, capital contributions to or investments in, any Person (other than (x) advances to Company Employees for travel and other business related expenses in the ordinary course of business and (y) loans, advances, capital contributions or investments to or in a direct or indirect wholly owned Company Subsidiary), (B) guarantee any debt securities of othersIndebtedness, or (DC) other than the incurrence or payment of incur any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”)Indebtedness;
(vixii) other than except as required by applicable Law or pursuant to the terms of any Company Benefit Plan as in effect on as of the date of this Agreement: Agreement Date or applicable Law, (A) establish, adopt, terminateenter into, establish grant or enter into amend in any respect, waive any rights or accelerate the vesting under, or modify any applicable actuarial assumption used in respect of, any Company Benefit PlanPlan or any CBA; (B) cause except for annual merit increases in annual base salaries and cash bonuses made in the ordinary course of business to employees of the Company and the Company Subsidiaries in an amount which do not exceed 3% in the aggregate and 5% individually, grant any increase in compensation, bonuses or permit other benefits to any current directors, officers, employees or individual independent contractors of the Company Benefit Plan to be amended in any material respectand the Company Subsidiaries; (C) pay any bonus hire, terminate the employment or make any profit-sharing or similar payment toservices of (other than for “cause”, as determined by the Company in good faith), or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; layoff (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(viisuch actions to) recognize any labor union employee or labor organizationindividual independent contractor, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course ordinary course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method business in respect of Taxes;
any employee or individual independent contractor with an annual base compensation that does not exceed $100,000, (xiiD) waive or release any restrictive covenant obligation of any current or former employee of the Company or the Company Subsidiaries, or (E) enter intointo or amend any severance, materially amend termination, employment or terminate consulting agreement with any current or former Company Employee, director or independent contractor of the Company or any Company Material ContractSubsidiary;
(xiii) other than as required by Law changes in GAAP or GAAPSEC rules and regulations, take change any action to change of its methods of financial accounting, cash management or financial accounting policies or procedurespractices in any material respect;
(xiv) initiate (A) make, change or rescind any material Tax election; (B) settle or compromise any Legal Proceedingclaim or assessment or enter into any closing agreement with respect to a material amount of Taxes; (C) change (or request to change) any material method of accounting for Tax purposes or annual Tax accounting period; (D) file any material amended Tax Return, (E) surrender any right to claim refund for a material amount of Taxes, or (F) or consent to any consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment;
(xv) settle, release, waive or commence any Legal Proceeding, except with respect to: (A) routine matters in the ordinary course of business; (B) in such cases where the Company reasonably determines in good faith that the failure to commence suit would result in a material impairment of a valuable aspect of its business (provided, that the Company consults with Parent and considers in good faith the views and comments of Parent with respect to any such Legal Proceeding prior to commencement thereof); or (C) in connection with a breach of this Agreement or any other agreements contemplated hereby;
(xvi) (i) except as disclosed on Section 6.2(b)(xvi) of the Company Disclosure Letter, settle, release, waive or compromise any Legal Proceeding or other claim (or threatened Legal Proceeding or other claim), other than (A) any Transaction Litigation (which shall instead be governed by Section 6.8) or (B) any Legal Proceeding relating to a breach of this Agreement or any other agreements contemplated hereby and (1) that results solely in a monetary obligation involving only the payment of monies by the Company of not more than $250,000 in the aggregate; (2) that results solely in a monetary obligation that is funded by an indemnity obligation to, or an insurance policy of, the Company and the payment of monies by the Company that together with any settlement made under clause (1) are not more than $250,000 in the aggregate (not funded by an indemnity obligation or through insurance policies); or (3) that results solely in a monetary obligation involving payment by the Company of an amount not greater than the amount specifically reserved in accordance with GAAP with respect to such Legal Proceedings or claim on the Balance Sheet;
(xvii) adopt or implement any stockholder rights plan or similar arrangement;
(xviii) enter into or amend a any Contract that would reasonably be expected to prevent cause the Company to abandon, terminate, delay, fail to consummate, materially impede or materially impedeinterfere with the Transactions;
(xix) (A) negotiate, interfere withmodify, hinder extend or delay enter into any CBA or recognize or certify any labor union, labor organization, works council, or group of employees as the consummation bargaining representative for any employees of the Contemplated TransactionsCompany or the post-Closing Company Subsidiaries; or (B) implement or announce any employee layoffs, plant closings, reductions in force, furloughs, temporary layoffs, salary or wage reductions, work schedule changes or other such actions that could implicate the WARN Act; or
(xvixx) agreeauthorize any of, resolve or commit commit, resolve, propose or agree in writing or otherwise to do take any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectlyof, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Lawsforegoing actions.
Appears in 1 contract
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (Cii) as expressly required or permitted by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19)this Agreement, or (viii) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), during the Pre-Closing Period: each Company covenants and agrees as to itself and its Subsidiaries that, from the date hereof until the earlier of the Effective Time or the termination of this Agreement in accordance with Article VIII, the business of the Company and its Subsidiaries shall conduct its business and operations be conducted in the Ordinary Course of Business and in compliance ordinary course in all material respects with all applicable Laws and the requirements Company and its Subsidiaries shall use their respective reasonable efforts to preserve their business organizations substantially intact and maintain its existing relations and goodwill with Governmental Entities, key customers, suppliers, and other Persons with whom the Company or any Subsidiary of all Contracts that constitute the Company Material Contracts.
has material business relations. Without limiting the generality of, and in furtherance of, the foregoing, from the date hereof until the earlier of the Effective Time or the termination of this Agreement in accordance with Article VIII, except (b) Except (iA) as otherwise expressly required or permitted by this Agreement, Agreement or as required by Law; (iiB) as set forth in Section 4.2(b6.1(a) of the Company Disclosure Schedule, or (iiiC) as required by applicable Law or (iv) with the prior written consent of Parent may approve in advance in writing (which consent approval shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), at all times during the Pre-Closing Period, the Company shall not, nor shall it cause or will not and will not permit any of its Subsidiaries to, do any of the followingdirectly or indirectly:
(i) declare, accrue, set aside adopt or pay propose any dividend or make any other distribution in respect of any shares of its capital stock or repurchase, redeem or otherwise reacquire, directly or indirectly, any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers change in the Ordinary Course memorandum and articles of Business which are included in the calculation of the Company Outstanding Shares; association or (C) any instrument convertible into or exchangeable for any capital stock or other security equivalent organizational documents of the Company or any of its Subsidiaries;
(iiiii) except as required to give effect to anything in contemplation any scheme of arrangement, merge or consolidate the Closing, amend Company or any of its Subsidiaries with any other Person, except for any such transactions among Wholly Owned Subsidiaries of the Company that are not obligors or guarantors of Third Party indebtedness, or other than in the ordinary course, restructure, reorganize or completely or partially liquidate or otherwise enter into any Contracts imposing material changes or material restrictions on assets, operations or businesses of the Company and its Subsidiaries’ Organizational Documents;
(iii) acquire, or effect or be a party to any whether by purchase, merger, consolidation, share exchangescheme of arrangement or acquisition of stock or assets or otherwise, business combinationany assets, recapitalizationsecurities, reclassification properties, interests, or businesses or make any investment (whether by purchase of sharesstock or securities, stock splitcontributions to capital, reverse stock split loans to, or similar transaction exceptproperty transfers), in each case, other than (A) in the ordinary course of business, (it being understood and agreed that the acquisition of all or substantially all of the assets or outstanding shares or other equity securities of any Person is not in the ordinary course of business), or (B) if not in the ordinary course of business, with a value or purchase price (including the value of assumed liabilities) not in excess of US$2,500,000 (or an equivalent amount in RMB) individually or US$2,500,000 (or an equivalent amount in RMB) in the aggregate for all such transactions by the avoidance of doubt, the Contemplated TransactionsCompany and its Subsidiaries;
(iv) form issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, or redeem, purchase or otherwise acquire, any share capital of the Company or any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any share capital, or any options, warrants or other rights of any kind to acquire any share capital or such convertible or exchangeable securities, other than (A) in connection with the exercise of Company Options outstanding on the date hereof or (B) pursuant to Contracts in effect as of the date hereof or granted in compliance with Section 6.1(xix);
(v) create or incur (A) any Lien on any Company IP owned by the Company or any of its Subsidiaries outside the ordinary course of business or (B) any Lien on any other assets of the Company or any of its Subsidiaries, which assets have a value in excess of US$2,500,000, in each case, other than Permitted Liens;
(vi) make any loans or capital contributions to or investments in any Person (other than the Company or any direct or indirect Wholly Owned Subsidiary of the Company) in excess of US$2,500,000, except pursuant to Contracts in effect as of the date hereof which have been filed as exhibits to the Company Reports filed with the SEC;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its share capital (except for dividends paid by any Subsidiary to the Company or acquire any equity interest or other interest in to any other Entity Subsidiary and periodic dividends and other periodic distributions by Non-Wholly Owned Subsidiaries in the ordinary course consistent with past practices), or enter into a joint venture any Contract with any other Entityrespect to the voting of its share capital;
(Aviii) lend money to reclassify, split, combine, subdivide, directly or indirectly, any Person of its share capital or securities convertible or exchangeable into or exercisable for any of its share capital;
(except for the advancement of expenses to employeesix) incur, directors and consultants in the Ordinary Course of Business)alter, (B) incur amend or guarantee modify, any indebtedness for borrowed moneymoney or guarantee such indebtedness of another Person, (C) or permit any Subsidiary of the Company to guarantee any debt securities indebtedness of othersthe Company, or (D) other than the incurrence or payment guarantee of indebtedness in the ordinary course of business not to exceed US$2,500,000 in the aggregate, including any Transaction Expensesborrowings under the existing credit facilities of the Company and its Subsidiaries to fund working capital needs, and such other actions taken in the ordinary course of business consistent with past practice;
(x) make or authorize any capital expenditure in excess of the budgeted capital expenditure amounts set forth US$2,500,000 per project or related series of projects of US$2,500,000 in the aggregate, other than expenditures necessary to maintain existing assets in good repair, consistent with past practice;
(xi) make any changes with respect to accounting policies or procedures materially affecting the reported consolidated assets, liabilities or results of operations of the Company operating budget delivered and its Subsidiaries, except as required by changes in applicable generally accepted accounting principles or Law;
(xii) settle any Action before a Governmental Entity by or against the Company or any of its Subsidiaries or relating to Parent concurrently with any of their business, properties or assets, other than settlements (A) requiring of the execution Company and its Subsidiaries only the payment of this Agreement monetary damages not exceeding US$2,500,000 and (B) not involving the “admission of any wrongdoing by the Company Budget”or any of its Subsidiaries;
(xiii) engage in the conduct of any new line of business material to the Company and its Subsidiaries, taken as a whole;
(xiv) enter into, amend or modify, in any material respect, or terminate, or waive any material rights under, any Material Contract (or Contract that would be a Material Contract if such Contract had been entered into prior to the date hereof);
(vixv) other than make or change any material Tax election, materially amend any Tax Return (except as required by applicable Law Law), enter into any material closing agreement with respect to Taxes, surrender any right to claim a material refund of Taxes, settle or the terms finally resolve any material controversy with respect to Taxes or materially change any method of any Company Benefit Plan as in effect on the date of this Agreement: Tax accounting;
(xvi) (A) adoptwith regard to material Intellectual Property owned by the Company or any of its Subsidiaries, terminatetransfer, establish sell, license, mortgage, surrender, encumber, divest, cancel, abandon or enter into allow to lapse or expire or otherwise dispose of any Company Benefit Plansuch material Intellectual Property, other than licenses or other Contracts granted in the ordinary course of business, or cancellation, abandonment, allowing to lapse or expire such Intellectual Property that is no longer used or useful in any of the Company’s or its Subsidiaries’ respective businesses or pursuant to Contracts in effect prior to the date hereof; and (B) cause with regard to other assets, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or permit any Company Benefit Plan allow to be amended in lapse or expire or otherwise dispose of any material respect; (C) pay any bonus assets, licenses, operations, rights, product lines, businesses or make any profit-sharing or similar payment to, or increase the amount interests therein of the wagesCompany or its Subsidiaries, salary, commissions, benefits or other compensation or remuneration payable to, including capital stock of any of its directorsSubsidiaries, officers or employees, other than increases except in base salary and annual cash bonus opportunities and payments made connection with services provided in the Ordinary Course ordinary course of Business consistent business, sales of products in the ordinary course of business and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with past practice and which do a fair market value not exceed, in excess of US$2,500,000 in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employeeseach case, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for causepursuant to Contracts in effect as of the date hereof;
(viixvii) recognize any labor union except as required pursuant to existing written plans or labor organizationContracts in effect as of the date hereof, except as otherwise required by applicable Law and after prior written consent or in the ordinary course of Parent business consistent with past practice, (which consent shall not be unreasonably withheld, delayed or conditioned);
(viiiA) enter into any material transaction other than in new employment or compensatory agreements (including the Ordinary Course renewal of Business;
(ixany consulting agreement) acquire with any material asset employee, consultant or sell, lease director of the Company or otherwise irrevocably dispose of any of its assets Subsidiaries except employment agreements with newly hired employees in the ordinary course of business consistent with past practice and not providing any severance, (B) grant or propertiesprovide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or grant make any Encumbrance with respect new equity awards to such assets any director, officer or propertiesemployee of the Company or any of its Subsidiaries, in each case, except increases in compensation and bonus in the Ordinary Course ordinary course of Business;
business consistent with past practice, (xD) sellestablish, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter intoadopt, materially amend or terminate any Company Material Contract;
Benefit Plan (xiii) other than except as required by Law Law) or GAAPamend the terms of any outstanding equity-based awards, (E) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, to the extent not already required in any such Company Benefit Plan, (F) materially change accounting policies any actuarial or procedures;
other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, or (xivG) initiate forgive any loans to directors, officers or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation employees of the Contemplated TransactionsCompany or any of its Subsidiaries; or
(xvixviii) agree, resolve authorize or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 1 contract
Samples: Merger Agreement (Camelot Information Systems Inc.)
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
, except (b) Except (iw) as expressly permitted required by this Agreement or as required by applicable Legal Requirements or to the extent necessary to comply with any obligation under any Contracts made available to Parent on or prior to the date of this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (ivx) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), at all times during (y) in the Pre-Closing Periodcase of Section 5.02(a), Section 5.02(b)(v) and Section 5.02(b)(xi), in connection with any action taken, or omitted to be taken, pursuant to any COVID-19 Measures or which is otherwise taken, or omitted to be taken, in response to COVID-19 or any other pandemic, epidemic or disease outbreak, as determined by the Company in its reasonable discretion, or (z) as set forth in Section 5.02 of the Company Disclosure Schedule:
(a) the Company shall, and shall not, nor shall it cause or permit any each of its Subsidiaries to, do use commercially reasonable efforts to (i) conduct its business in the ordinary course consistent with past practice and (ii) preserve intact its material assets, properties, Contracts, licenses and business organization and to preserve satisfactory business relationships with licensors, licensees, lessors, Governmental Bodies and others having material business dealings with the Acquired Companies (provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.02(b) shall be deemed a breach of this Section 5.02(a) unless such action would constitute a breach of such other provision); and
(b) the following:Company shall not (and shall cause its Subsidiaries not to):
(i) (A) establish a record date for, declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock equity interests, or (B) repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital equity interests, or any rights, warrants or options to acquire any of its equity interests or any restricted stock units, other than: (1) repurchases of Shares outstanding as of the date hereof pursuant to the Company’s right (under written commitments in effect as of the date hereof that have been delivered or other securities (except made available to Parent) to purchase Shares held by a Company Associate in connection with the payment termination of such Person’s employment or engagement by the Company; (2) cancellation of Company Options, Company RSUs or Company Warrants (or Shares issued upon the exercise or vesting and settlement thereof) outstanding on the date hereof pursuant to the terms of any such Company Option, Company RSU or Company Warrant (in effect as of the date hereof) between the Company and a Company Associate or member of the Board of Directors upon termination of such Person’s employment or engagement by the Company; or (3) in connection with withholding to satisfy the exercise price and/or withholding Taxes incurred upon the exerciseTax obligations with respect to Company Options, settlement Company RSUs or vesting of any award granted under the Company Plan Warrants in accordance with the present terms of such award in effect on the date of this Agreement)Company Option, Company RSU or Company Warrant;
(ii) split, combine, subdivide or reclassify any Shares or other equity interests;
(iii) sell, issue, grant, pledge or otherwise dispose of or deliver, pledge, transfer, encumber or authorize any the sale, issuance, grant, delivery, pledge, transfer or encumbrance of the foregoing with respect to: (A) any capital stock stock, equity interest or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); security, (B) any option, warrant call, warrant, restricted securities, restricted stock unit, stock appreciation rights, incentive award measured based on the Shares or similar equity or equity-based awards with respect to any Acquired Company or right to acquire any capital stock stock, voting securities, equity interest or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; security or (C) any instrument convertible into or into, exchangeable for or settled in any capital stock stock, voting securities, equity interest or other security of (except that the Company or any of its Subsidiaries;
(iii) except may issue Shares as required to give effect to anything in contemplation be issued upon (x) the exercise of Company Options outstanding as of the Closingdate of this Agreement in accordance with their terms, amend any (y) the vesting or settlement of its Company RSUs or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification (z) the exercise of shares, stock split, reverse stock split or similar transaction except, for Company Warrants outstanding as of the avoidance date of doubt, the Contemplated Transactionsthis Agreement in accordance with their terms);
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts as set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than Section 2.08 or as required by applicable Law or the terms of any Company Benefit pursuant to an Employee Plan as in effect on the date of this Agreement or adopted or amended in compliance with this Agreement: (A) , establish, adopt, terminateterminate or materially amend any Employee Plan (or any plan, establish program, arrangement or enter into agreement that would be an Employee Plan if it were in existence on the date hereof) or any Company Benefit Plan; (B) cause collective bargaining agreement or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment toother labor agreement, or increase the amount of the wages, salary, commissions, benefits amend or other compensation or remuneration payable to, waive any of its directorsmaterial rights under, officers or employeesaccelerate the payment or vesting of compensation or benefits under, any provision of any of the Employee Plans or grant any employee or director any material increase in compensation, bonuses or severance, retention or other payments or benefits (except that the Acquired Companies may amend any Employee Plan to the extent required by applicable Legal Requirements);
(v) other than increases in base salary and annual cash bonus opportunities and payments due to offers of employment or engagement made by any Acquired Company as of the date of this Agreement that has been made available to Parent, hire any employee or retain any consultant or promote any employee (other than non-executive employees in the Ordinary Course ordinary course of Business business consistent with past practice and which do not exceedcompensation generally consistent with similarly-situated employees);
(vi) (A) commence, alone or with any third party, any clinical trial in the aggregaterespect of any Product Candidate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (yB) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) unless mandated by a Specified Governmental Body, discontinue, terminate or give notice of termination to suspend any officer other than for causeongoing clinical or preclinical study;
(vii) recognize terminate, allow to lapse or expire, suspend, modify or otherwise take any labor union step to limit the effectiveness or labor organizationvalidity of, except or fail to maintain as otherwise required by valid and in full force and effect, any applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned)material Governmental Authorization;
(viii) enter into qualify any material transaction other than in the Ordinary Course new site for manufacturing of Businessany Product Candidate;
(ix) acquire any material asset amend or sell, lease or otherwise irrevocably dispose permit the adoption of any amendment to its certificate of its assets incorporation or properties, bylaws or grant other charter or organizational documents or amend or waive any Encumbrance with respect to such assets or properties, except in provision of the Ordinary Course of BusinessWarrant Agreements;
(x) sellform any Subsidiary, assignacquire any equity interest in any other Entity or enter into any joint venture or clinical or commercial collaboration agreement or any other material collaboration, transferdevelopment, partnership or similar material arrangement or trigger or exercise any right of first negotiation under any collaboration, license or development agreement;
(xi) make or authorize any capital expenditure (except that the Acquired Companies may make capital expenditures in the ordinary course of business consistent with past practice that do not exceed $750,000 individually or $1,500,000 in the aggregate);
(xii) acquire, lease, license, sublicense sublicense, pledge, sell or otherwise dispose of any Company IP of, divest or spin-off, abandon, waive, covenant not to assert, relinquish or permit to lapse (other than pursuant to any Patent expiring at the end of its statutory term and not capable of being extended), transfer or assign any material right or other material asset or property (except (A) non-exclusive licenses or sublicenses of Intellectual Property Rights in the Ordinary Course ordinary course of Businessbusiness consistent with past practice, (B) entering into clinical trial agreements with respect to clinical trials that are ongoing as of the date of this Agreement, and material transfer agreements in the ordinary course of business consistent with past practice pursuant to which an Acquired Company solely and exclusively owns any and all Intellectual Property Rights conceived, developed or reduced to practice thereunder, in amounts not exceeding $750,000 individually or $1,500,000 in the aggregate, (C) pursuant to dispositions of obsolete, surplus or worn out assets or properties that are no longer useful in the conduct of the business of the Acquired Companies in amounts not exceeding $750,000 in the aggregate or (D) expirations of leases for Leased Real Property in accordance with the terms thereof);
(xixiii) lend money or make capital contributions or advances to or make investments in, any Person, or incur or guarantee any Indebtedness in excess of $150,000 (except for advances to employees and consultants for travel and other business related expenses in the ordinary course of business consistent with past practice and in compliance with the Company’s policies related thereto);
(A) other than in the ordinary course of business consistent with past practice, amend or modify in any material respect, or waive or release any material rights under or voluntarily terminate, any Material Contract, or (B) enter into any contract that would constitute a Material Contract if it were in effect on the date of this Agreement;
(xv) except, in each case, as required by applicable Legal Requirements or as would not be material to the Company and its Subsidiaries, as a whole, (A) make any change to any accounting method or accounting period used for Tax purposes; (B) make, change or revoke any material Tax election; (C) file a material amended Tax Return; (D) enter into a “closing agreement” within the meaning of Section 7121 of the Code (or any corresponding or similar provision of any state, fail to pay local or non-U.S. Tax law) with any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to Governmental Body regarding any Tax Return, liability or assessment; (E) request any letter ruling from the IRS (or any comparable ruling from any other taxing authority); (F) settle or compromise any income audit, examination or Legal Proceeding relating to Taxes or surrender a right to a Tax refund; (G) waive or extend the statute of limitations with respect to any Tax or Tax Return (other material than pursuant to customary extensions of the due date for filing a Tax liability Return); or submit any voluntary disclosure application, (H) enter into any Tax allocation, sharing, indemnification indemnity or other similar sharing agreement or arrangement (other than customary commercial contracts gross-up or indemnification provisions in credit agreements, derivatives, leases, employment agreements and similar agreements entered into in the Ordinary Course ordinary course of Business the principal subject matter of which is not Taxesbusiness consistent with past practice);
(xvi) settle, release, waive or compromise any Legal Proceeding or other claim (or threatened Legal Proceeding or other claim), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension any settlement, release, waiver or compromise that (1) results solely in monetary obligations involving only the payment of time to file any Tax Return granted in monies by the Ordinary Course of Business Acquired Companies of not more than seven $500,000 in the aggregate (7) monthsexcluding monetary obligations that are funded by an insurance policy of the Acquired Companies), and (2) results in no other material non-monetary obligation of the Acquired Companies; provided, however that the settlement, release, waiver or adopt compromise of any Legal Proceeding or change claim brought by the stockholders of any Acquired Company against any Acquired Company and/or its directors relating to the Transactions or a breach of this Agreement or any other agreements contemplated hereby shall be subject to Section 2.07 or Section 6.06, as applicable, and provided further the foregoing shall not permit any Acquired Company to settle, release, waive or compromise any Legal Proceeding or claim (x) that provides for the grant to any third party of a license or other grant by any Acquired Company of rights to any material accounting method Company IP or material Company Licensed IP or (y) that would impose any material restrictions or changes on the business or operations of, or the admission of wrongdoing by, any Acquired Company, or commence any material Legal Proceeding, other than in respect the ordinary course of Taxesbusiness consistent with past practice;
(xiixvii) enter into, materially amend into any collective bargaining agreement or terminate other agreement with any Company Material Contractlabor organization (except to the extent required by applicable Legal Requirements);
(xiiixviii) other than as required by Law adopt or GAAP, take implement any action to change accounting policies stockholder rights plan (or proceduressimilar plans or arrangements);
(xivxix) initiate adopt a plan or settle agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated TransactionsAcquired Company; or
(xvixx) agreeauthorize any of, resolve or agree or commit to do take, any of the actions described in the foregoing clauses (i) through (xix) of this Section 5.02(b). Notwithstanding the foregoing.
(c) Nothing , nothing contained in this Agreement herein shall give Parentto Parent or Purchaser, directly or indirectly, the right rights to control or direct the operations of the Company Acquired Companies prior to the Effective Offer Acceptance Time. Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with the terms and conditions of this Agreementhereof, complete unilateral control and supervision over of its business and its Subsidiaries’ respective operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 1 contract
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: (i) the Company shall ensure that each of the Company and its Subsidiaries shall conduct Acquired Corporations conducts its business and operations (A) in the Ordinary Course of Business ordinary course and in substantially the same manner as previously conducted and (B) in material compliance in all material respects with all applicable Laws Legal Requirements and the requirements of all Acquired Corporation Contracts that constitute Company Material Contracts; (ii) the Company shall use its reasonable efforts to ensure that each of the Acquired Corporations preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Acquired Corporations; (iii) the Company shall use its reasonable efforts to keep in full force all insurance policies referred to in Section 3.19; (iv) the Company shall cause to be provided all notices, assurances and support required by any Acquired Corporation Contract relating to any Proprietary Asset in order to ensure that no condition under such Acquired Corporation Contract occurs that could result in, or could increase the likelihood of, (A) any transfer or disclosure by any Acquired Corporation of any Acquired Corporation Source Code, or (B) a release from any escrow of any Acquired Corporation Source Code that has been deposited or is required to be deposited in escrow under the terms of such Acquired Corporation Contract; (v) the Company shall promptly notify Parent of (A) any notice or other communication from any Person alleging that the Consent of such Person is or may be required in connection with any of the transactions contemplated by this Agreement, and (B) any Legal Proceeding commenced, or, to the best of its knowledge threatened, relating to or involving or otherwise affecting any of the Acquired Corporations that relates to the consummation of the transactions contemplated by this Agreement; and (vi) the Company shall (to the extent requested by Parent) cause its officers and the officers of its Subsidiaries to report regularly to Parent concerning the status of the Company's business.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during During the Pre-Closing Period, the Company shall notnot (without the prior written consent of Parent), nor and shall it cause or not permit any of its Subsidiaries the other Acquired Corporations to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock stock, or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)securities;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any the issuance or grant of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); security, (B) any option, call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that (1) the Company may issue shares of Company Common Stock (x) upon the valid exercise of Company Options outstanding as of the Company or any date of its Subsidiariesthis Agreement, and (y) pursuant to the ESPP);
(iii) except as required to give effect to anything in contemplation of the Closingcontemplated by Section 6.3, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of the Company's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option or other security or any related Contract;
(iv) amend or permit the adoption of any amendment to its Subsidiaries’ Organizational Documentscertificate of incorporation or bylaws or other charter or organizational documents, or effect or be become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, division or subdivision of shares, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(Avi) make any capital expenditure (except that the Acquired Corporations may make capital expenditures that, when added to all other capital expenditures made on behalf of the Acquired Corporations during the Pre-Closing Period, do not exceed $100,000 in the aggregate);
(vii) enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any Material Contract, or amend or terminate, or waive or exercise any material right or remedy under, any Material Contract;
(viii) acquire, lease or license any right or other asset from any other Person or sell or otherwise dispose of, or lease or license, any right or other asset to any other Person (except in each case for immaterial assets acquired, leased, licensed or disposed of by the Company in the ordinary course of business and consistent with past practices), or waive or relinquish any material right;
(ix) lend money to any Person (except for the advancement of expenses to employeesPerson, directors and consultants in the Ordinary Course of Business), (B) or incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”)indebtedness;
(vix) other than as required by applicable Law establish, adopt or the terms of amend any Company Benefit Plan as in effect on the date of this Agreement: (A) adoptemployee benefit plan, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employeesemployees (except that the Company (A) may make routine, other than reasonable salary increases that have been disclosed to Parent prior to the date of this Agreement in base salary connection with the Company's customary employee review process, and annual cash (B) may pay customary bonus opportunities payments and profit sharing payments made in the Ordinary Course of Business consistent with past practice practices payable in accordance with existing bonus and which do not exceed, profit sharing plans referred to in the aggregate, the amounts specifically budgeted therefore in Part 3.17(a) of the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditionedDisclosure Schedule);
(viiixi) hire any employee at the level of supervisor or above or with an annual base salary in excess of $75,000, or enter into an employment relationship with anyone which is other than "at-will", or promote any employee except in order to fill a position vacated after the date of this Agreement;
(xii) change any of its pricing policies, product return policies, product maintenance polices, service policies, product modification or upgrade policies, personnel policies or other business policies, or any of its methods of accounting or accounting practices in any respect;
(xiii) make any Tax election;
(xiv) commence or settle any Legal Proceeding;
(xv) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire or take any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle action outside the ordinary course of business or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period substantially inconsistent with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactionspast practices; or
(xvi) agree, resolve agree or commit to do take any of the foregoingactions described in clauses "(i)" through "(xv)" of this Section 5.2(b).
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, During the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective TimePre-Closing Period, the Company shall exercisepromptly notify Parent in writing of: (i) the discovery by the Company of any event, consistent with condition, fact or circumstance that occurred or existed on or prior to the terms date of this Agreement and conditions that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance, or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Company; and (iv) any event, complete unilateral control and supervision over its business operations. Notwithstanding anything to condition, fact or circumstance that would make the contrary timely satisfaction of any of the conditions set forth in this AgreementAnnex I impossible or unlikely or that has had or could reasonably be expected to have a Material Adverse Effect on the Acquired Corporations. Without limiting the generality of the foregoing, no consent the Company shall promptly advise Parent in writing of Parent shall be required any Legal Proceeding or material claim threatened, commenced or asserted against or with respect to any matter set forth of the Acquired Corporations. No notification given to Parent pursuant to this Section 5.2(c) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable LawsAgreement.
Appears in 1 contract
Operation of the Company’s Business. (a) Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 4.2(a5.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this AgreementLetter, (iii) as required by applicable Law, or (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or unless Parent shall otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to consent in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: each of Period the Company shall, and shall cause its Subsidiaries shall to, use commercially reasonable efforts to conduct its business and operations in the Ordinary Course of Business and in material compliance in all material respects with all applicable Laws Law and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 4.2(b5.2(b) of the Company Disclosure ScheduleLetter, (iii) as required by applicable Law Law, or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock stock; or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock Company Capital Stock or other securities (except in connection with the payment for shares of Company Common Stock from terminated employees, directors or consultants of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this AgreementCompany);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iii) except as required to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iii) other than in the Ordinary Course of Business, sell, issue grant, or authorize any of the foregoing actions with respect to more than 25% of the shares of Company Capital Stock outstanding as of the date of this Agreement: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options), (B) any option, warrant or right to acquire any capital stock or any other security or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iv) form any Subsidiary or other than in the Ordinary Course of Business, acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(v) (A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business)Person, (B) incur or guarantee any indebtedness for borrowed money, or (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease lease, license or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(xvii) sell, assign, transfer, license, sublicense or otherwise dispose of any material Company IP Rights (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xiviii) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Returnwaive, settle or compromise any income pending or other material Tax liability or submit any voluntary disclosure applicationthreatened Legal Proceeding against the Company, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into waivers, settlements or agreements (A) for an amount not in excess of $100,000 in the Ordinary Course aggregate (excluding amounts to be paid under existing insurance policies or renewals thereof) and (B) that do not impose any material restrictions on the operations or businesses of Business the principal subject matter of which is not Taxes), request Company or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months)equitable relief on, or adopt or change any material accounting method in respect the admission of Taxeswrongdoing by the Company;
(xiiix) enter into, materially amend in a manner adverse to the Company or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation outside of the Contemplated TransactionsOrdinary Course of Business; or
(xvix) agree, resolve or commit to do any of the foregoing.
(c) . Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the First Effective Time. Prior to the First Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 1 contract
Samples: Merger Agreement (Pulmatrix, Inc.)
Operation of the Company’s Business. (a) Except During the Pre-Closing Period: (i) except (x) as required or otherwise contemplated under this Agreement or as required by applicable Legal Requirements, (y) with the written consent of Parent, or (z) as set forth in Section 4.2(a) Part 5.2 of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent Company shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: ensure that each of the Company and its Subsidiaries shall conduct Acquired Corporations conducts in all material respects its business and operations in the Ordinary Course ordinary course; and (ii) the Company shall promptly notify Parent of Business (A) any knowledge of any notice from any Person alleging that the Consent of such Person is or may be required in connection with any of the transactions contemplated by this Agreement, and in compliance in (B) any Legal Proceeding commenced, or, to its knowledge threatened, relating to or involving any of the Acquired Corporations that relates to the consummation of the transactions contemplated by this Agreement. The Company shall, and shall cause each of the other Acquired Corporations to, use commercially reasonable efforts to preserve intact the material components of their current business organization, including keeping available the services of current officers and key employees, and use commercially reasonable efforts to maintain their respective relations and good will with all material respects with all applicable Laws suppliers, material customers, Governmental Bodies and other material business relations; provided, however, that the requirements of all Contracts that constitute Company Material ContractsAcquired Corporations shall be under no obligation to put in place any new retention programs or include additional personnel in existing retention programs.
(b) Except During the Pre-Closing Period, except (ix) as expressly permitted by required or otherwise contemplated under this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) Agreement or as required by applicable Law or Legal Requirements, (ivy) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during or (z) as set forth in Part 5.2 of the Pre-Closing PeriodCompany Disclosure Schedule, the Company shall not, nor and shall it cause or not permit any of its Subsidiaries the other Acquired Corporations to, do any of the following:
(i) (1) establish a record date for, declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock (including the Company Common Stock), or (2) repurchase, redeem or otherwise reacquirereacquire any of its shares of capital stock (including any Company Common Stock), directly or indirectlyany rights, warrants or options to acquire any shares of its capital stock, other than: (A) dividends or distributions between or among any of the wholly owned Acquired Corporations to the extent consistent with past practices (but not from the Company to its stockholders); (B) repurchases of Restricted Shares (or other Shares) outstanding as of the date hereof pursuant to the Company’s right (under written commitments in effect as of the date hereof) to purchase Restricted Shares and/or Shares held by a Company Associate only upon termination of such associate’s employment or engagement by the Acquired Corporations; (C) repurchases of Company Options or RSUs (or shares of capital stock issued upon the exercise or vesting thereof) outstanding on the date hereof (in cancellation thereof) pursuant to the terms of any such Company Option or RSU (in effect as of the date hereof) between the Company and an employee, consultant or member of the Board of Directors of the Company only upon termination of such Person’s employment or engagement by the Acquired Corporations; or (D) in connection with withholding to satisfy the Tax obligations with respect to Company Options, Restricted Shares or RSUs;
(ii) split, combine, subdivide or reclassify any shares of its capital stock (including the Company Common Stock) or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)equity interests;
(iiiii) sell, issue, grant, pledge or otherwise dispose of or deliver, pledge, transfer, encumber or authorize any the issuance, sale, delivery, pledge, transfer, encumbrance or grant of the foregoing with respect to: (A) any capital stock stock, equity interest or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); security, (B) any option, warrant call, warrant, restricted securities or right to acquire any capital stock stock, equity interest or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock stock, equity interest or other security (except that the Company may issue shares of the Company or any of its Subsidiaries;
(iii) except Common Stock as required to give effect to anything in contemplation be issued upon the valid exercise of Company Options or upon the vesting and settlement of other Company Equity Awards, as the case may be, outstanding as of the Closing, amend any date of its this Agreement or its Subsidiaries’ Organizational Documents, or effect or be a party pursuant to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated TransactionsESPP);
(iv) except as contemplated by Section 6.3, establish, adopt, terminate or amend any Employee Plan (or any plan, program, arrangement, practice or agreement that would be a Employee Plan if it were in existence on the date hereof), or amend or waive any of its rights under, or accelerate the vesting under, any provision of any of the Employee Plans (or any plan, program, arrangement, practice or agreement that would be a Employee Plan if it were in existence on the date hereof) or grant any employee or director any increase in compensation, bonuses or other benefits (except that the Acquired Corporations: (A) may provide increases in salary, wages or benefits to non-executive officer employees in the ordinary course of business and consistent with past practice; (B) may amend any Employee Plans to the extent required by applicable Legal Requirements; and (C) may make usual and customary annual, semi-annual or quarterly bonus payments, commission payments and profit sharing payments in the ordinary course of business consistent with past practice in accordance with the bonus, commission and profit sharing plans existing on the date of this Agreement and disclosed on the Company Disclosure Schedule);
(v) (A) enter into (x) any change-in-control agreement with any executive officer, employee, director or independent contractor or (y) any retention agreement with any executive officer or director, (B) enter into (aa) any employment, severance or other material agreement with any executive officer or director or (bb) any employment or severance agreement with any non-executive officer employee with an annual base salary greater than $200,000 or any consulting agreement with an independent contractors with an annual base compensation greater than $200,000, (C) hire any employee with an annual base salary in excess of $200,000 or (D) enter into any agreement with respect to the voting of its capital stock;
(vi) amend or permit the adoption of any amendment to its Certificate of Incorporation or bylaws or other charter or organizational documents;
(vii) form any Subsidiary or Subsidiary, acquire any equity interest or other interest in any other Entity or enter into a any joint venture with any other Entityventure, partnership, limited liability corporation or similar arrangement;
(Aviii) lend money to make or authorize any Person capital expenditure (except for that the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, Acquired Corporations may make any capital expenditure in excess of the budgeted capital expenditure amounts set forth that: (A) is provided for in the Company operating Company’s capital expense budget delivered or made available to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on Parent’s Representatives prior to the date of this Agreement, which expenditures shall be in accordance with the categories set forth in such budget; or (B) when added to all other capital expenditures made on behalf of all of the Acquired Corporations since the date of this Agreement but not provided for in the Company’s capital expense budget delivered or made available to Parent or Parent’s Representatives prior to the date of this Agreement, does not exceed $375,000 individually and $500,000 in the aggregate during any fiscal quarter);
(ix) acquire, lease, license, pledge, sell, abandon (or permit to lapse, other than any patent expiring at the end of its statutory term), transfer, assign guarantee, exchange or swap, mortgage or otherwise encumber (including pursuant to a sale-leaseback transaction or securitization) or subject to any material Encumbrance (other than Permitted Encumbrances) any material right or other material asset or property or sell or otherwise dispose of, or lease or license, any material right or other material asset or property to any other Person (other in the ordinary course of business), or sell or otherwise dispose of, divest or spin-off, or lease, license or sublicense, any material right or other material asset or property to any other Person (other than sales of appliances and subscriptions to products in the ordinary course of business consistent with past practice or pursuant to dispositions of obsolete, surplus or worn out assets that are no longer useful in the conduct of the business of the Company, or waive or relinquish, abandon, allow to lapse or encumber (except for any Permitted Encumbrance) any material right or material asset or property (except, in the case of any of the foregoing (A) as provided for in the Company’s capital expense budget delivered or made available to Parent or Parent’s Representatives prior to the date of this Agreement and (B) the Acquired Corporations may enter into license agreements for commercially available software on standard terms in the ordinary course of business);
(x) lend money or make capital contributions or advances to or make investments in, any Person, or incur or guarantee any Indebtedness (except for short-term borrowings, of not more than $250,000 in the aggregate, incurred in the ordinary course of business consistent with past practice, advances to employees for travel and other business related expenses in the ordinary course of business consistent with past practices and in compliance in all material respects with the Company’s policies related thereto and intercompany loans, advances, capital contributions or investments between or among the Company and any direct or indirect wholly owned Subsidiary of the Company);
(xi) amend or modify in any material respect, waive any rights under, terminate, replace or release, settle or compromise any material claim or liability or obligation under, any Material Contract or enter into any Contract which if entered into prior to the date hereof would have been a Material Contract, excluding any non-exclusive distribution, reseller or end user customer agreements;
(xii) except as required by applicable Legal Requirement, (a) make any material change to any accounting method or accounting period (or request such a change) in any material respect unless required by GAAP; (b) make any material Tax election (other a Tax election that is consistent with a Tax election made in a previous period); (c) rescind or change any material Tax election; (d) file an amended Tax Return that could materially increase the Taxes payable by the Acquired Corporations; (e) enter into a closing agreement with any Governmental Body regarding any material Tax; (f) settle, compromise or consent to any Tax claim or assessment or surrender a right to a material Tax refund; or (g) waive or extend the statute of limitations with respect to any material Tax other than (1) pursuant to extensions of time to file a Tax Return obtained in the ordinary course of business or (2) pursuant to an extension granted in the ordinary course of business in connection with an audit of federal, state or local Taxes to prevent the assessment or collection of a Tax;
(xiii) commence any Legal Proceeding, except with respect to: (A) adopt, terminate, establish or enter into any Company Benefit Planroutine matters in the ordinary course of business; (B) cause in such cases where the Company reasonably determines in good faith that the failure to commence suit would result in a material impairment of a valuable aspect of its business (provided that the Company consults with Parent and considers the views and comments of Parent with respect to such Legal Proceedings prior to commencement thereof); or permit any Company Benefit Plan to be amended in any material respect; (C) pay in connection with a breach of this Agreement or any bonus other agreements contemplated hereby;
(xiv) settle, release, waive or make compromise any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits Legal Proceeding or other compensation claim (or remuneration payable to, any of its directors, officers threatened Legal Proceeding or employeesother claim), other than increases any Legal Proceeding relating to a breach of this Agreement or any other agreements contemplated hereby or pursuant to a settlement that does not relate to any of the Transactions contemplated hereby and: (A) that results solely in base salary and annual cash bonus opportunities and payments made in a monetary obligation involving only the Ordinary Course payment of Business consistent with past practice and which do monies by the Acquired Corporations of not exceed, more than $500,000 in the aggregate; or (B) that results solely in a monetary obligation that is funded by an indemnity obligation to or, an insurance policy of, the amounts specifically budgeted therefore in Acquired Corporations and the Company Budget; payment of monies by the Acquired Corporations that together with any settlement made under subsection “(D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be A)” are not more than $250,000 per year 500,000 in the aggregate (not funded by an indemnity obligation or (F) terminate or give notice of termination to any officer other than for causethrough insurance policies);
(viixv) recognize enter into any collective bargaining agreement or agreement to form a work council or other agreement with any labor union organization or labor organizationworks council (except to the extent required by applicable Legal Requirements);
(xvi) adopt or implement any stockholder rights plan or similar arrangement;
(xvii) fail to make any material filing, pay any fee, or take another action necessary to maintain in full force and effect any trademark or trade name that is material to the conduct of the business of the Acquired Corporations, as a whole, as currently conducted;
(xviii) except as required by existing written agreements or Company Benefit Plans in effect prior to the date of this Agreement, or as otherwise required by applicable Law Law, waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any Company Benefit Plan or authorize cash payments in exchange for any options granted under any Company Benefit Plan, except as otherwise provided in this Agreement;
(xix) knowingly disclose any material trade secrets of the Acquired Companies other than pursuant to agreements entered into in the ordinary course of business consistent with past practice that contain confidentiality undertakings with respect to such confidential information and after prior trade secrets;
(xx) adopt a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of the other Acquired Corporations; or
(xxi) authorize any of, or agree or commit to take, any of the actions described in clauses “(i)” through “(xx)” of this Section 5.2(b). During the Pre-Closing Period, without the written consent of Parent the Company (which consent shall not be unreasonably withheld, delayed or conditioned);
, Parent and Merger Sub shall not, and shall cause the Guarantors and their respective Affiliates to not, (viiii) enter into discussions or negotiations of any material transaction Contracts or other than agreements, arrangements or understandings (whether oral or written) or commitments to enter into agreements, arrangements or understandings (whether oral or written) or (ii) amend or otherwise supplement any agreements, arrangements or understandings (whether oral or written) in existence on the date of this Agreement, in the Ordinary Course case of Business;
clauses “(ix) acquire i)” and “(ii)” that are between Parent, Merger Sub, the Guarantors or any material asset of their Affiliates, on the one hand, and any officer or selldirector of the Company, lease on the other hand, that relate in any way to the Company or otherwise irrevocably dispose of any of its assets Subsidiaries or propertiesthe Transaction. Notwithstanding the foregoing, nothing contained herein shall give to Parent or grant any Encumbrance with respect Merger Sub, directly or indirectly, rights to such assets control or properties, except in direct the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation operations of the Contemplated Transactions; or
(xvi) agreeAcquired Corporations prior to the Effective Time, resolve or commit to do any of the foregoing.
(c) Nothing and nothing contained in this Agreement shall is intended to give Parentthe Company, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective TimeParent’s or its Subsidiaries’ operations. Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with the terms and conditions of this Agreementhereof, complete unilateral control and supervision over of its business and its Subsidiaries’ respective operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 1 contract
Samples: Merger Agreement (Websense Inc)
Operation of the Company’s Business. (a) Except (i) as set forth in on Section 4.2(a) 4.3 of the Company Disclosure Schedule, (ii) as expressly permitted contemplated by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s Law or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or unless Orion shall otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to consent in writing by Parent (which such consent shall not to be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: (i) the Company and each Subsidiary of the Company and its Subsidiaries shall conduct its business and operations operations: (A) in the Ordinary Course of Business Business; and (B) in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts; (ii) the Company and each Subsidiary of the Company shall use commercially reasonable efforts to preserve intact its current business organization, use commercially reasonable efforts to keep available the services of its current key employees, officers and other employees and maintain its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the Company or its Subsidiaries; and (iii) the Company shall promptly notify Orion of: (A) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with any of the Contemplated Transactions; and (B) any Legal Proceeding against, relating to, involving or otherwise affecting the Company or any Subsidiary of the Company that is commenced, or, to the Knowledge of the Company, threatened against, the Company or any Subsidiary of the Company and (C) any written notice or, to the Knowledge of the Company, other communication from any Person alleging that any material payment or other material obligation is or will be owed to such party at any time before or after the date of this Agreement, except for invoices or other communications related to agreements or dealings in the Ordinary Course of Business, payments or obligations related to the Contemplated Transactions or payments or obligations identified in this Agreement, including the Company Disclosure Schedule.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during During the Pre-Closing Period, the Company shall notpromptly notify Orion in writing, nor shall it cause or permit any by delivery of its Subsidiaries toan updated Company Disclosure Schedule, do any of the following:
of: (i) declare, accrue, set aside or pay any dividend or make any other distribution in respect the discovery by the Company of any shares event, condition, fact or circumstance that occurred or existed on or prior to the date of its capital stock this Agreement and that caused or repurchaseconstitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement and/or any inaccuracy in the Company Capitalization Representation; (ii) any event, redeem condition, fact or otherwise reacquirecircumstance that occurs, directly arises or indirectly, exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any shares of its capital stock representation or other securities warranty made by the Company in this Agreement and/or any inaccuracy in the Company Capitalization Representation if: (except in connection with the payment A) such representation or warranty had been made as of the exercise price and/or withholding Taxes incurred upon time of the exerciseoccurrence, settlement existence or vesting of any award granted under the Company Plan in accordance with the terms discovery of such award in effect event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement);
; (iiiii) sellany material breach of any covenant or obligation of the Company; and (iv) any event, issuecondition, grant, pledge fact or otherwise dispose circumstance that could reasonably be expected to make the timely satisfaction of or encumber or authorize any of the foregoing conditions set forth in Section 6, Section 7 and Section 8 impossible or materially less likely. Without limiting the generality of the foregoing, the Company shall promptly advise Orion in writing of any Legal Proceeding or any claim threatened with respect to: (A) any capital stock or other security of to the Company or any Subsidiary of its Subsidiaries (except for shares the Company. Except with respect to the Company Capitalization Representation and any corresponding provisions of outstanding Company Common Stock issued upon this Agreement, no notification given to Orion pursuant to this Section 4.3(b) shall change, limit or otherwise affect any of the valid exercise of Company Options); (B) any optionrepresentations, warrant warranties, covenants or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation obligations of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iii) except as required to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvi) agree, resolve or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions Disclosure Schedule for purposes of Section 7.1 or any other provision of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 1 contract
Samples: Merger Agreement (OvaScience, Inc.)
Operation of the Company’s Business. (a) Except During the Pre-Closing Period:
(i) as set forth in Section 4.2(a) the Company shall ensure that each of the Company Disclosure Schedule, Entities conducts its business and operations: (A) in the ordinary course and in accordance with past practices; and (B) in material compliance with all applicable Laws and with the requirements of all Contracts of Company Entities that constitute Material Contracts;
(ii) as expressly permitted by or required in accordance this Agreementthe Company shall use commercially reasonable efforts to ensure that each of the Company Entities preserves intact its current business organization, keeps available the services of its current officers and other key employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, distributors, resellers, employees and other Persons having material business relationships with the respective Company Entities;
(iii) as the Company shall promptly notify Parent in writing of (A) any notice from any Person alleging that the Consent of such Person is or may be required by applicable Lawin connection with any of the Transactions and (B) any Legal Proceeding commenced, or, to the Knowledge of the Company, threatened against, relating to, involving or otherwise affecting any of the Company Entities that relates to the Merger or any of the other Transactions;
(iv) use commercially reasonable efforts to keep in connection full force all insurance policies referred to in Section 3.26 (other than any such policies that are immediately replaced with substantially similar policies), provided that if it is unable to do so, it shall notify Parent at least 20 days before such policies terminate or otherwise lapse; and
(v) the COVID-19 pandemic, Company shall (to the extent reasonably necessary, (Arequested by Parent and permitted under applicable Law) to protect cause the health officers and safety other key employees of the Company’s or any Company Entities to freely communicate (without limitation) with Parent regarding the Company Entities’ results of its Subsidiaries’ employees, operations and material developments.
