Restrictions on Company Operations. Except as expressly required or permitted by this Agreement, as set forth in Section 5.2 of the Company Disclosure Letter or as approved in advance by Newco in writing (which approval will not be unreasonably withheld, delayed or conditioned), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time, the Company shall not, and shall not permit its Subsidiaries to: (a) amend its certificate of incorporation or bylaws or comparable organizational documents; (b) issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (A) the issuance and sale of Shares pursuant to Stock Awards outstanding prior to the date hereof, (B) subject to Section 1.4(d), under the Company ESPP issuable in accordance with the terms of the Company ESPP as of the date hereof, (C) issuances or sales of Subsidiary Securities to the Company or another wholly owned Subsidiary of the Company or (D) grants of Stock Awards described in Section 5.2(b) of the Company Disclosure Letter (provided, that such Stock Awards shall not be subject to or include any acceleration of vesting conditions in connection with the Merger or the transactions contemplated by this Agreement); (c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities other than (A) the acquisition by the Company of Shares in connection with the surrender of Shares by holders of Company Options in order to pay all or a portion of the exercise price of the Company Options, (B) the withholding of Shares to satisfy all or a portion of any Tax obligations with respect to Stock Awards and (C) the acquisition of Stock Awards in connection with the forfeiture of such awards; (d) other than cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or one of its Subsidiaries, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or 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; (e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the transactions contemplated hereby, including the Merger); (f) (i) incur or assume any long-term or short-term debt or issue any debt securities, except for loans or advances to direct or indirect wholly owned Subsidiaries or letters of credit put in place, operating leases entered into, or short-term, immaterial debt incurred, in each case in the ordinary course of business, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person except for advances of travel and other business expenses in the ordinary course of business to employees of the Company or any of its Subsidiaries or (iv) mortgage or pledge any of its or its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens); (g) except as may be required by the existing terms of any Employee Plan or Contract in effect as of the date hereof or by Applicable Law, (i) enter into, adopt, amend (including acceleration of vesting), modify or terminate any bonus, profit sharing, compensation, severance, termination, option, restricted stock, restricted stock unit, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of (A) any director or officer or (B) other than in the ordinary course of business, any consultant, independent contractor or employee (including offer letters with new employee hires and new contractor or consultant engagements in the ordinary course of business), in each case, in any manner; (ii) increase in any manner the compensation or benefits of (A) any director or officer or (B) other than in the ordinary course of business consistent with past practice, any employee who is Vice President level and below (other than a Vice President level employee who is a direct report to the Company’s Chief Executive Officer); (iii) pay any special bonus or special remuneration to any director, officer, consultant, independent contractor or employee or (iv) pay any benefit not required by or made pursuant to any plan or arrangement as in effect as of the date hereof, other than in the ordinary course of business; (h) 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 Employee Plans or agreements subject to the Employee Plans or any other Contract of the Company other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any agreements subject to the Employee Plans in effect as of the date hereof; (i) acquire, sell, lease, abandon (other than in the Company’s reasonable business discretion), license or dispose of any property or assets in any single transaction or series of related transactions, except in connection with the marketing, development, manufacturing, sale, distribution, support or maintenance of Company Products or for grants of non-exclusive licenses of Intellectual Property Rights, in each case, in the ordinary course of business; (j) except as may be required by Applicable Law or GAAP, make any change in any of the accounting principles or practices used by it; (k) except as required by Applicable Law or GAAP, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, in any case other than in the ordinary course of business; (l) (i) make or change any material Tax election, (ii) file any amended income Tax Return, or any other amended Tax Return that would materially increase the Taxes payable by the Company or its Subsidiaries, (iii) settle or compromise any material Liability for Taxes or (iv) consent to any extension or waiver of any limitation period with respect to any material claim or assessment for Taxes, or (v) fail to pay any material Taxes as they become due and payable (including estimated taxes), except to the extent such Taxes are contested in good faith and adequate reserves have been established for such Taxes in accordance with GAAP; (m) (i) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) involving payments of more than $250,000 in the aggregate per year or (ii) modify, amend or exercise any right to renew any lease or sublease of real property (other than renewals of a lease or sublease which is terminable upon notice of three (3) months or less or which involves payments of no more than $100,000 in the aggregate per year) or waive or violate any term or condition thereof or grant any consents thereunder; grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment, Lien or charge affecting any real property or any part thereof (other than a Permitted Lien); (i) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, (ii) other than in the ordinary course of business, enter into, renew or amend any Material Contract or grant any release or relinquishment of any rights under any Material Contract or (iii) incur any new capital expenditure(s), individually or in the aggregate, with obligations to the Company or any of its Subsidiaries in excess of $4,000,000 per fiscal quarter for each fiscal quarter beginning January 1, 2019; (o) 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 (i) reflected or reserved against in full in the Balance Sheet or incurred since the date of the Balance Sheet in the ordinary course of business or (ii) the settlement, compromise, payment, discharge or satisfaction of which does not include any obligation (other than the payment of money) to be performed by the Company or its Subsidiaries following the Effective Time that would be material to the Company and its Subsidiaries, taken as a whole; (p) disclose, deliver, license, escrow or otherwise make available any (i) Technology or Trade Secrets of the Company to any Person (other than such disclosure, delivery, license or escrow pursuant to a written confidentiality agreement or agreement containing confidentiality provisions, in each case, entered into in the ordinary course of business and with reasonable protections of, and preserving all rights of the Company and its Subsidiaries in and to, such Technology and/or Trade Secrets), or (ii) source code for Company Software or Company Products to any Person (other than employees, consultants and independent contractors who require such source code to perform his or her duties for the Company or its Subsidiaries and are subject to a written confidentiality agreements to reasonably protect against unauthorized disclosure of such source code); or (q) enter into a Contract or otherwise commit to do any of the foregoing. If the Company or any of its Subsidiaries desires to take an action that would be prohibited pursuant to the foregoing clauses (a)-(p) without the written consent of Newco, prior to taking such action, the Company may request such written consent (which consent shall not be unreasonably withheld, conditioned or delayed) by sending an e-mail to the representatives of Newco listed on Section 5.1 of the Company Disclosure Letter.