(Bb) to respond to third party supply or service disruptions caused by Without limiting the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, generality of the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned)foregoing, during the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, (ii) except as set forth in Section 4.2(bPart 5.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law Schedule or (iv) with the Parent’s prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditionedand except as permitted by Section 6.2(d), at all times during the Pre-Closing Period, the Company (A) shall not, nor and (B) shall it cause or not permit any of its Subsidiaries the other Company Entities to, do any of the following:
(i) amend its certificate of incorporation or by-laws or comparable organizational documents or create any new Subsidiaries;
(ii) issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any security of any Company Entity, except for the issuance and sale of shares of Company Common Stock pursuant to Company Equity Awards outstanding as of the date of this Agreement upon the exercise or vesting thereof, as applicable;
(iii) directly or indirectly acquire, repurchase or redeem any security of any Company Entity, except in connection with Tax withholdings and exercise price settlements upon the exercise, vesting or issuance of shares under Company Equity Awards;
(iv) (A) split, combine, subdivide or reclassify any shares of capital stock, or (B) declare, accrue, set aside or pay any dividend or make any other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock, except for cash dividends made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its capital stock wholly-owned Subsidiaries;
(v) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any Company Entity, except for (A) this Agreement and the Transactions and (B) the Prior Agreement and the transactions contemplated thereby;
(vi) (A) redeem, repurchase, redeem prepay, defease, cancel, incur, create, assume or otherwise reacquireacquire or modify in any material respect any long-term or short-term debt for borrowed monies or issue or sell any debt securities or calls, directly or indirectlyoptions, any shares of its capital stock warrants or other rights to acquire any debt securities (except in connection with of any Company Entity or enter into any agreement having the payment economic effect of any of the exercise price and/or withholding Taxes foregoing, except for (1) debt incurred upon in the exerciseordinary course of business under letters of credit, settlement lines of credit or vesting other credit facilities or arrangements in effect on the date hereof, (2) loans or advances between the Company and any direct or indirect Subsidiaries, or between any direct or indirect Subsidiaries of the Company in the ordinary course of business consistent with past practices, and (3) the issuance of credit to new customers for the purchase of products or services of the Company Entities in the ordinary course of business consistent with past practices, (B) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any award granted under other Person, except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company Plan in accordance with the terms of such award in effect place on the date of this Agreement);
, (iiC) sellmake any loans, issue, grant, pledge advances (other than any retainer for legal services) or otherwise dispose of capital contributions to or encumber or authorize investments in any of the foregoing with respect to: other Person (A) any capital stock or other security of than the Company or any of its Subsidiaries (direct or indirect wholly-owned Subsidiaries), except for shares travel advances or business expenses in the ordinary course of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted business consistent with past practice to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iii) except as required to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of othersEntities, or (D) mortgage or pledge any asset owned or used by any Company Entity, or create or suffer to exist any Encumbrance thereupon (other than Permitted Encumbrances), except pursuant to the incurrence or payment terms of any Transaction Expensesletters of credit, make any capital expenditure lines of credit or other credit facilities or arrangements, in excess of effect on the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”)date hereof;
(vivii) other than except as may be required by applicable Law or the terms of this Agreement or of any Company Benefit Employee Plan as in effect on the date of this Agreement: , (A) enter into, adopt, terminateamend (including acceleration of vesting), establish modify or enter into terminate any bonus, profit sharing, incentive, compensation, severance, retention, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, change in control, pension, retirement, collective bargaining or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any Company Benefit Plan; Associate, (B) cause increase the compensation payable or permit to become payable to any Company Benefit Plan Associate, pay or agree to be amended in any material respect; (C) pay any special bonus or make special remuneration to any profit-sharing or similar payment toCompany Associate, or increase the amount pay or agree to pay any benefit not required by any Company Employee Plan as in effect as of the wagesdate hereof, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made except in the Ordinary Course ordinary course of Business business consistent with past practice and which do with respect to any Company Associate who is not exceeda member of the board of directors or officer, (C) hire any employee with an annual base salary in excess of $100,000 or at or senior to the aggregatelevel of Vice President, the amounts specifically budgeted therefore in the Company Budget; (D) increase the grant or pay any severance or change of control benefits offered termination pay to (or amend any such existing arrangement with) any current or new employeesformer member of the board of directors, officer, employee or independent contractor of any Company Entity, except in the ordinary course of business with respect to any employee or independent contractor who is not a member of the board of directors or consultants; officer, (E) hire increase benefits payable under any (x) officer existing severance or (y) employee whose annual base salary is termination pay policies or is expected to be more than $250,000 per year similar employment agreements, or (F) terminate accelerate the vesting or give notice of termination payment of, or fund or in any other way secure the payment, compensation or benefits under, any Company Employee Plan to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise the extent not required by applicable Law and after prior written consent the terms of Parent (which consent shall not be unreasonably withheld, delayed this Agreement or conditioned)such Company Employee Plan as in effect on the date of this Agreement;
(viii) enter into subject in all respects to the terms of Section 6.7, commence any material transaction other than Legal Proceeding or settle any pending or threatened Legal Proceeding, except for the settlement of any Legal Proceeding solely for money damages not in excess of $250,000 in the Ordinary Course of Businessaggregate and as would not be reasonably likely to have any adverse impact on any other Legal Proceeding;
(ix) acquire except as may be required as a result of a change in applicable Law or in GAAP, make any material asset or sell, lease or otherwise irrevocably dispose of change in any of its assets the accounting methods, principles or properties, practices used by it or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Businesschange an annual accounting period;
(x) sell, assign, transfer, license, sublicense (A) make or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, (B) settle or compromise any material federal, state, local or foreign income or other material Tax liability or submit any voluntary disclosure applicationliability, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or C) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes, (D) change any income annual Tax accounting period or method of Tax accounting, (E) file any materially amended Tax Return, (F) enter into any closing agreement with respect to any Tax or (G) surrender any right to claim a material Tax refund;
(xi) (A) acquire (by merger, consolidation or acquisition of stock or assets or otherwise) any other Entity or any material Taxes equity interest therein, (B) sell or otherwise dispose of, lease or license any properties or assets of any Company Entity (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course ordinary course of Business of not more than seven (7) monthsbusiness), which are material to the Company Entities, taken as a whole, (C) acquire, lease or adopt or change license any material accounting method right or other asset from any Person (other than in respect the ordinary course of Taxesbusiness consistent with past practice);
(xii) make any capital expenditures in excess of $50,000 individually or $200,000 in the aggregate;
(xiii) make any material changes or modifications to any investment or risk management policy or other similar policies (including with respect to hedging), or any cash management policy;
(xiv) other than in the ordinary course of business, enter into, materially or amend in any material respect, terminate or terminate fail to renew, any Company Material Contract;
(xiiixv) change any of its product return policies, product maintenance polices, service policies, product modification or upgrade policies in any material respect;
(xvi) enter into any material transaction with any of its Affiliates (other than a Company Entity) other than as required by Law pursuant to written arrangements in effect on the date of this Agreement and excluding any employment, compensation or GAAP, similar arrangements otherwise expressly permitted pursuant to this Section 5.2(b);
(xvii) abandon or permit to lapse any right to any material patent or patent application;
(xviii) take any action that is intended or is reasonably likely to change accounting policies or procedures;
result in the conditions set forth in Sections 7.1, 7.2, 7.3 (xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impedeexcept after compliance with Section 6.2(d)), interfere with7.5, hinder or delay the consummation of the Contemplated Transactions7.6, 7.9, 7.10 and 7.11 not being satisfied; or
(xvixix) agree, resolve agree or commit to do take any of the foregoingactions described in clauses above in this Section 5.2(b).
(c) Nothing During the Pre-Closing Period, the Company shall promptly notify Parent in writing of any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in ARTICLE 7 impossible or unlikely or that has had or could reasonably be expected to have or result in a Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any Legal Proceeding or material claim commenced or, to the Company’s Knowledge, threatened against or with respect to any of the Company Entities. No notification given to Parent pursuant to this Section 5.2(c) or any information or knowledge obtained pursuant to Section 5.1 shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations any of the Company prior remedies available to Parent under this Agreement.
(d) During the Effective Time. Prior to the Effective TimePre-Closing Period, the Company shall exercise, consistent with promptly notify Parent in writing if the terms and conditions Company has the right to exercise any right or option to repurchase shares of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent capital stock from any Company Associate or other Person upon termination of Parent shall be required with respect such Person’s service to any matter set forth in this Section 4.2 or elsewhere in this Agreement of the Company Entities. The Company shall not exercise any such repurchase right except to the extent that the requirement of such consent could violate any applicable Lawsdirected by Parent in writing.
Appears in 1 contract
Operation of the Company’s Business. (a) Except During the Pre-Closing Period, except: (iw) as set forth in Section 4.2(a) Part 4.2 of the Company Disclosure Schedule, ; (iix) as otherwise expressly permitted contemplated by or required in accordance this Agreement, ; (iiiy) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during ; or (z) as required by applicable Legal Requirements: (i) the Pre-Closing Period: Company shall ensure that each of the Company and its Subsidiaries shall conduct Acquired Corporations conducts its business and operations in all material respects in the Ordinary Course ordinary course and in accordance with past practices; (ii) the Company shall use its reasonable best efforts to ensure that each of Business the Acquired Corporations conducts its business and operations in compliance in all material respects with all applicable Laws Legal Requirements and the requirements of all Company Contracts that constitute Company Material Contracts; (iii) the Company shall use commercially reasonable efforts to ensure that each of the Acquired Corporations preserves intact in all material respects its current business organization, keeps available the services of its current officers and other employees and maintains in all material respects its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Acquired Corporations; and (iv) the Company shall promptly notify Parent of: (A) any notice or other communication from any Person alleging that the Consent of such Person is or may be required in connection with the Merger or any of the other transactions contemplated by this Agreement; and (B) any Legal Proceeding commenced, or, to the Company’s Knowledge, threatened against, relating to, involving or otherwise affecting any of the Acquired Corporations that relates to the consummation of the Merger or any of the other transactions contemplated by this Agreement.
(b) Except (i) as expressly permitted by this Agreement, (ii) as Subject to the exceptions set forth in clauses “(w)” through “(z)” of Section 4.2(b) of 4.2(a), during the Pre-Closing Period, the Company Disclosure Schedule, shall not (iii) as required by applicable Law or (iv) with without the prior written consent of Parent Parent, which consent, with respect to the matters described in clauses “(which consent ii),” “(iv)” and “(vi)” through “(xv)” of Section 4.2(b), shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, and the Company shall not, nor shall it cause or permit any ensure that the other Acquired Corporations do not (without the prior written consent of its Subsidiaries to, do any of the following:Parent):
(i) (A) declare, accrue, set aside or pay any dividend or make any other distribution (whether in cash, stock or otherwise) in respect of any shares of its capital stock (other than dividends or distributions by a direct or indirect wholly-owned Subsidiary of the Company to its parent); or (B) repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except securities, other than in connection the ordinary course of business from employees of any Acquired Corporation whose employment with such Acquired Corporation has terminated and other than repurchases under the payment previously publicly disclosed stock repurchase program of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)Company;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any of the foregoing with respect tosale, issuance or grant of: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options)security; (B) any option, restricted stock unit, deferred stock unit, restricted stock award or other equity-based compensation award (whether payable in cash, stock or otherwise), call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that: (1) the Company may issue shares of Company Common Stock: (x) upon the valid exercise of Company Equity Awards or the vesting or scheduled delivery of shares pursuant to Company Stock-Based Awards, in each case, outstanding as of the date of this Agreement; and (y) pursuant to the ESPP; and (2) the Company may, in the ordinary course of business and consistent with past practices, (x) grant to non-officer employees and officer employees who do not have a change in control agreement set forth in Part 2.14(f) of the Disclosure Schedule (such employees “Non-CIC Executives”) of the Acquired Corporations hired or promoted (other than promotions to an executive officer position) after the date of this Agreement and (y) grant after October 31, 2011 to non-officer employees and Non-CIC Executives of the Acquired Corporations pursuant to the Company’s normal grant practices, Company Equity Awards (in the case of (x) and (y), having, as applicable, an exercise price equal to the fair market value of the Company or any Common Stock covered by such Company Equity Award determined as of its Subsidiariesthe time of the grant of such Company Equity Award, containing no vesting acceleration provisions and containing the Company’s standard vesting schedule) under the Company Equity Plans);
(iii) except as required to give effect to anything provided for under the Company Contracts identified in contemplation Part 4.2(b)(iii) of the ClosingDisclosure Schedule as such Company Contracts are in effect on the date of this Agreement, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of the Company Equity Plans or any provision of any Contract evidencing any Company Equity Awards, or otherwise modify any of the terms of any outstanding Company Equity Award, warrant or other security or any related Contract;
(iv) amend or permit the adoption of any amendment to its Subsidiaries’ Organizational Documentscertificate of incorporation or bylaws or other charter or organizational documents, or effect or be become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, division or subdivision of shares, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or Entity, except for acquisitions of equity interests having a cost of less than $3,000,000 in the aggregate;
(vi) make any capital expenditure, except capital expenditures that do not exceed $7,500,000 in the aggregate in any calendar quarter;
(vii) other than in the ordinary course of business consistent with past practices: (A) enter into a joint venture or become bound by, or permit any of the assets owned or used by it to become bound by, any: (1) Material Contract; or (2) any other Contract with any other EntityPerson who is (or is expected to become) a customer of any Acquired Corporation; or (B) amend or terminate, or waive any rights or exercise any right or remedy under, any Material Contract, in each case under this clause “(B)” in a manner that is adverse in any material respect to the Acquired Corporations taken as a whole;
(viii) (A) acquire, lease or license any right or other asset from any other Person, other than: (1) in the ordinary course of business consistent with past practices (including acquisitions of supplies, parts, fuel, materials and other inventory in the ordinary course of business consistent with past practices); or (2) any such acquisitions, leases or licenses that are for consideration not in excess of $2,000,000 individually or $10,000,000 in the aggregate during any six month period following the date of this Agreement; or (B) sell or otherwise dispose of, or lease or license, any right or other asset to any other Person having a current value in excess of $1,500,000 individually, or $5,000,000 in the aggregate during any six month period following the date of this Agreement, other than: (w) sales, dispositions, leases or licenses of inventory or other assets in the ordinary course of business consistent with past practices; (x) pursuant to Contracts existing on the date hereof or Contracts entered into after the date hereof in accordance with this Section 4.2; (y) dispositions of obsolete or worthless assets or properties; or (z) transactions solely among the Company and/or any of its Subsidiaries;
(ix) make any pledge of any of its material assets or permit any of its material assets to become subject to any Encumbrances, except for Permitted Encumbrances or in connection with indebtedness permitted by clause “(x)” of this Section 4.2(b);
(x) (A) lend money to any Person (except for other than the advancement Company and any wholly-owned Subsidiary of expenses the Company), other than loans or advances to employees, directors and consultants employees of the Acquired Corporations made in the Ordinary Course ordinary course of Business), business consistent with past practices; or (B) incur or guarantee any indebtedness for borrowed moneyindebtedness, other than: (C1) guarantee any debt securities in connection with foreign exchange hedging transactions in the ordinary course of others, business consistent with past practices; or (D2) other than indebtedness of up to $2,000,000 in the incurrence or payment aggregate under the Company’s lines of any Transaction Expenses, make any capital expenditure credit in excess existence as of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution date of this Agreement (the “Company Budget”)Agreement;
(vixi) other than as required by applicable Law (A) establish, adopt, enter into or the terms of amend any Company Benefit Employee Plan as or Company Employee Agreement or any plan, practice, agreement, arrangement or policy that would be a Company Employee Plan or Company Employee Agreement if it was in effect existence on the date of this Agreement: (A) adopt, terminate, establish ; or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation (including equity-based compensation, whether payable in stock, cash or other property) or remuneration payable to, any of its directors, directors or any of its officers or employees, other than employees (except that the Company: (1) may provide salary increases in base salary and annual cash bonus opportunities and payments made to non-officer employees in the Ordinary Course ordinary course of Business business and in accordance with past practices in connection with the Company’s customary employee review process; (2) may amend the Company Employee Plans to the extent required by applicable Legal Requirements; (3) change co-payment amounts under health plans, implement new bonus metrics under bonus plans or implement new earnings per share thresholds under applicable Company Employee Plans, in each case under this clause “(3)” to the extent in the ordinary course of business consistent with past practice practices; (4) may make bonus payments and which profit sharing payments utilizing the same performance metrics and related payment formulas in accordance with existing bonus and profit sharing plans; (5) may make retention payments in accordance with the agreements set forth in Part 4.2(xi)(B)(5) of the Disclosure Schedule; and (6) may enter into Company Employee Agreements with non-officer employees in the ordinary course of business that do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the provide for severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxesacceleration benefits;
(xii) enter into, materially amend hire or terminate any Company Material Contractemployee at the level of Vice President or above or with an annual base salary in excess of $180,000 (other than terminations of employees for cause), or promote any employee to a level of Vice President or above or to a position with an annual base salary in excess of $180,000 except in order to fill a position vacated after the date of this Agreement;
(xiii) other than in the ordinary course of business consistent with past practices and except as required by Law the terms of any Contract existing on the date hereof or by any Legal Requirement or GAAP, take change any action to change accounting of its product return policies, product maintenance polices, service policies, product modification or upgrade policies, personnel policies or proceduresother business policies, or any of its methods of accounting or accounting practices in any material respect;
(xiv) initiate or settle make any Legal Proceedingmaterial Tax election;
(xv) commence any Legal Proceeding, except with respect to: (i) this Agreement and the transactions contemplated hereby; or (ii) routine collection matters in the ordinary course of business and consistent with past practices;
(xvi) settle any Legal Proceeding or other material claim, except: (A) pursuant to a settlement that does not involve any liability or obligation on the part of any Acquired Corporation or involves only the payment of monies by the Acquired Corporations of not more than $250,000 in any individual case or $1,000,000 in the aggregate for all such settlements; or (B) if such settlement: (1) does not relate to Tax matters or Intellectual Property matters; (2) is not, individually or in the aggregate, reasonably expected to affect in any material respect the operation of the business of the Company and its Subsidiaries taken as a whole; and (3) will not require a payment by the Company or any of its Subsidiaries in excess of the amounts set forth in clause “(A)” of this sentence;
(xvii) enter into any Contract covering any Company Associate or amend a Contract that make any payment to any Company Associate, that, considered individually or considered collectively with any other such Contracts or payments, will, or would reasonably be expected to prevent or materially impedeto, interfere with, hinder or delay be characterized as a “parachute payment” within the consummation meaning of Section 280G(b)(2) of the Contemplated TransactionsCode or give rise directly or indirectly to the payment of any amount that would not be deductible pursuant to Section 162(m) of the Code (or any comparable provision under U.S. state or local or non-U.S. Tax Legal Requirements); or
(xvixviii) agree, resolve agree or commit to do take any of the foregoingactions described in clauses “(i)” through “(xvii)” of this Section 4.2(b).
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, During the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective TimePre-Closing Period, the Company shall exercise, consistent with ensure that no Acquired Corporation terminates the terms and conditions employment of this Agreement, complete unilateral any Person who has entered into one of the change-in-control and supervision over its business operations. Notwithstanding anything to the contrary agreements set forth on Part 2.14(f) of the Disclosure Schedule unless Parent reasonably determines that such termination will not trigger the payment or provision of any benefits (including the acceleration of any Company Equity Awards) to or in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement favor of such consent could violate any applicable LawsPerson.
Appears in 1 contract
Operation of the Company’s Business. (a) Except (i) During the Pre-Closing Period, except as set forth in Section 4.2(aSchedule 5.2: (i) the Company shall ensure that each of the Company Disclosure ScheduleAcquired Corporations conducts its business and operations (A) in the ordinary course and in accordance with past practices (including not accelerating the collection of receivables or delaying the payment of payables), and (B) in compliance with all applicable Legal Requirements and the requirements of each Material Contract; (ii) as expressly permitted by or required in accordance this Agreementthe Company shall use commercially reasonable efforts to ensure that each of the Acquired Corporations preserves intact its current business organization, keeps available the services of its current officers and key employees and maintains its relations and goodwill with its material suppliers, customers, development partners, landlords, creditors, licensors, licensees, key employees and other Persons having material business relationships with the respective Acquired Corporations; (iii) as required by applicable Law, (iv) the Company shall use commercially reasonable efforts to keep in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented full force all insurance policies referred to in writing by Parent (which consent shall not be unreasonably withheldSection 2.17 and, delayed or conditioned), if any such insurance policy is scheduled to expire during the Pre-Closing Period: each , the Company shall use commercially reasonable efforts to cause such insurance policy to be renewed or replaced (on terms and with coverage substantially equivalent to the terms and coverage of the expiring insurance policy) on or prior to the date of expiration of such insurance policy; (iv) the Company shall cause to be provided all notices and support required by any Company Contract relating to any Intellectual Property or Intellectual Property Right in order to ensure that no condition under such Company Contract occurs that could result in, or could increase the likelihood of, (A) any transfer or disclosure by any Acquired Corporation of the source code for any portion of the Company Software, or (B) a release from any escrow of any source code for any Company Software that has been deposited or is required to be deposited in escrow under the terms of such Company Contract; (v) the Company shall promptly notify Parent of (A) any written notice or (to the Knowledge of the Company) other communication from any Person alleging that the Consent of such Person is or may be required in connection with any of the Contemplated Transactions, and (B) any Legal Proceeding commenced, or, to the Knowledge of the Company, threatened against, relating to or involving or otherwise affecting any of the Acquired Corporations; and (vi) the Company shall (to the extent requested by Parent) cause its officers and the officers of its Subsidiaries shall conduct its to report to Parent with reasonable frequency concerning the status of the business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contractseach Acquired Corporation.
(b) Except (i) as expressly permitted by this AgreementDuring the Pre-Closing Period, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with without the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioneddeemed to have been provided with respect to each matter set forth on Schedule 5.2), at all times during the Pre-Closing Period, the Company shall not, nor and shall it cause or not permit any of its Subsidiaries the other Acquired Corporations to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock stock, or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)securities;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any the sale, issuance or grant of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); security, (B) any option, warrant option or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that the Company shall be permitted to issue Company Common Stock upon the exercise of outstanding Company Options or upon the conversion of outstanding Company Preferred Stock or upon the exercise of other outstanding warrants or other securities disclosed to Parent in writing in Part 2.3 of the Company or any of its SubsidiariesDisclosure Schedule);
(iii) except as required to give effect to anything in contemplation of the Closing, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of the Company’s stock option plans, any provision of any Contract evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract, or fail to exercise any repurchase right with respect to any shares of Company Capital Stock (unless Parent consents in writing to the Company failing to exercise any such repurchase right);
(iv) amend or permit the adoption of any amendment to its Subsidiaries’ Organizational Documentscertificate of incorporation or bylaws or other charter or organizational documents, or effect or be become a party to any merger, consolidation, share exchange, business combinationAcquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivv) form any Subsidiary subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment tocapital expenditure (except that the Acquired Corporations may make capital expenditures that, or increase the amount when added to all other capital expenditures made on behalf of the wagesAcquired Corporations during the Pre-Closing Period, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than exceed $250,000 30,000 per year or (F) terminate or give notice of termination to any officer other than for causemonth);
(vii) recognize prepay or accelerate the payment of any labor union obligation or labor organization, expense (except as otherwise required by applicable Law and after prior written consent in the ordinary course of Parent (which consent shall not be unreasonably withheld, delayed or conditionedbusiness);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or propertiesbecome bound by, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvi) agree, resolve or commit to do permit any of the foregoing.
(c) Nothing contained in this Agreement shall give Parentassets owned or used by it to become bound by, directly any Material Contract, or indirectlyamend or terminate, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.waive or
Appears in 1 contract
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) except: (w) as expressly required or specifically permitted by under this Agreement, (iix) as set forth in Section 4.2(b) with the written consent of the Company Disclosure ScheduleParent (not to be unreasonably withheld, conditioned or delayed), (iiiy) as required by applicable Law or (ivz) as set forth in Part 5.2(a) of the Company Disclosure Schedule, the Company shall, and shall cause each of the other Acquired Corporations to, conduct its business and operations in the ordinary course, consistent with past practice and the Company shall use its commercially reasonable efforts to: (A) preserve intact its business organization and material assets, (B) keep available the services of its officers and employees who are integral to the operation of the business as presently conducted, (C) maintain in effect all of its Governmental Authorizations, and (D) maintain satisfactory relationships with customers, lenders, suppliers, licensors, licensees, distributors and others having material business relationships with the prior written consent Acquired Corporations. Without limiting the generality of Parent (which consent shall not be unreasonably withheldthe foregoing, delayed or conditioned), at all times during the Pre-Closing Period, except: (1) as required or specifically permitted under this Agreement, (2) with the written consent of Parent (not to be unreasonably withheld, conditioned or delayed), (3) as required by applicable Law or (4) as set forth in Part 5.2(a) of the Company Disclosure Schedule, the Company shall not, nor and shall it cause or permit any of its Subsidiaries the other Acquired Corporations not to, do any of the following:
(i) declare, accrue, set aside or pay any dividend dividends on, or make any other distribution distributions (whether in cash, stock or property) in respect of of, any shares of its capital stock or repurchase, redeem or otherwise reacquire, directly or indirectly, any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)stock;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any the issuance or grant of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); Company, (B) any option, warrant call, warrant, share of phantom stock or phantom stock right, stock purchase or stock appreciation right, restricted stock unit, performance stock unit or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation security of the Company Outstanding Shares; Company, or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any Company, in each of its Subsidiaries;
(iii) except as required to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
clauses (A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, through (C) guarantee any debt securities other than: (x) the issuance of others, Shares upon the exercise of Company Options or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered pursuant to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan the award agreements that are outstanding on the date of this Agreement, in each case in accordance with the applicable equity award’s terms as in effect on the date of this Agreement: Agreement (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to as may be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment toamended, or increase the amount granted or awarded not in violation of the wagesthis Agreement), salary, commissions, benefits (y) grants or other compensation awards of Shares (including Company Restricted Stock) or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments Company Options to new hires that are made in the Ordinary Course ordinary course of Business business consistent with past practice (provided that the number of Shares granted to any new hire shall not exceed the number of Shares that are granted in the ordinary course of business consistent with past practice with respect to an initial grant to a new hire for the same position or job level) and which do not exceed(z) grants or awards of Shares (including Company Restricted Stock) or Company Options required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements that, in the aggregateeach case, the amounts specifically budgeted therefore in are listed on Part 3.14(a) of the Company Budget; Disclosure Schedule, have been made available to Parent, and are in effect as of the date of this Agreement (or as may be amended or entered into not in violation of this Agreement);
(iii) commence any offering or otherwise issue or grant any awards under the ESPP;
(iv) (A) split, combine or reclassify its outstanding shares of capital stock of the Company, (B) repurchase, redeem, or otherwise acquire, or offer to repurchase, redeem, or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or (C) enter into any agreement with respect to voting of any of the capital stock of any of the Acquired Corporations or any securities convertible into or exchangeable for such capital stock;
(v) except as contemplated by Section 6.2, to the extent required by applicable Law or as required pursuant to a Company Employee Plan in effect prior to the date of this Agreement and set forth in Part 3.14(a) of the Company Disclosure Schedule (or as may be implemented or amended not in violation of this Agreement), (A) enter into, establish, adopt, modify, amend or terminate any Company Employee Plan or any other compensation or benefit plan with, for or in respect of any stockholder, director, officer, other employee or consultant that would constitute a Company Employee Plan had it been in effect as of the date of this Agreement (except as required by Law), (B) take any action to amend, modify or waive any of its rights under, or accelerate the vesting criteria or vesting requirements of payment of any compensation or benefit under, any Company Employee Plan (except as required by such Company Employee Plans), (C) increase in any manner the compensation or benefits of any current or former Company Associate (except for (i) increases required to be made pursuant to the terms of existing Company Employee Plans and (ii) increases required under any applicable Law), (D) grant, pay or increase the severance any severance, retention or change of in control payments or benefits offered to any current director, officer, employee or new employeesconsultant, directors or consultants; (E) hire hire, elect or appoint any (x) officer or (y) employee hire employees whose annual base salary is or is expected to be more than total cash and equity compensation exceeds $250,000 per year in the aggregate or (F) terminate issue or give notice of termination to forgive any officer loans (other than for causeroutine travel advances or similar business expense advances issued in the ordinary course of business and the use of Acquired Corporation credit cards in accordance with the Acquired Corporation’s policy) to Company Associates;
(vi) amend, modify, waive any provision of or permit the adoption of any amendment to the Company Charter Documents;
(vii) recognize incur, guarantee or assume any labor union long-term or labor organization, short-term Indebtedness except as otherwise required (x) for borrowings under the Company’s current credit facilities in the ordinary course of business consistent with past practice or (y) in respect of Indebtedness owing by applicable Law and after prior written consent any wholly owned Subsidiary of Parent (which consent shall not be unreasonably withheld, delayed the Company to the Company or conditioned)another wholly owned Subsidiary of the Company;
(viii) enter into make any material transaction other than capital expenditures in an amount in excess of $250,000 individually or $500,000 in the Ordinary Course of Businessaggregate;
(ix) acquire (by merger, consolidation, acquisition of stock or otherwise), lease, license or sublicense any material asset right, business or sellother asset, lease including Intellectual Property, from any other Person or sell or otherwise irrevocably dispose of any (by merger, consolidation, sale of its assets stock or propertiesotherwise), or grant lease, license or sublicense, any Encumbrance right, business or other asset, including Intellectual Property, to any other Person, or waive or relinquish, abandon, allow to lapse or encumber (except for any Permitted Encumbrance) any right, business or asset, including Intellectual Property, in each case of the foregoing, other than, for rights or assets other than Intellectual Property, pursuant to transactions where the amount of consideration paid or transferred in connection with respect to such assets transactions would not exceed $250,000 individually or properties, except $500,000 in the Ordinary Course of Businessaggregate;
(x) merge or consolidate with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(xi) change any of its methods of accounting or accounting practices in any respect unless required by GAAP or applicable Law, except for such changes that are required by GAAP or Regulation S-X promulgated under the Exchange Act;
(xii) enter into any collective bargaining, agreement to form a work council or other union or similar agreement or commit to enter into any such agreements;
(xiii) enter into or amend or modify in any material respect, consent to the termination of (other than at its stated expiry date), or waive, release or assign any material rights, claims or benefits under, any Company Material Contract or any other Contract that, if in effect as of the date hereof, would constitute a Company Material Contract;
(xiv) institute, settle, or compromise any Legal Proceeding involving the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $250,000 in the aggregate, the imposition of equitable relief or the actual or potential violation of any criminal Law, other than any Legal Proceeding brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(xv) abandon, allow to lapse, sell, assign, transfer, license, sublicense grant any security interest in otherwise encumber or otherwise dispose of any Company IP (other than pursuant Intellectual Property, or grant any right or license to non-exclusive licenses in the Ordinary Course of Business)any Intellectual Property;
(xixvi) makeadopt or implement any stockholder rights plan;
(xvii) enter into any material partnership arrangements, joint development agreements or strategic alliances;
(xviii) make or change or revoke any material Tax electionelection inconsistent with past practices, fail to pay change any income or other Tax accounting period for purposes of a material Tax as such or material method of Tax becomes due and payableaccounting, file any amendment making amended Tax Return in respect of a material Tax item, enter into any closing agreement with respect to any material change Tax, surrender any right to any claim a material Tax Return, refund or settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent agree to any an extension or waiver of any limitation period the statute of limitations with respect to any claim or assessment for any income or other a material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect amount of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvixix) agree, resolve agree or commit to do take any of the foregoing actions described in clauses (i) through (xviii) of this Section 5.2(a). Notwithstanding the foregoing.
(c) Nothing , nothing contained in this Agreement shall give Parentto Parent or Merger Sub, directly or indirectly, the right rights to control or direct the operations of the Company Acquired Corporations prior to the Effective Time. Prior to In addition, notwithstanding the Effective Timeforegoing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth nothing in this AgreementSection 5.2(a) shall restrict the Acquired Corporations from, no or require the consent of Parent shall be required with respect to prior to, engaging in any matter set forth in this Section 4.2 transaction or elsewhere in this Agreement to entering into any agreement exclusively among the extent that the requirement of such consent could violate any applicable Laws.Acquired Corporations
Appears in 1 contract
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by contemplated or required in accordance by this Agreement, (iiiii) as required by applicable Law, (iii) as set forth in Section 5.2(a) or Section 5.2(b) of the Company Disclosure Schedules, or (iv) as consented to in connection with writing by Parent, during the COVID-19 pandemicInterim Period, to the extent reasonably necessary, Company shall and shall cause the Company Subsidiaries to: (A) use commercially reasonable efforts to protect ensure that it conducts its and their respective businesses in the health ordinary course consistent with past practice and safety of the Company’s or any of its Subsidiaries’ employees, (B) use commercially reasonable efforts to respond to third party supply preserve intact its and their respective current business organizations, keep available the services of its and their respective key employees and maintain its and their respective relations and goodwill with the Persons having material business relationships with the Company or service disruptions caused the Company Subsidiaries.
(b) Except (w) as expressly contemplated or required by the COVID-19 pandemic or this Agreement, (Cx) as required by any applicable Law, directive (y) as set forth in Section 5.2(a) or guideline from any Governmental Body arising out of, or otherwise related to, Section 5.2(b) of the COVID-19 pandemic (including any response to COVID-19)Company Disclosure Schedules, or (vz) as may be consented to in writing by Parent (which consent shall will not be unreasonably withheld, delayed conditioned or conditioneddelayed, other than with respect to subsections (i), (ii), (iii), (iv), (v), (vi), (ix), (x), (xi), (xii), (xiii)(F), (xiv), (xviii), (xxii), (xxiii), (xiv), and, to the extent relating to the foregoing subsections, (xxv)), during the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Interim Period, the Company shall not, nor not and shall it cause or permit any of its the Company Subsidiaries not to, do any of the following:
(i) except as permitted by Section 5.2(b)(ii), declare, accrue, set aside or pay any dividend, make or pay any dividend or make any other distribution (whether in cash, stock, property or otherwise) in respect of any shares of its capital stock or repurchaseany other Company or Company Subsidiary securities (other than dividends or distributions paid in cash from a direct or indirect wholly owned Company Subsidiary to the Company or another direct or indirect wholly owned Company Subsidiary); adjust, split, subdivide, combine or reclassify any capital stock or otherwise amend the terms of any Company or Company Subsidiary securities; or acquire, redeem or otherwise reacquirereacquire or offer to acquire, directly redeem or indirectly, otherwise reacquire any shares of its capital stock or other securities securities, other than (except 1) the withholding or retirement of shares of Company Common Stock to satisfy Tax obligations with respect to Company Equity Awards outstanding on the Agreement Date, and (2) the acquisition by the Company of shares of Company Common Stock in connection with the payment surrender of shares of Company Common Stock by holders of Company Options outstanding on the Agreement Date in order to pay the exercise price thereof and/or any related withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)taxes;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize the sale, issuance or grant of any Equity Interests, except that (x) the Company may issue shares of Company Common Stock pursuant to the foregoing exercise, vesting or settlement of Company Equity Awards under the Stock Plans or a Company Inducement Grant outstanding on the Agreement Date and disclosed on the Company Disclosure Schedules; and (y) the Company may grant, in the aggregate, Company Equity Awards with respect to: a value no more than $250,000 (Abased on the price per share of Company Common Stock contemplated to be paid pursuant to this Agreement) (1) to any capital stock or other security newly hired employees of the Company and the Company Subsidiaries in accordance with the Company’s grant guidelines as of the Agreement Date or any of its Subsidiaries (except for shares of outstanding 2) to Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers Employees in the Ordinary Course ordinary course of Business which are included in business (consistent with the calculation Company’s grant guidelines as of the Company Outstanding Shares; Agreement Date and which have been disclosed to the Parent prior to the date of this Agreement) in connection with the Company’s review and promotion processes or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiariesotherwise to recognize performance;
(iii) except as otherwise contemplated by Section 1.5, amend or otherwise modify any of the terms of any outstanding Company Equity Awards;
(iv) amend or permit the adoption of any amendment to the Company Charter Documents or the equivalent documents of any Company Subsidiary;
(v) subject to Section 5.3, acquire any Equity Interest, business, or assets (other than, solely with respect to assets, (x) in the ordinary course of business consistent with past practice or (y) purchases pursuant to commitments under Contracts of the Company or any Company Subsidiary as in effect on the date of this Agreement (and if required to give effect to anything in contemplation be disclosed on Section 3.16 of the ClosingCompany Disclosure Schedules, amend scheduled therein) of any of its or its Subsidiaries’ Organizational Documentsother Person, or effect or be become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, division or subdivision of shares, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivvi) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture any Contract that would explicitly impose any material restriction on the right or ability of the Company or any Company Subsidiary: (A) to compete with any other EntityPerson; (B) to acquire any product or other asset or any services from any other Person; (C) to perform services for or sell products to any other Person; (D) to transact business with any other Person; or (E) to operate at any location in the world, in each case, other than Contracts that contain covenants that prohibit the Company or any Company Subsidiary from using any trade names other than the Company’s or a Company Subsidiary’s trade names;
(Avii) other than in the ordinary course of business consistent with past practice, enter into, amend, modify, or terminate (other than expiration in accordance with its terms), or waive any material right, remedy or default under, any Company Material Contract, Real Property Lease or any other Contract that, if in effect as of the date hereof would constitute a Company Material Contract or grant any material refunds, credits, rebates, allowances to any customers;
(viii) make any capital expenditures in excess of $100,000 or as otherwise set forth on Section 5.2(b)(viii) of the Company Disclosure Schedules;
(ix) make any material FDA or other applicable regulatory filings, declaration, listing, registration, report or submission, other than in the ordinary course of business consistent with past practice or in response to any request or demand from a Governmental Authority, or make any filing or submission to consolidate or change the indications in the label for Iluvien or Yutiq in any respect;
(x) transfer, sell or otherwise dispose of, or lease or license, or pledge, encumber, mortgage, or otherwise subject to any Lien (other than a Permitted Lien), any right, asset or property material to the Company and the Company Subsidiaries, taken as a whole, to any other Person, except inventory and transactions in the ordinary course of business;
(xi) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization, consolidation, or other reorganization;
(xii) repurchase, prepay, assume, issue, or lend money to any Person (except for the advancement of expenses other than (i) advances to employees, directors and consultants customers or Company Employees in the Ordinary Course ordinary course of Businessbusiness or (ii) loans between or among the Company and any Company Subsidiary), make any capital contributions (other than capital contributions to a direct or indirect wholly owned Company Subsidiary), guarantee any Indebtedness other than with respect to the Company or any Company Subsidiary, or incur any Indebtedness (other than guarantees and letters of credit provided to customers in the ordinary course of business consistent with past practice);
(xiii) except as required pursuant to the terms of any Company Plan in effect as of the Agreement Date or applicable Law, (A) provide for any increase in compensation or benefits payable to any current or former director, officer or employee of the Company or any of the Company Subsidiaries (other than, in the aggregate across all such individuals, a $50,000 increase in annual base compensation), other than with respect any current officer or employee of the Company or any of the Company Subsidiaries with annual base cash compensation of less than $325,000 in the ordinary course consistent with past practice; (B) incur grant or guarantee increase any indebtedness severance, termination, retention, change in control or similar compensation or benefits of any current or former director, officer, or employee of the Company or any of the Company Subsidiaries, other than providing severance in the ordinary course of business consistent with past practice to Company Employees terminated other than for borrowed money, cause (as defined in any applicable Company Employee Agreement(s) or Company Plans in each case as in effect as of the Agreement Date); (C) guarantee establish, adopt, terminate, enter into or amend in any debt securities of othersrespect any Company Plan (or any plan, program, policy, contract, arrangement or agreement that would be a Company Plan if it were in existence on the Agreement Date), or (D) other than amend or waive any of its rights under, or accelerate the incurrence vesting, funding or payment of any Transaction Expensescompensation or benefits under, make any capital expenditure in excess provision of any of the budgeted capital expenditure amounts set forth Company Plans (or any plan, program, policy, contract, arrangement or agreement that would be a Company Plan if it were in existence on the Agreement Date) or reduce any exercise or purchase price of Company Options or grant any employee or director any increase in compensation, bonuses or other benefits, other than entry into offer letters or other employment Contracts with new hires permitted pursuant to clause (D) below; (D) hire any employee that would be entitled to receive annual base cash compensation of $325,000 or more (except in order to fill any position vacated after the Agreement Date at a substantially similar level of compensation as the position being filled), or terminate any employee that is entitled to receive annual base cash compensation of $325,000 or more; (E) promote any officers or employees, except in connection with the Company’s annual or quarterly compensation review cycle or as the result of the termination or resignation of any officer or employee; or (F) enter into any CBA or recognize or certify any labor union, labor organization, works council or group of employees as the bargaining representative for any employees of the Company or Company Subsidiaries;
(xiv) institute, settle, or compromise any Legal Proceedings involving the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $100,000 individually or $500,000 in the Company operating budget delivered to aggregate, other than (i) any Legal Proceeding brought against Parent concurrently with the execution or Merger Subsidiary arising out of a breach or alleged breach of this Agreement by Parent or Merger Subsidiary, and (ii) the “settlement of claims, liabilities, or obligations reserved against on the Company Budget”)Balance Sheet; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business, other than injunctive or similar relief with a de minimis adverse effect on the Company and its Subsidiaries;
(vixv) other than as required by applicable Law changes in GAAP or the terms SEC rules and regulations, change any of any Company Benefit Plan as in effect on the date its methods of this Agreement: (A) adopt, terminate, establish financial accounting or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended financial accounting practices in any material respect; ;
(Cxvi) pay (A) settle or compromise any bonus Tax claim or make assessment with respect to a proposed Tax liability in excess of $100,000 individually or $500,000 in the aggregate with any profit-sharing taxing authority (or similar payment toextend or waive any statute of limitations with respect thereto), or increase (B) enter into any “closing agreement” within the amount meaning of Section 7121 of the wagesCode (or any similar provision of state, salarylocal, commissions, benefits or other compensation non-U.S. Law) with respect to a Tax liability in excess of $100,000 individually or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, $500,000 in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viiixvii) enter into any material transaction other than agreement, agreement in the Ordinary Course principle, letter of Businessintent, memorandum of understanding, or similar Contract with respect to any joint venture, strategic partnership, or alliance;
(ixxviii) acquire except in connection with actions permitted by Section 5.3 hereof, take any material asset or sell, lease or otherwise irrevocably dispose of action to exempt any of its assets or propertiesPerson from, or grant make any Encumbrance acquisition of securities of the Company by any Person not subject to, any state takeover statute or similar statute or regulation that applies to Company with respect to such assets an Acquisition Proposal or propertiesotherwise, including the restrictions on “business combinations” set forth in Section 203 of the DGCL, except in for Parent, Merger Subsidiary, or any of their respective Subsidiaries or Affiliates, or the Ordinary Course of Businesstransactions contemplated by this Agreement;
(xxix) abandon, allow to lapse, sell, assign, transfer, license, sublicense grant any security interest in otherwise encumber or otherwise dispose of any Company IP (Intellectual Property, or grant any right or license to any Company Intellectual Property other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course ordinary course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period business consistent with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxespast practice;
(xiixx) enter intoterminate or modify in any material respect, materially amend or terminate fail to extend, replace or exercise renewal rights with respect to, any Company Material Contractmaterial insurance policy;
(xiiixxi) other than as required by Law conduct any clinical trials that are not being conducted or GAAP, take any action proposed to change accounting policies or proceduresbe conducted prior to the date of this Agreement;
(xivxxii) initiate engage in any transaction with, or settle enter into any Legal Proceedingagreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC;
(xvxxiii) enter into adopt or amend a Contract that would reasonably be expected implement any stockholder rights plan or similar arrangement
(xxiv) pay fees to prevent or materially impede, interfere with, hinder or delay the consummation financial advisors except as set forth on Section 3.8 of the Contemplated TransactionsCompany Disclosure Schedules; or
(xvixxv) agreeauthorize any of, resolve or commit commit, resolve, propose or agree in writing or otherwise to do take any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectlyof, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Lawsforegoing actions.
Appears in 1 contract
Operation of the Company’s Business. (a) Except During the period from the date of this Agreement through the Closing or the earlier termination of this Agreement in accordance with Article 7 hereof (the “Pre-Closing Period”) (except with the prior written Consent of Parent, which Consent shall not be unreasonably withheld, delayed or conditioned) the Company shall, and shall cause each of its Subsidiaries to:
(i) ensure that each of the Company and each of its Subsidiaries (A) conducts its business in the ordinary course of business consistent with past practice and (B) complies in all material respects with all applicable Legal Requirements and all Material Contracts (which for the purpose of this Section 4.1 shall include any Contract that would be a Material Contract if existing on the date of this Agreement); and
(ii) use commercially reasonable efforts to ensure that the Company and each of its Subsidiaries preserve intact their current business organizations, keep available the services of their current officers and employees, and maintain, in all material respects, their relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees, and other Persons having business relationships with the Company and each of its Subsidiaries, respectively.
(b) Except as otherwise contemplated by this Agreement, as is reasonably necessary for the Company to take all actions required by this Agreement or as set forth in Section 4.2(aPart 4.1(b) of the Company Disclosure Schedule, during the Pre-Closing Period (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection except with the COVID-19 pandemicprior written Consent of Parent, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent Consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: each of the Company shall not, and shall not permit any of its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.to:
(b) Except (i) as expressly permitted by take any action that, had it occurred prior to the date of this Agreement, (iiAgreement would have violated Section 2.7(q) as set forth in Section 4.2(bor been disclosed on Part 2.7(q) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any of the following:;
(iii) (A) declare, accrueset aside, set aside or pay any dividend dividends on, or make any other distribution distributions (whether in cash, stock, or property) in respect of any shares of its capital stock or repurchase, redeem or otherwise reacquire, directly or indirectlyof, any shares of its capital stock or other equity or voting interests, except for dividends by a direct or indirect wholly owned Subsidiary
(iii) issue, deliver, sell, pledge, or otherwise encumber any shares of its capital stock, any other equity or voting interests or any securities (except convertible into, or exchangeable for, or any options, warrants, calls, or rights to acquire or receive, any such shares, interests, or securities or any stock appreciation rights, phantom stock awards, or other rights that are linked in connection with any way to the payment price of the exercise price and/or withholding Taxes incurred upon Company Common Stock or the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect to: (A) any capital stock or other security value of the Company or any part thereof (other than the issuance of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company OptionsStock Options in accordance with their present terms); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iiiiv) amend or propose to amend its Organizational Documents or effect or, except as required to give effect to anything in contemplation of the Closingpermitted under Section 4.4, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be become a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivv) form any Subsidiary except as permitted under Section 4.4, acquire by merger or acquire any consolidation, or by purchasing all or a substantial portion of the assets of, or by purchasing all or a substantial equity or voting interest in, or other interest in by any other manner, all or a substantial portion of any business or any Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”)division thereof;
(vi) other than in the ordinary course of business consistent with past practice, acquire any material assets or a license therefor, or make any capital expenditures, or incur any obligations or liabilities in connection therewith, except pursuant to existing Contracts or that, in the aggregate, would not exceed $200,000 in the aggregate;
(vii) except in the ordinary course of business consistent with past practice, enter into, amend, or terminate any lease or sublease of real property (whether as a lessor, sublessor, lessee, or sublessee) or fail to exercise any right to renew any lease or sublease of real property;
(viii) sell, grant a license in, or otherwise subject to any Encumbrance or otherwise dispose of any of its material properties or assets, other than the sale of inventory and the granting of nonexclusive licenses in the ordinary course of business consistent with past practice;
(ix) incur any indebtedness of the Company, including indebtedness under the Company Credit Facility, or repurchase, prepay, or incur any indebtedness or guarantee any indebtedness of another Person or issue or sell any debt securities or options, warrants, calls, or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, or enter into any arrangement having the economic effect of any of the foregoing;
(x) make any loans, advances, or capital contributions to, or investments in, any other Person, other than the Company or any direct or indirect wholly owned Subsidiary of the Company;
(xi) (A) pay, discharge, settle, or satisfy any material claims or Legal Proceeding (including claims of stockholders and any stockholder litigation relating to this Agreement, the Merger, or any other Contemplated Transaction or otherwise) or (B) waive, release, grant, or transfer any right of material value other than in the ordinary course of business consistent with past practice, or (C) commence any material Legal Proceeding (other than to enforce any rights under this Agreement);
(xii) enter into any Material Contract:
(A) except in the ordinary course of business consistent with past practice;
(B) if consummation of the Contemplated Transactions or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation, or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any Encumbrance in or upon any of the properties or assets of the Company or any of its Subsidiaries or Parent or any of its Subsidiaries under, or give rise to any increased, additional, accelerated, or guaranteed rights or entitlements under, any material provision of such Contract; or
(C) that in any way purports to materially restrict the business activity of the Company or any of its Subsidiaries or any of their Affiliates or to materially limit the freedom of the Company or any of its Subsidiaries or any of their Affiliates to engage in any line of business or to compete with any Person or in any geographic area.
(xiii) amend, modify, change, or terminate any Material Contract to which the Company or any of its Subsidiaries is a party, or waive, release, or assign any rights or claims thereunder, in each case other than in the ordinary course of business;
(xiv) except as required by applicable Law Legal Requirements, adopt or enter into any collective bargaining agreement or other labor union Contract applicable to the terms employees of the Company or any of its Subsidiaries;
(xv) increase or grant in any material manner the compensation or benefits of, or pay any bonus, severance or termination payment to, any employee, officer, director, or independent contractor of the Company or any of its Subsidiaries, except for such increases, grants or payments that were disclosed to Parent prior to the date of this Agreement;
(xvi) except as contemplated by this Agreement or required to comply with Legal Requirements or any Contract or Company Benefit Plan as in effect on the date of this Agreement and disclosed in Part 2.11(a) of the Company Disclosure Schedule:
(A) pay to any employee, officer, director, or independent contractor of the Company or any of its Subsidiaries any benefit, including severance or termination payments, not provided for under any Contract or Company Benefit Plan in effect on the date of this Agreement: ,
(AB) adopt, terminate, establish or enter into except as required by the terms of any applicable Company Benefit Plan; (B) cause or permit , grant any awards under any Company Benefit Plan to be amended (including the grant of Company Stock Options, stock appreciation rights, stock-based or stock-related awards, performance units or restricted stock or restricted stock units or the removal of existing restrictions in any material respect; Contract or Company Benefit Plan or awards made thereunder),
(C) pay take any bonus or make action to fund any profit-sharing or similar future payment toof, or increase in any other way secure the amount of the wagespayment of, salary, commissions, benefits or other compensation or remuneration payable tobenefits under any Contract or Company Benefit Plan,
(D) take any action to accelerate the vesting or payment of any compensation or benefit under any Contract or Company Benefit Plan,
(E) adopt, enter into, or amend any of its directors, officers or employees, Company Benefit Plan other than increases in base salary and annual cash bonus opportunities and payments made offer letters entered into with new employees in the Ordinary Course ordinary course of Business business consistent with past practice and which do that provide, except as required by applicable Legal Requirements, for “at will employment” with no severance benefits, or
(F) make any material determination under any Company Benefit Plan that is not exceed, in the aggregate, the amounts specifically budgeted therefore ordinary course of business consistent with past practice;
(xvii) (A) fail to accrue a reserve in its books and records and financial statements in accordance with past practice for Taxes payable by the Company Budget; or any of its Subsidiaries, (B) settle or compromise any material Legal Proceeding relating to any Tax, (C) make, change, or revoke any Tax election, (D) increase the severance make any change to its method of reporting income, deductions, or change of control benefits offered to any current or new employeesother Tax items for Tax purposes, directors or consultants; (E) hire enter into any (x) officer or (y) employee whose annual base salary is or is expected transaction with an Affiliate outside the ordinary course of business if such transaction would give rise to be more than $250,000 per year a material tax liability or (F) terminate waive any statute of limitations in respect of Taxes or give notice of termination right to any officer other than for causeextension of time with respect to a Tax assessment or deficiency;
(viixviii) recognize any labor union or labor organization, except as otherwise required by GAAP or applicable Law and after prior written consent Legal Requirements, change its fiscal year, revalue any of Parent (which consent shall not be unreasonably withheldits material assets, delayed or conditioned)make any changes in financial or Tax accounting methods, principles, or practices;
(viiixix) enter into take any material transaction other than action (or omit to take any action) if such action (or omission) would, or would be reasonably likely to result in the Ordinary Course failure of Businessthe conditions set forth in Section 5.1 to be satisfied as of the Closing;
(ixxx) acquire any material asset fail to use its commercially reasonable efforts to maintain in full force and effect the existing insurance policies or sellto replace such insurance policies with comparable insurance policies covering the Company, lease or otherwise irrevocably dispose of any of its assets or Subsidiaries and their respective properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Businessand businesses;
(xxxi) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in increase the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation size of the Contemplated TransactionsCompany Board; or
(xvixxii) agreeauthorize any of, resolve or commit commit, resolve, or agree to do take any of of, the foregoingforegoing actions.
(c) Nothing Other than the requirement of consent of Parent contained in Section 4.1(a) and (b), nothing contained in this Agreement shall give ParentParent or Merger Sub, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ respective operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, each of the Company, on the one hand, and Parent and Merger Sub, on the other hand, shall exercise complete unilateral control and supervision over its business and its subsidiaries’ respective businesses and operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 1 contract
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period, unless Parent has given its prior written consent or as set forth in Part 4.2(a) of the Disclosure Schedule: (i) the Company shall use commercially reasonable efforts to conduct, and to cause each of the Company and its Subsidiaries shall conduct to conduct, its business and operations in the Ordinary Course ordinary course and in accordance with past practices in all material respects; (ii) the Company shall use commercially reasonable efforts to, and to cause each of Business its Subsidiaries to, (A) conduct its business and operations in compliance in all material respects with all applicable Laws Legal Requirements and the material requirements of all Contracts that constitute Company Material Contracts, (B) preserve intact its current business organization, (C) keep available the services of its current officers and other employees and (D) maintain its relations and goodwill with suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons with which it material business relationships; (iii) the Company shall keep in full force all material insurance policies and shall renew any Existing D&O Policies (as defined in Section 5.5(b)) that expire during the Pre-Closing Period upon the same terms as in effect on the date of this Agreement; (iv) the Company shall properly withhold and remit to the appropriate Governmental Body all withholding taxes; and (v) the Company shall promptly notify Parent in writing of any Legal Proceeding that is commenced, or, to the Company’s Knowledge, threatened in writing, against the Company or any of its Subsidiaries or, to the Company’s Knowledge, any director, officer or key employee of the Company.
(b) Except (i) as expressly permitted by this AgreementDuring the Pre-Closing Period, (ii) except as set forth in Section Part 4.2(b) of the Company Disclosure Schedule, (iii) as required specifically contemplated by applicable Law this Agreement or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing PeriodParent, the Company shall not, nor not and shall it cause or not permit any of its Subsidiaries to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock stock, or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except other than repurchases of unvested securities in connection with the payment termination of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreementservice providers);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any of the foregoing with respect tosale, issuance or grant of: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options)security; (B) any option, call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security security, except that the Company may issue shares of Company Common Stock upon the valid exercise of Company Options or Company Warrants outstanding as of the Company or any date of its Subsidiariesthis Agreement;
(iii) amend or waive any of its rights under, or permit the acceleration of the vesting under (other than as contemplated by Section 1.9(a)), any provision of (A) any of the Company Stock Plans, (B) any Company Option or any agreement evidencing or relating to any outstanding stock option, (C) any restricted stock purchase agreement or (D) any other Contract evidencing or relating to any equity award (whether payable in cash or stock), except as required by applicable Legal Requirements;
(iv) amend or permit the adoption of any amendment to give effect to anything in contemplation its certificate of the Closing, amend any of its incorporation or its Subsidiaries’ Organizational Documentsbylaws or other charter or organizational documents, or effect or be become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, division or subdivision of shares, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expensespurchase, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently ordinary course of business consistent with past practices, of marketable securities that would be classified as short-term investments on the execution of this Agreement (the “Company Budget”)Company’s balance sheet;
(vi) make any capital expenditure (except for purchases of demonstration equipment or a capital expenditure that: (A) is in the ordinary course of business and consistent with past practices; (B) does not exceed $10,000 individually; and (C) when added to all other than as required by applicable Law or capital expenditures made on behalf of the terms of any Company Benefit Plan as in effect on and its Subsidiaries since the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do does not exceed, exceed $50,000 in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause);
(vii) recognize enter into or become bound by, or permit any labor union of the assets owned or labor organizationused by it to become bound by, except as otherwise required by applicable Law and after prior written consent any Material Contract (other than entering into distribution agreements in the ordinary course of Parent business), or amend or terminate, or waive or exercise any material right or remedy under, any Material Contract (which consent shall not be unreasonably withheldother than amending, delayed modifying or conditionedterminating distribution agreements in the ordinary course of business);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sellacquire, lease or otherwise irrevocably dispose of license any of its assets right or properties, other asset from any other Person or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense sell or otherwise dispose of of, or lease or license, any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income right or other material Tax as such Tax becomes due and payable, file any amendment making any material change asset to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvi) agree, resolve or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.other
Appears in 1 contract
Operation of the Company’s Business. Except as required by applicable Law or as expressly contemplated by this Agreement, the Company covenants and agrees as to itself and its Subsidiaries that, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with Article VIII, the business of it and its Subsidiaries shall be conducted only in the ordinary course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve their business organizations intact and maintain its existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associates. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with Article VIII, except (aA) Except as otherwise expressly required or permitted by this Agreement or as required by Law; (iB) as the Controlling Shareholder may approve in advance in writing, which approval shall not be unreasonably withheld, conditioned or delayed; provided, however, that the Controlling Shareholder shall be deemed to have approved if the Controlling Shareholder does not object within two weeks after a written request for such approval is delivered to the Controlling Shareholder by the Company; or (C) as set forth in Section 4.2(a6.1(a) of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its memorandum and articles of association or other applicable governing instruments;
(ii) as expressly permitted by effect any scheme of arrangement, merge or required consolidate the Company or any of its Subsidiaries with any other Person, or other than in accordance this Agreementthe ordinary course, restructure, reorganize or completely or partially liquidate or otherwise enter into any Contracts imposing material changes or material restrictions on its assets, operations or businesses;
(iii) as required acquire, directly or indirectly, whether by applicable Lawpurchase, merger, consolidation, scheme of arrangement or acquisition of stock or assets or otherwise, any assets, securities, properties, interests, or businesses or make any investment (whether by purchase of stock or securities, contributions to capital, loans to, or property transfers), in each case, other than (A) in the ordinary course of business or (B) if not in the ordinary course of business, with a value or purchase price (including the value of assumed liabilities) not in excess of $1,000,000 in any transaction or related series of transactions or acquisitions;
(iv) in connection with issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the COVID-19 pandemicissuance, to the extent reasonably necessarysale, (A) to protect the health and safety pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, or redeem, purchase or otherwise acquire, any shares of capital stock of the Company’s Company or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), securities convertible or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed exchangeable into or conditioned), during the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of exercisable for any shares of its such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or repurchasesuch convertible or exchangeable securities, redeem or otherwise reacquire, directly or indirectly, any shares of its capital stock or other securities (except than in connection with the payment issuance of the exercise price and/or withholding Taxes incurred upon the exercise, settlement Company securities as required to comply with any Company Benefit Plan or vesting of any award granted under the Company Plan in accordance with the terms of such award employment agreement as in effect on the date of this Agreement), or pursuant to Contracts in effect as of the date of this Agreement;
(iiv) sellreclassify, issuesplit, grantcombine, pledge subdivide, directly or otherwise dispose of or encumber or authorize indirectly, any of the foregoing its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to: to any of its capital stock (except for dividends paid by any Subsidiary to the Company or to any other Subsidiary and periodic dividends and other periodic distributions by Non-Wholly-Owned Subsidiaries in the ordinary course consistent with past practices), or enter into any Contract with respect to the voting of its capital stock;
(vii) create or incur (A) any capital stock lien or other security interest on any Company Intellectual Property owned or exclusively licensed or that is material and non-exclusively licensed by the Company or any of its Subsidiaries outside the ordinary course of business or (B) any Lien on any other assets of the Company or any of its Subsidiaries having a value in excess of $1,000,000, in each case, other than Permitted Liens;
(viii) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly owned Subsidiary of the Company) in excess of $1,000,000 in the aggregate except pursuant to Contracts in effect as of the date of this Agreement which have either been filed as exhibits to the Company Reports filed with the SEC or identified in Section 5.1(j) of the Company Disclosure Schedule;
(ix) incur, alter, amend or modify, any indebtedness for shares borrowed money or guarantee such indebtedness of outstanding another Person, or permit any Subsidiary of the Company Common Stock issued upon to guarantee any indebtedness of the valid exercise Company, other than the incurrence or guarantee of indebtedness in the ordinary course of business not to exceed $1,000,000 in the aggregate, including any borrowings under the existing credit facilities of the Company Options); and its Subsidiaries to fund working capital needs, and such other actions taken in the ordinary course of business consistent with past practice;
(Bx) issue or sell any option, warrant debt securities or right warrants or other rights to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other debt security of the Company or any of its Subsidiaries;
(iiixi) except as required to give effect to anything in contemplation of the Closing, amend any of its make or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make authorize any capital expenditure in excess of the budgeted capital expenditure amounts set forth $300,000 per project or related series of projects of $1,000,000 in the Company operating aggregate, other than expenditures necessary to maintain existing assets in good repair and expenditures contemplated by the Company’s budget delivered to Parent concurrently with and approved development plans as of the execution date of this Agreement (included in Section 6.1(a) of the “Company Budget”)Disclosure Schedule;
(vixii) make any changes with respect to accounting policies or procedures materially affecting the reported consolidated assets, liabilities or results of operations of the Company and its Subsidiaries, except as required by changes in applicable generally accepted accounting principles or Law;
(xiii) settle any Action before a Governmental Entity by or against the Company or any of its Subsidiaries or relating to any of their business, properties or assets, other than settlements (A) entered into in the ordinary course of business consistent with past practice, (B) requiring of the Company and its Subsidiaries only the payment of monetary damages not exceeding $100,000 and (C) not involving the admission of any wrongdoing by the Company or any of its Subsidiaries;
(xiv) enter into, amend or modify, in any material respect, or terminate, or waive any material rights under, any Material Contract (or Contract that would be a Material Contract if such Contract had been entered into prior to the date hereof), any material manufacturing or supply agreement for any of the Company’s material products, or material IP Contract that is reasonably expected to result in a Material Adverse Effect;
(xv) make or change any material Tax election, materially amend any Tax Return (except as required by applicable Law Law), enter into any material closing agreement with respect to Taxes, surrender any right to claim a material refund of Taxes, settle or the terms finally resolve any material controversy with respect to Taxes or materially change any method of Tax accounting;
(xvi) transfer, sell, license, mortgage, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Company Benefit Plan as material Intellectual Property, other than licenses or other Contracts granted in the ordinary course of business, or cancellation, abandonment, allowing to lapse or expire such Intellectual Property that is no longer used or useful in any of the Company’s or its Subsidiaries’ respective businesses or pursuant to Contracts in effect on prior to the date of this Agreement: ;
(Axvii) adopttransfer, terminatesell, establish lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or enter into any Company Benefit Plan; (B) cause allow to lapse or permit any Company Benefit Plan to be amended in expire or otherwise dispose of any material respect; (C) pay any bonus assets, licenses, operations, rights, product lines, businesses or make any profit-sharing or similar payment to, or increase the amount interests therein of the wagesCompany or its Subsidiaries, salary, commissions, benefits or other compensation or remuneration payable to, including capital stock of any of its directorsSubsidiaries, officers or employees, other than increases except in base salary and annual cash bonus opportunities and payments made connection with services provided in the Ordinary Course ordinary course of Business consistent business, sales of products in the ordinary course of business and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with past practice and which do a fair market value not exceed, in excess of $500,000 in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for causepursuant to Contracts in effect as of the date of this Agreement;
(viixviii) recognize any labor union except as required pursuant to existing written plans or labor organization, except Contracts in effect as of the date of this Agreement or as set forth in Section 5.1(h) of the Company Disclosure Schedule or as otherwise required by applicable Law and after prior written consent of Parent Law, (which consent shall not be unreasonably withheld, delayed or conditioned);
(viiiA) enter into any material transaction other than in new employment or compensatory agreements (including the Ordinary Course renewal of Business;
(ixany consulting agreement) acquire with any material asset employee, consultant or sell, lease director of the Company or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (Subsidiaries other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts agreements that are entered into in the Ordinary Course ordinary course of Business the principal subject matter of which is business with new hire employees who are not Taxes)officers or directors, request (B) grant or consent provide any severance or termination payments or benefits to any extension director, officer or waiver employee of the Company or any limitation period of its Subsidiaries other than normal payments and benefits in the ordinary course of business consistent with respect past practice, (C) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any claim director, officer or assessment for employee of the Company or any income or other material Taxes (of its Subsidiaries, in each case other than pursuant to an extension of time to file any Tax Return granted non-officer employees in the Ordinary Course ordinary course of Business of not more than seven business consistent with past practice, (7D) months)establish, or adopt or change any material accounting method in respect of Taxes;
(xii) enter intoadopt, materially amend or terminate any Company Material Contract;
Benefit Plan (xiii) other than except as required by Law Law) or GAAPamend the terms of any outstanding equity-based awards, (E) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, to the extent not already provided in any such Company Benefit Plan, (F) materially change accounting policies any actuarial or procedures;
other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, or (xivG) initiate forgive any loans to directors, officers or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation employees of the Contemplated TransactionsCompany or any of its Subsidiaries; or
(xvixix) agree, resolve authorize or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 1 contract
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
, except (b) Except (iw) as expressly permitted by required under this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (ivx) with the prior written consent of Parent (which consent shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed), at (y) as required by applicable Law or (z) as expressly set forth in Schedule 5.2(a) as of the date of this Agreement, the Company shall conduct, and shall ensure that each of the other Acquired Corporations conducts, its business and operations only in the ordinary course consistent with past practice and shall use commercially reasonable efforts to (A) preserve intact the business organization and material assets of the Acquired Corporations, (B) keep available the services of the officers and employees of the Acquired Corporations, (C) maintain in effect all times of the Governmental Authorizations of the Acquired Corporations and (D) maintain satisfactory relationships with customers, lenders, suppliers, licensors, licensees, distributors and others having material business relationships with the Acquired Corporations. Without limiting the generality of the foregoing, during the Pre-Closing Period, except (1) as expressly required under this Agreement, (2) with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), (3) as required by applicable Law or (4) as set expressly forth in Schedule 5.2(a) as of the date of this Agreement, the Company shall not, nor not and shall it cause or not permit any of its Subsidiaries the other Acquired Corporations to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution (whether in cash, stock, property or otherwise) in respect of any shares of its capital stock or other securities, other than dividends or distributions between or among any of the Acquired Corporations to the extent in the ordinary course of business consistent with past practices and the Company’s regular quarterly dividends, not to exceed $0.21 per share per quarter, payable in cash and declared and paid consistent with past practice;
(ii) directly or indirectly repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercisesecurities, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) including any option, warrant call, warrant, share of phantom stock or phantom stock right, stock purchase or stock appreciation right, restricted stock unit, performance stock unit or right to acquire any capital stock or any other security, other than option grants acquisitions by the Company of Shares in satisfaction by holders of Company Options, Company Restricted Shares or Company Stock Awards of the exercise price and/or withholding taxes or as a result of forfeiture, as applicable;
(iii) sell, issue, grant or authorize the issuance or grant of any capital stock or other security of any Acquired Corporation, including (A) any option, call, warrant, share of phantom stock or phantom stock right, stock purchase or stock appreciation right, restricted stock unit, performance stock unit awards granted or right to employees acquire any capital stock or other security of Acquired Corporation and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (CB) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iii) except as required to give effect to anything Acquired Corporation, in contemplation of the Closingeach case, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than (x) the incurrence or payment issuance of any Transaction Expenses, make any capital expenditure in excess Shares upon the exercise of Company Options pursuant to the budgeted capital expenditure amounts set forth in terms of Company Stock Awards that are outstanding on the Company operating budget delivered to Parent concurrently with the execution date of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or in accordance with the terms of any Company Benefit Plan the ESPP as in effect on the date of this Agreement: , in each case, in accordance with the applicable equity award’s terms as in effect on the date of this Agreement (Aor as may be amended or granted or awarded not in violation of this Agreement) adoptand (y) grants or awards of Shares (including Company Restricted Shares) or Company Options required to be made under the ESPP as in effect on the date of this Agreement or pursuant to the express terms of any existing written employment or other compensation Contract in effect as of the date of this Agreement (or as may be amended or entered into not in violation of this Agreement);
(iv) split, terminatesubdivide, establish combine or reclassify the outstanding shares of capital stock of the Company or enter into any Company Benefit Plan; (B) cause or permit agreement with respect to voting of any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits capital stock or other compensation or remuneration payable to, securities of any of its directors, officers the Acquired Corporations or employees, any securities convertible into or exchangeable for any of the capital stock or other than increases in base salary and annual cash bonus opportunities and payments made in securities of any of the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for causeAcquired Corporations;
(viiv) recognize any labor union or labor organization, except as otherwise contemplated by Section 6.2 or Section 6.3, to the extent required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than required pursuant to an extension Employee Plan in effect prior to the date of time to file any Tax Return granted this Agreement and set forth in Part 3.16(a) of the Ordinary Course Company Disclosure Schedule (or as may be implemented or amended not in violation of Business of not more than seven (7) monthsthis Agreement), or adopt or change any material accounting method in respect of Taxes;
(xiiA) enter into, establish, adopt, modify, materially amend or terminate any collective bargaining agreement, any Employee Plan or any other compensation or benefit plan with, for or in respect of any stockholder, director, officer, other current or former employee or consultant that would constitute an Employee Plan had it been in effect as of the date of this Agreement, (B) take any action to materially amend, modify or waive any of its rights under, or accelerate the vesting criteria or vesting requirements of payment of any compensation or benefit under, any collective bargaining agreement or any Employee Plan (except as expressly required by the terms of such Employee Plans as of the date of this Agreement), (C) increase in any manner the compensation of any current or former Company Associate (except for (i) increases required to be made pursuant to the express terms of an Employee Plan in effect prior to the date of this Agreement and set forth in Part 3.16(a) of the Company Disclosure Schedule (or as may be implemented or amended not in violation of this Agreement), (ii) increases in cash compensation made or bonuses determined and paid in the ordinary course of business and consistent with past practice to employees who are not officers which are approved in writing by the Chief Executive Officer of the Company, (iii) changes to welfare benefits which are not, in the aggregate, material and (iv) increases required under any applicable Law), (D) hire, elect or appoint any officer, (E) issue or forgive any loans (other than routine travel advances or similar business expense advances issued in the ordinary course of business and consistent with past practice, and the use of Acquired Corporation credit cards in accordance with the express terms of the Acquired Corporation’s written policy with respect thereto in effect prior to the date of this Agreement) to Company Associates, (F) except as expressly required by the terms of an Employee Plan, accelerate any payment or benefit payable or to become payable, or the funding of any benefit or payment, to any Company Associate, (G) waive, release or condition any non-compete, non-solicit, non-disclosure, confidentiality or other restrictive covenant owed to any Acquired Corporation, (H) hire any employee or individual independent contractor whose base salary exceeds $150,000 per year; (I) terminate, other than for cause, the employment or engagement of any Company Associate whose base salary or wages exceeds $150,000 per year; or (J) withdraw from any Multiemployer Plan;
(vi) amend, modify or waive any provision of, or permit the adoption of any amendment to, the Company Charter Documents or any of the organizational or charter documents of any Acquired Corporation;
(vii) incur or assume any Indebtedness except (x) for borrowings under the Credit Facility in the ordinary course of business consistent with past practice in amounts that would not cause the aggregate amounts outstanding under the Credit Facility to exceed $45,000,000 or (y) in respect of Indebtedness owing by any wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company up to a maximum of $60,000,000;
(viii) except as set forth in the fiscal year 2015 budget on Schedule 5.2(a), make any capital expenditures, except that the Company may make capital expenditures not listed on the fiscal year 2015 budget on Schedule 5.2(a) so long as (A) no such capital expenditure individually exceeds $250,000 and (B) all capital expenditures of the Company (whether or not set forth on the budget) during the term of this Agreement do not exceed the aggregate amount of capital expenditures contemplated by the fiscal year 2015 budget set forth on Schedule 5.2(a);
(ix) (A) acquire, lease, license or sublicense any right or other asset, including Intellectual Property Rights, from any other Person or sell or otherwise dispose of, or lease, license or sublicense, any right or other asset, including Intellectual Property Rights, to any other Person (in each case, other than in the ordinary course of business and consistent with past practices), (B) waive or relinquish, abandon, allow to lapse or encumber (except for any Permitted Encumbrance) any right or other asset, including Intellectual Property Rights, (C) enter into any new line of business or (D) form any Subsidiary, other than, in the case of clauses (A) and (B), pursuant to transactions where the amount of consideration paid or transferred in connection with such transaction would not exceed $250,000 individually or $1,000,000 in the aggregate;
(A) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement, (B) amend or modify any Material Contract in a manner that is materially adverse to the Company and its Subsidiaries or (C) terminate any Material Contract; provided, however, that nothing in this Section 5.2(a)(x) shall prohibit or restrict in any way the Company or its Subsidiaries from accepting or entering into, performing under or fulfilling, or amending, modifying or terminating, any customer purchase orders in the ordinary course of business; provided, further, that any contracts with both (1) a term of longer than one (1) year and (2) a “requirements” clause, minimum sales provision or requiring the Company to purchase all or a specified amount of any good or service from any Person or requiring the Company or any of its Subsidiaries to provide any rebates or volume discounts on goods sold or services provided shall be considered a “Material Contract” for purposes of this Section 5.2(a)(x), regardless of whether such contract is material to the Company and the Subsidiaries of the Company taken as a whole;
(xi) materially change any of its accounting methods, policies or procedures unless required by GAAP or applicable Law or make any material Tax election or change any material Tax election already made, adopt or change any material Tax accounting method, amend any material Tax Return, enter into any material closing agreement or settle any claim or assessment relating to material Taxes or consent to any claim or assessment relating to material Taxes or any waiver of the statute of limitations for any such claim or assessment;
(xii) settle or compromise any Legal Proceedings other than settlements in the ordinary course of business consistent with past practice involving the payment of an amount less than $500,000 in the aggregate and that would not reasonably be expected to have a material on-going effect on the business or operations of any Acquired Corporation;
(xiii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any Acquired Corporation (other than as required by Law or GAAP, take any action to change accounting policies or proceduresthe Mergers);
(xiv) initiate acquire or settle transfer any Legal Proceedingright or interest in any real property; or
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvi) agree, resolve agree or commit to do take any of the foregoing.
foregoing actions described in clauses (ci) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions through (xiv) of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws5.2(a).
Appears in 1 contract
Samples: Merger Agreement (COURIER Corp)
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: (i) the Company shall ensure that each of the Company and its Subsidiaries shall conduct Acquired Corporations conducts its business and operations operations: (1) in the Ordinary Course of Business ordinary course and in accordance with past practices; and (2) in compliance in all material respects with all applicable Laws Legal Requirements; (ii) the Company shall use reasonable efforts to ensure that each of the Acquired Corporations preserves intact its current business organization, keeps available the services of its current officers and other employees, complies with the requirements of all Company Contracts that constitute Company Material Contracts, and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Acquired Corporations; (iii) the Company shall keep in full force all insurance policies referred to in Section 2.20 (other than any such policies that are immediately replaced with substantially similar policies); (iv) the Company shall promptly notify Parent of: (1) any notice or other communication from any Person alleging that the Consent of such Person is or may be required in connection with any of the Contemplated Transactions; and (2) any Legal Proceeding against or involving any of the Acquired Corporations that is commenced, or, to the knowledge of the Company, threatened against, any of the Acquired Corporations; (v) the Company shall (to the extent reasonably requested by Parent) cause its officers and the officers of its Subsidiaries to report regularly to Parent concerning the status of the Company’s business; (vi) the Company shall (to the extent reasonably requested by Parent) use its commercially reasonable efforts to (and otherwise cooperate with Parent to) transfer any cash, cash equivalents and short-term investments (“Cash”) held by the Company outside of the United States to (and hold such Cash in) the United States and to minimize any Tax Liabilities resulting therefrom (it being understood, however, that the Company shall not be required to incur any material Tax Liabilities as a result of such transfers unless either (1) such Tax Liabilities relate exclusively to post-Closing periods or (2) Parent agrees to reimburse the Company for any such Tax Liabilities if the Closing does not occur); (vii) subject to clause (vi), the Company shall preserve and maintain its Cash balances in a manner consistent with past practice (subject to expenditures related to the Contemplated Transactions); and (viii) the Company shall comply in all material respects with the terms and conditions of the Final Judgment.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during During the Pre-Closing Period, the Company shall notnot (without the prior written consent of Parent), nor and shall it cause not (without the prior written consent of Parent, which consent shall not be unreasonably withheld or delayed in the case of clauses (vi), (vii), (xiii), or (xiv)) permit any of its Subsidiaries the other Acquired Corporations to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock (other than dividends or other distributions from a Subsidiary to the Company or another Subsidiary), or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except other than repurchases of shares of capital stock in accordance with the Option Plans in connection with the payment termination of the exercise price and/or withholding Taxes incurred upon the exercise, settlement employees or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreementother service providers);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any of the foregoing with respect tosale, issuance or grant of: (A1) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options)security; (B2) any option, call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C3) any instrument convertible into or exchangeable for any capital stock or other security security, except that the Company may issue shares of Company Common Stock upon the valid exercise of Company Options outstanding as of the Company or any date of its Subsidiariesthis Agreement;
(iii) except as required to give effect to anything in contemplation of the Closing, amend or waive any of its rights under, or permit the acceleration of the vesting under, any provision of: (1) any of the Company’s stock option plans; (2) any Company Option or any agreement evidencing or relating to any outstanding stock option or warrant; (3) any restricted stock purchase agreement; or (4) any other Contract evidencing or relating to any equity award (whether payable in cash or stock), other than pursuant to rights to acceleration disclosed in Part 2.3(d) and Part 2.5(e) of the Company Disclosure Schedule;
(iv) amend or permit the adoption of any amendment to its Subsidiaries’ Organizational Documentscertificate of incorporation or bylaws or other charter or organizational documents, or effect or be become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, division or subdivision of shares, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(Avi) make any capital expenditure (except a capital expenditure that: (1) is in the ordinary course of business and consistent with past practices; (2) does not exceed $100,000 individually; and (3) when added to all other capital expenditures made by or on behalf of the Acquired Corporations since the date of this Agreement, does not exceed $250,000 in the aggregate);
(vii) other than in the ordinary course of business consistent with past practices, enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any Material Contract, or amend or terminate, or waive or exercise any material right or remedy under, any Material Contract;
(viii) surrender or cause to be surrendered any Owned Real Property or Leased Real Property;
(ix) acquire, lease or license any right or other asset from any other Person or sell or otherwise dispose of, or lease or license, any right or other asset to any other Person (except in each case for assets (that are not material individually or in the aggregate) acquired, leased, licensed or disposed of by the Company in the ordinary course of business and consistent with past practices), or expressly waive, or relinquish any material right;
(x) other than in the ordinary course of business consistent with past practices, write off as uncollectible, or establish any extraordinary reserve with respect to, any receivable or other indebtedness;
(xi) make any pledge of any of its assets or permit any of its assets to become subject to any Encumbrances, except for pledges of or Encumbrances with respect to immaterial assets made in the ordinary course of business consistent with past practices;
(xii) lend money to any Person (except for the excluding advancement of reasonable expenses to employees, directors and consultants employees in the Ordinary Course ordinary course of Businessbusiness consistent with past practice), (B) or incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”)indebtedness;
(vixiii) other than as required by applicable Law (1) establish, adopt, enter into or the terms of amend any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit PlanAgreement (except that Company Benefit Plans or Company Benefit Agreements may be amended to the extent required by applicable Legal Requirements); (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C2) pay any bonus or make any profit-sharing or similar payment toto (except that the Company may make customary bonus and commission payments consistent with past practices, (A) in accordance with bonus and commission plans and programs in effect on the date of this Agreement, in the ordinary course of business or (B) in connection with the hiring of new employees in the ordinary course of business; or (3) increase the amount of the wages, salary, commissions, fringe benefits or other compensation (including equity-based compensation, whether payable in stock, cash or other property) or remuneration payable to, any of its directors, directors or any of its officers or other employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; ;
(D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (Exiv) hire any (x) officer employee at the level of Manager or (y) employee whose above or with an annual base salary is in excess of $155,000, promote any employee except in order to fill a position vacated after the date of this Agreement or, except in the ordinary course of business or is expected to be more than for “cause,” terminate the employment of any employee with an annual base salary in excess of $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause155,000;
(viixv) recognize change any labor union of its methods of accounting or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned)accounting practices in any respect;
(viiixvi) make any Tax election;
(xvii) subject to Section 5.6, commence or settle any Legal Proceeding;
(xviii) enter into any material transaction or take any other than in material action outside the Ordinary Course ordinary course of Businessbusiness;
(ix1) acquire pay to the Financial Advisor (A) any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except amounts described as non-discretionary in the Ordinary Course engagement letter between the Company and the Financial Advisor dated March 19, 2010 (the “Engagement Letter”) in excess of Business;
those set forth on Part 2.29 of the Disclosure Schedule or (xB) sell, assign, transfer, license, sublicense or otherwise dispose of pay any Company IP (other than pursuant to non-exclusive licenses amounts described as discretionary in the Ordinary Course of Business);
Engagement Letter or (xi2) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate modify in any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay manner the consummation of the Contemplated TransactionsEngagement Letter; or
(xvixx) agree, resolve agree or commit to do take any of the foregoingactions described in clauses “(i)” through “(xviii)” of this Section 4.2(a).
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, During the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective TimePre-Closing Period, the Company shall exercisepromptly notify Parent in writing of: (i) the discovery by the Company of any event, consistent with condition, fact or circumstance that occurred or existed on or prior to the terms date of this Agreement and conditions that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if: (1) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (2) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Company; and (iv) any event, complete unilateral control and supervision over its business operations. Notwithstanding anything condition, fact or circumstance that could reasonably be expected to make the contrary timely satisfaction of any of the conditions set forth in this AgreementSection 6 or Section 7 impossible or, no consent in the good faith judgment of Parent shall the Company, materially less likely or that has had or could reasonably be required with respect expected to any matter set forth have or result in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.a Company
Appears in 1 contract
Samples: Merger Agreement (Rae Systems Inc)
Operation of the Company’s Business. During the Pre-Closing Period:
(a) Except the Company shall (iand shall cause each of the other Acquired Corporations to) conduct their respective businesses and operations in the ordinary course and in substantially the same manner as set forth such businesses and operations have been conducted prior to the date of this Agreement;
(b) the Company shall (and shall cause each of the other Acquired Corporations to) use reasonable efforts to preserve intact their respective current business organizations, keep available the services of their respective current officers and employees and maintain their respective relations and good will with all suppliers, customers, landlords, creditors, employees and other Persons having business relationships with any of the Acquired Corporations;
(c) the Company shall (and shall cause each of the other Acquired Corporations to) keep in Section 4.2(a) full force all insurance policies identified in Part 2.17 of the Company Disclosure Schedule, ;
(iid) as expressly permitted by or required the Company shall (and shall cause each of the other Acquired Corporations to) cause their respective officers to report regularly (but in accordance this Agreement, no event less frequently than bi-monthly) to Parent concerning the status of the business of each Acquired Corporation;
(iiie) as required by applicable Law, (iv) in connection the Company shall use commercially reasonable efforts to file an amended and restated certificate of incorporation with the COVID-19 pandemicSecretary of State for the State of Delaware that provides for a liquidation preference in favor of the Company Series A Preferred Stock equal in value, in the aggregate, to the extent reasonably necessary, Liquidation Consideration (Athe "Company Amended and Restated Certificate");
(f) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent Company shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: (and shall cause each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall other Acquired Corporations not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock or stock, and shall not repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under that the Company Plan in accordance with may repurchase Company Common Stock from former employees pursuant to the terms of such award in effect on the date of this Agreementexisting restricted stock purchase agreements);
(iig) the Company shall not (and shall cause each of the other Acquired Corporations not to) sell, issue, grant, pledge or otherwise dispose of or encumber issue or authorize any the issuance of the foregoing with respect to: (Ai) any capital stock or other security of the Company or any of its Subsidiaries security, (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (Bii) any option, warrant option or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (Ciii) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iii) except as required to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvi) agree, resolve or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 1 contract
Samples: Agreement and Plan of Merger and Reorganization (Dna Sciences Inc)
Operation of the Company’s Business. (a) Except During the Pre-Closing Period: (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, except (iiw) as expressly permitted by required under this Agreement or required in accordance this Agreement, (iii) as required by applicable LawLegal Requirements, (ivx) in connection with the COVID-19 pandemicwritten consent of Parent, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: each (y) for any actions taken reasonably and in good faith in response to COVID-19 or COVID-19 Measures and with prior written notice to Parent or (z) as set forth in Section 5.2 of the Company Disclosure Schedule, the Company shall, and shall cause its Subsidiaries shall to conduct its business their respective businesses and operations in all material respects in the Ordinary Course of Business ordinary course and in compliance in all material respects with all applicable Laws Legal Requirements; and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, (ii) as the Company shall promptly notify Parent of (y) any knowledge of the receipt of any notice from any Person alleging that the Consent of such Person is or may be required in connection with any of the Transactions and (z) any Legal Proceeding commenced, or, to its knowledge threatened in writing, relating to or involving the Company or any of its Subsidiaries that seeks to enjoin the consummation of the Transactions. The Company shall, and shall cause each of its Subsidiaries to, use their respective commercially reasonable efforts to (A) preserve intact, in all material respects, the material components of the Company’s and each such Subsidiary’s current business organization, including keeping available the services of current officers and key employees, (B) maintain in all material respects the Company’s and each such Subsidiary’s respective relations and goodwill with all material suppliers, material customers, Governmental Bodies and other material business relations and (C) take the actions set forth in Section 4.2(b5.2(a) of the Company Disclosure Schedule; provided, that no action by the Company or any of its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.2(b) shall be deemed a breach of this Section 5.2(a) unless such action would constitute a breach of such other provision.
(iiib) During the Pre-Closing Period, except (w) as required or otherwise contemplated under this Agreement or as required by applicable Law or Legal Requirements, (ivx) with the prior written consent of Parent (Parent, which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, (y) for any actions taken reasonably and in good faith in response to COVID-19 or COVID-19 Measures or (z) as set forth in Section 5.2(b) of the Company shall notDisclosure Schedule, neither Company nor shall it cause or permit any of its Subsidiaries to, do any of the followingshall:
(i) (A) establish a record date for, declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock (including the Company Common Stock) or (B) repurchase, redeem or otherwise reacquirereacquire any of its shares of capital stock (including any Share), directly or indirectlyany rights, warrants or options to acquire any shares of its capital stock, other than in connection with withholding to satisfy the exercise price and/or Tax obligations with respect to Company Stock Awards;
(ii) split, combine, subdivide or reclassify any shares of its capital stock (including the Shares) or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)equity interests;
(iiiii) sell, issue, grant, pledge or otherwise dispose of or deliver, pledge, transfer, encumber or authorize any the issuance, sale, delivery, pledge, transfer, encumbrance or grant by the Company of the foregoing with respect to: (A) any capital stock stock, Company Stock Award or other equity interest or other security of the Company, (B) any option, call, warrant, restricted securities or right to acquire any capital stock, equity interest or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock stock, equity interest or other security of the Company (except on the exercise or any vesting (as applicable) of its SubsidiariesCompany Options, Company RSUs or Company PSUs outstanding as of the date of this Agreement);
(iiiiv) (A) except as otherwise provided under the terms of this Agreement or required under the existing terms of an existing Employee Plan, establish, adopt, terminate or amend, or waive its rights under, any Employee Plan, or any employee benefit plan, policy, program or agreement that would have constituted an Employee Plan if it had been in effect on the date of this Agreement, (B) make or grant to give effect to anything in contemplation any employee of the ClosingCompany who receives total annual base salary that equals or exceeds $150,000 any increase in compensation, bonuses or other benefits; (C) grant or amend any cash, equity or equity-based award; (D) make or grant any severance, change in control, retention or termination payments to any Company Associate; (E) accelerate the vesting or payment of any compensation for the benefit of any Company Associate; (F) hire any Person with an annual base salary in excess of $150,000; or (H) terminate (other than for cause), or layoff (or give notice of any such actions to) any individual service provider of the Company or its Subsidiaries with an annual base salary in excess of $150,000;
(v) amend or permit the adoption of any amendment to its or its Subsidiaries’ Organizational Documents, certificate of incorporation or effect bylaws or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactionscorresponding governing documents;
(ivvi) form any Subsidiary or Subsidiary, acquire any equity interest or other interest in any other Entity or enter into a any joint venture with any other Entityventure, partnership, limited liability corporation or similar arrangement;
(vii) make or authorize any capital expenditure other than any capital expenditure that (A) lend money is provided for in the Company’s capital expense budget either delivered or made available to Parent or Parent’s Representatives prior to the date of this Agreement, which expenditures shall be in accordance with the categories set forth in such budget; or (B) when added to all other capital expenditures made on behalf of the Company since the date of this Agreement but not provided for in the Company’s capital expense budget either delivered or made available to Parent or Parent’s Representatives prior to the date of this Agreement, does not exceed $200,000 individually and $500,000 in the aggregate during any fiscal quarter;
(viii) acquire, lease, license, sublicense, pledge, sell or otherwise dispose of, divest or spin-off, abandon, waive, relinquish or fail to renew, permit to lapse (other than any Intellectual Property Right expiring at the end of its statutory term for which an extension or renewal cannot be obtained), transfer, assign, guarantee, exchange or swap, mortgage or otherwise encumber (including pursuant to a sale-leaseback transaction or securitization) or subject to any Person Encumbrance (except for the advancement of expenses to employeesother than Permitted Encumbrances) any material right or other material asset or property, directors and consultants including any material Intellectual Property Rights (except, in the Ordinary Course case of Businessany of the foregoing (A) in the ordinary course of business (including entering into non-exclusive license agreements and materials transfer agreements in the ordinary course of business), (B) incur pursuant to dispositions of obsolete, surplus or guarantee any indebtedness worn out assets that are no longer useful for borrowed money, the conduct of the business of the Company and (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure as provided for in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”Section 5.2(b)(viii);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire receive, collect, compile, use, store, process, share, safeguard, secure (technically, physically or administratively), dispose of, destroy, disclose, or transfer (including cross-border) any material asset Personal Information (or sellfail to do any of the foregoing, lease as applicable) in violation of any (A) applicable Privacy Laws, (B) privacy policies or otherwise irrevocably dispose notices of the Company or any of its assets Subsidiaries or properties, (C) any of the contractual obligations of the Company or grant any Encumbrance of its Subsidiaries with respect to such assets or properties, except in the Ordinary Course of Businessany Personal Information;
(x) selllend money or make capital contributions or advances to, assignor material investments in, transfer, license, sublicense or otherwise dispose of any Company IP Person (other than pursuant between the Company and its wholly owned Subsidiaries), or incur or guarantee any Indebtedness (except for (A) advances to non-exclusive licenses employees and consultants for travel and other business related expenses in the Ordinary Course ordinary course of Businessbusiness, (B) Indebtedness incurred under the Existing Credit Agreement and other credit facilities in existence as of the date hereof that will be paid off prior to, or substantially simultaneously with, the Closing and (C) Indebtedness between the Company and its Subsidiaries);
(xi) make, change amend or revoke modify in any material Tax electionrespect, fail to pay waive any income rights under, terminate, replace or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Returnrelease, settle or compromise any income or other material Tax claim, liability or submit obligation under any voluntary disclosure application, Material Contract or enter into any Tax allocationContract which if entered into prior to the date hereof would have been a Material Contract, sharing, indemnification excluding any non-exclusive license agreements or other similar agreement or arrangement (other than customary commercial contracts services agreements entered into in the Ordinary Course ordinary course of Business the principal subject matter business or any statement of which is work under existing Material Contracts not Taxes), request or consent to any extension or waiver in excess of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes$750,000 individually;
(xii) enter intocommence any Legal Proceeding, materially amend except with respect to (A) routine matters in the ordinary course of business, (B) in such cases where the Company reasonably determines in good faith that the failure to commence suit would result in a material impairment of a valuable aspect of its business (provided, that the Company consults with Parent and considers in good faith the views and comments of Parent with respect to any such Legal Proceeding prior to commencement thereof) or terminate (C) in connection with a breach of this Agreement or any Company Material Contractother agreements contemplated hereby;
(xiii) settle, release, waive or compromise any Legal Proceeding or other claim (or threatened Legal Proceeding or other claim), other than as required any Legal Proceeding relating to a breach of this Agreement or any other agreements contemplated hereby or pursuant to a settlement that does not relate to any of the Transactions and (A) that results solely in a monetary obligation involving only the payment of monies by Law the Company of not more than $500,000 in the aggregate, (B) that results solely in a monetary obligation that is funded by an indemnity obligation to, or GAAPan insurance policy of, take the Company and the payment of monies by the Company that together with any action settlement made under clause (A) are not more than $500,000 in the aggregate (not funded by an indemnity obligation or through insurance policies) or (C) that results solely in a monetary obligation involving payment by the Company of an amount not greater than the amount specifically reserved in accordance with GAAP with respect to change accounting policies such Legal Proceedings or proceduresclaim on the Balance Sheet;
(xiv) initiate enter into any collective bargaining agreement or settle other agreement with any labor organization (except to the extent required by applicable Legal ProceedingRequirements);
(xv) enter into adopt or amend a Contract that would reasonably be expected to prevent implement any stockholder rights plan or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; orsimilar arrangement;
(xvi) agreeadopt a plan or agreement of complete or partial liquidation or dissolution, resolve merger, consolidation, restructuring, recapitalization or commit other reorganization of the Company;
(xvii) enter into any new material line of business (it being understood that commencement of preclinical or clinical studies in compliance with Section 5.2(b)(xviii) shall not be deemed to do constitute a new line of business) or enter into any Contract that materially limits or otherwise restricts the Company or any of the foregoing.
its Affiliates (c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to including following the Effective Time, Parent and its Affiliates (other than, in the Company shall exercisecase of Parent and its Affiliates, consistent with due to the terms and conditions operation of Parent’s or its Affiliates’ own Contracts)) following the Closing, from engaging or competing in any line of business or in any geographic area or otherwise enter into any Contracts imposing material restrictions on the Company’s assets, operations or business;
(xviii) (A) commence any clinical study of which Parent has not been informed prior to the date of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement(B) unless mandated by any regulatory authority or Governmental Body, no consent of Parent shall be required with respect to discontinue, terminate or suspend any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.ongoing clinical study or
Appears in 1 contract
Operation of the Company’s Business. (a) Except During the Pre-Closing Period, except for actions required to consummate the Merger: (i) as the Company shall ensure that the Company and each of the Subsidiaries conducts its business and operations in the ordinary course and in accordance with past practices (including with respect to closing the Company’s books at the end of each calendar month); (ii) the Company shall use commercially reasonable efforts to ensure that the Company and each of the Subsidiaries preserves intact its current business organization, keeps available the services of its current officers, other employees and agents and maintains its relations and goodwill with all suppliers, distributors, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Company and the Subsidiaries and with all Governmental Bodies; and (iii) the Company shall take the actions set forth in Section on Part 4.2(a) of the Company Disclosure Schedule, .
(iib) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with Without limiting the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety generality of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned)foregoing, during the Pre-Closing Period: each of , except for actions required to consummate the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, (ii) Merger or as set forth in Section on Part 4.2(b) of the Company Disclosure Schedule, the Company shall not (iii) as required by applicable Law or (iv) with without the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditionedParent), at all times during the Pre-Closing Period, and the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any ensure that each of the following:Subsidiaries does not (without the prior written consent of Parent):
(i) declare, accrue, set aside or pay any dividend or make any other distribution payable in cash, stock, property or otherwise, in respect of any shares of its capital stock share capital, or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its share capital stock or other securities (except securities, other than to redeem, cancel and/or otherwise engage in connection with the payment retirement or cancellation of the exercise price and/or withholding Taxes incurred upon Company Options or In the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement);Money Warrants.
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any of the foregoing with respect tosale, issuance or grant of: (A) any share of capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options)security; (B) any option, call, warrant or right to acquire any share of capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any share of capital stock or other security (except that the Company may issue shares of Company Common Stock upon the valid exercise of Company equity awards that were outstanding as of the Company or any date of its Subsidiariesthis Agreement);
(iii) except as required to give effect to anything in contemplation of the Closing, amend or waive any of its or its Subsidiaries’ Organizational Documentsmaterial rights under, or accelerate the vesting under, any material provision of any Contract evidencing any outstanding material restricted stock purchase agreement, or otherwise modify any of the material terms of any outstanding option, warrant or other security or any related Contract, except as may be required by applicable Legal Requirements;
(iv) amend or permit the adoption of any amendment to the certificate of incorporation, bylaws or other organizational documents any of the Company or the Subsidiaries;
(v) (A) acquire any material equity interest or other interest in any other Entity; (B) form any Subsidiary; or (C) effect or be become a party to any merger, consolidation, plan of arrangement, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, issuance of bonus shares, division or subdivision of shares, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”)transaction;
(vi) except for capital expenditures specifically set forth in the capital budgets set forth in Part 4.2(b)(vii) of the Company Disclosure Schedule made in a manner consistent therewith, make or authorize any individual capital expenditure that exceeds $100,000 or that, when added to all other than as required by applicable Law or capital expenditures made on behalf of the terms of any Company Benefit Plan as in effect on since the date of this Agreement, exceeds $100,000;
(vii) except as set forth in Part 4.2(b)(viii) of the Company Disclosure Schedule: (A) adoptother than in the ordinary course of business consistent with past practice, terminate, establish or enter into any Company Benefit Plancontract that would have been a Significant Contract had it been entered into prior to this Agreement; or (B) cause other than in the ordinary course of business consistent with past practice (1) amend, modify or terminate any material provision of any Significant Contract; (2) cancel, modify or waive any material debts or claims held by it or waive any material rights having in each case a value in excess of $10,000; or (3) enter into any agreement to purchase or sell any interest in real property, grant any security interest in real property, enter into any lease, sublease, license, or other occupancy agreement with respect to any real property or alter, amend, modify, or terminate any of the terms of any lease; any of the forgoing notwithstanding, the Company shall be permitted to purchase an amendment to its Directors and Officers Liability Insurance policy that is commonly known as a “tail” or a “discovery period” amendment that would cover acts discovered after the Effective Time that occurred prior to the Effective Time, for a premium not to exceed $95,000. Prior to the purchase or the amendment to Company’s Directors and Officers Liability Insurance policy, Company will consult with Parent to discuss and determine the most cost effective premium that can be obtained for like coverage. Company and Parent agree that the most cost effective amendment to its Directors and Officers Liability Insurance policy will be selected, however, any replacement policy will contain substantially the same provisions and coverage as the policy that existed at the Effective Time.
(viii) acquire, lease or license any right or other asset from any other Person or sell or otherwise dispose of, or lease or license any right or other asset to any other Person (except, in each case, for assets acquired, leased, licensed or disposed of by the Company in the ordinary course of business and consistent with past practices);
(ix) make any pledge of any of its material assets or permit any of its material assets to become subject to any Encumbrances, except for Encumbrances that do not materially detract from the value of such assets or materially impair the operations of the Company Benefit Plan or the Subsidiaries;
(x) make any loans, advances or capital contributions to be amended or investments in any material respect; Person (Cother than in the ordinary course of business), or, except in the ordinary course of business and consistent with past practices, incur or guarantee any indebtedness;
(xi) establish, adopt, enter into or amend any Company Employee Plan or Company Employee Agreement, pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation (including equity-based compensation, whether payable in stock, cash or other property) or remuneration payable to, any of its directors, directors or any of its officers or employees, other than employees (except that the Company: (A) may provide routine salary increases in base salary and annual cash bonus opportunities and payments made to employees in the Ordinary Course ordinary course of Business business and in accordance with past practices in connection with the Company’s customary employee review process; and (B) may make customary bonus payments and profit sharing payments consistent with past practice practices in accordance with bonus and which do not exceed, in profit sharing plans existing as of the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change date of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditionedthis Agreement);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter intopromote any employee or change any employee’s title; hire any employee with an annual base salary in excess of $100,000; or increase the salary (whether through payment of, materially amend or terminate agreement to pay, bonus amounts or otherwise) for any Company Material Contractemployee, other than compensation adjustments consistent with historical practices;
(xiii) other than as required by Law concurrent changes in GAAP or GAAPSEC rules and regulations, take change any action to change of its methods of accounting policies or proceduresaccounting practices in any material respect;
(xiv) initiate or settle make any Legal Proceedingmaterial Tax election;
(xv) commence any material Legal Proceeding, except with respect to routine collection matters in the ordinary course of business and consistent with past practices;
(xvi) settle any material Legal Proceeding or other material claim, except pursuant to a settlement that does not involve any liability or obligation on the part of the Company and the Subsidiaries or involves only the payment of monies by the Company or the Subsidiaries of not more than $10,000 in the aggregate for all such settlements;
(xvii) enter into any material Contract covering any Company Associate, or amend a Contract that make any payment to any Company Associate, that, considered individually or considered collectively with any other such Contracts or payments, will, or would reasonably be expected to prevent or materially impedeto, interfere with, hinder or delay be characterized as a “parachute payment” within the consummation meaning of Section 280G(b)(2) of the Contemplated TransactionsCode or give rise directly or indirectly to the payment of any amount that would not be deductible pursuant to Section 162(m) of the Code (or any comparable provision under U.S. state or local or non-U.S. Tax Legal Requirements);
(xviii) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article 6 not being satisfied; or
(xvixix) agree, resolve agree or commit to do take any of the foregoing.
actions described in clauses (ci) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions through (xviii) of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws4.2(b).