Appears in 1 contract
Samples: Merger Agreement (Imperva Inc)
Restrictions on Company Operations. Except as expressly required or permitted by this Agreement, as set forth in Section 5.2 of the Company Disclosure Letter or as approved in advance by Newco in writing (which approval will not be unreasonably withheld, delayed or conditioned), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time, the Company shall not, and shall not permit its Subsidiaries to:
(a) amend its certificate of incorporation or bylaws or comparable organizational documents;
(b) issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (A) the issuance and sale of Shares pursuant to Stock Awards outstanding prior to the date hereofhereto or, (B) subject to Section 1.4(d), under the Company ESPP issuable in accordance with the terms of the Company ESPP as of the date hereof, (C) issuances or sales of Subsidiary Securities to the Company or another wholly owned Subsidiary of the Company or (D) grants of Stock Awards described in Section 5.2(b) of the Company Disclosure Letter (provided, that such Stock Awards shall not be subject to or include any acceleration of vesting conditions in connection with the Merger or the transactions contemplated by this Agreement)hereto;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities other than (A) the acquisition by the Company of Shares in connection with the surrender of Shares by holders of Company Options in order to pay all or a portion of the exercise price of the Company Options, (B) the withholding of Shares to satisfy all or a portion of any Tax obligations with respect to Stock Awards and (C) the acquisition of Stock Awards in connection with the forfeiture of such awardsSecurities;
(d) other than cash dividends made by any direct or indirect wholly wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or 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;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the transactions contemplated hereby, including the Merger);
(f) (i) incur or assume any long-term or short-term debt or issue any debt securities, except for (A) short-term debt incurred to fund operations of the business in the ordinary course of business consistent with past practice and (B) loans or advances to direct or indirect wholly wholly-owned Subsidiaries or letters of credit put in place, operating leases entered into, or short-term, immaterial debt incurred, in each case in the ordinary course of businessSubsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly wholly-owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person except for travel advances of travel and other business expenses in the ordinary course of business consistent with past practice to employees of the Company or any of its Subsidiaries or (iv) mortgage or pledge any of its or its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens);
(g) except as may be required by the existing terms of any Employee Plan or Contract in effect as of the date hereof or by Applicable Law, (i) enter into, adopt, amend (including acceleration of vesting), modify or terminate any bonus, profit sharing, compensation, severance, termination, option, restricted stock, restricted stock unit, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of (A) any director or officer or (B) other than in the ordinary course of businessofficer, any consultantor, independent contractor or employee (including offer letters with new employee hires and new contractor or consultant engagements in the ordinary course of business), in each case, in any manner; (ii) increase in any manner the compensation or benefits of (A) any director or officer or (B) other than in the ordinary course of business consistent with past practice, any employee who is Vice President level and below (consultant, independent contractor or employee, in each case, in any manner or increase in any manner the compensation or fringe benefits of any director, officer or, other than a Vice President level employee who is a direct report to in the Company’s Chief Executive Officer); (iii) ordinary course of business consistent with past practice, employee, pay any special bonus or special remuneration to any director, officer, consultant, independent contractor or employee employee, or (iv) pay any benefit not required by or made pursuant to any plan or arrangement as in effect as of the date hereof, other than in the ordinary course of businessbusiness consistent with past practice;
(h) 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 Employee Plans or agreements subject to the Employee Plans or any other Contract of the Company other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any agreements subject to the Employee Plans in effect as of the date hereof;
(i) acquire, sell, lease, abandon (other than in the Company’s reasonable business discretion), license or dispose of any property or assets in any single transaction or series of related transactions, except in connection with for the marketing, development, manufacturing, sale, distribution, support or maintenance sale of Company Products or for grants of non-exclusive licenses of to Intellectual Property Rights, in each case, Rights in the ordinary course of businessbusiness consistent with past practice;
(j) except as may be required by Applicable Law or GAAP, make any change in any of the accounting principles or practices used by it;
(k) except as required by Applicable Law or GAAP, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, in any case other than in the ordinary course of businessbusiness consistent with past practice;