Appears in 1 contract
Operation of the Company’s Business. (a) Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 4.2(a5.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, or (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or unless Terrain shall otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to consent in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: each of Period the Company shall, and shall cause its Subsidiaries shall to, subject to Section 5.2(b), use commercially reasonable efforts to conduct its business and operations in the Ordinary Course of Business and in material compliance in all material respects with all applicable Laws Law and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly contemplated or permitted by this AgreementAgreement (including in connection with the Pre-Closing Financing), (ii) as set forth in Section 4.2(b5.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law Law, or (iv) with the prior written consent of Parent Terrain (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock stock; or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock Company Capital Stock or other securities (except in connection with the payment for shares of Company Common Stock from terminated employees, directors or consultants of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this AgreementCompany);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iii) except as required to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize the issuance of: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options), (B) any option, warrant or right to acquire any capital stock or any other security or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(v) (A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business)Person, (B) incur or guarantee any indebtedness for borrowed money, other than in the Ordinary Course of Business, (C) guarantee any debt securities of others, others or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure or commitment in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”)$250,000;
(vi) other than in the Ordinary Course of Business or as required by applicable Law or under the terms of any Company Benefit Employee Plan as in effect on the date of this Agreementor applicable law: (A) adopt, terminate, establish or enter into any Company Benefit Employee Plan; , (B) cause or permit any Company Benefit Employee Plan to be amended other than as required by law or in any material respect; order to make amendments for the purposes of Section 409A of the Code, (C) pay any material bonus or make any profit-sharing or similar payment toto (except with respect to obligations pursuant to any Company Employee Plan), or or, other than to an employee newly hired in the Ordinary Course of Business and broad-based increases in base compensation that are in the Ordinary Course of Business, increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; employees or (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for causeCompany Associate;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in outside the Ordinary Course of Business;
(ixviii) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(xix) sell, assign, transfer, license, sublicense or otherwise dispose of any material Company IP Rights (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xix) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax ReturnReturn or adopt or change any material accounting method in respect of Taxes, enter into any Tax closing agreement, settle or compromise any income or other material Tax liability claim or assessment, submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification Tax sharing or other similar agreement or arrangement (including indemnity agreements), other than customary commercial contracts Contracts entered into in the Ordinary Course of Business Business, including with vendors, customers, lenders, or landlords, the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any the limitation period with respect applicable to or relating to any Tax claim or assessment for any income or other material Taxes (assessment, other than pursuant to an any such extension of time to file any Tax Return granted or waiver that is obtained in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of TaxesBusiness;
(xiixi) other than in the Ordinary Course of Business, enter into, materially amend or terminate any Company Material Contract;
(xiiixii) other than as required by Law terminate or GAAPmodify in any material respect, take or fail to exercise renewal rights with respect to, any action to change accounting policies or proceduresmaterial insurance policy;
(xivxiii) initiate or settle any Legal Proceeding
(xv) enter into Proceeding or amend a Contract that would reasonably be expected to prevent other claim or materially impede, interfere with, hinder dispute involving or delay against the consummation Company in excess of $50,000 in the Contemplated Transactionsaggregate; or
(xvixiv) agree, resolve or commit to do any of the foregoing.
(c) . Nothing contained in this Agreement shall give ParentTerrain, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 1 contract
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: (i) the Company shall use commercially reasonable efforts to ensure that each of the Company and Acquired Companies conducts its Subsidiaries shall conduct its business businesses and operations (A) in the Ordinary Course of Business ordinary course consistent with past practices and (B) in compliance in all material respects with all applicable Laws Law and the requirements of all Contracts Specified Contracts; (ii) the Company shall use all commercially reasonable efforts to ensure that constitute each of the Acquired Companies preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its existing material relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with any of the Acquired Companies; (iii) the Company Material Contractsshall keep in full force all insurance policies referred to in Section 3.19 or comparable replacement or renewal policies; (iv) the Company shall use commercially reasonable efforts to cause to be provided all notices, assurances and support required by any Specified Contract relating to any Software or Intangibles in order to ensure that no condition under such Specified Contract occurs that could result in (A) any transfer or disclosure by any Acquired Company of any source code, or (B) a release from any escrow of any source code that has been deposited or is required to be deposited in escrow under the terms of such Specified Contract; and (v) the Company shall promptly notify Parent of any notice or other communication from any Person alleging that the Consent of such Person is or may be required in connection with any of the transactions contemplated by this Agreement.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during During the Pre-Closing Period, the Company shall notnot (without the prior written consent of Parent), nor and shall it cause or not permit any of its Subsidiaries the other Acquired Companies to, do any except as set forth in Section 5.2(b) of the followingCompany Disclosure Letter:
(i) (A) declare, accrue, set aside or pay any dividend on, or make any other distribution (whether in cash, securities or other property) in respect of, any of its outstanding capital stock (other than, with respect to a Subsidiary of the Company, to its corporate parent), (B) split, combine or reclassify any of its outstanding capital stock or other equity interests or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its outstanding capital stock or repurchaseother equity interests, or (C) purchase, redeem or otherwise reacquire, directly or indirectly, acquire any shares of its outstanding capital stock or any rights, warrants or options to acquire any such shares (other securities (except in connection with than the payment valid exercise of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting Company Options outstanding as of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this AgreementAgreement or issued pursuant to Section 5.2(b)(ii);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber Encumber or authorize any the issuance, grant, pledge or Encumbrance of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); security, (B) any option, call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that the Company may issue shares of Company Common Stock upon the valid exercise of Company Options outstanding as of the date of this Agreement, including shares that may be issued pursuant to the Company's 1999 Employee Stock Purchase Plan, and the Company or may in the ordinary course of business grant each employee hired during the Pre-Closing Period a Company Option to purchase up to 20,000 shares of Company Common Stock (and the Company may issue shares of Company Common Stock upon the valid exercise of such Company Options); provided, however, that (X) such Company Options, in the aggregate, shall not grant rights to purchase greater than 200,000 shares of Company Common Stock and (Y) any such Company Options shall be issued with an exercise price per share of its Subsidiariesthe higher of $9.00 and the fair market value of a share of Company Common Stock on the date of grant (determined by the closing price of such share on Nasdaq on the date of grant);
(iii) except as required to give effect to anything in contemplation of the Closing, amend or waive any of its rights under any provision of any of the Company's Stock Option Plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract, in each case with respect to the capital stock of the Company or the Acquired Companies;
(iv) amend or permit the adoption of any amendment to its Subsidiaries’ Organizational Documentscertificate of incorporation or bylaws or other charter or organizational documents, or effect or be become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, division or subdivision of shares, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivv) form any Subsidiary or directly or indirectly acquire any equity interest or other interest in in, or make any other Entity investment in or enter into a joint venture with capital contribution to, any other Entity;
(Avi) make any capital expenditure that would have a material adverse impact on the Acquired Companies. For purposes of this Section 5.2(b)(vi), "material adverse impact on the Acquired Companies" shall mean capital expenditures that, when added to all other capital expenditures made on behalf of the Acquired Companies during the Pre-Closing Period, exceed the aggregation of $200,000 for each month during the Pre-Closing Period;
(vii) except as otherwise permitted by this Section 5.2, enter into or become bound by, or permit any of the material assets owned or used by it to become bound by, any material Contract, or amend or terminate, or waive or exercise any material right or remedy under, any material Contract, in each case other than in the ordinary course of business and consistent with past practices;
(viii) acquire, lease or license any right or other material asset from any other Person or sell or otherwise dispose of, or lease or license, any material right or other material Asset, including without limitation, any Software or Intangibles of the Acquired Companies to any other Person, except in each case for assets acquired, leased, licensed or disposed of by the Company in the ordinary course of business and consistent with past practices;
(ix) dispose of or permit to lapse any material rights to the use of any Software or Intangibles of the Acquired Companies, or dispose of or disclose to any Person other than representatives of Parent any material trade secret, formula, process, know-how or other Intangibles not theretofore a matter of public knowledge, except in each case in ordinary course of business and consistent with past practices;
(x) lend money to any Person (except for the advancement of expenses to employeesPerson, directors and consultants in the Ordinary Course of Business), (B) or incur or guarantee any indebtedness for borrowed moneyindebtedness, including without limitation, any additional borrowings under any existing lines of credit (C) guarantee any debt securities except that the Company may make routine borrowings and advancement of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth expenses in the Company operating budget delivered to Parent concurrently ordinary course of business and consistent with the execution of this Agreement (the “Company Budget”past practices);
(viA) other than except as required by to comply with applicable Law Law, establish, adopt or the terms of amend any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Employee Benefit Plan; (B) cause , pay, commit to pay or permit any Company Benefit Plan to be amended in any material respect; (C) pay accelerate the payment of any bonus or make, commit to make or accelerate any profit-sharing or similar payment to, or increase or commit to increase the amount of the wages, salary, commissions, benefits fringe benefits, severance, insurance or other compensation or remuneration payable to, any of its directors, officers officers, employees or employeesconsultants, except that the Company may (i) make routine, reasonable salary increases in connection with the Company's customary employee review process, (ii) pay bonus payments in accordance with its established bonus policy which payments have been identified in a Schedule delivered by Company to Parent prior to the date of this Agreement, and (iii) make severance payments to employees terminated or contemplated to be terminated in connection with the transactions contemplated by this Agreement in accordance with its standard severance practices (to the extent the Company uses its commercially reasonable efforts to obtain releases from such employees reasonably acceptable to Parent), or (B) other than increases as permitted by in base salary and annual cash bonus opportunities and payments made Section 5.2(b)(xii), enter into or amend any employment, consulting, severance or similar agreement with any individual other than consulting agreements entered into in the Ordinary Course ordinary course of Business consistent with past practice and which do not exceed, business involving payments in the aggregate, the amounts specifically budgeted therefore aggregate for all such consulting agreements not in the Company Budget; excess of $50,000 in any month and not with a term in excess of 90 days;
(D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (Exii) hire any (x) officer or (y) employee whose with an annual base salary is in excess of $100,000, or is expected with total annual compensation in excess of $200,000, or promote any employee except in order to be more than $250,000 per year or (F) terminate or give notice fill a position vacated after the date of termination to any officer other than for causethis Agreement;
(viixiii) recognize make any labor union material change in any method of accounting or labor organizationaccounting practice or policy (including any method, practice or policy relating to Taxes), except as required by any changes in GAAP or as otherwise required by applicable Law Law;
(xiv) make or rescind any material Tax election or settle or compromise any material Tax liability of the Company or of any Acquired Company;
(xv) (A) commence or settle any material Proceeding, or (B) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations reflected or reserved against in the consolidated financial statements (or the notes thereto) of the Company and after prior written consent its consolidated Subsidiaries (except in the ordinary course of Parent (which consent shall not be unreasonably withheld, delayed or conditionedbusiness and consistent with past practices);
(viiixvi) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization or any agreement relating to an Acquisition Proposal;
(xvii) permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(xviii) enter into any agreement, understanding or commitment that restrains, limits or impedes, in any material respect, the ability of any Acquired Company to compete with or conduct any business or line of business;
(xix) plan, announce, implement or effect any reduction in force, lay-off, early retirement program, severance program or other program or effort concerning the termination of employment of employees of the Company or its Subsidiaries generally;
(xx) take any action that could be reasonably expected to result in any of the conditions to the Offer set forth in Annex I not being satisfied;
(xxi) enter into any material transaction or take any other than in material action outside the Ordinary Course ordinary course of Businessbusiness and inconsistent with past practices;
(ixxxii) acquire any material asset or sellacquire, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification agreement to acquire or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to lease any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated TransactionsReal Property; or
(xvixxiii) agree, resolve agree or commit to do take any of the foregoing.
actions described in clauses "(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions i)" through "(xxii)" of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws5.2(b).
Appears in 1 contract
Samples: Merger Agreement (Caminus Corp)
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, except (iiA) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) required or otherwise contemplated under this Agreement or as required by applicable Law Laws, (B) any action required to be taken, or omitted to be taken, pursuant to COVID-19 Measures, (ivC) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed) or (D) as set forth in Section 6.2 of the Company Disclosure Schedule, the Company shall use its commercially reasonable efforts to (i) conduct in all material respects its business and operations in the ordinary course and (ii) preserve intact the material components of the Company’s current business organization, including by maintaining its relations and goodwill with all material suppliers, material customers, Governmental Bodies and other material business relations (it being understood that with respect to the matters specifically addressed by any provision of Section 6.2(b), at all times during such specific provisions shall govern over the more general provision of this Section 6.2(a)).
(b) During the Pre-Closing Period, except (i) as required or otherwise contemplated under this Agreement or as required by applicable Laws, (ii) any action required to be taken, or omitted to be taken, pursuant to COVID-19 Measures, (iii) with the written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed) or (iv) as set forth in Section 6.2 of the Company Disclosure Schedule, the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any of the following:
(i) amend or permit the adoption of any amendment to the Company’s certificate of incorporation and bylaws;
(ii) (A) establish a record date for, declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock (including the Company Common Stock) or (B) repurchase, redeem or otherwise reacquirereacquire any of its shares of capital stock (including any Company Common Stock), directly or indirectlyany rights, warrants or options to acquire any shares of its capital stock, other than: (1) repurchases or reacquisitions of Shares outstanding as of the Agreement Date pursuant to the Company’s right (under written commitments in effect as of the Agreement Date) to purchase or reacquire Shares held by a Company Associate only upon termination of such associate’s employment or engagement by the Company; (2) repurchases of Company Stock Awards (or shares of capital stock issued upon the exercise or other securities vesting thereof) outstanding on the Agreement Date (except in cancellation thereof) pursuant to the terms of any such Company Stock Award (in effect as of the Agreement Date) between the Company and a Company Associate only upon termination of such Person’s employment or engagement by the Company; or (3) in connection with the payment of withholding to satisfy the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Tax obligations with respect to Company Plan in accordance with the terms of such award in effect on the date of this Agreement)Stock Awards;
(iiiii) split, combine, subdivide or reclassify any Shares or other equity interests;
(iv) issue, sell, issue, grant, pledge or otherwise dispose of or deliver, pledge, transfer, encumber or authorize any the issuance, sale, grant delivery, pledge, transfer or encumbrance (other than pursuant to agreements in effect as of the foregoing with respect to: Agreement Date) of (A) any capital stock stock, equity interest or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); Company, (B) any option, warrant call, warrant, restricted securities or right to acquire any capital stock stock, equity interest or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation security of the Company Outstanding Shares; Company, or (C) any instrument convertible into or exchangeable for any capital stock stock, equity interest or other security of the Company (except that (1) the Company may issue Shares as required to be issued upon the exercise of Company Options or the vesting of Company Stock Awards and (2) the Company may issue Company Stock Awards to new employees who were offered Company Stock Awards as part of offer letters that were executed prior to the Agreement Date);
(v) except as contemplated by Section 3.8, establish, adopt, terminate or amend any Employee Plan (or any plan, program, arrangement, practice or agreement that would be an Employee Plan if it were in existence on the Agreement Date), or amend or waive any of its Subsidiariesrights under, or accelerate the vesting under, any provision of any of the Employee Plans (or any plan, program, arrangement, practice or agreement that would be an Employee Plan if it were in existence on the Agreement Date) or grant any employee or director any award or increase in compensation, bonuses or other benefits, except that the Company may (A) amend any Employee Plans to the extent required by applicable Laws; and (B) make annual or quarterly bonus or commission payments based on actual performance for completed performance periods in the ordinary course of business in accordance with the bonus or commission plans existing on the Agreement Date;
(iiivi) except as required (A) enter into (1) any change-of-control agreement with any executive officer, employee, director or independent contractor or (2) any retention, employment, severance or other material agreement with any executive officer, employee, independent contractor or director, (B) enter into any employment or severance agreement with any employee below the level of Vice President with an annual base salary greater than $200,000 or any consulting agreement pursuant to give effect to anything which the Company would provide base compensation greater than $200,000 in contemplation a 12-month period or (C) hire or terminate (other than for cause) any employee with an annual base salary in excess of the Closing, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions$200,000;
(ivvii) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(viii) make or authorize any capital expenditure, except that the Company may make any capital expenditure that: (A) is provided for in the Company’s capital expense budget either delivered or made available to Parent prior to the Agreement Date, which expenditures shall be in accordance with the categories set forth in such budget; or (B) when added to all other capital expenditures made on behalf of the Company since the Agreement Date but not provided for in the Company’s capital expense budget either delivered or made available to Parent prior to the Agreement Date, does not exceed $1,500,000 in the aggregate during any fiscal quarter);
(ix) lease, license, sublicense, pledge, sell or otherwise dispose of, divest or spin-off, abandon, waive, relinquish or permit to lapse (other than any patent expiring at the end of its statutory term), fail to protect or enforce, transfer, assign, guarantee, mortgage or otherwise subject to any material Encumbrance (other than Permitted Encumbrances) any material right or other material asset or property (including Intellectual Property Rights), except, in the case of any of the foregoing (A) in the ordinary course of business consistent with past practice (including entering into non-exclusive license agreements in the ordinary course of business consistent with past practice) or (B) pursuant to dispositions of obsolete, surplus or worn out assets that are no longer useful in the conduct of the business of the Company;
(x) purchase or acquire, directly or indirectly (including by merger, consolidation, or acquisition of stock or assets or any other business combination), (A) any corporation, partnership, other business organization or division thereof or any other business or all or substantially all of the assets of any Person or (B) any assets, real property, securities, properties, interests or businesses from any Person, in each case, other than (i) acquisitions of assets not in excess of $750,000 in the aggregate and (ii) acquisitions of raw materials, supplies, equipment, inventory and third-party software in the ordinary course of business;
(xi) lend money or make capital contributions or advances to or make investments in, any Person (except for the advancement of expenses to employeesPerson, directors and consultants in the Ordinary Course of Business), (B) or incur or guarantee any indebtedness Indebtedness, except for borrowed money(A) short-term borrowings, (C) guarantee any debt securities of othersnot more than $1,000,000 in the aggregate, incurred in the ordinary course of business or (DB) advances to employees and consultants for travel and other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth business related expenses in the Company operating budget delivered to Parent concurrently with the execution ordinary course of this Agreement (the “Company Budget”)business;
(vixii) other than except as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course ordinary course of Business consistent with past practice and which do not exceedbusiness, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance make or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method of Tax accounting, consent to the extension or waiver of the statutory period of limitations applicable to any Tax claim or assessment (other than in respect connection with automatic extensions of Taxes;
(xiithe due date for filing a Tax Return) enter into, materially amend or terminate settle or compromise any Company Material Contractmaterial Tax liability or refund;
(xiii) settle, release, waive or compromise any Legal Proceeding, other than as required (A) any Transaction Litigation (with respect to which any settlements, releases, waivers or compromises shall be subject to Section 7.5) or Legal Proceeding related to a breach of this Agreement or (B) any Legal Proceeding (1) that results solely in an obligation involving only the payment of monies by Law or GAAP, take any action to change accounting policies or proceduresthe Company of not more than $1,000,000 in the aggregate and (2) does not involve the admission of wrongdoing by the Company;
(xiv) initiate enter into any collective bargaining agreement or settle other agreement with any Legal Proceedinglabor organization (except to the extent required by applicable Laws);
(xv) enter into a new line of business or abandon or discontinue any existing line of business, it being understood that planned clinical trials conducted in the ordinary course of business shall not constitute new lines of business;
(xvi) adopt or implement any stockholder rights plan or similar arrangement or, subject to the provisions of Section 7.1, take any action to exempt any Person from, or make any acquisition of securities of the Company by any Person not subject to, any state takeover statute or similar statute or regulation that applies to Company with respect to an Acquisition Proposal or otherwise, including the restrictions on “business combinations” set forth in Section 203 of the DGCL, except for Parent, Purchaser, or any of their respective Subsidiaries or Affiliates, or the Transactions;
(xvii) make any material changes in any accounting methods, principles or practices, in each case, except as required by a change in GAAP or required by applicable Law;
(xviii) other than in the ordinary course of business: (A) accelerate, terminate or consent to the termination of, cancel, amend in any material respect, grant a waiver of any material right under or otherwise modify in any material respect any Material Contract or any Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation constitute a Material Contract if in effect as of the Contemplated Transactionsdate of this Agreement; or (B) enter into any Contract that would constitute a Material Contract if in effect as of the date of this Agreement; provided that, for purposes of this Section 6.2(b)(xviii), all references to “1,250,000” in Section 4.9(a)(i) or Section 4.9(a)(ii) shall be deemed to be references to “1,000,000”;
(xix) adopt a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization; or
(xvixx) agreeauthorize any of, resolve or agree or commit to do take, any of the foregoingactions described in clauses (i) through (xv) of this Section 6.2(b).
(c) Nothing Notwithstanding the foregoing, nothing contained in this Agreement herein shall give Parentto Parent or Purchaser, directly or indirectly, the right rights to control or direct the operations of the Company prior to the Effective Time, and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations. Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with the terms and conditions of this Agreementhereof, complete unilateral control and supervision over of its business and its Subsidiaries’ respective operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 1 contract
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: each of (i) the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course ordinary course and consistent with past practices; (ii) the Company shall use commercially reasonable efforts to preserve intact its current business organization, keep available the services of Business its current officers and in compliance in all material respects other employees and maintain its relations and goodwill with all applicable Laws suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the requirements Company and with all Governmental Bodies; (iii) the Company shall promptly notify Parent of: (A) any claim asserted by any Governmental Body; (B) any claim asserted in writing by any Person other than a Governmental Body; (C) any Legal Proceeding commenced; or (D) any Legal Proceeding, to the Knowledge of all Contracts the Company, threatened, in the case of clauses “(A)” through “(D)” against, relating to, involving or otherwise affecting the Company that constitute relates to any of the Contemplated Transactions; and (iv) the Company Material Contractsshall: (A) to the extent practicable, provide Parent with reasonable advance notice of each material meeting, hearing, conference, filing or discussion to which it is a party or is otherwise involved relating to any of the Specified Proceedings; (B) consult with Parent prior to making any material decision relating to any of the Specified Proceedings; and (C) promptly notify Parent of any material development relating to any of the Specified Proceedings.
(b) Except (i) as expressly permitted by this Agreement, (ii) as otherwise set forth in Section Part 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall notnot (without the prior written consent of Parent, nor which consent shall it cause or permit any of its Subsidiaries to, do any of the following:not be unreasonably withheld):
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock stock, or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)securities;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any of the foregoing with respect tosale, issuance or grant of: (A) any shares of capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options)security; (B) any option, call, warrant or right to acquire any shares of capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any shares of capital stock or other security (except that the Company may issue Company Shares upon the valid exercise of Company Options outstanding as of the Company or any date of its Subsidiariesthis Agreement);
(iii) amend or waive any of its rights under, or accelerate the vesting under, any provision of any agreement evidencing any outstanding stock option, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract, except as required by applicable Legal Requirements;
(iv) amend or permit the adoption of any amendment to give effect to anything in contemplation its Articles of Incorporation or the other organizational documents of the ClosingCompany, amend except as provided for in the Voting Proposals;
(A) acquire any of its equity interest or its Subsidiaries’ Organizational Documents, other interest in any other Entity; (B) form any Subsidiary; or (C) effect or be become a party to any merger, consolidation, plan of arrangement, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, issuance of bonus shares, division or subdivision of shares, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivvi) form make any Subsidiary or acquire capital expenditure (except that the Company may make any equity interest or capital expenditure that does not exceed KRW 500,000,000 individually and, when added to all other interest capital expenditures made on behalf of the Company following the date of this Agreement, does not exceed KRW 2,000,000,000 in any the aggregate), other Entity or enter into a joint venture with any other Entitythan capital expenditures that are to be made pursuant to the Significant Contracts identified in Part 2.9 of the Company Disclosure Schedule;
(vii) except in the ordinary course of business and consistent with past practices: (A) enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any Company Contract that constitutes a Significant Contract; or (B) amend in any material respect or terminate, or waive any material right or remedy under, any Company Contract that constitutes a Significant Contract, except as provided in Section 5.7(b);
(viii) lend money to any Person (except for the advancement of expenses other than routine travel and business expense advances made to employees, directors and consultants or officers or other employees in the Ordinary Course ordinary course of Businessbusiness and consistent with past practices), (B) or, except in the ordinary course of business and consistent with past practices, incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”)indebtedness;
(viix) other than as required by applicable Law establish, adopt, enter into or the terms of amend any Company Benefit Employee Plan as in effect on the date of this or Company Employee Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation (including equity-based compensation, whether payable in stock, cash or other property) or remuneration payable to, any of its directors, directors or any of its officers or employees, other than employees (except that the Company: (A) may provide routine salary increases in base salary and annual cash bonus opportunities and payments made to non-officer employees in the Ordinary Course ordinary course of Business business and consistent with past practice practices in connection with the Company’s customary employee review process; (B) may amend the Company Employee Plans to the extent required by applicable law; (C) may make customary bonus payments and which do not exceed, profit sharing payments in the aggregate, ordinary course of business and consistent with past practices in accordance with bonus and profit sharing plans existing on the amounts specifically budgeted therefore in the Company Budgetdate of this Agreement; and (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than Company Employee Agreements in connection with the Ordinary Course hiring of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose employees below the level of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of BusinessDirector);
(x) sellpromote any employee to the level of Director or above or change any employee’s title to Director or above, assign, transfer, license, sublicense except in order to fill a position vacated after the date of this Agreement; or otherwise dispose hire any employee at the level of any Company IP (other than pursuant to non-exclusive licenses Director or above or with an annual base salary in the Ordinary Course excess of Business)KRW 100,000,000;
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or any applicable Legal Requirements and US GAAP, take change any action of its methods of accounting or accounting practices in any respect;
(xii) make any material Tax election;
(xiii) commence any Legal Proceeding, except with respect to change accounting policies routine collection matters in the ordinary course of business and consistent with past practices or proceduresagainst Parent or Acquisition Sub in connection with the Contemplated Transactions;
(xiv) initiate or settle any Legal ProceedingProceeding (including the Specified Proceedings) or other material claim, except pursuant to a settlement that does not involve any liability or obligation on the part of the Company or involves only the payment of monies by the Company of not more than KRW 350,000,000 in the aggregate for all such settlements; or
(xv) enter into agree or amend a Contract commit to take any of the actions described in clauses “(i)” through “(xiv)” of this Section 4.2(b).
(c) During the Pre-Closing Period, the Company shall promptly notify Parent in writing of: (i) the discovery by the Company of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement or that occurs, arises or exists after the date of this Agreement and that would, individually or in the aggregate, cause the conditions set forth in clause “(a)” or clause “(b)” of Annex I not to be satisfied; (ii) any breach of any covenant or obligation of the Company that would cause the condition set forth in clause “(c)” of Annex I not to be satisfied; and (iii) any event, condition, fact or circumstance that would make the timely satisfaction of any of the Offer Conditions impossible or unlikely or that has had or would reasonably be expected to prevent have or materially impede, interfere with, hinder or delay result in a Company Material Adverse Effect. Without limiting the consummation of the Contemplated Transactions; or
(xvi) agree, resolve or commit to do any generality of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercisepromptly advise Parent in writing of any Legal Proceeding or material claim threatened in writing, consistent commenced or asserted in writing against or with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything respect to the contrary set forth Company. No notification given to Parent pursuant to this Section 4.2(c) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 1 contract
Samples: Share Allocation and Tender Offer Agreement (Ebay Inc)
Operation of the Company’s Business. (a) Except During the Pre-Closing Period: (i) except (w) as required or otherwise expressly contemplated under this Agreement, (x) with the written consent of Parent, (y) required by applicable Law or (z) as set forth in Section 4.2(a) 5.2 of the Company Disclosure ScheduleLetter, (ii) as expressly permitted by or required the Company shall ensure that each of the Acquired Entities conducts its business and operations in accordance this Agreementthe ordinary course, (iii) as required by applicable Law, (iv) in connection consistent with past practices and the COVID-19 pandemic, to the extent reasonably necessary, Company shall use its commercially reasonable efforts to: (A) to protect the health preserve intact its business organization and safety of the Company’s or any of its Subsidiaries’ employeesmaterial assets, (B) to respond to third party supply or service disruptions caused by keep available the COVID-19 pandemic or services of its officers and employees, (C) as required by any applicable Lawmaintain in effect all of its Governmental Authorizations and (D) maintain satisfactory relationships with customers, directive or guideline from any Governmental Body arising out oflenders, or otherwise related tosuppliers, licensors, licensees, distributors, strategic partners, logistics providers, customs brokers, payment processors/providers and others having material business relationships with the COVID-19 pandemic Company.
(including any response to COVID-19), or (vb) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned)Without limiting the generality of the foregoing, during the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
, except (b) Except (iw) as required or otherwise expressly permitted by contemplated under this Agreement, (iix) as set forth in Section 4.2(b) with the written consent of the Company Disclosure ScheduleParent, (iiiy) as required by applicable Law or (ivz) with as set forth in Section 5.2 of the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing PeriodCompany Disclosure Letter, the Company shall not, nor and shall it cause or not permit any of its Subsidiaries the other Acquired Entities to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution (whether in cash, stock or property or any combination thereof) in respect of any shares of its the Company’s capital stock stock, or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its the Company’s capital stock or options, warrants, convertible or exchangeable securities, restricted stock units, stock based performance units or other securities (except rights to acquire any such shares of capital stock, other than dividends or distributions solely between or among any of the wholly owned Acquired Entities to the extent consistent with past practices, and other acquisitions of Shares in connection with the payment satisfaction by holders of Company Options, Company RSUs, Company SPR Shares or Company CSPA Shares of the exercise price and/or withholding Taxes incurred upon the exercisetaxes or as a result of forfeiture, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)as applicable;
(ii) sell, issue, deliver, grant, pledge authorize the issuance or otherwise dispose grant of or encumber or authorize any of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); Company, (B) any option, warrant call, warrant, share of phantom stock or phantom stock right, stock purchase or stock appreciation right, restricted stock unit, performance stock unit, or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation security of the Company Outstanding Shares; or Company, (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or (D) equity awards denominated in shares of the Company’s capital stock (including any Company Options, Company RSUs, Company SPR Shares or Company CSPA Shares or other rights to acquire such shares or any other rights that give any Person the right to receive any economic interest of its Subsidiariesa nature accruing to the holders of Company Common Stock) other than the issuance of Shares upon the exercise of Company Options or pursuant to the terms of Company RSUs that are outstanding on the date of this Agreement, in each case in accordance with the applicable equity award’s terms as in effect on the date of this Agreement;
(iii) except as required to give effect to anything in contemplation split, combine or reclassify its outstanding shares of capital stock of the Closing, amend Company or enter into any agreement with respect to voting of any of its the capital stock of any of the Acquired Entities or its Subsidiaries’ Organizational Documents, any securities convertible into or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, exchangeable for the avoidance of doubt, the Contemplated Transactionssuch capital stock;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money except to any Person (except for the advancement of expenses extent required pursuant to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit an Employee Plan as in effect on the date of this Agreement: Agreement that is set forth in Section 5.2(b)(iv) of the Company Disclosure Letter, (A) enter into, establish, adopt, terminatemodify, establish amend or enter into terminate any Company Benefit Plan; Employee Plan (or any plan that would constitute an Employee Plan had it been in effect as of the date of this Agreement), (B) cause take any action to amend, modify or permit waive any Company Benefit Plan to be amended in of its rights under, or accelerate the vesting criteria or vesting requirements of payment of any material respect; compensation or benefit under, any Employee Plan, (C) pay increase in any bonus manner the compensation or make benefits of any profit-sharing or similar payment toCompany Associate, or increase the amount grant any type of the wages, salary, commissions, benefits or other compensation or remuneration payable tobenefit to any Company Associate not previously receiving or entitled to receive such compensation or benefit, (D) hire, elect or appoint any individual, except other than into those positions set forth on Schedule 5.2(b)(iv)(D), (E) terminate the employment of its directors, officers or employeesany individual, other than increases due to such individual’s death, disability, failure to perform or for cause (each as determined by the Company or any other Acquired Entity in base salary and annual cash bonus opportunities and payments made its reasonable discretion in the Ordinary Course ordinary course of Business business consistent with past practice), or (F) issue or forgive any loans to any Company Associate (other than routine travel advances or similar business expense advances issued in the ordinary course of business consistent with past practice and which do the use of Acquired Entity credit cards in accordance with the Acquired Entity’s policy); provided, however, that clauses (A) and (C) shall not exceedlimit the Company’s or any other Acquired Entity’s ability to make compensation and benefits (other than severance benefits and equity-based incentive compensation) available to employees hired in accordance with clause (D), in each case, in the aggregate, ordinary course of business consistent with past practice that are comparable to the amounts specifically budgeted therefore in compensation and benefits (other than severance benefits and equity-based incentive compensation) provided to similarly situated employees of the Company Budget; or the applicable Acquired Entity;
(Dv) increase amend, modify, waive any provision of or permit the severance adoption of any amendment to the Company Charter Documents or change the charter, bylaw or comparable organizational documents of control benefits offered any Acquired Entity;
(vi) (A) incur, redeem, repurchase, prepay, defease, guarantee, assume or otherwise become liable for or modify in any material respects the terms of any indebtedness for borrowed money, issue or sell any debt securities or warrants or other rights to acquire any current debt securities of the Company or new employeesany Subsidiary of the Company, directors guarantee any debt securities of another Person, enter into any “keep well” or consultants; other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing or (EB) hire make any loans, advances or capital contributions to, or investments in (including by purchase of stock or securities, property transfers or purchase of property or assets of any Person or otherwise), any other Person, other than to or in (x) officer the Company or any Company Subsidiary or (y) employee whose annual base salary is or is expected extensions of trade credit and advances of expenses to be more than $250,000 per year or (F) terminate or give notice employees, in each case in the ordinary course of termination to any officer other than for causebusiness consistent with past practice;
(vii) recognize except for capital expenditures in the ordinary course of business not to exceed (1) $750,000 in the aggregate and (2) $10,000 in any labor union individual instance or labor organizationin the case of sales demonstration equipment and related capital expenditures not to exceed $75,000 in any individual instance; make any capital expenditures without Parent’s consent, except as otherwise required by applicable Law and after prior written such consent of Parent (which consent shall not to be unreasonably withheld, delayed conditioned or conditioned)delayed;
(viii) enter into acquire, lease, license or sublicense any material transaction right or other asset, including Intellectual Property, from any other Person or sell or otherwise dispose of (including through any “spin-off”), or pledge, encumber or otherwise subject to any Encumbrance (other than a Permitted Encumbrance), or lease, license or sublicense, any right or other asset, including Intellectual Property, to any other Person (other than dispositions of inventory and non-exclusive licenses of Intellectual Property in the Ordinary Course ordinary course of Businessbusiness and consistent with past practices), or waive or relinquish, abandon, allow to lapse or encumber (except for any Permitted Encumbrance) any right, property or asset, including Intellectual Property, other than, solely with respect to assets other than Intellectual Property, pursuant to transactions where the amount of consideration paid or transferred in connection with such transactions would not exceed $50,000 individually or $100,000 in the aggregate;
(ix) acquire any material asset except to the extent required by applicable Law or sell, lease or otherwise irrevocably dispose consistent with past practice in the case of any of its assets election or propertiesamended Tax Return, make or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail change any annual Tax accounting period, change or consent to pay any income or other material change in any Tax as such Tax becomes due and payableaccounting method, file any amendment making any amended material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any closing agreement, surrender any right to claim a material Tax allocationrefund, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes)settle any material Tax liability, request any material Tax ruling, or waive or extend or consent to any extension or waiver of any limitation the statute of limitations period with respect applicable to any material Taxes, Tax claim or assessment assessment;
(x) change any of its methods of accounting or accounting practices unless required by GAAP or applicable Law, except for such changes that are required by GAAP or Regulation S-X promulgated under the Exchange Act;
(xi) enter into or become bound by, or permit any income of the assets owned or other used by it to become bound by, or modify or amend, waive or exercise any material Taxes right or remedy under or terminate any Material Contract or any Contract that, if existing on the date hereof, would have been a Material Contract, in each case except for customer or supplier purchase orders (other than pursuant to an extension but not, for the avoidance of time to file doubt, any Tax Return granted master purchase agreements, master supply agreements or any similar agreements) entered into in the Ordinary Course ordinary course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxesbusiness consistent with past practice;
(xii) enter intocommence, materially amend settle or terminate compromise any Proceeding or liability, except for settlements or compromises that (A) involve monetary remedies with a value not in excess of $75,000, with respect to any Proceeding or liability, or $150,000 in the aggregate, (B) do not grant to any third party rights to any material Company Material ContractIntellectual Property or impose any restriction on the right of the Acquired Entities to use or register any Intellectual Property or (C) do not impose any restriction or obligation (other than the payment of money) on the businesses of the Acquired Entities or any of their affiliates;
(xiii) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization, other than as required by Law or GAAP, take any action to change accounting policies or proceduresthe Merger;
(xiv) initiate or settle enter into any Legal Proceedingnew line of business;
(xv) amend in a manner that adversely impacts the ability to conduct its business, terminate or allow to lapse any Governmental Authorizations of the Acquired Entities;
(xvi) (A) cancel or permit to lapse any Owned Intellectual Property that is registered, issued or subject to a pending application or (B) disclose to any third party, other than Representatives of Parent or under a confidentiality agreement, any Confidential Information constituting Company Intellectual Property in a way that results in loss of intellectual property protection for such Confidential Information;
(xvii) form, create, establish, enter into or amend acquire an interest in any new subsidiary, joint venture or similar entity;
(xviii) cancel, terminate or modify in any material respect, or take any action that could permit cancellation, termination or material modification of, any insurance policy material to the Acquired Entities, taken as a Contract that would reasonably be expected whole;
(xix) enter into any long-term real property lease or extend any existing real property lease for a term of more than one-year;
(xx) enter into, modify or terminate any collective bargaining, agreement to prevent form a work council or materially impede, interfere with, hinder other union or delay the consummation of the Contemplated Transactionssimilar agreement or commit to enter into any such agreements; or
(xvixxi) agreeauthorize, resolve agree or commit to do take any of the foregoing actions described in clauses (i) through (xx) of this Section 5.2(b). Notwithstanding the foregoing.
(c) Nothing , nothing contained in this Agreement herein shall give Parentto Parent or Purchaser, directly or indirectly, the right rights to control or direct the operations of the Company Acquired Entities prior to the Effective Offer Acceptance Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 1 contract
Samples: Merger Agreement (Envivio Inc)
Operation of the Company’s Business. (a) Except in each case (ix) as specifically required by any other provision of this Agreement or specifically set forth in Section 4.2(aPart 5.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (Cy) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19)Legal Requirement, or (vz) as may be consented to in writing by Parent (which with the prior written consent shall not be unreasonably withheld, delayed or conditioned)of Parent, during the Pre-Closing Period: (i) the Company shall use its commercially reasonable efforts to ensure that each of the Company and its Subsidiaries shall conduct Acquired Entities conducts its business and operations (A) in the Ordinary Course of Business ordinary course and in compliance accordance with past practices and (B) in compliance, in all material respects respects, with all applicable Laws Legal Requirements and the requirements of all Company Contracts that constitute Company Material Contracts; (ii) the Company shall use commercially reasonable efforts to ensure that each Acquired Entity preserves intact its current business organization, keeps available the services of its current officers and other key employees and maintains its relations and goodwill with all material (individually or in the aggregate) suppliers, customers, landlords, creditors, licensors, licensees, distributors, resellers, employees and other Persons having business relationships with such Acquired Entity; (iii) the Company shall keep in full force all insurance policies referred to in Section 3.19 (other than any such policies that are immediately replaced with substantially similar policies); and (iv) the Company shall promptly notify Parent of (A) any written notice or other communication of which the Company has Knowledge from any Person alleging that the Consent of such Person is or may be required in connection with any of the Contemplated Transactions, and (B) any Legal Proceeding commenced, or, to the Knowledge of the Company, threatened in writing against, relating to, involving or otherwise affecting any Acquired Entity that relates to the consummation of the Offer or the Merger or any of the other Contemplated Transactions. Except in each case (x) as specifically required by any other provision of this Agreement, (y) as required by any applicable Legal Requirement, or (z) with the prior written consent of the Company, during the Pre-Closing Period, Parent shall promptly notify the Company of (A) any written notice or other communication of which Parent has Knowledge from any Person alleging that the Consent of such Person is or may be required in connection with any of the Contemplated Transactions, and (B) any Legal Proceeding commenced, or, to the Knowledge of Parent, threatened against, relating to, involving or otherwise affecting Parent or Acquisition Sub that relates to the consummation of the Offer or the Merger or any of the other Contemplated Transactions.
(b) Except in each case (ix) as expressly permitted specifically required by any other provision of this Agreement, (ii) as Agreement or specifically set forth in Section 4.2(bPart 5.2(b) of the Company Disclosure Schedule, (iiiy) as required by any applicable Law Legal Requirement, or (ivz) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), at all times during the Pre-Closing Period, the Company shall not, nor and shall it cause or not permit any of its Subsidiaries the other Acquired Entities to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock, split, combine or reclassify any capital stock or repurchase, redeem or otherwise reacquire, directly or indirectly, any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)securities;
(ii) sell, issue, grant, pledge grant or otherwise dispose of or encumber deliver or authorize any of the foregoing with respect tosale, issuance, delivery or grant of: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options)security; (B) any option, call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that the Company may issue shares of Company Common Stock upon the valid exercise of Company Options outstanding as of the Company or any date of its Subsidiariesthis Agreement);
(iii) except as required to give effect to anything in contemplation of the Closing, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of the Company Equity Plans or any provision of any Contract evidencing any outstanding Company Option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, restricted stock units, warrant or other security or any related Contract, other than any acceleration of vesting that occurs in accordance with the terms of a Company Contract in effect as of the date of this Agreement and previously Made Available to Parent;
(iv) amend or permit the adoption of any amendment to any of its Subsidiaries’ Organizational Charter Documents, or effect or be become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, division or subdivision of shares, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(vi) make any capital expenditure (except that the Company may make any capital expenditure that: (A) does not exceed $25,000 individually; and (B) when added to all other capital expenditures made on behalf of the Company during the calendar month in which such capital expenditure is made, does not exceed $100,000 in the aggregate);
(vii) other than in the ordinary course of business consistent with past practices (A) enter into or become bound by, or permit any of the material assets owned or used by it to become bound by, any Material Contract or (B) amend or terminate, or waive or exercise any material right or remedy under, any Material Contract;
(viii) grant any exclusive license or right with respect to any Company IP, other than any grant of Company IP that occurs in accordance with the terms of a Company Contract in effect as of the date of this Agreement and previously Made Available to Parent;
(ix) enter into, renew or become bound by, or permit any of the material assets owned or used by it to become bound by, any Contract the effect of which would be to grant to any Person following the Merger any right or license to any Intellectual Property right owned as of the date of this Agreement by any Acquired Entity;
(x) enter into, renew or become bound by, or permit any of the material assets owned or used by it to become bound by, any Contract containing, or otherwise subjecting any Acquired Entity to, any non-competition, exclusivity or other material restriction on the operation of the business of any Acquired Entity;
(xi) acquire, lease or license any right or other asset from any other Person or sell or otherwise dispose of, lease or license any right or other asset to any other Person (except in each case for assets acquired, leased, licensed or disposed of by the Acquired Entities in the ordinary course of business and consistent with past practices), or, other than in the ordinary course of business in connection with the collection of accounts receivable, waive or relinquish any material right;
(xii) other than in the ordinary course of business consistent with past practices, write off as uncollectible, or establish any extraordinary reserve with respect to, any receivable or other indebtedness;
(xiii) other than pledges under the Company’s Credit Facility, make any pledge of any of its material assets or permit any of its material assets to become subject to any Encumbrances, except for Encumbrances that do not materially detract from the value of such assets or materially impair the operations of the Acquired Entities;
(xiv) permit any cash, cash equivalents or short-term investments of the Acquired Entities to become subject to any Encumbrance;
(xv) other than amounts under the Company’s Credit Facility and capital expenditures permitted under Section 5.2(b)(vi), (A) lend money to any Person (except for the advancement of expenses to employeesPerson, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness (including capital lease obligations) (other than (x) indebtedness for borrowed moneyreimbursement of expenses made in the ordinary course of business, (Cy) guarantee accounts payable incurrred in the ordinary course of business and (z) amounts owed under Contracts) or obtain or enter into any bond or letter of credit or any related Contract, in each case in excess of $10,000 individually or $50,000 in the aggregate, or (B) announce, offer, arrange, syndicate or issue any debt securities (including convertible securities) or announce, arrange or syndicate any bank financing;
(xvi) except as may be required pursuant to the terms of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure Company Employee Plans as in excess effect as of the budgeted capital expenditure amounts date hereof and set forth on Part 3.17(a) of the Disclosure Schedule: (A) establish, adopt, enter into or amend any Company Employee Plan or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the Company operating budget delivered to Parent concurrently with the execution date of this Agreement (except that the “Company Budget”);
(vi) other than as may amend the Company Employee Plans to the extent required by Section 409A of the Code and other applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit PlanLegal Requirements); (B) cause grant or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation (including equity-based compensation, whether payable in stock, cash or other property), severance or remuneration payable to, any of its directorspresent or former director, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvi) agree, resolve or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.employee
Appears in 1 contract
Operation of the Company’s Business. (a) Except (i) During the Pre-Closing Period, except for actions required to consummate the Merger and the transactions expressly contemplated by this Agreement or as set forth in Section on Part 4.2(a) of the Company Disclosure Schedule, : (i) the Company shall ensure that each of the Acquired Corporations conducts its business and operations in the ordinary course and in accordance with past practices (including with respect to closing the Company’s books at the end of each calendar month); (ii) as expressly permitted by or required in accordance this Agreementthe Company shall use commercially reasonable efforts to ensure that each of the Acquired Corporations preserves intact its current business organization, keeps available the services of its current officers, other Company Associates and service providers and maintains its relations and goodwill with all suppliers, distributors, Distribution Providers, customers, landlords, creditors, licensors, licensees, employees and other Persons having significant business relationships with the respective Acquired Corporations and with all Governmental Bodies; and (iii) as required the Company shall promptly notify Parent of: (A) any claim asserted by applicable Law, any Governmental Body; (ivB) any claim asserted in connection with the COVID-19 pandemicwriting by any Person other than a Governmental Body; (C) any Legal Proceeding commenced; or (D) any Legal Proceeding, to the extent reasonably necessary, (A) to protect the health and safety Knowledge of the Company’s , threatened in writing; in the case of clauses “(A)” through “(D)” against, relating to, involving or otherwise affecting any of the Acquired Corporations that relates to the Merger or any of its Subsidiaries’ employees, the transactions contemplated by this Agreement.
(Bb) to respond to third party supply or service disruptions caused by Without limiting the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, generality of the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned)foregoing, during the Pre-Closing Period: each of , except for actions required to consummate the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws Merger and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted other transactions contemplated by this Agreement, (ii) Agreement or except as set forth in Section on Part 4.2(b) of the Company Disclosure Schedule, the Company shall not (iii) as required by applicable Law or (iv) with without the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, and the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any ensure that each of the following:other Acquired Corporations does not (without the prior written consent of Parent which shall not be unreasonably withheld);
(i) declare, accrue, set aside or pay any dividend or make any other distribution payable in cash, stock, property or otherwise, in respect of any shares of its capital stock share capital, or repurchase, redeem or otherwise reacquirereacquire any share capital or other securities, directly other than to repurchase, in full compliance with applicable Legal Requirements, restricted shares of Company Common Stock held by an employee upon the termination of such employee’s employment or indirectly, enter into any shares agreement with respect to the voting of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)stock;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any of the foregoing with respect tosale, issuance or grant of: (A) any share of capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options)security; (B) any option, call, warrant or right to acquire any share of capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any share of capital stock or other security (except that: (1) the Company may issue shares of Company Common Stock upon the valid exercise or vesting of Company Equity Awards that were outstanding as of the date of this Agreement; and (2) the Company may, in the ordinary course of business and consistent with past practices, grant Company Stock-Based Awards, other than Company Performance Share Awards, to a maximum of 30 newly-hired employees of the Company, none of whom shall be Key Employees, and pursuant to which no more than 150,000 shares of Company Common Stock in the aggregate may be issued, provided that such Company Stock-Based Awards: (x) shall not contain any “single-trigger,” “double-trigger” or other vesting acceleration provisions and shall not be subject to acceleration (in whole or in part) as a result of the Merger or any of the other transactions contemplated by this Agreement (whether alone or in combination with any termination of employment or other event); and (y) shall contain the Company’s standard vesting schedule which is set forth on Part 4.2(b) of the Company or any of its SubsidiariesDisclosure Schedule);
(iii) except as required to give effect to anything set forth in contemplation Section 5.3(b) of the Closingthis Agreement, amend or waive any of its or its Subsidiaries’ Organizational Documentsrights under, or accelerate the vesting under, any provision of the Company Equity Plans or any provision of any Contract evidencing any outstanding Company Equity Award or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract, except as may be required by applicable Legal Requirements or by the applicable Company Equity Plan as in effect as of the date of this Agreement;
(iv) amend or permit the adoption of any amendment to the certificate of incorporation, bylaws or other organizational documents of any of the Acquired Corporations;
(A) acquire any equity interest or other interest in any other Entity; (B) form any Subsidiary; or (C) effect or be become a party to any merger, consolidation, plan of arrangement, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, issuance of bonus shares, division or subdivision of shares, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”)transaction;
(vi) make or authorize any individual capital expenditure that exceeds $1,000,000 or that, when added to all other than as required by applicable Law or capital expenditures made on behalf of the terms of any Company Benefit Plan as in effect on Acquired Corporations since the date of this Agreement, exceeds $7,000,000;
(vii) except as set forth in Part 4.2(b)(vii) of the Company Disclosure Schedule: (A) adopt, terminate, establish or (i) enter into any Company Benefit PlanContract that would have been a Significant Contract pursuant to Sections 2.10(a)(v), 2.10(a)(vi), or 2.10(a)(xii) (such Contracts collectively, the “Specified Significant Contracts”) had it been entered into prior to the date of this Agreement; (ii) other than in the ordinary course of business and consistent with past practice, enter into any Contract with a Distribution Provider; and (iii) other than in the ordinary course of business and consistent with past practice, enter into any Contract that would have been a Significant Contract (other than Specified Significant Contract) had it been entered into prior to the date of this Agreement; (B) cause amend, modify or permit terminate any Company Benefit Plan to be amended Significant Contract (other than any User Agreement or privacy policy in any material respectthe ordinary course of business and consistent with past practice); (C) cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value in excess of $100,000; or (D) waive or relinquish, abandon or allow to lapse any material right or asset, including any such Intellectual Property Rights;
(viii) acquire, lease or license any right or other asset from any other Person or sell or otherwise dispose of, or lease or license any right or other asset to any other Person (except, in each case, for assets acquired, leased, licensed or disposed of by the Company in the ordinary course of business and consistent with past practices);
(ix) make any pledge of any of its material assets or permit any of its material assets to become subject to any Encumbrances, except for Encumbrances that do not materially detract from the value of such assets or materially impair the operations of any of the Acquired Corporations;
(x) (A) make any loans, advances or capital contributions to or investments in any Person (other than routine travel and business expense advances made to directors or officers or other Company Associates in the ordinary course of business), or (B) except in the ordinary course of business and consistent with past practices under the Company’s Existing Credit Facilities, incur or guarantee any indebtedness;
(xi) (A) enter into any collective bargaining agreement; or (B) establish, adopt, enter into or amend any Company Employee Plan or Company Employee Agreement with Key Employees, pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation (including equity-based compensation, whether payable in stock, cash or other property) or remuneration payable to, any of its directors, directors or any of its officers or employeesother Company Associates (except that the Company: (i) if the Closing Date occurs on or after April 1, 2016, may provide routine salary increases to employees other than increases in base salary and annual cash bonus opportunities and payments made Key Employees in the Ordinary Course ordinary course of Business business and in accordance with past practices in connection with the Company’s customary employee review process; provided that no individual employee’s salary shall increase by more than the amounts set forth on Part 4.2(b)(xi) of the Company Disclosure Schedule; (ii) may amend the Company Employee Plans to the extent required by applicable Legal Requirements; and (iii) may make customary bonus payments consistent with past practice and which do not exceed, practices in accordance with bonus plans existing as of the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change date of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditionedthis Agreement);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter intohire or promote any employee to the level of a Key Employee, materially amend or terminate any Company Material Contractexcept in order to fill a position vacated after the date of this Agreement;
(xiii) other than as required by Law concurrent changes in GAAP or GAAPSEC rules and regulations, change any of its methods of accounting or accounting practices in any respect;
(A) fail to file any Acquired Corporation Return when due (after giving effect to any properly obtained extensions of time in which to make such filings), (B) prepare or file any Acquired Corporation Return inconsistent with past practice or, on any such Acquired Corporation Return, take any action to position, make, change accounting policies or proceduresrescind any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Acquired Corporation Returns in prior periods, or (C) settle or compromise any Tax liability or refund, file any amended Acquired Corporation Return, or waive or extend the statute of limitations in respect of Taxes;
(xiv) initiate or settle any Legal Proceeding
(xv) commence any Legal Proceeding, except with respect to routine collection matters in the ordinary course of business and consistent with past practices;
(xvi) settle any Legal Proceeding or other material claim, except pursuant to a settlement that does not involve any liability or obligation on the part of any Acquired Corporation or involves only the payment of monies by the Acquired Corporations of not more than $500,000 in the aggregate for all such settlements;
(xvii) enter into any Contract covering any Company Associate, or, other than payments pursuant to contracts identified in Part 2.16(m) of the Company Disclosure Schedule, make any payment to any Company Associate, that, considered individually or amend a Contract that considered collectively with any other such Contracts or payments, will, or would reasonably be expected to prevent or materially impedeto, interfere with, hinder or delay be characterized as a “parachute payment” within the consummation meaning of Section 280G(b)(2) of the Contemplated TransactionsCode or give rise directly or indirectly to the payment of any amount that would not be deductible pursuant to Section 162(m) of the Code (or any comparable provision under U.S. state or local or non-U.S. Tax Legal Requirements);
(xviii) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the merger set forth in Section 6 not being satisfied;
(xix) fail to take any actions in order to maintain in full force and effect any Money Transmitter License required to continue to operate its business as currently operated;
(xx) except as set forth in Part 4.2(b)(xx) of the Company Disclosure Schedule, enter into any Contracts with Distribution Providers or any other Person to provide Company Services in any country in which any of the Acquired Corporations are not currently conducting business;
(xxi) cancel any insurance policies identified in Part 2.18 of the Company Disclosure Schedule or reduce the amount of any insurance coverage provided by such insurance policies; or
(xvixxii) agree, resolve agree or commit to do take any of the foregoingactions described in clauses “(i)” through “(xxi)” of this Section 4.2(b).
(c) Nothing During the Pre-Closing Period, (i) the Company shall promptly notify Parent in writing of: (x) any Stockholder Litigation; and (y) any fact, event or circumstance known to it that would reasonably be expected, individually or taken together with all other existing facts, events and circumstances known to it, to result in the failure of any of the conditions set forth in Section 6 to be satisfied; and (ii) Parent shall promptly notify the Company in writing of any fact, event or circumstance known to it that would reasonably be expected, individually or taken together with all other existing facts, events and circumstances known to it, to result in the failure of any of the conditions set forth in Section 7 to be satisfied; provided, however, that that no notification given by any party pursuant to this Section 4.2(c) shall limit or otherwise affect any of the representations, warranties, covenants, obligations or conditions contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 1 contract
Samples: Merger Agreement (XOOM Corp)
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable LawLaw or unless MTS shall otherwise consent in writing, during the Pre-Closing Period, the Company and its Subsidiary shall conduct their business and operations: (ivi) in the Ordinary Course of Business subject to and without derogating from any of the covenants of the Company and its Subsidiary set forth in Section 4.2(b), provided that during any period of full or partial suspension of operations related to the coronavirus (COVID-19) pandemic, the Company and its Subsidiary may, in connection with the COVID-19 coronavirus (COVID-19) pandemic, to the extent take such actions as are reasonably necessary, : (Ax) to protect the health and safety of the Company’s their employees and other individuals having business dealings with them; or any of its Subsidiaries’ employees, (By) to respond to third third-party supply or service disruptions caused by the COVID-19 pandemic or coronavirus (CCOVID-19) as required by pandemic, provided further that following any applicable Lawsuch suspension, directive or guideline from any Governmental Body arising out of, or otherwise related to, to the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: each of extent that the Company and or its Subsidiaries shall conduct Subsidiary took any actions pursuant to the immediately preceding proviso that caused deviations from its business and operations being conducted in the Ordinary Course of Business consistent with past practice, to resume conducting its business in the Ordinary Course of Business consistent with past practice in all material respects as soon as reasonably practicable; and (ii) in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except Except: (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) for entering into and consummating customary agreements with respect to the Closing Financing after receiving comments from MTS to such agreements (as set forth in Section 5.20 below), which consent shall not be unreasonably withheld, delayed or conditioned, (iv) as required by applicable Law or (ivv) with the prior written consent of Parent MTS (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company and its Subsidiary shall not, nor shall it cause or permit any of its Subsidiaries to, not do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its share capital stock or make any other actual, constructive or deemed distribution in respect of the Company Capital Stock, or directly or indirectly acquire, or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its share capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreementtheir current terms);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect to: (A) any share capital stock or other security of the Company or any of its Subsidiaries Subsidiary (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options, the issuance of the Advisor Warrant and issuance of Company Common Stock upon valid exercise thereof, the conversion of Company Preferred A Stock, the issuance of Company Preferred A-1 Stock to satisfy the Investor Commitment Fee and the issuance of Company Preferred B Stock to the Investor in connection with the Closing Financing); (B) any option, warrant or right to acquire any share capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Sharesproviders; or (C) any instrument convertible into or exchangeable for any share capital stock or other security of the Company or any of its SubsidiariesSubsidiary;
(iii) except as required to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational DocumentsDocuments (other than Articles of Amendment as contemplated in Section 5.18), or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) propose to adopt a plan of merger, consolidation, restructuring, recapitalization or other reorganization of the Company or its Subsidiary, or elect or appoint any new directors or executive officers of the Company or its Subsidiaries, except for the appointment of one additional director as communicated to MTS and except for the transactions contemplated by this Agreement and actions and resolutions adopted in the course of its implementation;
(v) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture venture, strategic alliance or partnership with any other Entity;
(vi) acquire or agree to acquire (by merger, consolidation or acquisition of stock or assets or by any other manner) (1) any business or other Person or (2) any assets that are material, individually or in the aggregate, to the Company and its Subsidiary; or (3) other than in the Ordinary Course of Business, sell, lease (as lessor), license or otherwise dispose of or subject to any Encumbrance any properties or assets of the Company or its Subsidiary, which are material to the Company or Subsidiary, except for purchases of inventory, services or supplies in the Ordinary Course of Business;
(i) (A) lend money to any Person (except for the advancement of expenses reasonable advances to employees, directors employees and consultants for travel and other reasonable business related expenses in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, or (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvi) agree, resolve or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 1 contract
Samples: Merger Agreement (Mer Telemanagement Solutions LTD)
Operation of the Company’s Business. (a) Except From and after the date hereof and prior to the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1 (the “Termination Date”), and except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as may be required by applicable Law, (ivii) in connection with the COVID-19 pandemic, to the extent reasonably necessary, consent in writing (Aincluding by email) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), during (iii) as may be required or expressly permitted by this Agreement or (iv) as disclosed in Section 5.1 of the Pre-Closing Period: each Disclosure Schedule, the Company covenants and agrees with the Parent that the business of the Company and its Subsidiaries shall conduct its business and operations be conducted in the Ordinary Course ordinary course of Business business and in compliance in all material respects with all applicable Laws and that the requirements Company and its Subsidiaries shall use their respective commercially reasonable efforts to preserve their tangible and intangible assets and maintain their present business relationships and goodwill with their respective officers, key employees, key customers, key suppliers and other key business relations; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of all Contracts that Section 5.1(b) shall be deemed a breach of this Section 5.1(a) unless such action would constitute Company Material Contractsa breach of such other provision.
(b) Except Subject to the exceptions set forth in clauses (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or through (iv) of Section 5.1(a), the Company agrees with the Parent that between the date hereof and the earlier of the Effective Time and the Termination Date, without the prior written consent (including by email) of the Parent (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), at all times during the Pre-Closing Period, the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any of the followingCompany:
(i) shall not, and shall cause its Subsidiaries not to, adopt any amendments to its certificate of incorporation or by-laws or similar applicable organization documents;
(ii) shall not, and shall cause its Subsidiaries not to, declare, accrueauthorize, set aside or pay any dividend dividends on or make any distribution with respect to its outstanding shares of capital stock or other distribution equity securities or with respect to any Company Equity Securities (whether in respect cash, assets, stock, other securities or other property), except for dividends or distributions by Subsidiaries in the ordinary course of business;
(iii) shall not, and shall cause its Subsidiaries not to, split, combine or reclassify or issue, grant, sell, transfer, encumber or otherwise dispose of, or authorize or propose the issuance, grant, sale, transfer, encumbrance or other disposition of, any shares of its capital stock or repurchaseother equity securities or any Company Equity Securities, except for (A) issuances of Common Stock as required to be issued upon exercise or settlement of vested Company Equity Awards under any Company Stock Plan and on the terms in effect on the date hereof, (B) in connection with the ESPP to the extent permitted by Section 2.6 and (C) encumbrances that are restrictions on transfer imposed by applicable securities Laws;
(iv) shall not, and shall cause its Subsidiaries not to, purchase, redeem or otherwise reacquireacquire, directly or indirectlyoffer to purchase, redeem or otherwise acquire, any shares of its capital stock or any other of its securities (except or any Company Equity Securities, except, in each case, in connection with the payment exercise and settlement of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted outstanding vested Company Equity Awards under the Company Plan in accordance with Stock Plans and on the terms of such award in effect on the date hereof;
(v) shall not, and shall cause its Subsidiaries not to, incur, assume, guarantee, amend, modify, refinance, prepay, redeem, repurchase or become obligated to do any of this Agreementforegoing with respect to any Indebtedness except for (A) transactions among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, (B) borrowings under the Credit Agreement in the ordinary course of business consistent with past practice or to finance acquisitions permitted by clause (viii) below, (C) the incurrence of Indebtedness by any Subsidiary of the Company of the type described in clause (d) of the definition thereof in the ordinary course of business and (D) the incurrence of Indebtedness that does not exceed $15,000,000 in aggregate principal amount outstanding at any time (so long as all such Indebtedness is prepayable without premium, penalty or other cost and excluding any Indebtedness permitted by clauses (A), (B) or (C) above);
(iivi) except in the ordinary course of business, shall not, and shall cause its Subsidiaries not to, (A) make any material change in any method of Tax or financial accounting or make or change any material Tax election other than changes required by GAAP or applicable Law or regulatory requirements with respect thereto or (B) settle or compromise any material income Tax liability for an amount materially in excess of amounts reserved;
(vii) shall not, and shall cause its Subsidiaries not to, (A) other than in the ordinary course of business or as required by applicable Law, adopt, amend, modify or terminate any Employee Benefit Plan or any plan, program, arrangement, practice or agreement that would be an Employee Benefit Plan if it were in effect on the date hereof, (B) enter into any collective bargaining agreement with any labor organization or union, (C) other than (I) in the ordinary course of business, (II) with respect to new hires or promotions, in each case of employees who are not directors, officers or “principals”, or (III) as required by applicable Law, increase the rate of compensation or other benefits, or enter into or provide any accelerated vesting, change-in-control, severance, retention or other similar arrangement with or benefit to, any current or former employee of the Company or any of its Subsidiaries who is not a director, officer or “principal” or (D) other than (I) as required by applicable Law or (II) with respect to new hires or promotions of directors, officers or “principals”, increase the rate of compensation or other benefits, or enter into or provide any accelerated vesting, change in control, severance, retention or other similar arrangement with or benefit to, any current or former director, officer or “principal” of the Company or any of its Subsidiaries; provided, however, in the case of each of clauses (A) through (D), that the Company or any of its Subsidiaries may (1) take any such action to the extent required under any Contracts or Employee Benefit Plans in effect as of the date hereof and (2) amend any Employee Benefit Plan if the cost to the Company and its Subsidiaries of providing benefits thereunder is not materially increased, and no action by an Excluded Subsidiary which would otherwise be a breach of this Section 5.1(b)(vii) shall be a breach of this Section 5.1(b)(vii) so long as such action was not taken at the direction of the Company;
(viii) other than for the account of Clients pursuant to Investment Management Services provided in the ordinary course of business, shall not, and shall cause its Subsidiaries not to, (A) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any property or assets of any Person (including by engaging in any “management company buy-out”) except for (I) “management company buy-outs” with up-front consideration (i.e., consideration excluding any earn-outs or other contingent or deferred consideration) not in excess of $50,000,000 in the aggregate and (II) other acquisitions with a value not in excess of $30,000,000 in the aggregate (and all such acquisitions shall be made on terms reasonably consistent with past practice and must also be Permitted Acquisitions), (B) make any investment in another entity (other than an entity that is a wholly owned Subsidiary of the Company as of the date hereof and other than incorporation of a wholly owned Subsidiary of the Company) with a value in excess of $10,000,000 in the aggregate, (C) sell, issuelease, grantlicense, pledge or otherwise dispose of or encumber or authorize subject to any of the foregoing with respect to: Lien (Aother than a Permitted Lien) any capital stock or other security material assets of the Company or any of its Subsidiaries (except except, in the case of the immediately preceding subclauses (A) and (C), for shares acquisitions or dispositions pursuant to any Contracts in effect as of outstanding Company Common Stock issued upon the valid exercise date hereof and which are disclosed in Section 5.1 of Company Optionsthe Disclosure Schedule, and solely in the case of the immediately preceding subclause (C); , for (Bw) dispositions of any option, warrant or right to acquire any capital stock Subsidiary or any other securityasset sale of all or substantially all of the assets of any Subsidiary, other in either case, so long as such Subsidiary does not have annual revenues in 2012 of more than option grants or restricted stock unit awards granted $3,000,000 (with the aggregate amount of all dispositions pursuant to employees this clause (w) limited to Subsidiaries with an aggregate amount of annual revenues in 2012 of not more than $10,000,000), (x) sales and service providers in the Ordinary Course non-exclusive licenses of Business which are included in the calculation products and services of the Company Outstanding Shares; and its Subsidiaries in the ordinary course of business, (y) dispositions of obsolete or worthless assets (including inactive Subsidiaries) and (z) transfers among the Company and its wholly owned Subsidiaries (other than any “management company buy-out”), (D) make any loans or advances to any Person (other than the Company or any wholly owned Subsidiary and advances to employees, “principals” and “management companies” in the ordinary course of business) or (CE) any instrument convertible into other than this Agreement or exchangeable for any capital stock in connection with the transactions contemplated hereby, adopt a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other security reorganization;
(ix) shall not, and shall cause its Subsidiaries not to, (A) cancel, materially modify, terminate or grant a waiver of any material rights under any Contract with any broker, finder, financial advisor, investment banker or other similar Person with respect to the transactions contemplated by this Agreement, any “management agreement” or any Material Contract in any respect in a manner which is materially adverse to the Company or any of its Subsidiaries;
(iii) except , other than cancellations, modifications, terminations or waivers of “management agreements” in the ordinary course of business consistent with the grant of authority to the Company’s Executive Management Committee in effect as required to give effect to anything in contemplation of the Closing, amend any date hereof or of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants Material Contracts in the Ordinary Course ordinary course of Business)business, (B) incur enter into a new Contract that (x) is a Contract with any broker, finder, financial advisor, investment banker or guarantee other similar Person with respect to the transactions contemplated by this Agreement, is a “management agreement” or would be a Material Contract if in existence as of the date hereof, other than Material Contracts entered into in the ordinary course of business, or (y) contains, unless required by applicable Law, a change in control provision in favor of the other party or parties thereto or would otherwise require a material payment to or give rise to any indebtedness for borrowed money, material rights to such other party or parties in connection with the transactions contemplated hereby or (C) guarantee waive, release, cancel, convey, encumber or otherwise assign any debt securities material rights or claims under any such Material Contract or new Contract of othersthe type set forth in clause (B)(x), other than in the ordinary course of business;
(x) shall not, and shall cause its Subsidiaries not to, merge or consolidate the Company or any of its Subsidiaries with any Person (D) other than the incurrence Merger and other than such transactions solely among wholly owned Subsidiaries of the Company);
(xi) shall not, and shall cause its Subsidiaries not to, make or payment of any Transaction Expenses, agree to make any capital expenditure expenditure, capital additions or capital improvements or enter into any agreements providing for any such capital expenditures, capital additions or capital improvements that exceed, in excess of the budgeted capital expenditure amounts aggregate, $7,500,000, other than those expenditures set forth in the Company operating Company’s 2013 capital expenditure budget delivered made available to the Parent concurrently with prior to the execution of this Agreement (the “Company Budget”)date hereof;
(vixii) other than shall not, and shall cause its Subsidiaries not to, commence any Action or compromise, settle or come to an arrangement regarding any pending or threatened Action, except for (A) Actions commenced in the ordinary course of business and (B) compromises, settlements and arrangements entered into in the ordinary course of business and which do not grant any material injunctive or equitable relief against the Company or any of its Subsidiaries; provided, however, that no action by an Excluded Subsidiary which would otherwise be a breach of this Section 5.1(b)(xii) shall be a breach of this Section 5.1(b)(xii) so long as such action was not taken at the direction of the Company;
(xiii) shall not, and shall cause its Subsidiaries not to, enter into, amend or modify any transaction or arrangement of the type that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(xiv) shall not, and shall cause its Subsidiaries not to, enter into any line of business materially unrelated to the businesses conducted by applicable Law the Company and its Subsidiaries as of the date hereof;
(xv) shall not, and shall cause its Subsidiaries not to, fail to maintain its existing insurance policies in full force and effect consistent with past practice unless such policies are replaced with comparable policies; and
(xvi) shall not, and shall cause its Subsidiaries not to, agree or make a binding commitment to take any of the terms of foregoing actions.
(c) With respect to any Company Benefit Plan Permitted Target (as defined in the Debt Commitment Letter as in effect on the date of this Agreement: (Ahereof) adopt, terminate, establish acquisition consummated on or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan after the date hereof and prior to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount completion of the wagesMarketing Period, salarythe Company shall use its commercially reasonable efforts to seek to provide the Parent with any third-party due diligence reports prepared in connection with such acquisition, commissionsthe provision of any such third-party due diligence reports to the Parent being contingent upon the Parent executing any agreements required by the preparers of such reports (including any required non-reliance letters) and that the provision of such reports to the Parent would not (i) be prohibited by applicable Law, benefits (ii) breach any attorney-client privilege or other compensation (iii) breach a Contract to which the Company or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in Subsidiaries (including the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (Dacquired company) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvi) agree, resolve or commit to do any of the foregoingare bound.
(cd) Nothing contained in this Agreement shall give Parentthe Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company or its Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business and its Subsidiaries’ respective operations. Notwithstanding anything .
(e) The Parent agrees with the Company, on behalf of itself and its Subsidiaries and Control Affiliates, that, from and after the date hereof and prior to the contrary set forth in this AgreementEffective Time (or, no consent of if earlier, the Termination Date), the Parent shall be required not, and shall not permit any of its Subsidiaries or Control Affiliates to, take or agree to take any action (including entering into agreements with respect to any matter set forth acquisitions, mergers, consolidations or business combinations) that would reasonably be expected to result in, individually or in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Lawsaggregate, a Parent Material Adverse Effect.
Appears in 1 contract
Samples: Merger Agreement (National Financial Partners Corp)
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: (i) the Company shall ensure that each of the Company and its Subsidiaries shall conduct Acquired Corporations conducts its business and operations in the Ordinary Course of Business ordinary course and in compliance in all material respects accordance with past practices (including with respect to closing the Company’s books at the end of each calendar month); (ii) the Company shall use commercially reasonable efforts to ensure that each of the Acquired Corporations preserves intact its current business organization, keeps available the services of its current officers and other employees and maintains its relations and goodwill with all applicable Laws suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the requirements respective Acquired Corporations and with all Governmental Bodies; (iii) the Company shall promptly notify Parent of: (A) any claim asserted by any Governmental Body; (B) any claim asserted in writing by any Person other than a Governmental Body; (C) any Legal Proceeding commenced; or (D) any Legal Proceeding, to the knowledge of all Contracts the Company, threatened, in the case of clauses “(A)” through “(D)” against, relating to, involving or otherwise affecting any of the Acquired Corporations that constitute relates to any of the Contemplated Transactions; and (iv) the Company Material Contractsshall: (A) to the extent practicable, provide Parent with reasonable advance notice of each material meeting, hearing, conference, filing or discussion to which it is a party or is otherwise involved relating to any of the Specified Proceedings; (B) consult with Parent prior to making any material decision relating to any of the Specific Proceedings; and (C) promptly notify Parent of any material development relating to any of the Specified Proceedings.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during During the Pre-Closing Period, the Company shall notnot (without the prior written consent of Parent, nor which consent shall it cause or permit any of its Subsidiaries tonot be unreasonably withheld), do any and the Company shall ensure that each of the following:other Acquired Corporations does not (without the prior written consent of Parent, which consent shall not be unreasonably withheld):
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock share capital, or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its share capital stock or other securities (except securities, other than to repurchase, in connection full compliance with the payment of the exercise price and/or withholding Taxes incurred applicable Legal Requirements, restricted Company Ordinary Shares held by an employee upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms termination of such award in effect on the date of this Agreement)employee’s employment;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any of the foregoing with respect tosale, issuance or grant of: (A) any share capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options)security; (B) any option, call, warrant or right to acquire any share capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any share capital stock or other security (except that: (1) the Company may issue Company Ordinary Shares: (x) upon the valid exercise of Company Options outstanding as of the date of this Agreement; and (y) pursuant to the Company ESPP; and (2) the Company may, in the ordinary course of business and consistent with past practices, grant Company Options to purchase no more than 100,000 (200,000 in the event the Effective Time shall not have occurred by September 15, 2005, but in no event more than 100,000 prior to September 15, 2005) Company Ordinary Shares in the aggregate to non-officer employees of the Company and newly-hired non-officer employees, provided that such Company Options: (x) shall have an exercise price equal to the fair market value of the Company Ordinary Shares covered by such options determined as of the time of the grant of such options; (y) shall not contain any “single-trigger,” “double-trigger” or other vesting acceleration provisions and shall not be subject to the Change in Control Resolutions or otherwise be subject to acceleration (in whole or in part) as a result of the Merger or any of its Subsidiariesthe other Contemplated Transactions (whether alone or in combination with any termination of employment or other event); and (z) shall contain the Company’s standard vesting schedule);
(iii) amend or waive any of its rights under, or accelerate the vesting under, any provision of any of the Company Option Plans or any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract or any of the terms of the Change in Control Resolutions, except as required by applicable Legal Requirements;
(iv) amend or permit the adoption of any amendment to give effect to anything in contemplation its Articles of Association or Memorandum of Association or the charter or other organizational documents of the Closing, amend other Acquired Corporations;
(A) acquire any of its equity interest or its Subsidiaries’ Organizational Documents, other interest in any other Entity; (B) form any Subsidiary; or (C) effect or be become a party to any merger, consolidation, plan of arrangement, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, issuance of bonus shares, division or subdivision of shares, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivvi) form make any Subsidiary or acquire capital expenditure (except that the Acquired Corporations may make any equity interest or capital expenditure that: (A) when added to all other interest capital expenditures made on behalf of the Acquired Corporations during the three-month period following the date of this Agreement, does not exceed US$2,000,000 in any the aggregate; and (B) when added to all other Entity or enter into a joint venture with any other Entitycapital expenditures made on behalf of the Acquired Corporations since the date of this Agreement, does not exceed US$4,000,000 in the aggregate);
(vii) except as set forth in Part 4.2(b)(vii) of the Company Disclosure Schedule: (A) enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any Significant Contract of the type described in Sections 2.10(a)(i), 2.10(a)(vi), 2.10(a)(vii), 2.10(a)(x), 2.10(a)(xi), 2.10(a)(xiv), 2.10(a)(xv) and 2.10(a)(xvi); (B) other than in the ordinary course of business and consistent with past practices, enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any Significant Contract of the type described in Sections 2.10(a)(ii), 2.10(a)(iii), 2.10(a)(iv), 2.10(a)(v), 2.10(a)(viii), 2.10(a)(ix), 2.10(a)(xii), 2.10(a)(xiii) and 2.10(a)(xvii); or (C) amend in any material respect or terminate, or waive any material right or remedy under, any Company Contract that constitutes a Significant Contract;
(viii) acquire, lease or license any right or other asset from any other Person or sell or otherwise dispose of, or lease or license, any right or other asset to any other Person (except in each case for assets acquired, leased, licensed or disposed of by the Company in the ordinary course of business and consistent with past practices);
(ix) make any pledge of any of its material assets or permit any of its material assets to become subject to any Encumbrances, except for Encumbrances that do not materially detract from the value of such assets or materially impair the operations of any of the Acquired Corporations;
(x) lend money to any Person (except for the advancement of expenses other than routine travel and business expense advances made to employees, directors and consultants or officers or other employees in the Ordinary Course ordinary course of Businessbusiness), (B) or, except in the ordinary course of business and consistent with past practices, incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”)indebtedness;
(vixi) other than as required by applicable Law establish, adopt, enter into or the terms of amend any Company Benefit Employee Plan as or Company Employee Agreement, distribute any employee handbook to the Company’s employees in effect on the date of this Agreement: (A) adoptIsrael, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation (including equity-based compensation, whether payable in stock, cash or other property) or remuneration payable to, any of its directors, directors or any of its officers or employees, other than employees (except that the Company: (A) may provide routine salary increases in base salary and annual cash bonus opportunities and payments made to non-officer employees in the Ordinary Course ordinary course of Business business and in accordance with past practices in connection with the Company’s customary employee review process; (B) may amend the Company Employee Plans to the extent required by applicable law; (C) may make customary bonus payments and profit sharing payments consistent with past practice practices in accordance with bonus and which do not exceed, in profit sharing plans existing on the aggregate, the amounts specifically budgeted therefore in the Company Budgetdate of this Agreement); (D) increase may comply with the severance or change Retention Plan, the 2005 Performance Incentive Plan and grant the employee bonus set forth in Part 4.2(b)(xi) of control benefits offered to any current or new employees, directors or consultantsthe Company Disclosure Schedule); and (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) may enter into any material transaction other than an employment agreement reflecting the Nxxxxxxxxx Parent Employment Arrangement referred to in Part 4.2(b)(xi) of the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of TaxesDisclosure Schedule;
(xii) enter intopromote any employee to the level of Vice President or above or change any employee’s title to Vice President or above, materially amend except in order to fill a position vacated after the date of this Agreement; or terminate hire any Company Material Contractemployee at the level of Vice President or above or with an annual base salary in excess of US$150,000, NIS 645,000 or £75,000;
(xiii) other than as required by Law concurrent changes in GAAP or GAAPSEC rules and regulations, take change any action to change of its methods of accounting policies or proceduresaccounting practices in any respect;
(xiv) initiate make any material Tax election, request any Tax pre-ruling (other than the Israeli Tax Rulings), request any material Tax ruling or settle apply for any Legal Proceedingadditional incentives under the Israeli Investment Encouragement Law;
(xv) commence any Legal Proceeding, except with respect to routine collection matters in the ordinary course of business and consistent with past practices;
(xvi) settle any Legal Proceeding (including the Specified Proceedings) or other material claim, except pursuant to a settlement that does not involve any liability or obligation on the part of any Acquired Corporation or involves only the payment of monies by the Acquired Corporations of not more than US$350,000 in the aggregate for all such settlements;
(xvii) enter into any Contract covering any Company Associate, or, other than payments pursuant to contracts identified in Part 2.16(l) of the Company Disclosure Schedule and in Part 4.2(b)(xvii) of the Company Disclosure Schedule, make any payment to any Company Associate, that, considered individually or amend considered collectively with any other such Contracts or payments, will, or would reasonably be expected to, be characterized as a Contract “parachute payment” within the meaning of Section 280G(b)(2) of the Code or give rise directly or indirectly to the payment of any amount that would not be deductible pursuant to Section 162(m) of the Code (or any comparable provision under U.S. state or local or non-U.S. Tax Legal Requirements);
(xviii) except pursuant to arrangements that are in effect as of the date of this Agreement, apply for funding, support, benefits or incentives from the Office of the Chief Scientist of the Ministry of Trade, Industry and Labor of the State of Israel or from any other Governmental Body; or
(xix) agree or commit to take any of the actions described in clauses “(i)” through “(xviii)” of this Section 4.2(b).
(c) During the Pre-Closing Period, the Company shall promptly notify Parent in writing of: (i) the discovery by the Company of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if: (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Company; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Section 6 impossible or unlikely or that has had or would reasonably be expected to prevent have or materially impede, interfere with, hinder or delay result in a Company Material Adverse Effect. Without limiting the consummation of the Contemplated Transactions; or
(xvi) agree, resolve or commit to do any generality of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercisepromptly advise Parent in writing of any Legal Proceeding or material claim threatened, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required commenced or asserted against or with respect to any matter set forth of the Acquired Corporations. No notification given to Parent pursuant to this Section 4.2(c) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable LawsAgreement.
Appears in 1 contract
Samples: Merger Agreement (Ebay Inc)
Operation of the Company’s Business. (a) Except Except: (i) as expressly required or permitted by this Agreement; (ii) as required by applicable Legal Requirements; (iii) as set forth in Section Part 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by ; or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall will not be unreasonably withheld, delayed conditioned or conditioneddelayed), during the Pre-Closing Period, the Company shall: (A) ensure that each of the Company and its Subsidiaries shall conduct Acquired Corporations conducts its business and operations (1) in the Ordinary Course of Business ordinary course and consistent with past practices and (2) in material compliance in all material respects with all applicable Laws Legal Requirements and the requirements of all Contracts that constitute Company Material Contracts; (B) ensure that each of the Acquired Corporations uses commercially reasonable efforts to preserve intact its material assets, properties, Contracts and Consents and 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, licensors, licensees, regulators and other Persons having business relationships with such Acquired Corporation; and (C) keep in full force and effect (with the same scope and limits of coverage) all insurance policies in effect as of the Agreement Date covering all material assets of the Acquired Corporations.
(b) Except Without limiting Section 4.2(a), except: (i) as expressly required or permitted by this Agreement, ; (ii) as required by applicable Legal Requirements; (iii) as set forth in Section Part 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law ; or (iv) with the prior written consent of as consented to in writing by Parent (which consent shall will not be unreasonably withheld, delayed conditioned or conditioneddelayed), at all times during the Pre-Closing Period, the Company shall not, nor and shall it cause or permit any of its Subsidiaries to, do not authorize any of the followingother Acquired Corporations to:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock or repurchase, redeem or otherwise reacquire, directly or indirectly, any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under amend the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)Charter Documents;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect to: (A) directly or indirectly issue, sell or grant any capital stock shares of any class of securities or other security Equity Interests of the Company or any of its Subsidiaries (except for shares of outstanding the “Company Common Stock issued upon the valid exercise of Company OptionsSecurities”); (B) , or any optioncall, right, warrant or right option to acquire any capital stock Company Securities, or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock Company Securities, provided that the Company may (1) issue shares of Company Common Stock pursuant to the ESPP or upon the exercise or settlement of Company Warrants, Company Options or Company Restricted Stock Awards that are outstanding on the Agreement Date in accordance with their terms, and (2) adopt a shareholder rights plan in response to an Acquisition Proposal and issue rights to Company stockholders in connection therewith; provided, that any such shareholder rights plan exempts (x) Parent and its Affiliates from being deemed an “acquiring person” (or any similar term) thereunder and (y) the Merger and any other security acquisition by Parent or Merger Sub of any Company Securities from triggering any “flip-over,” “flip-in” or exchange rights provided thereunder; (B) redeem, purchase or otherwise reacquire any outstanding Company Securities, except pursuant to the ESPP or in connection with the exercise or settlement of Company Warrants, Company Options or Company Restricted Stock Awards that are outstanding on the Agreement Date in accordance with their terms; (C) split, combine or reclassify any Company Securities; or (D) except as required by applicable Legal Requirements or as contemplated by the terms of this Agreement, amend or otherwise modify any of the terms of any outstanding Company Option or any of its SubsidiariesCompany Restricted Stock Award;
(iii) except as required to give effect to anything declare, set aside, make or pay any dividend or other distribution, whether payable in contemplation cash, stock, property or otherwise, in respect of the Closing, amend Company Common Stock or any capital stock of any of its the Company’s Subsidiaries;
(iv) form any subsidiary, acquire any Equity Interest, make, by contribution to capital, property transfers, purchase of securities or its Subsidiaries’ Organizational Documentsotherwise, any investment (other than investments in marketable securities and cash equivalents) in any Person other than a wholly-owned Subsidiary in the ordinary course of business and consistent with past practice, or effect or be become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, division or subdivision of shares, consolidation of shares or similar transaction excepttransaction; or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, for the avoidance of doubtdissolution, the Contemplated Transactionsrestructuring, recapitalization or other reorganization;
(ivv) form sell, license, sublicense, pledge, dispose of or lease any Subsidiary or acquire any equity interest right or other interest asset to any Person, except in any other Entity each case for assets: (A) acquired, licensed, sublicensed, leased or enter into a joint venture with any other Entitydisposed of by the Company in the ordinary course of business; or (B) that are not material to the business of the Company;
(Avi) lend money to any Person (except for the advancement of expenses other than advances to employees, directors and consultants its employees in the Ordinary Course ordinary course of Businessbusiness and consistent with past practice);
(vii) incur, guarantee or otherwise become liable for any indebtedness (or enter into a “keep well” or similar agreement), (B) incur including through borrowings under any of the Company’s existing credit facilities, or guarantee issue or sell any indebtedness for borrowed moneydebt securities or options, (C) guarantee warrants, calls or other rights to acquire any debt securities of othersany Acquired Corporation, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth except for debt incurred in the Company operating budget delivered ordinary course of business on commercially reasonable arm’s-length terms (and in any event, subject to Parent concurrently with prepayment without notice, premium or penalty) under letters of credit, lines of credit or other credit facilities or arrangements in effect on the execution of this Agreement (date hereof, which shall not exceed $5,000,000 in the “Company Budget”)aggregate;
(viviii) other than as required by applicable Law (A) enter into, establish, adopt, terminate or amend any Company Employee Plan or the terms of ESPP (or any plan, program or arrangement that would be a Company Benefit Employee Plan as if it were in effect existence on the date of this Agreement: (A) adopt), terminate, establish or enter into any except that the Company Benefit Planmay amend the Company Employee Plans to the extent required by applicable Legal Requirements and may amend the ESPP as and to the extent contemplated hereunder; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation (including equity-based compensation) or remuneration payable to, any of its employees, former employees, consultants, former consultants or directors, officers or employees, other than except that the Company may provide any routine salary increases in base salary and annual cash bonus opportunities and payments made to its employees in the Ordinary Course ordinary course of Business business and consistent with past practice and which do not exceedin connection with the Company’s customary employee review process and may make customary bonus and profit-sharing payments in accordance with plans or arrangements existing on the Agreement Date (to the extent complete and accurate copies of such plans or arrangement have been provided by the Company to Parent); (C) hire any employee at the level of vice president or above or with an annual base salary in excess of $200,000, except (1) for employees hired pursuant to offers of employment outstanding on the Agreement Date or (2) in order to fill a position vacated after the Agreement Date to the extent necessary to fulfill an essential function and only on commercially reasonable terms permitting termination without penalty upon thirty (30) days’ notice or less, or retain any independent contractor, or, except in the aggregateordinary course of business, terminate the amounts specifically budgeted therefore in the Company Budgetemployment or services of any director, officer, employee or consultant; (D) except as required by any Contract in effect on the Agreement Date (a complete and accurate copy of which has been provided by the Company to Parent), grant or pay any change of control, severance, retention or termination compensation or benefits to, or increase in any manner the change of control, severance or change of control termination compensation or benefits offered to of, any current director, officer, employee, consultant or new employees, directors former employee or consultantsconsultant; (E) hire take any (x) officer action to accelerate the vesting or (y) employee whose annual base salary is payment of any compensation or is expected to be more than $250,000 per year or benefit under any Company Employee Plan except as provided in Section 1.6 of this Agreement; (F) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Employee Plan; or (G) induce or attempt to induce, any director, officer, employee or consultant of any Acquired Corporation, whether directly or indirectly, to terminate his or give notice of termination her employment or service to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of BusinessAcquired Corporation;
(ix) acquire make any material asset changes to its methods of accounting or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or propertiesaccounting practices, except in the Ordinary Course of Businessas required by GAAP or SEC rules and regulations;
(x) sellcommence, assignsettle, transfer, license, sublicense compromise or otherwise dispose of resolve any Company IP Legal Proceeding, except: (other than pursuant A) with respect to non-exclusive licenses routine matters in the Ordinary Course ordinary course of Business)business; (B) in such cases where the Company reasonably determines in good faith that the failure to commence suit would result in a material impairment of a valuable aspect of its business; or (C) in connection with a breach of this Agreement;
(xi) (A) make, change or revoke any material Tax electionelection or adopt or change any method of Tax accounting, fail to pay (B) enter into any income “closing agreement” as described in Section 7121 of the Code (or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Returncomparable or similar provisions of applicable Legal Requirements), settle or compromise any income liability with respect to Taxes or other material surrender any claim for a refund of Taxes, (C) file any amended Tax liability Return, or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or D) consent to any extension or waiver of any limitation the limitations period with respect applicable to any claim or assessment for any income or other material Taxes (other than pursuant with respect to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter intomake any capital expenditure other than in the ordinary course of business and to the extent not exceeding $250,000 in the aggregate; provided, materially amend or terminate any Company Material Contractthat no capital expenditures shall be made involving the purchase of real property;
(xiiiA) enter into or terminate (other than expiration in accordance with its terms) any Material Contract or other Contract that would constitute a Material Contract if entered into as required by Law of the date of this Agreement, (B) modify or GAAPamend or renew (other than renewal in accordance with its terms and in the ordinary course of business consistent with past practice), take or waive any action material right or remedy under, any Material Contract; (C) enter into or extend the term or scope of any Contract that explicitly restricts the right or ability of the Company, or any of its Subsidiaries or Affiliates, to change accounting policies compete with any Person, transact business with any other Person or proceduresoperate in any geographic area; (D) enter into any Contract that would be breached by, or require the consent of any Third Party in order to continue in full force following, consummation of the Merger, or (E) enter into any Contract with any stockholder of the Company or Affiliate (other than the Company) of any such stockholder;
(xiv) initiate (A) fail to pay any required filing, prosecution, maintenance, or settle other fees, or otherwise fail to make any Legal Proceedingdocument filings or payments required to maintain any Company IP in full force and effect or to diligently prosecute applications for registration of Company IP; (B) sell, assign, license, sublicense, pledge, impair, abandon, fail to maintain, transfer or otherwise dispose of any right, title or interest of any Acquired Corporation in any Company IP; (C) grant, extend, amend, waive, cancel or modify any rights in or to the Company IP; or (D) divulge, furnish to or make accessible any trade secrets or know-how within Company IP to any Person who is not subject to an enforceable written agreement to maintain the confidentiality of such trade secrets or know-how;
(xv) other than in the ordinary course of business, (A) enter into any new insurance policy (other than an insurance policy replacing an existing policy and containing substantially similar terms as such existing policy), or (B) amend or cancel any insurance policies (except if the canceled policy is replaced by a Contract policy containing substantially similar terms to such canceled policy);
(xvi) approve, adopt, permit or agree to any reduction in the then applicable exercise or conversion price of any Company Warrant or any increase in the number of shares of Company Common Stock issuable upon exercise or conversion thereof;
(xvii) take any action that (A) would reasonably be expected to prevent impose any material delay in the obtaining of, or materially impedesignificantly increase the risk of not obtaining, interfere withany Governmental Authorization necessary to consummate the Merger or the expiration or termination of any applicable waiting period, hinder or delay (B) would be reasonably expected to increase in any material respect the risk of any Governmental Body entering an order, injunction, judgment, decree or ruling (whether temporary, preliminary or permanent) prohibiting or impeding the consummation of the Contemplated TransactionsMerger; or
(xvixviii) agreeauthorize any of, or commit, resolve or commit agree in writing or otherwise to do take any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectlyof, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Lawsforegoing actions.
Appears in 1 contract
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: (i) the Company shall ensure that each of the Company and its Subsidiaries shall conduct Acquired Corporations conducts its business and operations (A) in the Ordinary Course of Business ordinary course and in accordance with past practices and (B) in compliance in all material respects with all applicable Laws material Legal Requirements and the requirements of all Acquired Corporation Contracts that constitute Company Material Contracts; (ii) the Company shall use commercially reasonable efforts to ensure that each of the Acquired Corporations preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Acquired Corporations; (iii) the Company shall keep in full force all insurance policies referred to in Section 2.21; (iv) the Company shall provide all notices required by any Material Contract; (v) the Company shall promptly notify Parent of (A) any notice or other communication from any Person alleging that the Consent of such Person is or may be required in connection with the transactions contemplated by this Agreement, and (B) any Legal Proceeding commenced or threatened in writing against, relating to or involving or otherwise affecting any of the Acquired Corporations; (vi) the Company shall (to the extent requested by Parent) cause its officers to report regularly to Parent concerning the status of the Company's business; and (vii) the Company shall disclose to Parent any interparty administrative patent proceedings including, without limitation, proceedings with respect to any patent interferences or limitations that are commenced or threatened in writing and shall also disclose to Parent any development in discussions or proceedings between the Acquired Corporations and any academic institution that are with respect to any Acquired Corporation Intellectual Property.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during During the Pre-Closing Period, the Company shall notnot (without the prior written consent of Parent), nor and shall it cause or not permit any of its Subsidiaries the other Acquired Corporations to, do any of the following:
(i) declareexcept for (A) the issuance of shares of Company Common Stock (1) upon the valid exercise of Company Options or warrants outstanding as of the date hereof and (2) 55,821 shares of Company Common Stock pursuant to the Company ESPP, accruewhich issuances shall be made by May 1, set aside 2001 and upon such issuances all outstanding offering periods under the Company ESPP shall terminate and no further offering periods shall commence, provided however, if the stockholders of the Company approve an increase of 500,000 shares of Company Common Stock under the Company's ESPP at the Company's Annual Meeting of stockholders on May 22, 2001, the Company shall adopt a new offering period commencing June 1, 2001 which shall continue until March 31, 2002 with an interim purchase date of November 30, 2001 and a final purchase date of March 31, 2002; and (B) grants of Company Options to employees and directors in the ordinary course of business and in amounts and in a manner consistent with past practice, provided that, the aggregate number of shares of Company Common Stock issuable thereunder shall not exceed 200,000; issue, sell, pledge, dispose of, encumber, authorize, or pay any dividend propose the issuance, sale, pledge, disposition, encumbrance or make any other distribution in respect authorization of any shares of its capital stock of any class, or repurchaseany options, redeem warrants, convertible securities or otherwise reacquire, directly or indirectly, other rights of any kind to acquire any shares of its capital stock of, or any other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exerciseownership interest in, settlement or vesting of any award granted under the Company Plan in accordance with the terms or any of such award in effect on the date of this Agreement);
its Subsidiaries; (ii) sell, issue, grant, pledge amend or otherwise dispose propose to amend the Certificate of Incorporation or encumber or authorize any of the foregoing with respect to: (A) any capital stock or other security bylaws of the Company or any of its Subsidiaries (except as otherwise contemplated by the Company's Proxy Statement for the Company's 2001 Annual Meeting, a copy of which has been provided to Parent) or adopt, amend or propose to amend any shareholder rights plan or related rights agreement; (iii) split, combine or reclassify any outstanding shares of outstanding Company Common Stock issued upon the valid exercise Stock, or declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise with respect to shares of Company OptionsCommon Stock, except for cash dividends to shareholders of the Company declared in accordance with existing dividend policy payable to shareholders of record on the record dates consistently used in prior periods and except for the dividend of rights to shareholders of record on April 17, 2001 pursuant to the Company Rights Agreement; (iv) redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire any shares of its capital stock, or (v) authorize or propose or enter into any contract, agreement, commitment or arrangement with respect to any of the matters prohibited by this Section 4.2(b)(i); ;
(A) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, or (B) make any option, warrant or right to acquire any capital stock or any other security, investment in another entity (other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation any of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security Subsidiaries of the Company or other commitments disclosed in Part 2.1(a)(i) of the Company Disclosure Schedule and other than incorporation of a wholly owned Subsidiary); (ii) except in the ordinary course of business and in a manner consistent with past practice sell, pledge, dispose of, or encumber or authorize or propose the sale, pledge, disposition or encumbrance of any assets, except for transactions which do not exceed $100,000 individually and which do not exceed $250,000 in the aggregate; or (iii) authorize, enter into or amend any contract, agreement, commitment or arrangement with respect to any of its Subsidiariesthe matters prohibited by this Section 4.2(b)(ii);
(iii) except as required to give effect to anything in contemplation of the Closingsell, amend any of its or its Subsidiaries’ Organizational Documentstransfer, lease, license, or effect sublicense, mortgage, pledge, dispose of, encumber, grant or be a party otherwise dispose of any material Intellectual Property rights, or amend or modify in any material way any existing agreements with respect to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactionsmaterial Intellectual Property rights;
(iv) form incur any Subsidiary indebtedness for borrowed money or acquire issue any equity interest debt securities or other interest in any other Entity assume, guarantee or enter into a joint venture with any other Entity;
(A) lend money to endorse or otherwise as an accommodation become responsible for, the obligations of any Person (except for obligations of any other Acquired Corporation), or make any loans or advances (other than routine travel advances and loans under the advancement of expenses to employeesCompany's 401(k) Plan), directors and consultants except in the Ordinary Course ordinary course of Business), (B) incur business consistent with past practice and as otherwise permitted under any loan or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make credit agreement to which it is a party; authorize any capital expenditure expenditures which are, in the aggregate, in excess of $100,000 and not reflected in the budgeted Company's capital expenditure amounts budget made available to Parent; or enter into or amend in any material respect any Contract with respect to any of the matters set forth in this Section 4.2(b)(iv);
(v) hire or terminate any employees, independent contractors or consultants, having a total salary or severance package that is individually in excess of $100,000, or that collectively is in excess of $300,000; terminate without cause any employees or consultants where the aggregate of such terminations could result in the acceleration of vesting of options to acquire, in the aggregate, more than 10,000 shares of Company Common Stock; increase the compensation (including, without limitation, bonus) payable or to become payable to its officers or employees, except for previously disclosed officers salary increases, increases in salary or wages of employees who are not officers in the ordinary course of business consistent with past practices, or enter into any employment or severance agreement, except for employee offer letters substantially identical to one of the forms of offer letter included in Part 2.19(l)(iii) of the Company operating budget delivered to Parent concurrently with Disclosure Schedule; or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option (except as contemplated by Section 4.2(b)(i), restricted stock, pension, benefits, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the execution benefit of this Agreement (the “Company Budget”)any current or former directors, officers or employees;
(vi) other than as change, any accounting policies or procedures (including procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable) unless required by applicable Law statutory accounting principles or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for causeGAAP;
(vii) recognize create, incur, or assume any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned)Encumbrance on any material assets other than Permitted Encumbrances;
(viii) (A) enter into any Material Contract, (B) modify, amend or transfer in any material transaction other than respect or terminate any Acquired Corporation Contract that constitutes a Material Contract or waive, release or assign any material rights or claims thereto or thereunder, (C) enter into or extend any lease with respect to real property with any third party, (D) enter into any Acquired Corporation Contract that includes a change of control provision; (E) enter into any Acquired Corporation Contract providing for the payment of royalties in any amount or any Acquired Corporation Contract that provides for in-licensing or (F) modify, amend, transfer or terminate any Acquired Corporation Contract in a manner that could be reasonably expected to detract from the Ordinary Course ability of BusinessParent and the Surviving Corporation to exploit technology of the Acquired Corporations;
(ix) acquire make any material asset Tax election not required to be made prior to the Effective Time or sellsettle or compromise any federal, lease state, local or otherwise irrevocably dispose foreign income tax liability or agree to an extension of any a statute of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Businesslimitations;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of take any Company IP (other than pursuant to non-exclusive licenses action that results in the Ordinary Course acceleration of Business)vesting rights for Company Options;
(xi) make, change or revoke settle any material Tax electionlitigation or waive, fail to pay any income assign or other material Tax as such Tax becomes due and payable, file any amendment making release any material change to any Tax Returnrights or claims except, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course case of Business litigation, any litigation which settlement would not (A) impose either material restrictions on the principal subject matter conduct of which is not Taxesthe business of it or (B) for any individual litigation item settled, exceed $50,000 in cost or value to it. None of the Acquired Corporations shall pay, discharge or satisfy any liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted except in the Ordinary Course ordinary course of Business business consistent with past practice in an amount or value not exceeding $50,000 in any instance or series of not more than seven (7) months), related instances or adopt $100,000 in the aggregate or change any material accounting method in respect accordance with their terms as in effect as of Taxesthe date hereof;
(xii) engage in any transaction, or enter intointo any agreement, materially amend arrangement, or terminate understanding with, directly or indirectly, any director or officer of any of the Acquired Corporations other than (1) those existing as of the date hereof which are listed in the Company Material ContractDisclosure Schedule, and (2) agreements regarding loans made under the Company's 401(k) Plan;
(xiii) take any action which it believes when taken would reasonably be expected to adversely affect or delay in any material respect the ability of any of the parties to obtain any Consent or approval of any Governmental Authority required to consummate the transactions contemplated hereby;
(xiv) other than as required by Law or GAAPpursuant to this Agreement, take any action to change accounting policies or procedurescause the shares of Company Common Stock to cease to be quoted on The Nasdaq Stock Market;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into make any payment of investment banking, financial advisory or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactionsother similar fees; or
(xvi) agree, resolve or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 1 contract
Operation of the Company’s Business. (a) Except During the Pre-Closing Period the Company shall: (i) ensure that the Company and each of its Subsidiaries conducts its business and operations (A) only in the ordinary course and in accordance with past practices, and (B) in material compliance with all applicable Legal Requirements and the requirements of all Company Contracts; (ii) use commercially reasonable efforts to ensure that the Company and each of its Subsidiaries preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the Company or any of its Subsidiaries; (iii) keep in full force and effect (with the same scope and limits of coverage) all insurance policies in effect as set forth in Section 4.2(a) of the date of this Agreement covering all material assets of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, and each of its Subsidiaries; (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessaryrequested by Investor, (A) cause its officers to protect provide updates to Investor concerning the health and safety status of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or businesses; and (v) as may be consented to ensure that all Liquor Licenses required from any Liquor Authorities for the ownership, use, or operation of the businesses or properties now owned or operated by the Company and its Subsidiaries are in writing by Parent (which consent shall not be unreasonably withheldfull force and effect, delayed or conditioned), during the Pre-Closing Period: and that each of the Company and its Subsidiaries shall conduct its business and operations are in the Ordinary Course of Business and in material compliance in all material respects with all of the provisions thereof applicable Laws to it. The Company hereby covenants and agrees that it will not take any action that would adversely impact or otherwise delay the requirements Company in obtaining the approval of all Contracts that constitute any Liquor Authorities to maintain the Liquor Licenses after the Closing required for the ownership, use, or operation of the businesses or properties now owned or operated by the Company Material Contractsand its Subsidiaries or in obtaining temporary or new Liquor Licenses in replacement of such Liquor Licenses.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during During the Pre-Closing Period, the Company shall not, nor and shall it cause or permit any of its Subsidiaries to, do any not to (without the prior written consent of the following:Investor):
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (securities, except repurchases of unvested shares in connection with the payment termination of the exercise price and/or withholding Taxes incurred upon the exercise, settlement employment or vesting of consulting relationship with any award granted under the Company Plan in accordance with employee or consultant pursuant to the terms of such award provided in effect on the date of this Agreement)stock option or purchase agreements;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any the issuance or grant of the foregoing with respect to: (Ai) any capital stock or other security of the Company or any of its Subsidiaries security, (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (Bii) any optionCompany Rights, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (Ciii) any instrument convertible into or exchangeable for any capital stock or other security security, except that the Company shall be permitted (x) to issue Class A Voting Common Stock upon the valid exercise of Company Options outstanding as of the date of this Agreement and set forth in the Company Disclosure Schedule, and (y) to issue shares of Class A Common Stock upon the conversion of shares of the Company’s Class B Voting Common Stock, Class C Voting Common Stock or any of its SubsidiariesClass D Voting Common Stock;
(iii) except as required to give effect to anything in contemplation of the Closing, amend or waive any of its rights under, or accelerate the vesting under (if not automatic by its Subsidiaries’ Organizational terms), any provision of any of the Company’s stock option plans, any provision of any Contract related to any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option or any related Contract;
(iv) amend or permit the adoption of any amendment to the Company Constituent Documents, or effect or be effect, become a party to or authorize any merger, consolidation, share exchange, business combinationAcquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for except as permitted by this Agreement and the avoidance of doubt, the Contemplated TransactionsTBCA;
(ivv) recognize any labor union or enter into any collective bargaining agreement;
(vi) adopt a plan of complete or partial liquidation or dissolution or resolutions providing for or authorizing such a liquidation or a dissolution;
(vii) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(Aviii) make any capital expenditure outside the ordinary course of business or make any single capital expenditure in excess of $25,000; provided, however, that the maximum amount of all capital expenditures made on behalf of the Company and its Subsidiaries, taken as a whole, during the Pre-Closing Period shall not exceed $100,000 in the aggregate;
(ix) except in the ordinary course of business and consistent with past practice, enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any Company Contract, or amend or terminate, or waive or exercise any material right or remedy under, any Company Contract;
(x) acquire, lease or license any right or other asset from any other Person or sell or otherwise dispose of, or lease or license, any right or other asset to any other Person (except in each case for assets acquired, leased, licensed or disposed of by the Company in the ordinary course of business consistent with past practice) or waive, abandon or relinquish any material right;
(xi) lend money to any Person (except for the advancement of expenses to employeesPerson, directors and consultants in the Ordinary Course of Business), (B) or incur or guarantee any indebtedness for borrowed money, Indebtedness (C) guarantee any debt securities except that the Company may make routine borrowings in the ordinary course of others, or (D) other than business and in accordance with past practices under the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess Company’s credit facilities outstanding as of the budgeted capital expenditure amounts date hereof and set forth on the Company Disclosure Schedule (without any amendment or modification thereto) which in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”aggregate does not exceed $25,000);
(vixii) other than as required by applicable Law establish, adopt or the terms of amend any Company Benefit Plan as in effect on the date of this Agreement: (A) adoptor Subsidiary employee plan or collective bargaining agreement, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; officers.
(Exiii) hire any (x) officer or (y) new employee whose having an annual base salary is or is expected to be more than in excess of $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause50,000;
(viixiv) recognize change any labor union of its methods of accounting or labor organization, accounting practices in any respect except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned)generally accepted accounting principles;
(viiixv) make any material Tax election;
(xvi) commence or settle any Legal Proceeding that requires payment by the Company in excess of $30,000;
(xvii) enter into any material transaction or take any other than in material action outside the Ordinary Course ordinary course of Businessbusiness and inconsistent with past practices;
(ixxviii) acquire take or omit to take any material asset action that could, or sellis reasonably likely to, lease or otherwise irrevocably dispose of (A) result in any of its assets representations and warranties set forth in this Agreement or propertiesany certificate delivered in connection with the Closing being or becoming untrue in any material respect at any time at or prior to the Closing, (B) result in any of the conditions to the Closing set forth in Section 6 and Section 7 hereof not being satisfied, or grant (C) breach any Encumbrance with respect to such assets or properties, except in the Ordinary Course provisions of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactionsthis Agreement; or
(xvixix) authorize, agree, resolve commit or commit enter into any Contract to do take any of the foregoing.
actions described in clauses “(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions i)” through “(xviii)” of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws4.2(b).
Appears in 1 contract
Samples: Securities Purchase Agreement (Gordon Biersch Brewery Restaurant Group, Inc.)
Operation of the Company’s Business. (a) Except During the Pre-Closing Period: (i) except (x) as required or otherwise expressly permitted under this Agreement or as required by applicable Legal Requirements, (y) with the written consent of Parent, or (z) as set forth in Section Part 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent Company shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: ensure that each of the Company and its Subsidiaries shall conduct Acquired Corporations conducts its business and operations in the Ordinary Course of Business ordinary course and in compliance substantially the same manner as previously conducted; and (ii) the Company shall promptly (but in any event within two (2) business days) notify Parent of (A) any knowledge of any written notice from any Person alleging that the Consent of such Person is or may be required in connection with any of the transactions contemplated by this Agreement, and (B) any Legal Proceeding commenced, or, to its knowledge threatened in writing, relating to or involving any of the Acquired Corporations that relates to the consummation of the transactions contemplated by this Agreement. The Company shall, and shall cause each of the other Acquired Corporations to, use commercially reasonable efforts to preserve intact the material components of their current business organization, assets and goodwill including keeping available the services of current officers and key employees, and use commercially reasonable efforts to maintain their respective relations and goodwill with all material respects with all applicable Laws suppliers, material customers, licensors, lenders, Governmental Bodies and other material business relations; provided, however, that the requirements of all Contracts that constitute Company Material ContractsAcquired Corporations shall be under no obligation to put in place any new retention programs or include additional personnel in existing retention programs.
(b) Except During the Pre-Closing Period, except (ix) as expressly permitted required or otherwise contemplated under this Agreement or as required by this Agreementapplicable Legal Requirements, (iiy) with the written consent of Parent, or (z) as set forth in Section Part 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall not, nor and shall it cause or not permit any of its Subsidiaries Subsidiary to, do any of the following:
(i) (1) establish a record date for, declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock (including the Company Common Stock), or (2) repurchase, redeem or otherwise reacquirereacquire any of its shares of capital stock (including any Company Common Stock), directly or indirectlyany rights, warrants or options to acquire any shares of its capital stock, other than: (A) dividends or distributions between or among any of the Acquired Corporations to the extent consistent with past practices (but not from the Company to its shareholders); (B) repurchases of Company Options (or shares of capital stock issued upon the exercise thereof) outstanding on the date hereof (in cancellation thereof) pursuant to the terms of any such Company Option between the Company and an employee, consultant or member of the Board of Directors of the Company only upon termination of such Person’s employment or engagement by the Acquired Corporations; or (C) in connection with withholding to satisfy the Tax obligations with respect to Company Options.
(ii) split, combine, subdivide or reclassify any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under including the Company Plan in accordance with the terms of such award in effect on the date of this AgreementCommon Stock);
(iiiii) sell, issue, grant, deliver, transfer, pledge or otherwise dispose authorize the issuance or grant of or encumber or authorize any of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); security, (B) any option, warrant call, warrant, restricted securities or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that the Company may issue shares of the Company or any of its Subsidiaries;
(iii) except Common Stock as required to give effect to anything in contemplation be issued upon the valid exercise of Company Options outstanding as of the Closing, amend any date of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactionsthis Agreement);
(iv) except as contemplated by either Section 1.8 or Section 5.3, establish, adopt, terminate or amend any Employee Plan (or any plan, program, arrangement, practice or agreement that would be an Employee Plan if it were in existence on the date hereof), or amend or waive any of its rights under, or accelerate the vesting under, any provision of any of the Employee Plans (or any plan, program, arrangement, practice or agreement that would be an Employee Plan if it were in existence on the date hereof) or grant any employee or director any increase in compensation, bonuses or other benefits (except that the Acquired Corporations: (A) may provide increases in salary, wages or benefits to non-executive officer employees in the ordinary course of business and consistent with past practice; (B) may amend any Employee Plans to the extent required by applicable Legal Requirements; and (C) may make usual and customary annual bonus payments and profit sharing payments in the ordinary course of business consistent with past practice in accordance with the bonus and profit sharing plans existing on the date of this Agreement and disclosed on the Company Disclosure Schedule);
(v) hire any new officer or terminate the employment of any current Officer.
(vi) (A) enter into or amend any existing change-in-control or retention agreement with any officer, employee, director or independent contractor, (B) enter into any employment, severance or other agreement with any officer, employee, director or independent contractor, other than in the ordinary course of business consistent with past practice with respect to non-executive officer employees, employees with an annual base salary of less than $100,000 and independent contractors, (C) hire any employee with an annual base salary in excess of $100,000 or (D) enter into any agreement with respect to the voting of its capital stock;
(vii) amend or permit the adoption of any amendment to its certificate of formation or bylaws or other charter or organizational documents;
(viii) form any Subsidiary or Subsidiary, acquire any equity interest or other interest in any other Entity or enter into a any joint venture with any other Entityventure, partnership, limited liability corporation or similar arrangement;
(ix) make or authorize any capital expenditure other than (A) as provided for in the Company’s capital expenditure budget as set forth in Part 4.2(b)(ix) of the Company Disclosure Schedule; or (B) when added to all other capital expenditures made on behalf of all of the Acquired Corporations since the date of this Agreement but not provided for in the Company’s capital expenditure budget as set forth in Part 4.2(b)(ix) of the Company Disclosure Schedule, does not exceed $100,000 individually and $200,000 in the aggregate during any fiscal quarter;
(x) enter into any agreement with respect to the acquisition, lease, license or sublicense of any rights, assets or properties (other than purchases of inventory and supplies in the ordinary course of business), in a single transaction or series of transactions, of or from any other Person (other than in the ordinary course of business consistent with past practice) or sell or otherwise dispose of, divest or spin-off, or lease, license or sublicense, in a single transaction or series of transactions, any rights, assets or properties to any other Person (other than in the ordinary course of business consistent with past practice or pursuant to dispositions of obsolete, surplus or worn out assets that are no longer useful in the conduct of the business of the Company), or waive or relinquish, abandon, allow to lapse or encumber (except for any Permitted Encumbrance) any right, asset or property that is material to the business of the Company;
(xi) lend money or make capital contributions or advances to or make investments in, any Person (except advances to employees for the advancement of travel and other business related expenses to employees, directors and consultants in the Ordinary Course ordinary course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business business consistent with past practice and which do not exceedin compliance with the Company’s policies related thereto and intercompany loans, advances, capital contributions or investments between or among the Company and any Subsidiary of the Company), or incur or guarantee any Indebtedness except for borrowings incurred in the aggregate, ordinary course of business under the amounts specifically budgeted therefore Company’s existing secured line of credit under the Loan Facility and pre-payments thereon made in the Company Budget; (D) increase the severance or change ordinary course of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for causebusiness;
(viixii) recognize amend or modify in any labor union material respect, waive any rights under or labor organizationterminate any Material Contract, or enter into any Contract which if entered into prior to the date hereof would have been a Material Contract, in each case except as otherwise described in Part 4.2(b) of the Company Disclosure Schedule;
(xiii) except as required by applicable Law and after prior written consent of Parent Legal Requirement, (which consent shall not be unreasonably withheld, delayed or conditioned);
(viiia) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making make any material change to any accounting method or accounting period used for Tax Return, settle purposes (or compromise request such a change); (b) make any income or other material Tax liability election (other a Tax election that is consistent with a Tax election made in a previous period); (c) rescind or submit change any voluntary disclosure application, material Tax election; (d) surrender a right to a material Tax refund; (e) file an amended Tax Return that could reasonably be expected to increase the Taxes payable by the Acquired Corporations; (f) enter into a closing agreement with any Tax allocation, sharing, indemnification Governmental Body regarding any material Tax; (g) waive or other similar agreement or arrangement (other than customary commercial contracts entered into in extend the Ordinary Course statute of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period limitations with respect to any claim or assessment for any income or other material Taxes (Tax other than (1) pursuant to extensions of time to file a Tax Return obtained in the ordinary course of business or (2) pursuant to an extension of time to file any Tax Return granted in the Ordinary Course ordinary course of Business business in connection with an audit of not more than seven (7) months), state of local Taxes to prevent the immediate assessment or adopt or change any material accounting method in respect collection of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or proceduresa Tax;
(xiv) initiate or settle commence any Legal Proceeding, except with respect to: (A) routine matters in the ordinary course of business; (B) in such cases where the Company reasonably determines in good faith that the failure to commence suit would result in a material impairment of a valuable aspect of its business (provided that the Company consults with Parent and considers the views and comments of Parent with respect to such Legal Proceedings prior to commencement thereof); or (C) in connection with a breach of this Agreement or any other agreements contemplated hereby;
(xv) settle or compromise any Legal Proceeding or other claim (or threatened Legal Proceeding or other claim), other than pursuant to a settlement that does not relate to the any of the Transactions contemplated hereby and: (A) that results solely in a monetary obligation involving only the payment of monies by the Acquired Corporations of not more than $75,000 individually or $150,000 in the aggregate; or (B) that results solely in a monetary obligation that is funded by an indemnity obligation to or an insurance policy of the Acquired Corporations and the payment of monies by the Acquired Corporations that together with any settlement made under subsection “(A)” are not more than $75,000 individually or $150,000 in the aggregate (not funded through insurance policies);
(xvi) change any of its methods of accounting or accounting practices unless required by GAAP or applicable Legal Requirements;
(xvii) enter into any collective bargaining agreement or amend agreement to form a Contract work council or other union or similar agreement or commit to enter into any such agreements;
(xviii) adopt or implement any shareholder rights plan or similar arrangement;
(xix) fail to make any filing, pay any fee, or take another action necessary to maintain in full force and effect any trademark or trade name that would reasonably be expected is material to prevent or materially impede, interfere with, hinder or delay the consummation conduct of the Contemplated Transactionsbusiness of the Acquired Corporations, as a whole, as currently conducted, or enter into any license or transfer agreement granting or transferring to a third party an exclusive right to use any such trademark or trade name;
(xx) adopt a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of the other Acquired Corporations; or
(xvixxi) agreemortgage, resolve pledge, hypothecate, grant any security interest in or otherwise subject to any other Encumbrance other than Permitted Encumbrances, any material assets of the Company or its Subsidiary;
(xxii) implement any employee layoffs that would require any of the Acquired Corporations to provide notice under the WARN Act or similar state laws;
(xxiii) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than in the ordinary course of business consistent with past practice; or
(xxiv) authorize, or agree or commit to do take, any of the foregoingactions described in clauses “(i)” through “(xxiii)” of this Section 4.2(b).
(c) Nothing Notwithstanding the foregoing, nothing contained herein shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the operations of the Acquired Corporations prior to the Effective Time, and nothing contained in this Agreement shall is intended to give Parentthe Company, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective TimeParent’s or its Subsidiaries’ operations. Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with the terms and conditions of this Agreementhereof, complete unilateral control and supervision over of its business and its Subsidiaries’ respective operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 1 contract
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: (i) the Company shall ensure that each of the Company and its Subsidiaries shall conduct Acquired Corporations conducts its business and operations (A) in the Ordinary Course of Business ordinary course and in accordance with past practices and (B) in compliance in all material respects with all applicable Laws Legal Requirements and the requirements of all Acquired Corporation Contracts that constitute Company Material Contracts; (ii) the Company shall use all commercially reasonable efforts to ensure that each of the Acquired Corporations preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Acquired Corporations; (iii) the Company shall keep in full force all insurance policies referred to in Section 2.19; (iv) the Company shall provide all notices, assurances and support required by any Acquired Corporation Contract relating to any Proprietary Asset in order to ensure that no condition under such Acquired Corporation Contract occurs which could result in, or could increase the likelihood of, (A) any transfer or disclosure by any Acquired Corporation of any Acquired Corporation Source Code that is outside the Company's ordinary course of business or inconsistent with past practices, or (B) a release from any escrow of any Acquired Corporation Source Code which has been deposited or is required to be deposited in escrow under the terms of such Acquired Corporation Contract; (v) the Company shall promptly notify Parent of (A) any notice or other communication from any Person alleging that the Consent of such Person is or may be required in connection with the transactions contemplated by this Agreement, and (B) any Legal Proceedings commenced or, to the best of its knowledge threatened against, relating to or involving or otherwise affecting any of the Acquired Corporations which relate to the consummation of the transactions contemplated by this Agreement; and (vi) the Company shall (to the extent requested by Parent) cause its officers to report regularly to Parent concerning the status of the Company's business.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during During the Pre-Closing Period, the Company shall notnot (without the prior written consent of Parent), nor and shall it cause or not permit any of its Subsidiaries the other Acquired Corporations to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock stock, or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)securities;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any the issuance or grant of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); security, (B) any option, call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that (1) the Company may issue Company Common Stock (x) upon the valid exercise of Company Options outstanding as of the date of this Agreement and (y) pursuant to the ESPP, and (2) the Company or any may, in the ordinary course of business and consistent with past practices (x) grant options under its Subsidiariesstock option plans to employees hired by the Company after the date of this Agreement, and (y) in addition to options granted to employees hired by the Company after the date of this Agreement, grant options under its stock option plans to purchase no more than a total of 250,000 shares of Company Common Stock to employees of the Company);
(iii) except as required to give effect to anything in contemplation of the Closing, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of the Company's stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract;
(iv) amend or permit the adoption of any amendment to its Subsidiaries’ Organizational Documentsarticles of incorporation or bylaws or other charter or organizational documents, or effect or be become a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(Avi) make any capital expenditure (except that the Acquired Corporations may make capital expenditures that, when added to all other capital expenditures made on behalf of the Acquired Corporations during the Pre-Closing Period, do not exceed $500,000 in the aggregate in any fiscal quarter);
(vii) enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any Material Contract, or amend or terminate, or waive or exercise any material right or remedy under, any Material Contract;
(viii) acquire, lease or license any right or other asset from any other Person or sell or otherwise dispose of, or lease or license, any right or other asset to any other Person (except in each case for assets acquired, leased, licensed or disposed of by the Company in the ordinary course of business and consistent with past practices), or waive or relinquish any material right;
(ix) lend money to any Person (except for the advancement of expenses to employeesPerson, directors and consultants in the Ordinary Course of Business), (B) or incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than except that the incurrence or payment of any Transaction Expenses, Company may make any capital expenditure in excess of the budgeted capital expenditure amounts set forth routine borrowings in the Company operating budget delivered to Parent concurrently ordinary course of business and in accordance with the execution past practices under its line of this Agreement (the “Company Budget”credit with Bank One);
(vix) other than as required by applicable Law establish, adopt or the terms of amend any Company Benefit Plan as in effect on the date of this Agreement: (A) adoptemployee benefit plan, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employeesemployees (except that the Company may make (i) routine, other than reasonable salary increases in base salary connection with the Company's customary employee review process and annual cash bonus opportunities may pay customary bonuses, (ii) compensation and severance payments made pursuant to contractual obligations that exist as of the date of this Agreement and are disclosed in the Ordinary Course of Business Company Disclosure Schedule, and (iii) customary profit-sharing and similar payments consistent with past practice practices payable in accordance with existing bonus and which do not exceed, profit-sharing plans referred to in the aggregate, the amounts specifically budgeted therefore in Part 2.17(a) of the Company Budget; Disclosure Schedule);
(D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (Exi) hire any (x) officer new employee at the level of vice president or (y) employee whose above or with an annual base salary is in excess of $120,000, or is expected promote any employee except in order to fill a position vacated after the date of this Agreement, or engage any consultant or independent contractor other than pursuant to a Contract that can be terminated (without penalty) on notice of 90 days or less;
(xii) materially change any of its pricing policies, product return policies, product maintenance polices, service policies, product modification or upgrade policies, personnel policies or other business policies, or any of its methods of accounting or accounting practices in any respect;
(xiii) take or permit to be taken any action that could preclude Parent from accounting for the merger as a "pooling of interests" for accounting purposes;
(xiv) make any material Tax election;
(xv) commence any Legal Proceeding or settle any Legal Proceeding except for Legal Proceedings involving only the receipt of money by the Acquired Corporations or the payment by the Acquired Corporations of no more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for causein the aggregate;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viiixvi) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire or take any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle action outside the ordinary course of business or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period inconsistent with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactionspast practices; or
(xvixvii) agree, resolve agree or commit to do take any of the foregoingactions described in clauses "(i)" through "(xvi)" of this Section 4.2(b).
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, During the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective TimePre-Closing Period, the Company shall exercisepromptly notify Parent in writing of: (i) the discovery by the Company of any event, consistent with condition, fact or circumstance that occurred or existed on or prior to the terms date of this Agreement and conditions that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance, or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Company; and (iv) any event, complete unilateral control and supervision over its business operations. Notwithstanding anything to condition, fact or circumstance that would make the contrary timely satisfaction of any of the conditions set forth in this AgreementSection 6 impossible or unlikely or that has had or could reasonably be expected to have a Material Adverse Effect on the Acquired Corporations. Without limiting the generality of the foregoing, no consent the Company shall promptly advise Parent in writing of Parent shall be required any Legal Proceeding or material claim threatened, commenced or asserted against or with respect to any matter of the Acquired Corporations. No notification given to Parent pursuant to this Section 4.2(c) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement.
(d) During the Pre-Closing Period, Parent shall promptly notify the Company in writing of: (i) the discovery by Parent of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by Parent in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by Parent in this Agreement if (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance, or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of Parent; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Section 7 impossible or unlikely or that has had or could reasonably be expected to have a Material Adverse Effect on Parent. Without limiting the generality of the foregoing, Parent shall promptly advise the Company in writing of any Legal Proceeding or material claim threatened, commenced or asserted against or with respect to Parent. No notification given to the Company pursuant to this Section 4.2 4.2(d) shall limit or elsewhere otherwise affect any of the representations, warranties, covenants or obligations of Parent contained in this Agreement to the extent that the requirement of such consent could violate any applicable LawsAgreement.
Appears in 1 contract
Operation of the Company’s Business. (a) Except During the Pre-Closing Period: except (ix) as required or otherwise contemplated under this Agreement, (y) with the written consent of Parent (not to be unreasonably withheld, conditioned or delayed) or (z) as set forth in Section 4.2(a) Part 5.2 of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations (A) in the Ordinary Course of Business ordinary course and in substantially the same manner as previously conducted and (B) use reasonable best efforts to maintain compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during Legal Requirements. During the Pre-Closing Period, the Company shall not, nor shall it cause or permit any use reasonable best efforts to preserve intact the components of its Subsidiaries tocurrent business organization, do any including keeping available the services of current officers, directors, managers, employees, advisors and consultants and using reasonable best efforts to maintain relations and goodwill with their respective suppliers, distributors, manufacturers, customers and other business associates and Governmental Bodies and maintain all Permits, registrations in connection with the Company Registered IP and Insurance Policies (in such amounts and of such kinds comparable to that in effect as of the followingdate hereof).
(b) Without limiting the generality of the foregoing, during the Pre-Closing Period, except (x) as required or otherwise contemplated under this Agreement, (y) with the written consent of Parent or (z) as set forth in Part 5.2 of the Company Disclosure Schedule, the Company shall not:
(i) declare, accrueauthorize, set aside or pay any dividend or make any other distribution in respect of any shares of its the Company’s capital stock stock, or purchase or repurchase, redeem or otherwise reacquire, directly or indirectly, acquire any shares of its the Company’s capital stock or stock, other securities than (except A) acquisitions by the Company of Shares in connection with the payment surrender by holders of Company Stock Options to pay the exercise price and/or of such Company Stock Options, (B) the withholding Taxes incurred upon the exercise, settlement or vesting of any award Shares to satisfy Tax obligations with respect to awards granted under pursuant to the Company Plan Equity Plans and (C) the acquisition by the Company of Company Stock Options or Restricted Stock Units in accordance with the terms of such award thereof in effect on as of the date of this Agreement), as applicable, in connection with the forfeiture of such awards;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any of the foregoing with respect to: issuance or grant of, or accelerate the vesting or modify the terms of, (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); security, (B) any option, warrant call, warrant, share of phantom stock or phantom stock right, stock purchase or stock appreciation right, restricted stock unit, performance stock unit or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security security; provided, however, that Company may issue Shares upon the valid exercise of Company Stock Options or pursuant to Company Restricted Stock Units, in each case outstanding as of the Company or any date of its Subsidiariesthis Agreement;
(iii) except as required split, combine or reclassify its outstanding shares of capital stock or enter into any agreement with respect to give effect to anything in contemplation voting of the Closing, amend any of its capital stock or its Subsidiaries’ Organizational Documents, any securities convertible into or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, exchangeable for the avoidance of doubt, the Contemplated Transactionssuch capital stock;
(iv) form except as required by applicable Legal Requirements, (A) increase (other than by an amount which is not material and which occurred in the ordinary course of business consistent with past practice) the compensation payable or that could become payable by the Company to directors, managers, officers or employees, (B) enter into or amend in any Subsidiary material respect, any existing employment, severance, retention or change in control agreement with any of its past or present officers or employees, (C) terminate the employment of any employee or services of any service provider, other than for cause or the termination of (1) an employee with a base salary of less than $65,000 on an annualized basis or (2) a service provider whom the Company pays less than $65,000 on an annualized basis, (D) hire any employee with a base salary greater than or equal to $65,000 on an annualized basis or a service provider whom the Company pays at least $65,000 on an annualized basis, (E) establish, adopt, enter into, amend, terminate or take any action to accelerate rights under any Employee Plan, (F) pay any pension or retirement allowance not allowed by any existing Employee Plan or similar agreement, (G) make any discretionary contributions to pension or retirement plans in excess of the minimum required contributions as required by the Pension Protection Act of 2006 or (H) pay any bonus to any director or executive officer;
(v) enter into, adopt, amend, terminate or extend any collective bargaining Contract, or any similar agreement with any union, works council or similar employee representative body;
(vi) amend, modify or waive any provision of, or permit the adoption of, any amendment to the Company Charter or Company Bylaws or other charter or organizational documents;
(vii) (A) acquire any equity interest or other interest in any other Entity Entity, or (B) enter into a any joint venture with any other Entityventure, partnership or similar arrangement providing for the sharing of profits and losses;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (Bviii) incur or guarantee any indebtedness for borrowed money, (C) guarantee money or issue any debt securities or other rights to acquire debt securities of othersthe Company or the Company or assume, guarantee or (D) other than endorse, as an accommodation or otherwise, the incurrence or payment obligations of any Transaction Expensesother Person;
(ix) pre-pay any long-term debt or accelerate or delay any payments or the collection of payments due to the Company, except in the ordinary course of business of the Company;
(x) make any capital expenditure in excess of the budgeted capital expenditure amounts set forth $100,000 individually or $200,000 in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”)aggregate;
(vixi) take any action, outside the ordinary course of business consistent with past practices, that would materially diminish the working capital of the Company;
(xii) materially change recurring or non-recurring rates, promotions, sales incentives, commission plans, credit policies or collections procedures;
(xiii) enter into or renew any Contract with a term greater than one year and/or annual payments by the Company greater than $100,000;
(xiv) amend in any material respect or waive any of its material rights under any Material Contract, except in the ordinary course of business consistent with past practice or that would not materially and adversely affect the business of the Company;
(xv) (A) other than as required by applicable Law in the ordinary course of business of the Company, acquire, lease, license or the terms of sublicense any Company Benefit Plan as in effect on the date of this Agreement: (A) adoptmaterial right or other material asset, terminateincluding Intellectual Property, establish or enter into from any Company Benefit Planother Person; (B) cause divest, sell or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment tootherwise dispose of, or increase the amount of the wageslease, salary, commissions, benefits license or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or propertiessublicense, or grant any Encumbrance covenants not to assert or xxx with respect to, any material right or other material asset, including material Intellectual Property, to such assets or propertiesany other Person, except in the Ordinary Course sales of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose products and grants of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course ordinary course of Business)business; or (C) waive or relinquish, abandon, allow to lapse or encumber (except for any Permitted Encumbrance) any material right or material asset, including material Intellectual Property;
(xixvi) makeenter into any new line of business that is material to the Company, taken as a whole, or materially change any of its technology or revoke operating policies that are material, individually or in the aggregate, to the Company, taken as a whole, except in the ordinary course of business or as required by applicable Legal Requirements;
(xvii) lend money or make capital contributions to, or make investments in, any Person, except in each case in the ordinary course of business of the Company, or make (A) extensions of credit to customers except in the ordinary course of business or (B) advances to directors, officers and other employees for travel and other business-related expenses, except in each case in the ordinary course of business and in compliance in all material respects with the Company’s policies related thereto;
(xviii) make or change any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability liability, claim or submit assessment, change any voluntary disclosure applicationannual Tax accounting period, change or consent to any change in any material Tax accounting method, file any material amended Tax Return, enter into any closing agreement, surrender any right to claim a material Tax allocationrefund, sharing, indemnification or other similar agreement waive or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request extend or consent to any extension or waiver of the statute of limitations period applicable to the collection or assessment of any limitation period material Taxes;
(xix) waive, release or assign its rights with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension Legal Proceeding in which the Company is seeking monetary damages in excess of time to file any Tax Return granted $100,000 individually and $200,000 in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxesaggregate;
(xiixx) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate commence or settle any Legal ProceedingProceeding except for the settlement of any Legal Proceedings or other claim that is for solely monetary payments of no more than $100,000 individually and $200,000 in the aggregate;
(xvxxi) change any of its methods of accounting or accounting practices in any material respect unless required by GAAP or applicable Legal Requirements;
(xxii) adopt or recommend a plan of complete or partial dissolution, liquidation, recapitalization, restricting or other reorganization;
(xxiii) enter into any transactions or amend a Contract Contracts with any Affiliate or other Person that would reasonably be expected required to prevent or materially impede, interfere with, hinder or delay be disclosed by the consummation Company under Item 404 of Regulation S-K of the Contemplated TransactionsSEC;
(xxiv) conduct the businesses of the Company in a manner that would cause the Company to become an “investment company” subject to registration under the Investment Company Act;
(xxv) materially accelerate the payment of any accounts payable outside of the ordinary course of business consistent with past practice;
(xxvi) pay any transaction expense in excess of the budget set forth on Part 5.2(b)(xxvi) of the Company Disclosure Schedule; or
(xvixxvii) agree, resolve agree or commit to do take any of the actions described in clauses (i) through (xxvi) of this Section 5.2(b). Notwithstanding the foregoing.
(c) Nothing , nothing contained in this Agreement herein shall give Parentto Parent or Purchaser, directly or indirectly, the right rights to control or direct the operations of the Company prior to the Effective Offer Acceptance Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 1 contract
Operation of the Company’s Business. (a) Except During the Pre-Closing Period: (i) except (x) as expressly required under the terms of this Agreement or as required by applicable Legal Requirements, (y) with the written consent of Parent (not to be unreasonably withheld, conditioned or delayed), or (z) as set forth in Section 4.2(a) Part 5.2 of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: each of the Company and shall use its Subsidiaries shall conduct commercially reasonable efforts to ensure that each Acquired Corporation conducts in all material respects its business and operations in the Ordinary Course ordinary course of Business business consistent with past practice; and (ii) the Company shall promptly notify Parent of (A) any knowledge of any notice from any Person alleging that the Consent of such Person is or may be required in compliance in connection with any of the Transactions, and (B) any Legal Proceeding commenced, or, to its knowledge threatened, relating to or involving any Acquired Corporation that relates to the consummation of the Transactions. The Company shall, and shall cause each of its Subsidiaries to, use commercially reasonable efforts to preserve intact the material components of its current business organization, including keeping available the services of current officers and key employees and maintaining their respective relations and good will with all material respects with all applicable Laws suppliers, Governmental Bodies and the requirements of all Contracts that constitute Company Material Contractsother material business relations.
(b) Except During the Pre-Closing Period, except (ix) as expressly required or permitted under the terms of this Agreement or as required by this Agreementapplicable Legal Requirements, (iiy) with the written consent of Parent (not to be unreasonably withheld, conditioned or delayed), or (z) as set forth in Section 4.2(b) Part 5.2 of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company Acquired Corporations shall not, nor shall it cause or permit any of its Subsidiaries to, do any of the following:
(i) (1) establish a record date for, declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock (including the Company Common Stock), or (2) repurchase, redeem or otherwise reacquirereacquire any of its shares of capital stock (including any Company Common Stock), directly or indirectlyany rights, warrants or options to acquire any shares of its capital stock or stock, other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect tothan: (A) any capital stock or other security repurchases of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation outstanding as of the Company Outstanding Shares; or date hereof pursuant to the Company’s right (C) any instrument convertible into or exchangeable for any capital stock or other security under written commitments in effect as of the Company or any of its Subsidiaries;
(iiidate hereof) except as required to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvi) agree, resolve or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.purchase shares of
Appears in 1 contract
Operation of the Company’s Business. (a) Except During the Pre-Closing Period: (i) except (x) as specifically required under this Agreement, (y) with the written consent of Parent, or (z) as set forth in Section 4.2(a) Part 5.2 of the Company Disclosure Schedule, the Company shall ensure that each of the Acquired Corporations conducts its business and operations (A) in the ordinary course and in substantially the same manner as previously conducted and (B) in material compliance with all applicable Legal Requirements and the requirements of all Material Contracts; and (ii) as expressly permitted by the Company shall promptly notify Parent of (A) any notice or other communication from any Person alleging that the Consent of such Person is or may be required in accordance connection with any of the transactions contemplated by this Agreement, and (iiiB) as required by applicable Lawany Legal Proceeding commenced, (iv) in connection with the COVID-19 pandemicor, to the extent reasonably necessarybest of its knowledge threatened, (A) relating to protect the health and safety or involving or otherwise affecting any of the Company’s Acquired Corporations that relates to the consummation of the transactions contemplated by this Agreement. The Company shall use commercially reasonable efforts to preserve intact in all material respects its current business organization, including keeping available the services of current officers and key employees and use commercially reasonable efforts to maintain its relations and good will with all material suppliers, material customers and Governmental Bodies; provided, however, that the Acquired Corporations shall be under no obligation to put in place any new retention programs or any of its Subsidiaries’ employees, include additional personnel in existing retention programs.
(Bb) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
, except (b) Except (ix) as expressly permitted by specifically required under this Agreement, (iiy) with the written consent of Parent, or (z) as set forth in Section 4.2(b) Part 5.2 of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall not, nor and shall it cause or not permit any of its Subsidiaries the other Acquired Corporations to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its the Company’s capital stock stock, or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its the Company’s capital stock stock, other than: (A) dividends or other securities (except in connection with the payment distributions between or among any of the exercise price and/or withholding Taxes incurred Acquired Corporations to the extent consistent with past practices; (B) pursuant to the Company’s right to purchase restricted Shares held by a Company Associate upon termination of such associate’s employment or engagement by the exercise, settlement Acquired Corporations; or vesting (C) repurchases of any award granted under the Company Plan in accordance with share issuances pursuant to the terms of such award in effect on any Company Option between the date Company and an employee, consultant or member of this Agreement)the Board of Directors of the Company which vests during the Pre-Closing Period;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any the issuance or grant of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); security, (B) any option, call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit, stock-based performance unit awards granted to employees and service providers or any other right that is limited to, or the value of which is in any way based on or derived from the Ordinary Course value of Business which are included in the calculation any shares of the Company Outstanding Shares; capital stock or other securities of any of the Acquired Corporations or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that the Company may issue (1) Shares upon the valid exercise of Company Options or other Company Equity Awards, as the case may be, outstanding as of the date of this Agreement or issued after the date of this Agreement pursuant to the ESPP or (2) shares underlying Company or any Warrants outstanding as of its Subsidiariesthe date hereof);
(iii) (A) except as required to give effect to anything in contemplation of the Closingcontemplated by Section 6.3, establish, adopt or amend any Employee Plan, or amend or waive any of its or its Subsidiaries’ Organizational Documentsrights under, or effect or be a party accelerate the vesting under, any provision of any of the Employee Plans, (B) grant to any mergerCompany Associate any increase in compensation, consolidationbonuses or other benefits, share exchange(C) grant to any Company Associate any increase in severance or termination pay or (D) enter into or amend any Company Employee Agreement (except that the Acquired Corporations: (1) may provide routine, reasonable salary increases to non-officer employees in the ordinary course of business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for and consistent with past practices in connection with the avoidance of doubt, Acquired Corporation’s customary employee review process and (2) may amend any Employee Plans to the Contemplated Transactionsextent required by applicable Legal Requirements);
(iv) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documents (whether by merger, consolidation or otherwise);
(v) form any Subsidiary or Subsidiary, acquire any equity interest or other interest in any other Entity or enter into a any joint venture with any other Entityventure, partnership, limited liability corporation or similar arrangement;
(vi) make any capital expenditure or any obligations or liabilities in respect thereof (except that the Acquired Corporations may make any capital expenditure that: (A) lend money to any Person (except is provided for the advancement of expenses to employees, directors and consultants in the Ordinary Course Company’s capital expense budget delivered or made available to Parent or Parent’s Representatives prior to the date of Business), this Agreement; or (B) when added to all other capital expenditures made on behalf of all of the Acquired Corporations since the date of this Agreement but not provided for in the Company’s capital expense budget delivered or made available to Parent or Parent’s Representatives prior to the date of this Agreement, does not exceed $250,000 individually and $500,000 in the aggregate during any calendar quarter);
(vii) acquire, lease, license or sublicense any material right or other material asset from any other Person or sell or otherwise dispose of, or lease, license or sublicense, any material right or other material asset to any other Person, or waive, relinquish, abandon, allow to lapse or encumber any material right or other material asset;
(viii) make any loans, advances or capital contributions to, or investments in, any other Person, other than in the ordinary course of business consistent with past practice;
(ix) create, incur, assume, suffer to exist or otherwise be liable with respect to any indebtedness for borrowed money or incur or guarantee any indebtedness except for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth short-term borrowings incurred in the Company operating budget delivered to Parent concurrently with the execution ordinary course of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Businesspractice;
(x) sellenter into, assign, transfer, license, sublicense amend or modify in any material respect or terminate any Material Contract or otherwise dispose waive, release or assign any material rights, claims or benefits of the Company or any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business)its Subsidiaries;
(xi) make, make or change or revoke any material Tax election, fail to pay change any income accounting period, adopt or other change any material method of Tax as such Tax becomes due and payableaccounting, file any amendment making any material change to any amended Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure applicationreturn, enter into any closing agreement or settlement of any material Tax allocationclaim or assessment, sharingsurrender any right to claim a material Tax refund, indemnification offset or other similar agreement or arrangement (other than customary commercial contracts entered into reduction in the Ordinary Course of Business the principal subject matter of which is not Taxes)Tax liability, request or consent to any extension or waiver of any the limitation period with respect applicable to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of TaxesTax;
(xii) enter intocommence any Legal Proceeding, materially amend except with respect to: (A) routine matters in the ordinary course of business and consistent with past practices; (B) in such cases where the Company reasonably determines in good faith that the failure to commence suit would result in a material impairment of a valuable aspect of its business (provided that the Company consults with Parent and considers the views and comments of Parent with respect to such Legal Proceedings prior to commencement thereof); or terminate (C) in connection with a breach of this Agreement or any Company Material Contractother agreements contemplated hereby;
(xiii) settle any Legal Proceeding, other than as required pursuant to a settlement: (A) that results solely in a monetary obligation involving payment by Law the Acquired Corporations of not more than the amount specifically reserved in accordance with GAAP with respect to such Legal Proceedings on the Balance Sheet; (B) that results solely in a monetary obligation involving only the payment of monies by the Acquired Corporations of not more than $300,000 in the aggregate; (C) results solely in a monetary obligation that is funded by an insurance policy of the Acquired Corporations and the payment of monies by the Acquired Corporations that together with any settlement made under subsection (B) are not more than $300,000 in the aggregate (not funded through insurance policies); provided that, in the case of each of clauses (A), (B) and (C), no such settlement shall impose any ongoing restriction or GAAP, take any action to change accounting policies or proceduresobligation;
(xiv) initiate change any of its methods of accounting or settle accounting practices in any material respect unless required by GAAP or applicable Legal ProceedingRequirements;
(xv) enter into any collective bargaining or amend a Contract that would reasonably be expected other union agreements or commit to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactionsenter into any such agreements; or
(xvi) agree, resolve agree or commit to do take any of the actions described in clauses “(i)” through “(xv)” of this Section 5.2(b). Notwithstanding the foregoing.
(c) Nothing , nothing contained in this Agreement herein shall give Parentto Parent or Purchaser, directly or indirectly, the right rights to control or direct the operations of the Company Acquired Corporations prior to the Effective Offer Acceptance Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 1 contract
Operation of the Company’s Business. (a) Except During the Pre-Closing Period, except as (w) required by this Agreement or by Legal Requirements or Orders, (x) expressly permitted by the terms of this Section 5.2, or (y) set forth in Part 5.2 of the Company Disclosure Schedule or (z) consented to by Parent (which consent, as to subsection (ii) hereof, will not be unreasonably withheld, conditioned or delayed):
(i) the Company will, and will cause each other Acquired Corporation to, conduct its business: (A) in the ordinary course and in accordance with past practice; and (B) in compliance with all applicable Legal Requirements and the requirements of all Material Contracts, in each case in all material respects;
(ii) the Company will, and will cause each of its Subsidiaries to, use its commercially reasonable efforts to (x) preserve substantially intact its current business organization and (y) keep available the services of its current officers and key employees and maintain its relations and goodwill with material suppliers, customers, creditors, licensors, licensees, distributors, resellers, employees and other Persons having business relationships with the respective Acquired Corporations; and
(iii) the Company will promptly notify Parent of (A) any written notice or other written communication of which the Company has Knowledge from any Person alleging that the Consent of such Person is or may be required in connection with the Merger or any of the other Contemplated Transactions, and (B) any Legal Proceeding commenced, or, to the Knowledge of the Company, threatened in writing against, relating to, involving or otherwise affecting any of the Acquired Corporations that relates to the consummation of the Merger or any of the other Contemplated Transactions. Notwithstanding anything to the contrary contained in this Section 5.2(a), no action or failure to take action by any Acquired Corporation with respect to matters specifically addressed by any provision of Section 5.2(b) will constitute a breach under this Section 5.2(a) unless such action or failure to take action would constitute a breach of such provision of Section 5.2(b).
(b) During the Pre-Closing Period, except as (v) required by this Agreement or by Legal Requirements or Orders, (w) expressly permitted by the terms of this Section 5.2, (x) set forth in Section 4.2(aPart 5.2(b) of the Company Disclosure Schedule, (iiy) as expressly permitted by may be necessary or required advisable to satisfy the condition to Closing set forth in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic Section 6.11 or (Cz) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall consent, as to subsections (ii), (iii), (vii) and (ix) hereof, will not be unreasonably withheld, delayed conditioned or conditioneddelayed), during the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall will not, nor shall it and will cause or permit any of its Subsidiaries the other Acquired Corporations not to, do any of the following:
(i) declare, accrue, set aside declare or pay any dividend or make any other distribution in respect of any shares of its capital stock (other than between or among wholly owned Acquired Corporations in the ordinary course of business), split, combine or reclassify any capital stock of the Company or repurchase, redeem or otherwise reacquire, directly or indirectly, any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting Company other than repurchases from employees of any award granted under the Company Plan in accordance with following termination of employment pursuant to the terms of such award in effect on the date of this Agreement)an applicable pre-existing restricted stock agreement or Company Plan;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber deliver or authorize any of the foregoing with respect tosale, issuance, delivery or grant of: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options)stock; (B) any option, call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Sharesstock; or (C) any instrument convertible into or exchangeable for any capital stock (except for such actions in clause (A), (B) or other security (C) between or among wholly owned Acquired Corporations in the ordinary course of business and consistent with past practice) and except that: (1) the Company may issue shares of Company Common Stock (x) upon the valid exercise of Company Options outstanding as of the date of this Agreement, or granted after the date hereof in compliance with this Agreement or upon the vesting or settlement of Company RSUs outstanding as of the date of this Agreement or granted after the date hereof in compliance with this Agreement and (y) pursuant to the Company ESPP; and (2) the Company may, in the ordinary course of business consistent with past practice, grant to any employee of the Company in connection with either the hiring of such employee during the Pre-Closing Period or the Company’s annual employee review and grant process (x) options (having an exercise price equal to the fair market value of the Company Common Stock covered by such options determined as of the time of the grant of such options, containing the Company’s standard vesting schedule and other terms and conditions), (y) Company RSUs (containing the Company’s standard vesting schedule and other terms and conditions) or (z) Company Performance Units (containing the Company’s standard vesting schedule) under the Company Equity Plans; provided, however, that with respect to the grant of Company RSUs and Performance Units subject to a performance-based vesting schedule, the Company will take such actions as are necessary to ensure that the vesting schedule of these awards does not convert to time-based vesting in accordance with the applicable Company Equity Plan but is otherwise consistent with the terms and conditions of the Company’s standard vesting schedule; provided further, that the Company shall not be permitted to implement a long-term incentive plan or program for 2013 or otherwise grant any options, restricted stock, restricted stock units, performance units or any of its Subsidiaries;other award that would constitute a Company Equity Award, if granted, in lieu thereof.
(iii) except as required to give effect to anything in contemplation of the Closing, amend or waive any of its rights under, or its Subsidiaries’ Organizational accelerate the vesting under, any provision of any of the Company Equity Plans or any provision of any Contract evidencing any outstanding Company Equity Award or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, restricted stock units, warrant or other security or any related Contract, other than any acceleration of vesting that occurs in accordance with the terms of a Company Contract in effect as of the date of this Agreement;
(iv) (A) amend or permit the adoption of any amendment to any of the Company’s Charter Documents, or (B) effect or be become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, division or subdivision of shares, consolidation of shares or similar transaction excepttransaction, for in the avoidance case of doubtthe actions in clause (B), except by between or among wholly owned Subsidiaries of the Contemplated TransactionsCompany;
(ivv) form any Subsidiary or acquire any equity interest in a Third Party or make any asset acquisition from a Third Party (other interest than acquisitions of a type that would not require disclosure in Section 3.13(a)(iii) or Section 3.13(a)(v)), other than any other Entity acquisition of equity (i) for consideration not exceeding $100 million or enter into a joint venture with (ii) made in the ordinary course of business in the Company’s or any other Entityof its Subsidiaries’ investment portfolios;
(vi) make any capital expenditure that, when added to all other capital expenditures made by the Acquired Corporations since the date of this Agreement, exceeds $8,500,000,000;
(vii) other than in the ordinary course of business, (A) enter into any Material Contract, (B) amend or waive in any material respect or terminate any Material Contract or (C) grant any material exclusive license or right with respect to any Intellectual Property of any of the Acquired Corporations;
(viii) lend money to any Person Third Party (except for the advancement other than reimbursement of expenses to employees, directors and consultants made in the Ordinary Course ordinary course of Businessbusiness), (B) or incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, money or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish obtain or enter into any Company Benefit Planbond or letter of credit or any related Contract, in each case except for (i) indebtedness incurred in the ordinary course of business under the Company’s current borrowing agreements or indentures, (ii) indebtedness solely among or between Acquired Corporations in the ordinary course of business, (iii) any guarantee or support arrangement by an Acquired Corporation of obligations of one or more other Acquired Corporation in the ordinary course of business, (iv) any refinancing of any such indebtedness described in clauses (i), (ii) or (iii) on market terms or (v) indebtedness not in excess of $3,000,000,000; provided, however, that any such indebtedness shall expressly permit the consummation of the Merger, and shall not include any default or prepayment right as a result thereof;
(Bix) cause establish, adopt, enter into or permit amend any Company Benefit Plan to be amended in any material respect; (C) Plan, pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation (including equity-based compensation, whether payable in stock, cash or other property) or remuneration payable to, any of its directorsdirectors or any of its executive officers (except that the Company: (A) may provide routine, officers or employees, other than reasonable salary increases in base salary and annual cash bonus opportunities and payments made to employees in the Ordinary Course ordinary course of Business business and in accordance with past practice in connection with the Company’s customary employee review process; (B) may amend the Company Plans to the extent required by applicable Legal Requirements; and (C) may make customary bonus payments and profit sharing payments consistent with past practice in accordance with existing bonus and which do not exceed, profit sharing plans referred to in the aggregate, the amounts specifically budgeted therefore in Part 3.18(b) of the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditionedDisclosure Schedule);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sellother than in the ordinary course of business consistent with past practice, assignmaterially change any personnel policies or other business policies, transfer, license, sublicense or otherwise dispose any of any Company IP its methods of accounting (other than pursuant to non-exclusive licenses as required by Legal Requirements or GAAP) in the Ordinary Course of Business)any respect;
(xi) makeother than in the ordinary course of business consistent with past practice, make or change or revoke any material Tax election, fail to pay change an annual Tax accounting period, adopt or change any income Tax accounting period, adopt or other material change any Tax as such Tax becomes due and payableaccounting method, file any amendment making any material change to any amended Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar closing agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to Taxes, settle any Tax claim or assessment relating to any of the Acquired Corporations, surrender any right to claim a refund of Taxes, destroy or dispose of any books and records with respect to Tax matters relating to periods beginning before the Effective Time and for which the statute of limitations is still open or under which a record retention agreement is in place with a Governmental Body, if such election, adoption, change, amendment, agreement, settlement, surrender, consent, destruction or disposal would have the effect of materially increasing the Tax liability of any of the Acquired Corporations for any income period ending after the Effective Time or other material Taxes (other than pursuant to an extension of time to file materially decreasing any Tax Return granted in attribute of any of the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of TaxesAcquired Corporations existing at the Effective Time;
(xii) enter intosettle any Legal Proceeding other than Legal Proceedings (w) reserved against in the Company’s financial statements, materially amend (x) with respect to which the settlement involves solely the payment by the Acquired Corporations of an amount less than $50 million individually and less than $200 million in the aggregate for all Legal Proceedings, (y) that are covered by existing insurance policies subject to the deductible of such insurance policies or terminate any Company Material Contract;(z) settled in the ordinary course of business; or
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvi) agree, resolve agree or commit to do take any of the foregoingactions described in clauses (i) through (xii) of this Section 5.2(b).
(c) Nothing The parties understand and agree that (i) nothing contained in this Agreement shall will give Parentany Parent Entity, directly or indirectly, the right to control or direct the any Acquired Corporation’s operations of the Company prior to the Effective Time. Prior Closing, and (ii) prior to the Effective TimeClosing, the Company shall exercise, consistent with the terms and conditions of this Agreement, Acquired Corporations will exercise complete unilateral control and supervision over its business their respective operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 1 contract
Operation of the Company’s Business. (a) Except Except: (i) as set forth in Section 4.2(a) of the Company Disclosure Scheduleexpressly contemplated, required or permitted by this Agreement; (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, ; (iii) as set forth in Part 5.2(a) of the Disclosure Schedule; or (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall will not be unreasonably withheld, delayed conditioned or conditioneddelayed), during the Pre-Closing Interim Period: each of , the Company shall, and its Subsidiaries shall cause each Company Subsidiary, to conduct its business and operations (A) in the Ordinary Course of Business ordinary course and in compliance accordance with past practices and to the extent consistent therewith: (1) use commercially reasonable efforts to maintain its assets and properties and to preserve in all material respects its current relationships with customers, employees, suppliers and other Persons having material business Table of Contents dealings with the Company or any Company Subsidiary; (2) maintain its books and records in the usual, regular and ordinary manner, on a basis consistent with past practice; and (3) use commercially reasonable efforts to preserve the goodwill and ongoing operations of its business; and (B) in material compliance with all applicable Laws and the requirements of all Contracts that constitute Company Material ContractsLaws.
(b) Except Without limiting the generality of Section 5.2(a) above, except: (i) as expressly contemplated, required or permitted by this Agreement, ; (ii) as required by applicable Law; (iii) as set forth in Section 4.2(bthe applicable subsection of Part 5.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law ; or (iv) with the prior written consent of as consented to in writing by Parent (which consent shall will not be unreasonably withheld, delayed conditioned or conditioneddelayed), at all times during the Pre-Closing Interim Period, the Company shall not, nor and shall it cause or permit any of its Subsidiaries to, do not authorize any of the followingCompany Subsidiaries to:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock (whether in stock, property or repurchaseotherwise); adjust, split, combine or reclassify any capital stock; or acquire, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except in connection with securities, other than pursuant to the payment of the exercise price and/or withholding Taxes incurred Company’s right to acquire a Company RSA held by a Company Employee upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms termination of such award in effect on the date of this Agreement)Company Employee’s employment;
(ii) sell, issue, grant, deliver, pledge or otherwise dispose of or encumber or subject to any Encumbrance or authorize the sale, issuance, grant, delivery, pledge or encumbrance of subjection to any of the foregoing with respect toEncumbrance of: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options)security; (B) any Company Equity Award, option, call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exercisable or exchangeable for any capital stock or other security of security, except that: (1) the Company may issue shares of Company Common Stock pursuant to the exercise of Company Options under the Incentive Plan, in each case, to the extent such Company Options are outstanding on the Agreement Date; and (2) the Company may adopt a shareholder rights plan in response to an Acquisition Proposal and issue rights to Company stockholders in connection therewith; provided that any such shareholder rights plan shall not apply to the Offer, the Merger or any of its Subsidiariesthe other transactions expressly contemplated by this Agreement;
(iii) amend or otherwise modify any of the terms of any outstanding Company Equity Award, except as required to give effect to anything in contemplation by applicable Law or as contemplated by this Agreement;
(iv) amend or modify any of the ClosingCompany Charter Documents;
(v) acquire any Equity Interest in or business of any Person or division thereof, amend or enter into any of its or its Subsidiaries’ Organizational DocumentsContract with respect any such acquisition, or effect or be become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, division or subdivision of shares, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”)transaction;
(vi) other than as required by applicable Law divest, sell or the terms otherwise dispose of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose pledge of any of its assets (other than sales of inventory or properties, or grant any Encumbrance with respect to such assets or properties, except services in the Ordinary Course ordinary course of Business;
business) or permit any of its assets to become subject to any Encumbrances, other than Permitted Encumbrances; Table of Contents (vii) incur or suffer to exist any Indebtedness except (x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses for working capital borrowings incurred in the Ordinary Course ordinary course of Business);
business or (xiy) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7set forth on Part 5.2(b)(vii) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvi) agree, resolve or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.Disclosure Schedule;
Appears in 1 contract
Samples: Merger Agreement (NCI, Inc.)
Operation of the Company’s Business. (a) Except During the Pre-Closing Period, except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as required or expressly permitted by or required in accordance this Agreement, (iii) as required by applicable LawLegal Requirement, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed): (A) the Company shall ensure that each of the Acquired Companies conducts its business and operations in the ordinary course of business; and (B) the Company shall use reasonable efforts to ensure that each of the Acquired Companies preserves intact its current business organization and maintains its relations and goodwill with all suppliers, customers, strategic partners, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Acquired Companies; provided, however, that, no action or failure to take action with respect to matters specifically addressed by any of the provisions of clause “(b), at all times during ” below shall constitute a breach under this clause “(a)” unless such action or failure to take action would constitute a breach of such provision of clause “(b)” below.
(b) During the Pre-Closing Period, except (w) as expressly set forth in the Disclosure Schedule, (x) as required by applicable Legal Requirement, or (y) with the prior written consent of Parent (which in the case of Sections 4.2(b)(viii), (ix), (x), (xi), (xii), (xiii), (xv), (xvi), (xviii), and (solely related to the foregoing) (xxii), shall not be unreasonably withheld, conditioned or delayed but, in all other circumstances, may be granted or withheld in Parent’s sole discretion), the Company shall not, nor and the Company shall it cause or permit any each of its Subsidiaries not to, do any of the following:
(i) (A) amend or waive or propose to amend or waive the Company Organizational Documents or (B) amend or propose to amend in any material respect the organizational documents of any of its Subsidiaries, except, in the case of each of the foregoing clauses “(A)” and “(B)”, as may be required by applicable Legal Requirements (provided that, for the avoidance of doubt, this Section 4.2(b)(i) shall not restrict the creation of Subsidiaries in the ordinary course of business);
(ii) declare, accrue, set aside or pay any dividend or make any other distribution (whether in cash, shares or otherwise) in respect of any shares of its capital stock stock, or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except other than (A) Permitted Dividends, (B) dividends or other distributions by an Acquired Company to another Acquired Company wholly-owned by one or more other Acquired Companies and (C) acquisitions, or deemed acquisitions, of equity securities of the Acquired Companies in connection with (1) the payment withholding of equity securities to satisfy Tax obligations with respect to the exercise price and/or withholding Taxes incurred upon the exercise, vesting or settlement or vesting of any award granted awards under the Company Plan in accordance with Equity Plans and (2) forfeitures of awards under the terms of such award in effect on the date of this AgreementCompany Equity Plans);
(iiiii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize the sale, issuance or grant by the Company or any of the foregoing with respect toSubsidiary of: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options)security; (B) any option, restricted share unit, deferred share unit, restricted share award or other equity-based compensation award (whether payable in cash, share or otherwise), call, warrant or right to acquire any capital stock share or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock share or other security (except that the Company may issue Class A Shares upon the vesting of or delivery of shares pursuant to Company RSUs outstanding as of the date of this Agreement);
(iv) enter into any Contract with respect to the voting of any Company Capital Stock;
(v) split, divide, subdivide, combine, consolidate or reclassify any of its Subsidiariescapital stock or issue or authorize the issuance of any securities in lieu of or in substitution for shares of its capital stock;
(iiivi) except as required to give effect to anything in contemplation of the Closingor expressly permitted by this Agreement, amend or waive any of its or its Subsidiaries’ Organizational Documentsrights under, or effect accelerate the vesting under, any provision of any of the Company’s stock option or be a party to equity compensation plans or any provision of any Contract evidencing any outstanding stock option, any outstanding restricted share unit or any restricted share purchase agreement, or otherwise modify any of the terms of any outstanding equity-based compensation award, warrant or other security or any related Contract;
(vii) adopt, approve or implement any “poison pill” or similar rights plan or related agreement;
(viii) acquire (whether by way of merger, consolidation, share exchange, business combination, recapitalizationamalgamation, reclassification acquisition of sharesstock, stock splitacquisition of assets or otherwise) any Person or any division thereof, reverse stock split or similar transaction exceptexcept for acquisitions not in excess of $5,000,000 in the aggregate (provided that, for the avoidance of doubt, this Section 4.2(b)(viii) shall not restrict the Contemplated Transactionscreation of Subsidiaries in the ordinary course of business);
(ivix) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of $1,000,000 in the budgeted aggregate, except for expenditures contemplated by the capital expenditure amounts budget set forth in Part 4.2(b)(ix) of the Disclosure Schedule;
(x) other than in the ordinary course of business (and except with respect to any Fund Document (and any related side letter) or Investment Advisory Arrangement): (A) enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any Material Contract, except as permitted pursuant to clause “(xii)” below; or (B) amend in any material respect or terminate, or waive any material right or remedy under, any Material Contract;
(xi) lease or license any right or other asset from any other Person or sell or otherwise dispose of, or lease or license, any right or other asset to any third party (except in each case for assets with a fair market value not in excess of $2,000,000 in the aggregate with respect to all such leases, licenses or dispositions), provided that the foregoing shall not prohibit the Acquired Companies from taking any such actions with respect to investment assets in the ordinary course of business;
(A) other than (x) drawings under the Company’s revolving line of credit (i) to provide capital for seed investments into new Funds or bridge financing for Fund investment activities, (ii) up to an aggregate amount of $80,000,000 for the purposes set forth on Part 4.2(b)(xii) of the Disclosure Schedule or (iii) up to an aggregate amount of $25,000,000 for general purposes, or (y) the incurrence of other indebtedness up to an aggregate amount of $10,000,000, incur any indebtedness for borrowed money, issue or sell any debt securities or rights to acquire any debt securities of the Company operating budget delivered or such Acquired Company, guarantee any such indebtedness or any debt securities of another Person or enter into any “keep well” or other agreement to Parent concurrently maintain any financial statement condition of another Person, other than any such indebtedness incurred in connection with the execution refinancing of any indebtedness existing on the date of this Agreement or permitted to be incurred, assumed or otherwise entered into hereunder; or (B) make any loans to any Person, provided that the “foregoing shall not prohibit any Acquired Company Budget”)from making any such loan (1) taking the form of a loan or advance to any employee of any Acquired Company in accordance with applicable Legal Requirements up to an aggregate amount (for all employees taken together) of $2,000,000, (2) that constitutes the extension of credit to any customer or client of any Acquired Company so long as such extension of credit is made by any Acquired Company in the ordinary course of business, or (3) that is in connection with an investment in Company Funds in the ordinary course of business;
(vixiii) pledge any of the assets of an Acquired Company or otherwise permit any assets of an Acquired Company to become subject to any Encumbrance (other than Permitted Encumbrances or Encumbrances imposed by applicable securities laws), except for pledges of assets (A) made in the ordinary course of business or (B) not to exceed an aggregate amount of $5,000,000;
(xiv) except as expressly permitted by the Founders Agreement or Section 4.2(b)(xix), and except (A) as otherwise required by any existing Benefit Plan or applicable Law Legal Requirements, or (B) in the terms ordinary course of business (including in respect of the hiring, retention or termination of any Company employee of an Acquired Company, other than a Key Employee, during the Pre-Closing Period) (a) increase or grant any increase in the compensation, bonus, fringe or other benefits of, or pay, grant or promise any bonus to, any current or former employee, director or independent contractor who has an annual expected compensation in excess of $500,000, (b) grant or pay any severance or change in control pay or benefits to, or otherwise increase the severance or change in control pay or benefits of, any current or former employee, director or independent contractor, (c) enter into, materially amend or terminate any Benefit Plan as or any employee benefit plan, policy, program, agreement, trust or arrangement that would have constituted a Benefit Plan if it had been in effect on the date of this Agreement: , (Ad) adopttake any action to accelerate the vesting or payment of, terminateor otherwise fund or secure the payment of, establish any compensation or enter into benefits under any Company Benefit Plan; or (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (Ee) hire any or terminate (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause) any Key Employee;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xixv) make, change or revoke any material Tax election, fail to pay any income or election (other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Returnthan in the ordinary course of business), settle or compromise any income or other material Tax liability claim or submit liability, change (or make a request to any voluntary disclosure applicationGovernmental Body to change) any material aspect of its method of accounting for Tax purposes, enter into file any amended material Tax Return, prepare any Tax allocationReturn in a manner that is inconsistent with the past practice of the Acquired Companies, sharingsurrender any claim for a refund of a material amount of Taxes, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any the limitation period with respect applicable to any material Tax claim or assessment for any income or other material Taxes (other than such extensions occurring pursuant to an extension extensions of the time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) monthsReturn), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvi) agree, resolve or commit except as permitted by Section 5.11 and except for claims and litigation with respect to do any of the foregoing.
which an insurer (cbut no Acquired Company) Nothing contained in this Agreement shall give Parent, directly or indirectly, has the right to control the decision to settle, settle, compromise or direct the operations of the release any Legal Proceeding to which an Acquired Company prior is a party or is threatened to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required made a party (except with respect to any matter set forth (A) non-material disputes as may arise from time to time in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement Acquired Companies’ ordinary course of such consent could violate any applicable Laws.business and
Appears in 1 contract
Samples: Merger Agreement
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) on Part 4.3 of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: each of (i) the Company and its Subsidiaries shall conduct its business and operations operations: (A) in the Ordinary Course of Business Business; and (B) in compliance in all material respects with all applicable Laws Legal Requirements and the requirements of all Contracts that constitute material Contracts; (ii) the Company Material Contractsshall preserve intact its current business organization, keep available the services of its current officers and other employees and maintain its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the Company; and (iii) the Company shall promptly notify Replidyne of: (A) any notice or other communication from any Person alleging that the Consent of such Person is or may be required in connection with any of the Contemplated Transactions; and (B) any Legal Proceeding against, relating to, involving or otherwise affecting the Company that is commenced, or, to the Knowledge of the Company, threatened against, the Company.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) Part 4.3 of the Company Disclosure ScheduleSchedule or in the Ordinary Course of Business, (iii) as required by and subject to any Legal Requirement applicable Law or (iv) with to the Company and its Subsidiaries, during the Pre-Closing Period, the Company agrees that it shall not, without the prior written consent of Parent Replidyne (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), take any action set forth in Section 2.5(c)-(u); provided that, (i) for purposes of this Section 4.3(b), all references to $100,000 in Section 2.5 shall be replaced with $250,000 and (ii) notwithstanding the provisions of Section 2.5(e) or anything set forth in Part 4.3 of the Company Disclosure Schedule (except for the issuance of Company Warrants contemplated in the Company Stockholder Conversion Agreement), the Company shall not, without the prior written consent of Replidyne, issue options, warrants or other rights to acquire any capital stock or other securities of the Company, other than equity incentive awards issued under the Company’s 2007 Equity Incentive Plan (the “Company 2007 Plan”) to employees of and consultants to the Company in the Ordinary Course of Business that (i) do not cause the total number of shares subject to awards under the Company 2007 Plan to exceed the number of shares reserved for issuance under the Company 2007 Plan as of the date hereof and (ii) if such award requires exercise by the holder, have an exercise price not less than the fair market value of a share of Company Common Stock on the applicable Grant Date. Notwithstanding the foregoing, in the event any of the Company Options granted to the Company’s officers under the Company 2007 Plan set forth on Part 2.9(d) of the Company Disclosure Schedule are terminated, the Company may grant replacement options to such officers for the same number of shares and at all times the same exercise price (subject to appropriate adjustments to shares and price for stock splits or combinations) as currently set forth in agreements referenced on Part 2.9(d) without the approval of Replidyne.
(c) Notwithstanding the provisions of Sections 4.3(a) and (b) hereof, during the Pre-Closing Period, the Company shall not, nor shall it cause or permit be entitled to consummate any of its Subsidiaries to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock or repurchase, redeem or otherwise reacquire, directly or indirectly, any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iii) except as required to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvi) agree, resolve or commit to do any of the foregoingQualified Financing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 1 contract
Samples: Merger Agreement (Replidyne Inc)
Operation of the Company’s Business. (a) Except (i) as expressly contemplated or permitted by this Agreement or the Subscription Agreement, (ii) as set forth in Section 4.2(a5.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this AgreementLetter, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, respect to the extent reasonably necessaryissuance of any Company Notes, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19)which is expressly permitted, or (v) as may be consented to unless Parent shall otherwise consent in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: each of Period the Company shall, and shall cause its Subsidiaries shall to, use commercially reasonable efforts to conduct its business and operations in the Ordinary Course of Business and in material compliance in all material respects with all applicable Laws Law and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly contemplated or permitted by this Agreement, including the Subscription Agreement, (ii) as set forth in Section 4.2(b5.2(b) of the Company Disclosure ScheduleLetter, (iii) as required by applicable Law Law, (iv) with respect to the issuance of any Company Notes, which is expressly permitted, or (ivv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock stock; or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock Company Capital Stock or other securities (except in connection with the payment for shares of Company Common Stock from terminated employees, directors or consultants of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this AgreementCompany);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iii) except as required to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iii) other than in the Ordinary Course of Business, sell, issue grant, or authorize any of the foregoing actions with respect to more than 25% of the shares of Company Capital Stock outstanding as of the date of this Agreement: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options or Company Warrants), (B) any option, warrant or right to acquire any capital stock or any other security or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iv) form any Subsidiary or other than in the Ordinary Course of Business, acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(v) (A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business)Person, (B) incur or guarantee any indebtedness for borrowed money, or (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease lease, license or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(xvii) sell, assign, transfer, license, sublicense or otherwise dispose of any material Company IP Rights (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xiviii) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Returnwaive, settle or compromise any income pending or other material Tax liability or submit any voluntary disclosure applicationthreatened Legal Proceeding against the Company, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into waivers, settlements or agreements (A) for an amount not in excess of $100,000 in the Ordinary Course aggregate (excluding amounts to be paid under existing insurance policies or renewals thereof) and (B) that do not impose any material restrictions on the operations or businesses of Business the principal subject matter of which is not Taxes), request Company or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months)equitable relief on, or adopt or change any material accounting method in respect the admission of Taxeswrongdoing by the Company;
(xiiix) enter into, materially amend in a manner adverse to the Company or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation outside of the Contemplated TransactionsOrdinary Course of Business; or
(xvix) agree, resolve or commit to do any of the foregoing.
(c) . Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the First Effective Time. Prior to the First Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 1 contract
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health Sections 4 and safety 5 of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned)this Agreement, during the Pre-Closing Period: each of :
(a) the Company and each of its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business ordinary course and in compliance in all material respects with all applicable Laws substantially the same manner as such business and operations have been conducted prior to the requirements date of all Contracts that constitute Company Material Contracts.this Agreement;
(b) Except the Company and each of its Subsidiaries shall use reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and maintain its relations and good will with all suppliers, customers, landlords, creditors, employees and other Persons having business relationships with the Company or its Subsidiaries;
(ic) as expressly permitted by this Agreement, the Company and its Subsidiaries shall keep in full force all insurance policies identified in Part 2.17 of the Disclosure Schedule;
(iid) as set forth the Company and its Subsidiaries shall cause its officers to report regularly (but in Section 4.2(bno event less frequently than weekly) to Parent concerning the status of the business of the Company Disclosure Scheduleand its Subsidiaries, including the weekly bookings, revenue and backlog;
(iiie) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, neither the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do shall use any of the following:funds provided by Silicon Valley Bank in connection with that certain guaranty by Parent for any purposes other than as specifically set forth in that certain Side Letter dated June 20, 2001;
(if) neither the Company nor any of its Subsidiaries shall declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock stock, or shall repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under that the Company Plan in accordance with may repurchase Company Common Stock from former employees pursuant to the terms of such award in effect on the date of this Agreementexisting restricted stock purchase agreements);
(iig) neither the Company nor any of its Subsidiaries shall sell, issue, grant, pledge or otherwise dispose of or encumber issue or authorize any the issuance of the foregoing with respect to: (Ai) any capital stock or other security of the Company or any of its Subsidiaries security, (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (Bii) any option, warrant option or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (Ciii) any instrument convertible into or exchangeable for any capital stock or other security of (except that the Company or shall be permitted (w) to issue Company capital stock upon the exercise of outstanding Company warrants, (x) to issue Company Common Stock to employees upon the exercise of outstanding Company stock options, and (y) to issue shares of Company Common Stock upon the conversion of shares of Preferred Stock;
(h) neither the Company nor any of its SubsidiariesSubsidiaries shall amend or waive any of its rights under (i) any provision of its 1999 Stock Option Plan or 1995 Stock Plan, (ii) any provision of any agreement evidencing any outstanding Company stock options, or (iii) any provision of any restricted stock purchase agreement;
(iiii) except as required to give effect to anything in contemplation of neither the Closing, amend Company nor any of its Subsidiaries shall amend or its Subsidiaries’ Organizational Documentspermit the adoption of any amendment to the Company's Articles of Incorporation or Bylaws, other than the Charter Amendment, or effect or be permit the Company to become a party to any merger, consolidation, share exchange, business combinationAcquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except(except that the Company may issue shares of Company Common Stock upon the conversion of shares of Preferred Stock and upon the exercise of outstanding stock options in accordance with their terms, for and issue capital stock upon the avoidance exercise of doubt, the Contemplated Transactionsoutstanding warrants in accordance with their terms);
(ivj) neither the Company nor any of its Subsidiaries shall form any Subsidiary subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(Ak) neither the Company nor any of its Subsidiaries shall make any capital expenditure, except for capital expenditures that, when added to all other capital expenditures made on behalf of the Company or its Subsidiaries during the Pre-Closing Period, exceeds $10,000 per month;
(l) neither the Company nor any of its Subsidiaries 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, or (ii) amend or prematurely terminate, or waive any material right or remedy under, any such Contract;
(m) neither the Company nor any of its Subsidiaries 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 (iii) waive or relinquish any right, except for assets acquired, leased, licensed or disposed of by the Company pursuant to Contracts that are not Material Contracts;
(n) neither the Company nor any of its Subsidiaries shall (i) lend money to any Person (except for that the advancement of expenses Company and its Subsidiaries may make routine travel advances to employees, directors and consultants employees in the Ordinary Course ordinary course of Businessbusiness and may, consistent with its past practices, allow employees to acquire Company Common Stock in exchange for promissory notes upon exercise of Company stock options), or (Bii) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vio) other than as required by applicable Law neither the Company nor any of its Subsidiaries shall (i) establish, adopt or the terms of amend any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Employee Benefit Plan; , (B) cause or permit any Company Benefit Plan to be amended in any material respect; (Cii) pay any bonus or make any profit-sharing payment, cash incentive payment or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; or (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (Eiii) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for causenew employee;
(viip) recognize neither the Company nor any labor union of its Subsidiaries shall change any of its methods of accounting or labor organizationaccounting practices in any material respect;
(q) neither the Company nor any of its Subsidiaries shall make any Tax election;
(r) neither the Company nor any of its Subsidiaries shall commence or settle any material Legal Proceeding;
(s) neither the Company nor any of its Subsidiaries shall agree or commit to take any of the actions described in clauses"(e)" through "(r)" above. Notwithstanding the foregoing, except as otherwise required by applicable Law the Company and after its Subsidiaries may take any action described in clauses "(e)" through "(s)" above if Parent in its sole discretion gives its prior written consent to the taking of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required action by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvi) agree, resolve or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over or its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable LawsSubsidiaries.
Appears in 1 contract
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: Period (except with the prior written Consent of Parent) the Company shall:
(i) ensure that each of the Company and its Subsidiaries shall conduct Acquired Corporations conducts its business and operations (A) in the Ordinary Course of Business Business; and (B) in compliance in all material respects with all applicable Laws Legal Requirements and the requirements of all Material Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent for the purpose of this Section 6.2 shall not include any contract that would be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock or repurchase, redeem or otherwise reacquire, directly or indirectly, any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect a Material Contract if existing on the date of this Agreement);
(ii) selluse its reasonable best efforts to ensure that each of the Acquired Corporations preserves intact its current business organization, maintains its books and records in substantially the same manner as heretofore maintained, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Acquired Corporations whose loss would have a Material Adverse Effect on the Acquired Corporations, taken as a whole;
(iii) keep in full force all insurance policies referred to in Section 4.14;
(iv) to the extent reasonably requested by Parent, cause its officers to confer regularly with Parent concerning the status of the Company's business;
(v) maintain and keep all of its properties and equipment in good repair, working order and condition, ordinary wear and tear excepted, and perform all of its duties and obligations under all contracts, agreements, understandings and commitments applicable thereto, except in each case where the failure to maintain, comply or perform, individually or in the aggregate, would not have or be reasonably likely to have a Material Adverse Effect on the Acquired Corporations;
(A) cause each of the Acquired Corporations to timely file all Federal, state and local, domestic and foreign, income and franchise Tax Returns and reports and all other material Tax Returns and reports ("POST-SIGNING RETURNS") required to be filed by each such Acquired Corporation (after taking into account any extensions), which it is not contesting in good faith as set forth in Section 4.15(b) of the Company Disclosure Schedules, which shall be complete and correct, except for failures to file or be true and correct that individually or in the aggregate are not reasonably likely to result in a material liability for the Company; (B) cause each of the Acquired Corporations to timely pay all Taxes due and payable in respect of such Post-Signing Returns that are so filed; (C) accrue a reserve in its books and records and financial statements in accordance with past practice for Taxes payable by the Acquired Corporations for which no Post-Signing Return is due prior to the Effective Time; and (D) notify Parent of any Legal Proceeding pending against or with respect to the Acquired Corporations in respect of any material Tax.
(b) During the Pre-Closing Period (except with the prior written Consent of Parent), the Company shall not, and shall not permit any other Acquired Corporation to:
(i) (A) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity or voting interests, except for dividends by a direct or indirect wholly owned Subsidiary of the Company to its parent; (B) split, combine or reclassify any of its capital stock or other equity or voting interests, or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other equity or voting interests; or (C) purchase, redeem or otherwise acquire any shares of capital stock or any other securities of any Acquired Corporation or any options, warrants, calls or rights to acquire any such shares or other securities (including any Company Stock Options or shares of restricted stock except pursuant to forfeiture conditions of such restricted stock);
(ii) issue, grantdeliver, sell, pledge or otherwise dispose encumber any shares of its capital stock, any other equity or encumber voting interests or authorize any securities convertible into, or exchangeable for, or any options, warrants, calls or rights to acquire or receive, any such shares, interests or securities or any stock appreciation rights, phantom stock awards or other rights that are linked in any way to the price of the foregoing with respect to: (A) any capital stock Company Common Stock or other security the value of the Company or any part thereof (other than the issuance of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company OptionsStock Options outstanding on the date of this Agreement in accordance with their present terms); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iii) except as required amend or propose to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational Documents, Documents or effect or be become a party to any mergerany, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split recapitalization or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(iv) form acquire or agree to acquire, or dispose of or agree to dispose of, any Subsidiary or acquire any equity interest or assets other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants than in the Ordinary Course of Business), (B) incur any business or guarantee any indebtedness for borrowed moneyPerson, (C) guarantee any debt securities of otherseither by purchase, merger or consolidation, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess by purchasing a portion of the budgeted capital expenditure amounts set forth in the Company operating budget delivered assets thereof, or by any other manner;
(v) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) or modify, amend, terminate or exercise any right to Parent concurrently with the execution renew any lease or sublease of this Agreement (the “Company Budget”)real property;
(vi) other than as required by applicable Law sell, lease, license, mortgage or the terms otherwise encumber or subject to any Lien, abandon or otherwise dispose of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers properties or employees, assets other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than rental merchandise in the Ordinary Course of Business;
(ixvii) permit any purchase of Company Common Stock by the Company;
(viii) (A) repurchase, prepay or incur any indebtedness (other than indebtedness with respect to working capital in amounts consistent with past practice) or guarantee any indebtedness of another Person (other than immaterial amounts in the Ordinary Course of Business); (B) materially modify any indebtedness or other liability; (C) issue or sell any debt securities or options, warrants, calls or other rights to acquire any material asset debt securities of any Acquired Corporation; (D) guarantee any debt securities of another Person; (E) enter into any "keep well" or sell, lease other agreement to maintain any financial statement condition of another Person; or otherwise irrevocably dispose (F) enter into any arrangement having the economic effect of any of its assets the foregoing;
(ix) make any loans, advances or propertiescapital contributions to, or grant investments in, any Encumbrance other Person, other than the Company or any direct or indirect wholly owned Subsidiary of the Company, except for customary advances to employees in accordance with past practice;
(A) pay, discharge, settle or satisfy any material claims (including claims of Shareholders and any Shareholder litigation relating to this Agreement, the Merger or any Contemplated Transaction or otherwise), liabilities (including any material Tax liability) or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the Ordinary Course of Business or as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the Company Financial Statements (for amounts not in excess of such reserves) in each case in complete satisfaction, and with a complete release, of such matter with respect to all parties to such assets matter, of actions, suits, proceedings or propertiesclaims; (B) waive the benefits of, except or agree to modify in any material manner, any confidentiality, standstill or similar agreement to which the Company is a party or otherwise waive, release, grant or transfer any right of material value other than in the Ordinary Course of Business; or (C) commence any Legal Proceeding;
(xi) modify, amend or terminate in any material respect, any of its Material Contracts or waive, release or assign any material rights or claims;
(xii) enter into any Material Contract or other material commitment or transaction, or take any other material action, outside the Ordinary Course of Business;
(xxiii) sellmake any payment in excess of $5,000 in the aggregate or incur any liability or obligation for the purpose of obtaining any Consent from any third party to the Merger or the Contemplated Transactions;
(xiv) except as required by applicable Law, assign, transfer, license, sublicense (A) adopt or otherwise dispose enter into any collective bargaining agreement or other labor union contract applicable to the employees of any Company IP Acquired Corporation; (B) terminate the employment of any employee of any Acquired Corporation that has an employment, severance or similar agreement or arrangement with any Acquired Corporation, except as otherwise contemplated herein; (C) enter into or modify or amend any employment or severance agreement with any employee of an Acquired Corporation;
(xv) hire any new employee (other than store level employees with an annual base salary not to exceed the Company's ordinary pay rate for store level employees), promote any employee except in order to fill a position vacated after the date of this Agreement, or engage any consultant or independent contractor for a period exceeding 10 days;
(xvi) increase in any manner the compensation or benefits of, or pay or agree to pay any bonus to, any employee, officer, director or independent contractor of any Acquired Corporation, except pursuant to non-exclusive licenses the Stay Bonus Plan in the form attached hereto as Exhibit B (the "STAY BONUS PLAN"), to be adopted by the Company simultaneously with the execution of this Agreement, which shall provide for the payment of certain stay bonuses to certain employees as provided therein;
(xvii) except as required to comply with applicable Law or any contract or Benefit Plan in effect on the date of this Agreement, (A) pay to any employee, officer, director or independent contractor of any Acquired Corporation any benefit not provided for under any contract or Benefit Plan in effect on the date of this Agreement other than the payment of base compensation in the Ordinary Course of Business; (B) except to the extent expressly permitted under Section 6.2(b)(ii);
, grant any awards under any Benefit Plan (xiincluding the grant of Company Stock Options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock or the removal of existing restrictions in any contract or Benefit Plan or awards made thereunder); (C) make, change take any action to fund or revoke in any material Tax election, fail other way secure the payment of compensation or benefits under any contract or Benefit Plan; (D) take any action to pay accelerate the vesting or payment of any income compensation or other material Tax as such Tax becomes due and payable, file benefit under any amendment making any material change to any Tax Return, settle contract or compromise any income or other material Tax liability or submit any voluntary disclosure applicationBenefit Plan; (E) adopt, enter into or amend any Tax allocation, sharing, indemnification or other similar agreement or arrangement (Benefit Plan other than customary commercial contracts offer letters entered into with new employees in the Ordinary Course of Business the principal subject matter of which that provide, except as required by applicable Law, for "at will employment" with no severance benefits; or (F) make any material determination under any Benefit Plan that is not Taxes), request or consent to any extension or waiver of any limitation period inconsistent with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of TaxesBusiness;
(xiixviii) enter intoexcept as required by GAAP or applicable Law, materially amend change its fiscal year, revalue any of its material assets or terminate make any Company Material Contractchanges in cash management, financial or Tax accounting methods, principles or practices, including making or revoking any material Tax election (unless required by Law);
(xiiixix) introduce any new product lines or engage in any lines of business other than as required by Law or GAAP, the rent-to-own business;
(xx) take any action (or omit to change accounting policies take any action) if such action (or procedures;
omission) would or is reasonably likely to result in (xivA) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation representation and warranty of the Contemplated TransactionsCompany set forth in this Agreement that is qualified as to materiality becoming untrue (as so qualified); or (B) any such representation and warranty that is not so qualified becoming untrue in any material respect; or
(xvixxi) agreeauthorize any of, announce an intention to do any of, or commit, resolve or commit agree to do take any of of, the foregoingforegoing actions.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, During the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective TimePre-Closing Period, the Company shall exercisepromptly notify Parent in writing of:
(i) the discovery by the Company of any event, consistent with condition, fact or circumstance that occurred or existed on or prior to the terms date of this Agreement and conditions that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement;
(ii) any change in the Company's capital structure, including, without limitation, any change resulting from an exercise of a Company Stock Option outstanding as of the date hereof;
(iii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement;
(iv) any material breach of any covenant of the Company;
(v) any event, complete unilateral control and supervision over its business operations. Notwithstanding anything to condition, fact or circumstance that would make the contrary timely satisfaction of any of the conditions set forth in ARTICLE VIII and ARTICLE IX impossible or unlikely or that has had or could reasonably be expected to have a Material Adverse Effect on the Acquired Corporations; and
(vi) (A) any notice or other communication from any Person alleging that the Consent of such Person is or may be required in connection with the transactions contemplated by this Agreement; and (B) any Legal Proceeding or material claim commenced, no consent of Parent shall be required or to the Company's Knowledge, threatened or asserted against or with respect to any matter set forth of the Acquired Corporations or the Contemplated Transactions. Should the occurrence of any of the facts or conditions pursuant to this Section 6.2(c) require any change to the Company Disclosure Schedules, the Company shall promptly deliver to Parent a supplement to the Company Disclosure Schedules specifying such change. Notwithstanding the foregoing, no notification given to Parent pursuant to this Section 6.2(c) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable LawsAgreement.
Appears in 1 contract
Operation of the Company’s Business. From and after the date hereof and until the earlier of the Effective Time or the termination of this Agreement: (a) Except the Company and each of its subsidiaries shall conduct their business and operations (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, ordinary course and in accordance with past practices and (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Material Contracts that constitute Company Material Contracts.
(excluding events outside of the Company’s reasonable control); (b) Except the Company and its subsidiaries shall use commercially reasonable efforts to preserve intact their current business organizations, maintain the services of their current officers (including the Key Employees) and to preserve their relationships and goodwill with material suppliers, customers, development partners, landlords, creditors, licensors, licensees and employees; (c) the Company and its subsidiaries shall use commercially reasonable efforts to cause to be provided assurances and support required by any Contract relating to any Company Product in order to prevent any condition under such Contract from occurring that would reasonably be expected to result in (i) as expressly permitted by this Agreementany transfer by, or disclosure to a third party by, the Company or one of its subsidiaries of the source code for any portion of any Company Product or (ii) as set forth a release from any escrow of any source code that has been deposited or is required to be deposited in Section 4.2(bescrow under the terms of such Contract; and (d) the Company shall promptly notify Parent of (i) any notice or other communication (in writing or, to the Knowledge of the Company, otherwise) from any Person alleging that the consent or other agreement or approval of such Person is or may be required in connection with the Merger or any of the transactions contemplated hereby, and 000000000 x00 (xx) any Legal Proceeding commenced, or, to the Knowledge of the Company, threatened (in writing or, to the Knowledge of the Company, otherwise) against the Company Disclosure Scheduleor any of its subsidiaries. Without limiting any of the foregoing, neither the Company nor any of its subsidiaries shall take (iii) as required by applicable Law or (iv) with agree to take), without the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed conditioned or conditioned)delayed) any action that, at all times during if taken prior to the Pre-Closing Perioddate hereof, the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock or repurchase, redeem or otherwise reacquire, directly or indirectly, any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with would have been required to be disclosed pursuant to the terms of such award in effect on the date of this Agreement);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iii) except as required to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of BusinessSection 2.10(a), (B) incur or guarantee any indebtedness for borrowed moneyb), (Cc), (f), (g), (h), (i), (j), (k), (l), (m), (n), (o), (p), (q), (r), (s) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”t);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvi) agree, resolve or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this AgreementSection 4.1, no consent of Parent shall be required with respect to the Company and its subsidiaries may take any matter action set forth in this Section 4.2 or elsewhere in this Agreement to Schedule 4.1 from and after the extent that the requirement of such consent could violate any applicable Lawsdate hereof.
Appears in 1 contract
Samples: Draft Agreement (Rovi Corp)
Operation of the Company’s Business. (a) Except (i) as set forth in Section on Schedule 4.2(a) of the Company Disclosure Schedule), (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, or (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), during the Pre-Closing Period: each of the Company and its Subsidiaries shall (A) conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts, and (B) continue to pay material outstanding accounts payable and other material current Liabilities (including payroll) in the Ordinary Course of Business.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section on Schedule 4.2(b) of the Company Disclosure Schedule), (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), at all times during the Pre-Closing Period, the Company shall not, nor shall it cause or permit any of its Subsidiaries to, not do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except repurchases from terminated employees, directors or consultants of the Company or in connection with the payment of the exercise price and/or or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants stock options or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its SubsidiariesCompany;
(iii) except as required to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of reasonable and customary expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of $250,000 of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”)) or (E) forgive any loans to any Persons, including the Company’s employees, officers, directors or Affiliates;
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budgetpractice; (D) increase the severance or change of change-of-control benefits offered to any current or new employees, directors or consultants; consultants or (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its material assets or properties, or grant any Encumbrance with respect to such material assets or properties, except in the Ordinary Course of Business;
(xix) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business)) or any Company In-Licensed IP;
(xix) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xiixi) enter into, materially amend or terminate any Company Material ContractContract or Contract that would be deemed a Company Material Contract if entered into prior to the date hereof (other than in connection with the Ordinary Course of Business);
(xii) except as otherwise set forth in the Company Budget and the incurrence or payment of any Transaction Expenses, make any expenditures or discharge or satisfy any Liabilities, in each case, in amounts that exceed the aggregate amount anticipated in the Company Budget by $1,500,000;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding;
(xv) (A) fail to maintain any material insurance policies in full force and effect prior to the renewal period of any such material insurance policies or (B) fail to use commercially reasonable efforts to renew any such material insurance policies following the applicable expiration or acquire substantially similar insurance policies;
(xvi) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions;
(xvii) enter into a new line of business in a new geographic area where it was not previously conducted; or
(xvixviii) agree, resolve or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 1 contract
Operation of the Company’s Business. (a) Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Section 4.2(aSection 6.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this AgreementLetter, (iii) as required by applicable Law, or (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or unless Parent shall otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to consent in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: each of Period the Company shall, and shall cause its Subsidiaries shall to, use commercially reasonable efforts to conduct its business and operations in the Ordinary Course of Business and in material compliance in all material respects with all applicable Laws Law and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly contemplated or permitted by this Agreement, including as contemplated in the Concurrent Investment, (ii) as set forth in Section 4.2(bSection 6.2(b) of the Company Disclosure ScheduleLetter, (iii) as required by applicable Law Law, or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock stock; or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock of the Company or other securities (except in connection with the payment for repurchase or redemption of shares of Company Common Stock from terminated employees, directors or consultants of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this AgreementCompany);
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iii) except as required to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational Documentsorganizational documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransactions contemplated by this Agreement;
(iii) sell, issue, grant, pledge or otherwise dispose of or encumber or authorize any of the foregoing actions with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of Company Common Stock issued upon the valid exercise of Company Options or Company Warrants issued and outstanding as of the date of this Agreement or issued in accordance with this Section 6.2), (B) any option, warrant or right to acquire any capital stock or any other security or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity Person or enter into a joint venture with any other EntityPerson;
(v) (A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business)Person, (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, others or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure or commitment in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”)$100,000;
(vi) other than as required by applicable Law or in the terms Ordinary Course of any Company Benefit Plan as in effect on the date of this AgreementBusiness: (A) adopt, terminate, establish or enter into any Company Benefit Plan; employee plan, including, for the avoidance of doubt, any equity awards plans, (B) cause or permit any Company Benefit Plan employee plan to be amended other than as required by law or in any material respect; order to make amendments for the purposes of compliance with Section 409A of the Code, (C) pay any material bonus or make any material profit-sharing or similar payment toto (except with respect to obligations in place on the date of this Agreement pursuant to any employee plan disclosed to Parent), or materially increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; , or (E) hire hire, engage or appoint any (x) officer or (y) employee whose annual base salary is or is expected individual who may reasonably be deemed to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for causean “executive officer” as defined under the Exchange Act;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in outside the Ordinary Course of Business;
(ixviii) acquire any material asset or sell, lease lease, license or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance Lien with respect to such assets or properties, except in the Ordinary Course of Business;
(xix) sell, assign, transfer, license, sublicense or otherwise dispose of any material Company Owned IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xix) other than in the Ordinary Course of Business: (A) make, change or revoke any material Tax election, fail to pay ; (B) file any amended income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement ; (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7C) months), or adopt or change any material accounting method in respect of Taxes; (D) enter into any material Tax closing agreement, settle any material Tax claim or assessment; (E) consent to any extension or waiver of the limitation period applicable to or relating to any material Tax claim or assessment; or (F) surrender any material claim for refund;
(xi) waive, settle or compromise any pending or threatened Action against the Company, other than waivers, settlements or agreements (A) for an amount not in excess of $50,000 in the aggregate (excluding amounts to be paid under existing insurance policies or renewals thereof) and (B) that do not impose any material restrictions on the operations or businesses of the Company or any equitable relief on, or the admission of wrongdoing by the Company;
(xii) delay or fail to repay when due any material obligation, including accounts payable and accrued expenses, other than in the Ordinary Course of Business;
(xiii) forgive any loans to any Person, including its employees, officers, directors or Affiliate;
(xiv) other than, for the avoidance of doubt, obtaining “tail” insurance coverage in connection with the Closing, terminate or modify in any material respect, or fail to exercise renewal rights with respect to, any material insurance policy;
(xv) enter into, materially amend or terminate any Company Material Contract;
(xiiixvi) (A) materially change pricing or royalties or other than as required payments set or charged by Law the Company or GAAP, take any action of its Subsidiaries to its customers or licensees or (B) agree to materially change accounting policies pricing or procedures;
(xiv) initiate royalties or settle other payments set or charged by Persons who have licensed Intellectual Property to the Company or any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactionsits Subsidiaries; or
(xvixvii) agree, resolve or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 1 contract
Samples: Merger Agreement (CohBar, Inc.)
Operation of the Company’s Business. (a) Except During the Pre-Closing Period: (i) as set forth the Company shall ensure that each of the Acquired Corporations conducts its business and operations in Section the ordinary course and in accordance with past practices; (ii) the Company shall use commercially reasonable efforts to cause each of the Acquired Corporations to conduct its business and operations in compliance with all applicable Legal Requirements and the requirements of all Significant Contracts, to preserve intact its current business organization, to keep available the services of its current officers and other employees and to maintain its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Acquired Corporations and with all Governmental Bodies; (iii) the Company shall promptly notify Parent of any claim asserted or Legal Proceeding commenced, or, to the Knowledge of the Company, threatened against, relating to, involving or otherwise affecting any of the Acquired Corporations that relates to any of the Contemplated Transactions; (iv) the Company shall consult with Parent (and take Parent’s views into account) in determining whether to take any action (and in connection with any action taken by any of the Acquired Corporations) relating to any of the matters described in Item 2 of Part A of the Company Disclosure Schedule; and (v) the Company shall use its reasonable efforts to settle the matter identified in Part 4.2(a) of the Company Disclosure Schedule, Schedule in the manner set forth therein (ii) as expressly permitted by or required in accordance this Agreement, it being understood that the Company shall consult with Parent (iii) as required by applicable Law, (ivand take Parent’s views into account) in connection with the COVID-19 pandemic, to the extent reasonably necessary, any such settlement).
(Ab) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: each of , the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreementnot, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with without the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditionedwithheld with respect to the matters described in clauses “(iv),” “(vi),” “(vii),” “(x),” “(xi),” “(xii),” “(xiii),” “(xiv),” “(xv),” “(xvi)” and “(xviii)” of this sentence), at all times during the Pre-Closing Period, and the Company shall ensure that each of the other Acquired Corporations does not, nor without the prior written consent of Parent which consent shall it cause or permit any not be unreasonably withheld with respect to the matters described in clauses “(iv),” “(vi),” “(vii),” “(x),” “(xi),” “(xii),” “(xiii),” “(xiv)” “(xv),” “(xvi)” and “(xviii)” of its Subsidiaries to, do any of the following:this sentence):
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock stock, or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercisesecurities, settlement or vesting of other than intercompany payments made under any award granted under the Company Plan in accordance with the terms of such award in effect arrangements among any Acquired Corporations that are existing on the date of this Agreement)Agreement and that are consistent with past practices;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any of the foregoing with respect tosale, issuance or grant of: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options)security; (B) any option, call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that: (1) the Company may issue shares of Company Common Stock upon the valid exercise of Company Options or Company Stock Awards outstanding as of the date of this Agreement; and (2) the Company may, in the ordinary course of business and consistent with the past practices set forth in Part 4.2(b)(ii) of the Company Disclosure Schedule, grant Company Options one time each quarter to employees (including officers) of the Company, provided that such Company Options: (x) shall have an exercise price equal to the fair market value of the Company Common Stock covered by such options determined as of the time of the grant of such options; (y) shall not contain any “single-trigger,” “double-trigger” or other vesting acceleration provisions and shall not be subject to acceleration (in whole or in part) as a result of the Merger or any of its Subsidiariesthe other Contemplated Transactions (whether alone or in combination with any termination of employment or other event); and (z) shall contain the Company’s standard vesting schedule;
(iii) except as required to give effect to anything in contemplation of the Closing, amend or waive any of its or its Subsidiaries’ Organizational Documentsrights under, or accelerate the vesting under, any provision of any of the Company Option Plans or any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract, except as set forth in Part 4.2(b)(iii) of the Company Disclosure Schedule or as required by applicable Legal Requirements;
(iv) amend or permit the adoption of any amendment to its articles of incorporation and bylaws of the Company or the charter or other organizational documents of any of the other Acquired Corporations or form any Subsidiary;
(v) except as set forth in Part 4.2(b)(v) of the Company Disclosure Schedule: (A) acquire any equity interest or other interest in any other Entity; or (B) effect or be become a party to any merger, consolidation, plan of arrangement, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, issuance of bonus shares, division or subdivision of shares, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”)transaction;
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase capital expenditure (except that the Acquired Corporations may make capital expenditures that do not exceed the amount set forth in Part 4.2(b)(vi) of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for causeDisclosure Schedule);
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xvA) enter into or amend a Contract that would reasonably be expected to prevent become bound by, or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactions; or
(xvi) agree, resolve or commit to do permit any of the foregoing.
assets owned or used by it to become bound by: (c1) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations any Significant Contract of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth type described in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 clauses “(ii),” “(v),” “(vii),” “(x),” “(xvi),” “(xvii)” or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.“
Appears in 1 contract
Operation of the Company’s Business. (a) Except During the Pre-Closing Period, except to the extent Parent shall otherwise consent in writing (such consent not to be unreasonably withheld or delayed) and except as required by this Agreement:
(i) the Company and its subsidiaries shall conduct its business and operations (A) in the ordinary course and in accordance with past practices and (B) in material compliance with all applicable laws and the material requirements of all Material Contracts to which any of them is a party;
(ii) the Company and its subsidiaries 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, licensors, licensees, employees and other persons having business relationships with the Company or any of its subsidiaries, as the case may be;
(iii) the Company shall keep in full force all insurance policies referred to in Section 3.24;
(iv) the Company shall provide all notices, assurances and support required by any Material Contract to which it or any of its subsidiaries is a party relating to any Company Intellectual Property in order to ensure that no condition under such Material Contract occurs that could result in, or could increase the likelihood of (A) any transfer or disclosure by the Company or any of its subsidiaries of any of their source code, or (B) a release from any escrow of any source code that has been deposited or is required to be deposited in escrow under the terms of such Material Contract to which either the Company or any of it subsidiaries is a party;
(v) the Company shall promptly notify Parent of (A) any notice or other communication from any person alleging that the consent of such person is or may be required in connection with the transactions contemplated by this Agreement, and (B) any claim or action commenced or, to the knowledge of the Company threatened against, relating to or involving or otherwise affecting the Company or any of its subsidiaries that relates to the consummation of the transactions contemplated by this Agreement; and
(vi) the Company shall (to the extent reasonably requested by Parent) cause its officers to report regularly to Parent concerning the status of the Company's business.
(b) During the Pre-Closing Period, except as set forth in on Section 4.2(a5.02(b) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreementthe Company shall not, (iii) as required by applicable Law, (iv) in connection with without the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety prior written consent of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheldwithheld or delayed, delayed or conditioned), during the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during the Pre-Closing Period, the Company shall not, nor shall it cause or permit any of its Subsidiaries subsidiaries to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock or stock,
(ii) repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities except for repurchases of outstanding unvested shares of Company Common Stock in respect of which the Company has a right under specified circumstances to repurchase such shares at a fixed purchase price (except which shall not exceed the Cash Consideration) pursuant to restricted stock purchase agreements in connection with the payment form attached as Exhibit A to Section 3.03 of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)Disclosure Schedule;
(iiiii) sell, issue, grantgrant or authorize the issuance or grant of, or pledge or otherwise dispose of or encumber or authorize subject to any of the foregoing with respect to: Lien (A) any shares of capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); security, (B) any option, call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security security, or (D) any phantom stock or stock rights, SARs or stock - based performance units, except that (1) the Company may issue Company Common Stock (x) upon the valid exercise of Stock Options and Warrants outstanding as of the date of this Agreement in accordance with their present terms, and (y) pursuant to the ESPP, and (2) the Company may grant up to 500,000 options under its stock option plans to its existing employees and employees hired by the Company after the date of this Agreement in the ordinary course of business and consistent with past practice;
(iv) amend or waive any of its rights under, or accelerate the vesting under, any provision of any of the Company Stock Plans, any provision of any agreement evidencing any outstanding Stock Option or any restricted stock purchase agreement, or otherwise modify any of its Subsidiariesthe terms of any outstanding Stock Option, Warrant or other security or any related Contract;
(iiiv) except as required amend or permit the adoption of any amendment to give effect to anything in contemplation its certificate of the Closing, amend any of its incorporation or its Subsidiaries’ Organizational Documentsbylaws or other charter or organizational documents, or effect or be become a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivvi) form any Subsidiary subsidiary or acquire any equity interest or other interest in any other Entity entity or acquire by any manner, any person or division, business or any assets that individually or in the aggregate have a purchase price in excess of $100,000, except for purchases of components or supplies in the ordinary course of business and consistent with past practice;
(vii) make any capital expenditure or enter into a joint venture with any other Entityagreements providing for payments which, individually or in the aggregate, are in excess of amounts set forth in Section 5.02(b)(vii) of the Company Disclosure Schedule;
(Aviii) enter into or become bound by, or permit any of the assets owned or used by the Company or any of its subsidiaries to become bound by, any Material Contract, or amend or terminate, or waive or exercise any material right or remedy under, any Material Contract other than in the ordinary course of business and consistent with past practice not in excess of $50,000;
(ix) acquire or license any right or other asset from any other person or sell, encumber or otherwise dispose of, or lease or license, any right or other asset to any other person (except in each case for assets acquired, leased, licensed or disposed of by the Company in the ordinary course of business and consistent with past practice with an aggregate value not in excess of $100,000), or waive or relinquish any material right;
(x) lend money or make any advance to any Person person (other than transfers or loans among the Company and its wholly-owned subsidiaries who are also parties to the Loan and Security Agreement);
(xi) except for the advancement of expenses to employeesas required by law or as otherwise contemplated by this Agreement (A) establish, directors and consultants in the Ordinary Course of Business)adopt or amend or terminate any Benefit Plan or Benefit Agreement, (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth except in the Company operating budget delivered to Parent concurrently ordinary course of business and consistent with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adoptpast practice, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees; (C) grant any current or former director, consultant, officer or other than increases employee any increase in base salary and annual cash bonus opportunities and payments severance or termination pay, (D) amend or modify any Stock Option, (E) make any payment to any person under any Benefit Plan that is not required to be made to such person under such Benefit Plan as in effect on the date of this Agreement, (F) change the manner in which contributions to any Pension Plan are made or the basis on which such contributions are determined, or (G) take any action to accelerate any rights or benefits, or make any material determinations not in the Ordinary Course ordinary course of Business business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; under any Benefit Plan or Benefit Agreement;
(D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (EA) hire any (x) officer new employee at the level of director or (y) employee whose above or with an annual base salary is or is expected in excess of $100,000, (B) promote any employee except in order to be more than $250,000 per year fill a position vacated after the date of this Agreement, or (FC) terminate engage any consultant or give notice of termination to any officer independent contractor for a period exceeding 30 days other than for causein the ordinary course of business and consistent with past practice;
(viixiii) recognize any labor union or labor organization, except insofar as otherwise may be required by applicable Law a change in GAAP, make any changes in accounting methods, principles or practices;
(xiv) make any tax election or compromise or settle any material income tax liability;
(xv) commence or settle any legal proceeding (other than (A) with respect to patent lawsuits currently pending and after prior written consent set forth in Section 5.02(b)(xv) of Parent the Company Disclosure Schedule and (which consent shall not be unreasonably withheld, delayed or conditionedB) Collection Actions);
(viiixvi) enter into or amend any Contract whether written or oral that contains any guarantees as to the Company's or any of its subsidiaries future revenues;
(xvii) enter into or amend any agreements pursuant to which any person is granted exclusive marketing, manufacturing or other rights with respect to any product process or technology of the Company or any of its subsidiaries;
(xviii) transfer or license to any person or entity or otherwise extend or modify any rights to the Intellectual Property of the Company and its subsidiaries other than in the ordinary course of business and consistent with past practice; provided that in no event shall the Company or any of its subsidiaries license on an exclusive basis or sell any Intellectual Property of the Company or its subsidiaries;
(xix) enter into any material transaction or take any other than in material action outside the Ordinary Course ordinary course of Businessbusiness or inconsistent with past practices;
(ixxx) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies that would, or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay result in any condition to the consummation of the Contemplated TransactionsMerger set forth in Article VII not being satisfied; or
(xviA) agreepay, resolve discharge, settle or commit satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to do the date of this Agreement), or modify the terms of any existing settlement agreement or arrangement, other than the payment, discharge, settlement or satisfaction, in the ordinary course of business and consistent with past practices or in accordance with their terms, of Non-Litigation Liabilities recognized or disclosed in the foregoing.
most recent consolidated financial statements (cor the notes thereto) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, included in the Company shall exercise, SEC Documents or Non-Litigation Liabilities incurred since the date of such financial statements in the ordinary course of business consistent with past practice, (B) cancel any indebtedness, (C) waive or assign any claims or rights of substantial value, (D) waive any benefit of, agree to modify in any manner, terminate, release any person from or fail to enforce any standstill or similar agreement to which the terms and conditions Company or any of this Agreementits subsidiaries is a party or of which the Company or any of its subsidiaries is a beneficiary or (E) waive any material benefit of, complete unilateral control and supervision over agree to modify in any material respect, terminate, release any person from or fail to enforce any confidentiality or similar agreement to which the Company or any of its business operationssubsidiaries is a party or of which the Company or any of its subsidiaries is a beneficiary. Notwithstanding anything to the contrary set forth in this Agreement, no consent For purposes of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.this
Appears in 1 contract
Operation of the Company’s Business. (a) Except During the Pre-Closing Period, except (iw) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as may be required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (ivx) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), at (y) as expressly required by this Agreement or (z) as set forth in Section 4.2(a) of the Disclosure Schedule: (i) the Company shall conduct, and shall ensure that each of the Company’s controlled Subsidiaries (excluding, for the avoidance of doubt, GAC) conducts, and shall use reasonable best efforts to cause (including by exercising any rights under any applicable governing document) each of the other Acquired Companies to conduct, its business and operations in the ordinary course and consistent with past practices; (ii) the Company shall use commercially reasonable efforts to ensure that the Company and each of its controlled Subsidiaries (excluding, for the avoidance of doubt, GAC) preserves intact, and to cause (including by exercising any rights under any applicable governing document) each of the other Acquired Companies to preserve intact, its current business organization, keeps available the services of its current officers and other employees (other than for routine terminations in the ordinary course of business consistent with past practice of employees who are not Key Employees) and key service providers and maintains its relations and goodwill with all times during suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having material business relationships with such Acquired Company; and (iii) the Company shall promptly notify Parent of the receipt of any written notice from any Person alleging that the Consent of such Person is or may be required in connection with the Merger or any of the other Contemplated Transactions.
(b) During the Pre-Closing Period, except (w) as may be required by applicable Law, (x) with the prior written consent of Parent (which consent shall not be unreasonable withheld, conditioned or delayed); (y) as expressly required by this Agreement or (z) as set forth in Section 4.2(b) of the Disclosure Schedule, the Company shall not, nor and the Company shall it cause or permit any of its Subsidiaries to, do any ensure that each of the followingCompany’s controlled Subsidiaries (excluding, for the avoidance of doubt, GAC) do not, and shall use reasonable best efforts to cause (including by exercising any rights under any applicable governing document) each of the other Acquired Companies not to:
(i) declare, accrue, set aside or pay any dividend or make any other distribution (whether in cash, stock or otherwise) in respect of any shares of its capital stock (except for (A) the Special Dividend or (B) dividends paid by any Subsidiary of the Company in the ordinary course consistent with past practice to the Company or to any other wholly owned Subsidiary of the Company), or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)securities;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any of the foregoing with respect tosale, issuance or grant of: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options)security; (B) any option, stock appreciation right, restricted stock unit, deferred stock unit, market stock unit, performance stock unit, restricted stock award or other equity-based compensation award (whether payable in cash, stock or otherwise), call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiariessecurity;
(iii) except as required to give effect to anything in contemplation of the Closing, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of the Company Stock Award Plans or any provision of any Contract evidencing any Company Equity Award, or otherwise modify any of the terms of any outstanding Company Equity Award, warrant or other security or any related Contract;
(iv) amend or permit the adoption of any amendment to its Subsidiaries’ Organizational Documentscertificate of incorporation or bylaws or other charter or organizational documents, or effect or be become a party to any liquidation, dissolution, merger, consolidation, share exchange, business combination, plan or scheme of arrangement, amalgamation, restructuring, recapitalization, reclassification of shares, stock split, reverse stock split split, division or subdivision of shares, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) make any capital expenditure or incur any obligation or liability in respect thereof other than expressly provided for in the budget of the Acquired Companies Made Available to Parent or in an amount not exceeding $150,000, individually, or $500,000 in the aggregate;
(vii) (A) enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any Material Contract; or (B) renew, extend, amend or terminate, or waive or exercise any material right or remedy under, any Material Contract, other than in the ordinary course of business and consistent with past practices;
(viii) enter into or become bound by any Contract imposing any material restriction on the right or ability of any Acquired Company (A) to engage in any line of business or compete with, or provide services to, any other Person or in any geographic area, (B) to acquire any material product or other material asset or any service from any other Person, sell any product or other material asset to or perform any service for any other Person, or transact business or deal in any other manner with any other Person or (C) to develop, sell, supply, license, distribute, offer, support or service any material product or any material Intellectual Property Rights or other material asset to or for any other Person;
(ix) enter into or become bound by any Contract that (A) grants material and exclusive rights to license, market, sell or deliver any product of any Acquired Company, (B) contains any “most favored nation” or similar provision in favor of the other party or (C) contains a right of first refusal, first offer or first negotiation or any similar right with respect to any asset owned by an Acquired Company that is material to the Acquired Companies, taken as a whole;
(i) other than in the ordinary course of business consistent with past practice, acquire, lease or license any right or other asset from any other Person (other than licenses for commercially available software or software-as-a-service and licenses ancillary to commercial Contracts) or (ii) other than with respect to immaterial rights or assets in the ordinary course of business consistent with past practice, sell or otherwise dispose of, or lease or license, any right or other asset to any other Person (other than (A) non-exclusive licenses or (B) licenses or grants of Intellectual Property Rights ancillary to commercial agreements);
(xi) make any pledge of any of its material assets or permit any of its material assets to become subject to any Encumbrance (other than Permitted Encumbrances), except in connection with the incurrence of any indebtedness permitted under subsection (xii) of this Section 4.2(b);
(xii) lend or advance money to any Person, other than routine advances to employees and independent contractors for travel and other normal business expenses incurred in the ordinary course of business consistent with past practices in accordance with the Company’s policies, or incur, assume, guarantee, prepay, redeem or modify in any material respect any indebtedness (directly, contingently, or otherwise) other than borrowings in the ordinary course of business under the Company’s existing credit facilities (or replacements thereof) and in respect of letters of credit; provided, however, that any wholly owned Subsidiary of the Company may lend money to any other wholly owned Subsidiary of the Company, or incur any indebtedness to, or guarantee any indebtedness of any other wholly owned Subsidiary of the Company, in each case in the ordinary course of business and consistent with past practices;
(xiii) except as required by applicable Law or required by the terms of any Company Benefit Employee Plan as disclosed on Section 2.17(f) of the Disclosure Schedule, (A) enter into any collective bargaining agreement, works council agreement or other Contract with any employee representative body, (B) establish, adopt, enter into, materially amend or terminate any Company Employee Plan or any plan, practice, agreement, arrangement or policy that would be a Company Employee Plan if it was in effect existence on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus pay, or make any new commitment to pay, any bonus, cash incentive payment or profit-sharing or similar payment to, or increase or make any commitment to increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any Company Associate (except that the Company (1) may, subject to the limitations set forth in Section 4.2(b)(xiii) of its directorsthe Disclosure Schedule, officers or employeesprovide routine, other than reasonable salary increases in base salary and annual cash bonus opportunities and payments made to non-officer employees in the Ordinary Course ordinary course of Business business and in accordance with past practices in connection with the Company’s customary employee review process and (2) may, subject to the limitations set forth in Section 4.2(b)(xiii) of the Disclosure Schedule, make customary bonus payments consistent with past practice and which do not exceed, practices in accordance with existing bonus plans referred to in Section 2.17(f) of the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditionedDisclosure Schedule);
(viii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate (A) hire or settle terminate (other than for cause) any Legal Proceeding
employee located in the United States with an annualized base salary in excess of $150,000; (xvB) enter into hire or amend a Contract that would reasonably be expected to prevent terminate (other than for cause) any employee located outside the United States at the level of director or materially impede, interfere with, hinder above or delay the consummation with an annual base salary in excess of the Contemplated Transactions; or
$100,000 (xvi) agree, resolve or commit to do any of the foregoing.
such employees in clauses “(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms A)” and conditions of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.“
Appears in 1 contract
Operation of the Company’s Business. (a) Except During the Pre-Closing Period:
(i) as set forth in Section 4.2(a) the Company shall ensure that each of the Company Disclosure Schedule, Entities conducts its business and operations: (A) in the ordinary course and in accordance with past practices; and (B) in material compliance with all applicable Laws and with the requirements of all Contracts of Company Entities that constitute Material Contracts;
(ii) as expressly permitted by or required in accordance this Agreementthe Company shall use commercially reasonable efforts to ensure that each of the Company Entities preserves intact its current business organization, keeps available the services of its current officers and other key employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, distributors, resellers, employees and other Persons having material business relationships with the respective Company Entities;
(iii) as the Company shall promptly notify Parent in writing of (A) any notice from any Person alleging that the Consent of such Person is or may be required by applicable Lawin connection with any of the Transactions and (B) any Legal Proceeding commenced, or, to the Knowledge of the Company, threatened against, relating to, involving or otherwise affecting any of the Company Entities that relates to the Merger or any of the other Transactions;
(iv) use commercially reasonable efforts to keep in connection full force all insurance policies referred to in Section 3.26 (other than any such policies that are immediately replaced with substantially similar policies), provided that if it is unable to do so, it shall notify Parent at least 20 days before such policies terminate or otherwise lapse; and
(v) the COVID-19 pandemic, Company shall (to the extent reasonably necessary, (Arequested by Parent and permitted under applicable Law) to protect cause the health officers and safety other key employees of the Company’s or any Company Entities to freely communicate (without limitation) with Parent regarding the Company Entities’ results of its Subsidiaries’ employees, operations and material developments.
(Bb) to respond to third party supply or service disruptions caused by Without limiting the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, generality of the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned)foregoing, during the Pre-Closing Period: each of the Company and its Subsidiaries shall conduct its business and operations in the Ordinary Course of Business and in compliance in all material respects with all applicable Laws and the requirements of all Contracts that constitute Company Material Contracts.
(b) Except (i) as expressly permitted by this Agreement, (ii) except as set forth in Section 4.2(bSchedule 5.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the Parent’s prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditionedand except as permitted by Section 6.2(d), at all times during the Pre-Closing Period, the Company (A) shall not, nor and (B) shall it cause or not permit any of its Subsidiaries the other Company Entities to, do any of the following:
(i) amend its certificate of incorporation or bylaws or comparable organizational documents or create any new Subsidiaries;
(ii) issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any security of any Company Entity, except for the issuance and sale of shares of Company Common Stock pursuant to Company Equity Awards outstanding as of the date of this Agreement upon the exercise or vesting thereof, as applicable;
(iii) directly or indirectly acquire, repurchase or redeem any security of any Company Entity, except in connection with Tax withholdings and exercise price settlements upon the exercise, vesting or issuance of shares under Company Equity Awards;
(iv) (A) split, combine, subdivide or reclassify any shares of capital stock, or (B) declare, accrue, set aside or pay any dividend or make any other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock, except for cash dividends made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its capital stock wholly-owned Subsidiaries;
(v) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any Company Entity, except for this Agreement and the Transactions;
(vi) (A) redeem, repurchase, redeem prepay, defease, cancel, incur, create, assume or otherwise reacquireacquire or modify in any material respect any long-term or short-term debt for borrowed monies or issue or sell any debt securities or calls, directly or indirectlyoptions, any shares of its capital stock warrants or other rights to acquire any debt securities (except in connection with of any Company Entity or enter into any agreement having the payment economic effect of any of the exercise price and/or withholding Taxes foregoing, except for (1) debt incurred upon in the exerciseordinary course of business under letters of credit, settlement lines of credit or vesting other credit facilities or arrangements in effect on the date hereof, (2) loans or advances between the Company and any direct or indirect Subsidiaries, or between any direct or indirect Subsidiaries of the Company in the ordinary course of business consistent with past practices, and (3) the issuance of credit to new customers for the purchase of products or services of the Company Entities in the ordinary course of business consistent with past practices, (B) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any award granted under other Person, except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company Plan in accordance with the terms of such award in effect place on the date of this Agreement);
, (iiC) sellmake any loans, issue, grant, pledge advances (other than any retainer for legal services) or otherwise dispose of capital contributions to or encumber or authorize investments in any of the foregoing with respect to: other Person (A) any capital stock or other security of than the Company or any of its Subsidiaries (direct or indirect wholly-owned Subsidiaries), except for shares travel advances or business expenses in the ordinary course of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted business consistent with past practice to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security of the Company or any of its Subsidiaries;
(iii) except as required to give effect to anything in contemplation of the Closing, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated Transactions;
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(A) lend money to any Person (except for the advancement of expenses to employees, directors and consultants in the Ordinary Course of Business), (B) incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities of othersEntities, or (D) mortgage or pledge any asset owned or used by any Company Entity, or create or suffer to exist any Encumbrance thereupon (other than Permitted Encumbrances), except pursuant to the incurrence or payment terms of any Transaction Expensesletters of credit, make any capital expenditure lines of credit or other credit facilities or arrangements, in excess of effect on the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”)date hereof;
(vivii) other than except as may be required by applicable Law or the terms of this Agreement or of any Company Benefit Employee Plan as in effect on the date of this Agreement: , (A) enter into, adopt, terminateamend (including acceleration of vesting), establish modify or enter into terminate any bonus, profit sharing, incentive, compensation, severance, retention, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, change in control, pension, retirement, collective bargaining or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any Company Benefit Plan; Associate, (B) cause increase the compensation payable or permit to become payable to any Company Benefit Plan Associate, pay or agree to be amended in any material respect; (C) pay any special bonus or make special remuneration to any profit-sharing or similar payment toCompany Associate, or increase the amount pay or agree to pay any benefit not required by any Company Employee Plan as in effect as of the wagesdate hereof, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made except in the Ordinary Course ordinary course of Business business consistent with past practice and which do with respect to any Company Associate who is not exceeda member of the board of directors or officer, (C) hire any employee with an annual base salary in excess of $100,000 or at the aggregatelevel of Vice President, the amounts specifically budgeted therefore in the Company Budget; (D) increase the grant or pay any severance or change of control benefits offered termination pay to (or amend any such existing arrangement with) any current or new employeesformer member of the board of directors, officer, employee or independent contractor of any Company Entity, except in the ordinary course of business with respect to any employee or independent contractor who is not a member of the board of directors or consultants; officer, (E) hire increase benefits payable under any (x) officer existing severance or (y) employee whose annual base salary is termination pay policies or is expected to be more than $250,000 per year similar employment agreements, or (F) terminate accelerate the vesting or give notice of termination payment of, or fund or in any other way secure the payment, compensation or benefits under, any Company Employee Plan to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise the extent not required by applicable Law and after prior written consent the terms of Parent (which consent shall not be unreasonably withheld, delayed this Agreement or conditioned)such Company Employee Plan as in effect on the date of this Agreement;
(viii) enter into commence any material transaction other than Legal Proceeding or settle any pending or threatened Legal Proceeding, except for the settlement of any Legal Proceeding solely for money damages not in excess of $250,000 in the Ordinary Course of Businessaggregate and as would not be reasonably likely to have any adverse impact on any other Legal Proceeding;
(ix) acquire except as may be required as a result of a change in applicable Law or in GAAP, make any material asset or sell, lease or otherwise irrevocably dispose of change in any of its assets the accounting methods, principles or properties, practices used by it or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Businesschange an annual accounting period;
(x) sell, assign, transfer, license, sublicense (A) make or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, (B) settle or compromise any material federal, state, local or foreign income or other material Tax liability or submit any voluntary disclosure applicationliability, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or C) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes, (D) change any income annual Tax accounting period or method of Tax accounting, (E) file any materially amended Tax Return, (F) enter into any closing agreement with respect to any Tax or (G) surrender any right to claim a material Tax refund;
(xi) (A) acquire (by merger, consolidation or acquisition of stock or assets or otherwise) any other Entity or any material Taxes equity interest therein, (B) sell or otherwise dispose of, lease or license any properties or assets of any Company Entity (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course ordinary course of Business of not more than seven (7) monthsbusiness), which are material to the Company Entities, taken as a whole, (C) acquire, lease or adopt or change license any material accounting method right or other asset from any Person (other than in respect the ordinary course of Taxesbusiness consistent with past practice);
(xii) make any capital expenditures in excess of $50,000 individually or $200,000 in the aggregate;
(xiii) make any material changes or modifications to any investment or risk management policy or other similar policies (including with respect to hedging), or any cash management policy;
(xiv) other than in the ordinary course of business, enter into, materially or amend in any material respect, terminate or terminate fail to renew, any Company Material Contract;
(xiiixv) change any of its product return policies, product maintenance polices, service policies, product modification or upgrade policies in any material respect;
(xvi) enter into any material transaction with any of its Affiliates (other than a Company Entity) other than as required by Law pursuant to written arrangements in effect on the date of this Agreement and excluding any employment, compensation or GAAP, similar arrangements otherwise expressly permitted pursuant to this Section 5.2(b);
(xvii) abandon or permit to lapse any right to any material patent or patent application;
(xviii) take any action that is intended or is reasonably likely to change accounting policies or procedures;
result in the conditions set forth in Sections 7.1, 7.2, 7.3 (xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impedeexcept after compliance with Section 6.2(d), interfere with7.5, hinder or delay the consummation of the Contemplated Transactions7.7, 7.11, 7.12, 7.13, 7.15 and 7.16 not being satisfied; or
(xvixix) agree, resolve agree or commit to do take any of the foregoingactions described in clauses above in this Section 5.2(b).
(c) Nothing During the Pre-Closing Period, the Company shall promptly notify Parent in writing of any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in ARTICLE 7 impossible or unlikely or that has had or could reasonably be expected to have or result in a Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any Legal Proceeding or material claim commenced or, to the Company’s Knowledge, threatened against or with respect to any of the Company Entities. No notification given to Parent pursuant to this Section 5.2(c) or any information or knowledge obtained pursuant to Section 5.1 shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations any of the Company prior remedies available to Parent under this Agreement.
(d) During the Effective Time. Prior to the Effective TimePre-Closing Period, the Company shall exercise, consistent with promptly notify Parent in writing if the terms and conditions Company has the right to exercise any right or option to repurchase shares of this Agreement, complete unilateral control and supervision over its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent capital stock from any Company Associate or other Person upon termination of Parent shall be required with respect such Person’s service to any matter set forth in this Section 4.2 or elsewhere in this Agreement of the Company Entities. The Company shall not exercise any such repurchase right except to the extent that the requirement of such consent could violate any applicable Lawsdirected by Parent in writing.
Appears in 1 contract
Samples: Merger Agreement (Anaren Inc)
Operation of the Company’s Business. (a) Except (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, (ii) as expressly permitted by or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employees, (B) to respond to third party supply or service disruptions caused by the COVID-19 pandemic or (C) as required by any applicable Law, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during During the Pre-Closing Period: (i) the Company shall ensure that each of the Company and its Subsidiaries shall conduct Acquired Corporations conducts its business and operations (A) in the Ordinary Course of Business ordinary course and in accordance with past practices and (B) in compliance in all material respects with all applicable Laws Legal Requirements and the requirements of all Acquired Corporation Contracts that constitute Company Material Contracts; (ii) the Company shall use reasonable efforts to ensure that each of the Acquired Corporations preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with the respective Acquired Corporations; (iii) the Company shall keep in full force all insurance policies referred to in Section 3.19 (or reasonably equivalent policies); (iv) the Company shall cause to be provided all notices, assurances and support required by any Acquired Corporation Contract relating to any Acquired Corporation IP in order to ensure that no condition under such Acquired Corporation Contract occurs that could reasonably be expected to result in, or could reasonably be expected to increase the likelihood of, (A) any transfer or disclosure by any Acquired Corporation of any material Acquired Corporation Source Code, or (B) a release from any escrow of any material Acquired Corporation Source Code that has been deposited or is required to be deposited in escrow under the terms of such Acquired Corporation Contract; and (v) the Company shall promptly notify Parent of (A) any notice or other communication from any Person alleging that the Consent of such Person is or may be required in connection with any of the Contemplated Transactions, and (B) any Legal Proceeding commenced, or, to its knowledge threatened against, relating to or involving or otherwise affecting any of the Acquired Corporations that relates to the consummation of the Contemplated Transactions.
(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) as required by applicable Law or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), at all times during During the Pre-Closing Period, the Company shall notnot (without the prior written consent of Parent), nor and shall it cause or not permit any of its Subsidiaries the other Acquired Corporations to, do take any of the following:following actions (except that the Company may take any such action to the extent that the imposition by Parent of the limitations specified in this Section 5.2(b) with respect to such action in question is contrary to applicable Legal Requirements):
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock stock, or repurchase, redeem or otherwise reacquire, directly or indirectly, reacquire any shares of its capital stock or other securities (except in connection with the payment of the exercise price and/or withholding Taxes incurred upon the exercise, settlement or vesting of any award granted under the Company Plan in accordance with the terms of such award in effect on the date of this Agreement)securities;
(ii) sell, issue, grant, pledge or otherwise dispose of or encumber grant or authorize any the issuance or grant of the foregoing with respect to: (A) any capital stock or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); security, (B) any option, call, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock or other security (except that (1) the Company may issue shares of Company Common Stock (x) upon the valid exercise of Company Options outstanding as of the date of this Agreement, and (y) pursuant to the ESPP, and (2) the Company may, in the ordinary course of business and consistent with past practices, grant to employees of the Company or any options (having an exercise price equal to the fair market value of the Company Common Stock covered by such options determined as of the time of the grant of such options) under its Subsidiariesstock option plans after May 15, 2004;
(iii) except as required to give effect to anything set forth in contemplation Part 3.17 of the ClosingDisclosure Schedule, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of the Company’s stock option plans, any provision of any agreement evidencing any outstanding stock option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, warrant or other security or any related Contract;
(iv) amend, terminate or grant any waiver under the Company Rights Agreement;
(v) amend or permit the adoption of any amendment to its Subsidiaries’ Organizational Documentscertificate of incorporation or bylaws or other charter or organizational documents, or effect or be become a party to any merger, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split split, division or subdivision of shares, consolidation of shares or similar transaction except, for the avoidance of doubt, the Contemplated Transactionstransaction;
(ivvi) form any Subsidiary or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
(Avii) make any capital expenditure outside of the ordinary course of business;
(viii) other than in the ordinary course of business consistent with past practices, enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any Material Contract, or amend or terminate, or waive or exercise any material right or remedy under, any Material Contract;
(ix) acquire, lease or license any right or other asset from any other Person or sell or otherwise dispose of, or lease or license, any right or other asset to any other Person (except in each case for assets acquired, leased, licensed or disposed of by the Company in the ordinary course of business and consistent with past practices), or waive or relinquish any material right;
(x) other than in the ordinary course of business consistent with past practices, write off as uncollectible, or establish any extraordinary reserve with respect to, any receivable or other indebtedness;
(xi) make any pledge of any of its assets or permit any of its material assets to become subject to any Encumbrances, except for the Encumbrances identified in Part 3.8(ii) of the Disclosure Schedule and Encumbrances that do not materially detract from the value of such assets;
(xii) lend money to any Person (except for the advancement of expenses to employeesPerson, directors and consultants in the Ordinary Course of Business), (B) or incur or guarantee any indebtedness for borrowed money, (C) guarantee any debt securities except that the Company may make routine borrowings and advances of others, or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth funds to employees in the Company operating budget delivered to Parent concurrently ordinary course of business and in accordance with the execution of this Agreement (the “Company Budget”past practices);
(vixiii) other than as required by applicable Law establish, adopt or the terms of amend any Company Benefit Plan as in effect on the date of this Agreement: (A) adoptemployee benefit plan, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employeesemployees (except that the Company (A) may make routine, other than reasonable salary increases in base salary connection with the Company’s customary employee review process, (B) pay all bonuses referred to in Part 3.17(a) of the Disclosure Schedule which are accrued for as of December 31, 2003 and annual cash not yet paid and (C) may make additional customary bonus opportunities payments and profit sharing payments made in the Ordinary Course of Business consistent with past practice practices payable in accordance with existing bonus and which do not exceed, profit sharing plans referred to in Part 3.14(a) of the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditionedDisclosure Schedule);
(viiixiv) hire any employee with an annual base salary in excess of $70,000, or promote any employee except in order to fill a position vacated after the date of this Agreement;
(xv) make any change in any of its personnel policies or related business policies in any material respect, or any of its methods of accounting or accounting practices in any respect;
(xvi) make any Tax election;
(xvii) commence or settle any Legal Proceeding, other than with respect to routine collections matters initiated by any Acquired Corporation in the ordinary course of business;
(xviii) enter into any material transaction other than in the Ordinary Course of Business;
(ix) acquire or take any material asset or sell, lease or otherwise irrevocably dispose of any of its assets or properties, or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(x) sell, assign, transfer, license, sublicense or otherwise dispose of any Company IP (other than pursuant to non-exclusive licenses in the Ordinary Course of Business);
(xi) make, change or revoke any material Tax election, fail to pay any income or other material Tax as such Tax becomes due and payable, file any amendment making any material change to any Tax Return, settle action outside the ordinary course of business or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period inconsistent with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Taxes;
(xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law or GAAP, take any action to change accounting policies or procedures;
(xiv) initiate or settle any Legal Proceeding
(xv) enter into or amend a Contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Contemplated Transactionspast practices; or
(xvixix) agree, resolve agree or commit to do take any of the foregoingactions described in clauses ”(i)” through “(xviii)” of this Section 5.2(b).
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, During the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective TimePre-Closing Period, the Company shall exercisepromptly notify Parent in writing of: (i) the discovery by the Company of any event, consistent condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) the Company obtaining knowledge of any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance, or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) the Company obtaining knowledge of any material breach of any covenant of the Company; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Exhibit B impossible or unlikely or that has had or could reasonably be expected to have or result in a Company Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any Legal Proceeding or material claim threatened, commenced or asserted against or with respect to any of the terms and conditions Acquired Corporations which, if it had been pending on the date of this Agreement, complete unilateral control and supervision over its business operationswould have been required to have been disclosed in Part 3.21 of the Disclosure Schedule or which relates to any of the Contemplated Transactions. Notwithstanding anything No notification given to Parent pursuant to this Section 5.2(c) shall limit or otherwise affect any of the contrary set forth representations, warranties or covenants of the Company contained in this Agreement.
(d) The Company shall timely exercise in full any right or option it may have to repurchase shares of its capital stock which is or becomes exercisable during the Pre-Closing Period from any current or former employee, no consent consultant, officer, member of Parent shall be required with respect the board of directors or other Person upon termination of such Person’s service to any matter set forth of the Acquired Corporations; provided, however, that the Company shall use reasonable efforts to notify Parent in this Section 4.2 or elsewhere writing at least 10 days in this Agreement advance of any such repurchase and, notwithstanding the above, shall only exercise any such repurchase right to the extent that the requirement of such consent could violate any applicable Lawsdirected by Parent in writing.
Appears in 1 contract
Samples: Merger Agreement (Synopsys Inc)
Operation of the Company’s Business. (a) Except During the Pre-Closing Period: (i) as set forth in Section 4.2(a) of the Company Disclosure Schedule, except (iiA) as required or expressly permitted by provided for under this Agreement or required in accordance this Agreement, (iii) as required by applicable Law, (iv) in connection with the COVID-19 pandemic, to the extent reasonably necessary, (A) to protect the health and safety of the Company’s or any of its Subsidiaries’ employeesLaws, (B) to respond to third party supply or service disruptions caused by with the COVID-19 pandemic or (C) as required by any applicable Lawprior written consent of Parent, directive or guideline from any Governmental Body arising out of, or otherwise related to, the COVID-19 pandemic (including any response to COVID-19), or (v) as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the Pre-Closing Period: each conditioned or (C) as set forth in Part 5.2 of the Company and its Subsidiaries Disclosure Schedule, the Company shall conduct in all material respects its business and operations in the Ordinary Course ordinary course, and (ii) the Company shall promptly notify Parent of Business (A) any knowledge of the receipt of any notice from any Person alleging that the Consent of such Person is or may be required in connection with any of the Transactions and (B) any Legal Proceeding commenced, or, to its knowledge threatened in compliance in writing, relating to or involving the Company that relates to the consummation of the Transactions. The Company shall use commercially reasonable efforts to preserve intact the material components of the Company’s current business organization, including keeping available the services of current officers and key employees, and use commercially reasonable efforts to maintain its relations and goodwill with all material respects with all applicable Laws suppliers, material customers, material licensors, material licensees, Governmental Bodies and other material business relations; provided, however, that the requirements of all Contracts that constitute Company Material Contractsshall be under no obligation to put in place any new retention programs or include additional personnel in existing retention programs.
(b) Except During the Pre-Closing Period, except (ix) as required or expressly permitted by provided for under this Agreement, (ii) as set forth in Section 4.2(b) of the Company Disclosure Schedule, (iii) Agreement or as required by applicable Law or Laws, (ivy) with the prior written consent of Parent (Parent, which consent shall not be unreasonably withheld, delayed or conditioned), at all times during conditioned or (z) as set forth in Part 5.2 of the Pre-Closing PeriodCompany Disclosure Schedule, the Company shall not, nor shall it cause or permit any of its Subsidiaries to, do any of the following:
(i) (A) establish a record date for, declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock (including the Company Common Stock) or other equity or voting interest or (B) repurchase, redeem or otherwise reacquirereacquire any of its shares of capital stock (including any Share) or other equity or voting interests, directly or indirectlyany rights, warrants or options to acquire any shares of its capital stock or other securities equity or voting interests, other than: (except 1) repurchases or reacquisitions of Shares outstanding as of the date of this Agreement pursuant to the Company’s right (under written commitments in effect as of the date of this Agreement) to purchase or reacquire Shares held by a Company Associate only upon termination of such associate’s employment or engagement by the Company; (2) repurchases of Company Stock Awards (or shares of capital stock issued upon the exercise or vesting thereof) outstanding on the date hereof (in cancellation thereof) pursuant to the terms of any such Company Stock Award (as in effect as of the date of this Agreement) between the Company and a Company Associate or member of the Company Board only upon termination of such Person’s employment or engagement by the Company or (3) in connection with the payment of withholding to satisfy the exercise price and/or withholding Taxes incurred upon Tax obligations with respect to Company Stock Awards outstanding on the exercise, settlement or vesting of any award granted under the Company Plan in accordance with date hereof pursuant to the terms of any such award Company Stock Award (as in effect on as of the date of this Agreement);
(ii) split, combine, subdivide or reclassify any shares of its capital stock (including the Shares) or other equity interests;
(iii) sell, issue, grant, pledge or otherwise deliver, pledge, transfer, encumber, dispose of or encumber authorize the issuance, sale, delivery, pledge, transfer, encumbrance, disposition or authorize any grant by the Company of the foregoing with respect to: (A) any capital stock stock, equity interest or other security of the Company, (B) any option, call, warrant, restricted securities or right to acquire any capital stock, equity interest or other security of the Company or any of its Subsidiaries (except for shares of outstanding Company Common Stock issued upon the valid exercise of Company Options); (B) any option, warrant or right to acquire any capital stock or any other security, other than option grants or restricted stock unit awards granted to employees and service providers in the Ordinary Course of Business which are included in the calculation of the Company Outstanding Shares; or (C) any instrument convertible into or exchangeable for any capital stock stock, equity interest or other security of the Company or any of its Subsidiaries;
(iii) except that the Company may issue Shares as required upon the exercise of Options or pursuant to give effect to anything in contemplation of purchase rights under the Closing, amend any of its or its Subsidiaries’ Organizational Documents, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except, for the avoidance of doubt, the Contemplated TransactionsESPP);
(iv) form any Subsidiary except as otherwise permitted under clause (i), clause (iii) or acquire any equity interest or other interest in any other Entity or enter into a joint venture with any other Entity;
clause (v) of this Section 5.2(b), (A) lend money to establish, adopt, enter into, terminate or amend any Person Employee Plan (except for or any plan, program, arrangement, practice, policy or agreement that would be an Employee Plan if it were in existence on the advancement of expenses to employees, directors and consultants in the Ordinary Course of Businessdate hereof), (B) incur amend or guarantee waive any indebtedness of its rights under any provision of, or accelerate the vesting, funding or payment of any compensation or benefits under, any of the Employee Plans (or any plan, program, arrangement, practice, policy or agreement that would be an Employee Plan if it were in existence on the date hereof) or grant any Company Associate an increase in compensation, bonuses or other benefits (except that the Company: (1) may change the title of its employees; provided that such changes in title do not involve increases in the applicable employee’s compensation other than in the ordinary course of business and commensurate with the new title; (2) may provide increases in salary, wages or benefits in the ordinary course of business; and (3) may set targets for borrowed money2024 annual bonus payments);
(v) hire or terminate (other than for cause) any employee or independent contractor with an annual base salary or annual base compensation (as applicable) in excess of $300,000;
(vi) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws;
(vii) (A) form any Subsidiary, (B) acquire any equity or voting interest (including by merger) in any other Entity, (C) guarantee acquire a material portion of the assets of any debt securities other Person (other than any acquisition of otherssupplies, raw materials, inventory or products in the ordinary course of business), or (D) other than the incurrence or payment of any Transaction Expenses, make any capital expenditure in excess of the budgeted capital expenditure amounts set forth in the Company operating budget delivered to Parent concurrently with the execution of this Agreement (the “Company Budget”);
(vi) other than as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement: (A) adopt, terminate, establish or enter into any Company Benefit Plan; (B) cause or permit any Company Benefit Plan to be amended in any material respect; (C) pay any bonus or make any profit-sharing joint venture, partnership, limited liability corporation or similar payment to, or increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than increases in base salary and annual cash bonus opportunities and payments made in the Ordinary Course of Business consistent with past practice and which do not exceed, in the aggregate, the amounts specifically budgeted therefore in the Company Budget; (D) increase the severance or change of control benefits offered to any current or new employees, directors or consultants; (E) hire any (x) officer or (y) employee whose annual base salary is or is expected to be more than $250,000 per year or (F) terminate or give notice of termination to any officer other than for cause;
(vii) recognize any labor union or labor organization, except as otherwise required by applicable Law and after prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned)arrangement;
(viii) enter into make or authorize any material transaction other than capital expenditure (except that the Company may make any capital expenditure that: (A) is provided for in the Ordinary Course Company’s capital expense budget set forth on Part 5.2(b)(viii) of Businessthe Company Disclosure Schedule, which expenditures shall be in accordance with the categories set forth in such budget; or (B) when added to all other capital expenditures made on behalf of the Company since the date of this Agreement but not provided for in the Company’s capital expense budget set forth on Part 5.2(b)(viii) of the Company Disclosure Schedule, does not exceed $2,000,000 individually and $10,000,000 in the aggregate during any fiscal quarter);
(ix) acquire acquire, lease, license, sublicense, pledge, sell or otherwise dispose of, divest or spin-off, abandon, waive, relinquish or permit to lapse (other than any patent expiring at the end of its statutory term), fail to prosecute, enforce or maintain, fail to renew (including with respect to In-bound Licenses), transfer, assign, guarantee, exchange or swap, mortgage or otherwise encumber (including pursuant to a sale-leaseback transaction or securitization) or subject to any material Encumbrance (other than Permitted Encumbrances) any material right or other material asset or sellproperty (except, lease or otherwise irrevocably dispose in the case of any of its the foregoing (A) with respect to such tangible assets or properties, or grant any Encumbrance in the ordinary course of business consistent with past practice, and with respect to such assets or propertiesIntellectual Property Rights, except entering into non-exclusive license agreements for manufacturing and materials transfer agreements in the Ordinary Course ordinary course of Businessbusiness subject to valid and enforceable confidentiality and non-disclosure provisions, (B) pursuant to dispositions of obsolete, surplus or worn out assets that are no longer useful in the conduct of the business of the Company and (C) as provided for in subsection (viii));
(x) sell, assign, transfer, license, sublicense disclose any trade secrets or otherwise dispose of other confidential information relating to any Company IP (Product other than pursuant to a binding written confidentiality or non-exclusive licenses in disclosure agreement, and with respect to any trade secrets, with protections sufficient to protect and maintain the Ordinary Course of Business)trade secret as a trade secret under applicable Law;
(xi) lend money or make capital contributions or advances to or make investments in, any Person, or incur, assume, guarantee or otherwise become liable for any Indebtedness (except for advances to employees and consultants for travel and other business related expenses in the ordinary course of business) or enter into any swap or hedging transaction or other derivative agreements other than in the ordinary course of business;
(xii) amend or modify in any material respect, waive any rights under, terminate, replace or release, settle or compromise any material claim, liability or obligation under any Material Contract or enter into any Contract which if entered into prior to the date hereof would have been a Material Contract, excluding any non-exclusive license agreements or services agreements entered into in the ordinary course of business or any statements of work under existing Material Contracts, in each case not in excess of $1,000,000 individually;
(xiii) except as required by applicable Laws, make, rescind, or change or revoke any material Tax election, fail to pay change any income or other material annual Tax as such Tax becomes due and payableaccounting period, file any amendment making any material change to any Tax Return, settle or compromise any income or other material Tax liability or submit any voluntary disclosure application, enter into any Tax allocation, sharing, indemnification or other similar agreement or arrangement (other than customary commercial contracts entered into in the Ordinary Course of Business the principal subject matter of which is not Taxes), request or consent to any extension or waiver of any limitation period with respect to any claim or assessment for any income or other material Taxes (other than pursuant to an extension of time to file any Tax Return granted in the Ordinary Course of Business of not more than seven (7) months), or adopt or change any material accounting method in respect of Tax accounting, amend any material Tax Return, surrender any claim for a material refund of Taxes;
, waive or extend the statute of limitations with respect to any material Tax claim or assessment (xii) enter into, materially amend or terminate any Company Material Contract;
(xiii) other than as required by Law automatic waivers or GAAPextensions obtained in the ordinary course of business), take enter into any action material closing agreement with respect to change accounting policies Taxes, or proceduressettle or compromise any material Tax assessment or other material Tax liability;
(xiv) initiate or settle commence any Legal Proceeding, except with respect to: (A) routine matters in the ordinary course of business; (B) in such cases where the Company reasonably determines in good faith that the failure to commence suit would result in a material impairment of a valuable aspect of its business (provided that the Company consults with Parent and considers the views and comments of Parent with respect to any such Legal Proceeding prior to commencement thereof); or (C) in connection with a breach of this Agreement or any other agreements contemplated hereby;
(xv) settle, release, waive or compromise any Legal Proceeding or other claim (or threatened Legal Proceeding or other claim), other than as set forth in Section 6.6 or any Legal Proceeding relating to a breach of this Agreement or any other agreements contemplated hereby or pursuant to a settlement that does not relate to any of the Transactions and (A) that results solely in a monetary obligation involving only the payment of monies by the Company of not more than $500,000 in the aggregate or (B) that results solely in a monetary obligation that is funded by an indemnity obligation to, or an insurance policy of, the Company and the payment of monies by the Company that together with any settlement made under subsection “(A)” are not more than $500,000 in the aggregate (not funded by an indemnity obligation or through insurance policies);
(xvi) enter into any Labor Agreement with any labor organization or amend a Contract recognize or certify any labor union, labor organization, works council, or group of employees of the Company as the bargaining representative for any employees of the Company (except to the extent required by applicable Laws);
(xvii) implement any employee layoffs, plant closings, reductions in force, furloughs, temporary layoffs, work schedule changes or other such actions that would could reasonably be expected to prevent require advance notice under the WARN Act;
(xviii) adopt or materially impedeimplement any stockholder rights plan or similar arrangement;
(xix) adopt a plan or agreement of complete or partial liquidation or dissolution, interfere withmerger, hinder consolidation, restructuring, recapitalization or delay the consummation other reorganization of the Contemplated TransactionsCompany;
(xx) make any material changes in financial accounting methods, principles or practices materially affecting the consolidated assets, liabilities or results of operations of the Company, except insofar as may be required (A) by GAAP, (B) by Regulation S-X under the Securities Act, or (C) by any Governmental Body or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(xxi) enter into any material transfer agreement except pursuant to the Company’s standard form material transfer agreement, substantially in the same form as provided to Parent in all material respects;
(xxii) waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference or nondisparagement obligation of any current or former employee or independent contractor; or
(xvixxiii) agreeauthorize any of, resolve or agree or commit to do take, any of the foregoingactions described in clauses “(i)” through “(xxii)” of this Section 5.2(b).
(c) During the Pre-Closing Period, the Company shall, in each case to the extent reasonably practicable and permissible under applicable Law, (i) provide Parent with a reasonable opportunity to review the material portions of any applications or filings to be made with the FDA, the U.S. Nuclear Regulatory Commission or any other Governmental Body, and any material correspondence or other material communication proposed to be submitted or otherwise transmitted to the FDA, the U.S. Nuclear Regulatory Commission or any other Governmental Body, in any case, with respect to any Product or any of the Company’s clinical activities, (ii) consult with Parent in connection with any proposed meeting with the FDA, the U.S. Nuclear Regulatory Commission or any other Governmental Body relating to any Product or any of the Company’s clinical activities, and (iii) keep Parent reasonably informed of any material communication (written or oral) with or from the FDA, the U.S. Nuclear Regulatory Commission or any other Governmental Body regarding any Product or any of the Company’s clinical activities. Nothing contained in this Agreement herein shall give Parentto Parent or Purchaser, directly or indirectly, the right rights to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with the terms and conditions of this Agreementhereof, complete unilateral control and supervision over of its business operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 4.2 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Laws.
Appears in 1 contract
Samples: Merger Agreement (RayzeBio, Inc.)