(l) (i) make or change any material Tax election, (ii) file any amended income Tax Return, or any other amended Tax Return that would materially increase the Taxes payable by the Company or its Subsidiaries, (iii) settle or compromise any material Liability for Taxes Taxes, or (iv) consent to any extension or waiver of any limitation period with respect to any material claim or assessment for Taxes, or (v) fail to pay any material Taxes as they become due and payable (including estimated taxes), except to the extent such Taxes are contested in good faith and adequate reserves have been established for such Taxes in accordance with GAAP;
(m) (i) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) involving payments of more than $250,000 in the aggregate per year or (ii) modify, amend or exercise any right to renew any lease or sublease of real property (other than renewals of a lease or sublease which is terminable upon notice of three (3) months or less or which involves payments of no more than $100,000 in the aggregate per year) or waive or violate any term or condition thereof or grant any consents thereunder; grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment, Lien or charge affecting any real property or any part thereof (other than a Permitted Lien)thereof;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, (ii) enter into or renew any Material Contract (other than in the ordinary course of business, enter into, renew business consistent with past practice) or amend any Material Contract or grant any release or relinquishment of any rights under any Material Contract or (iii) incur any new capital expenditure(s), individually or in the aggregate, with obligations to the Company or any of its Subsidiaries in excess of $4,000,000 8 million per fiscal quarter for each fiscal quarter beginning January 1, 20192015, with a pro rated portion of $8 million per fiscal quarter for the period from the date of this Agreement to December 31, 2014;
(o) 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 (i) reflected or reserved against in full in the Balance Sheet or incurred since the date of the Balance Sheet in the ordinary course of business consistent with past practice or (ii) the settlement, compromise, payment, discharge or satisfaction of which does not include any obligation (other than the payment of money) to be performed by the Company or its Subsidiaries following the Effective Time that would be material to the Company and its Subsidiaries, Subsidiaries taken as a whole;
(p) disclose, deliver, license, escrow or otherwise make available any (i) Technology or Trade Secrets of the Company to any Person (other than such disclosure, delivery, license or escrow pursuant to a written confidentiality agreement or agreement containing confidentiality provisions, in each case, entered into in the ordinary course of business and with reasonable protections of, and preserving all rights of the Company and its Subsidiaries in and to, such Technology and/or Trade Secrets), or (ii) source code for Company Software or Company Products to any Person (other than employees, consultants and independent contractors who require such source code to perform his or her duties for the Company or its Subsidiaries and are subject to a written confidentiality agreements to reasonably protect against unauthorized disclosure of such source code); or
(qp) enter into a Contract or otherwise commit to do any of the foregoing. If the Company or any of its Subsidiaries desires to take an action that would be prohibited pursuant to the foregoing clauses (a)-(p) without the written consent of Newco, prior to taking such action, the Company may request such written consent (which consent shall not be unreasonably withheld, conditioned or delayed) by sending an e-mail to the representatives of Newco listed on Section 5.1 of the Company Disclosure Letter.
Appears in 1 contract
Restrictions on Company Operations. Except as expressly required or permitted by this Agreement, as set forth in Section 5.2 of the Company Disclosure Letter Letter, as required by or pursuant to the ASR Confirmations or as approved in advance by Newco in writing (which approval will not be unreasonably withheld, delayed conditioned or conditioneddelayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time, the Company shall not, and shall not permit its Subsidiaries to:
(a) amend its certificate of incorporation or bylaws or comparable organizational documents;
(b) issue, sell sell, pledge, encumber or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (A) the issuance and sale of Shares pursuant to Stock Awards Company Options outstanding prior to the date hereof, (B) subject the vesting of RSUs, PSUs and similar equity awards outstanding prior to Section 1.4(d)the date hereof, or options under the Company ESPP issuable in accordance with the terms of the Company ESPP as of the date hereof, (C) issuances or sales of Subsidiary Securities to the Company or another wholly owned Subsidiary of the Company or (D) grants of Stock Awards described in Section 5.2(b) of the Company Disclosure Letter (provided, that such Stock Awards shall not be subject to or include any acceleration of vesting conditions in connection with the Merger or the transactions contemplated by this Agreement);
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities other than (A) the acquisition by the Company of Shares Securities, except in connection with the surrender of Shares by holders of Company Options in order to pay all any net exercise or a portion of the exercise price of the net share withholding arrangement regarding Company Options, (B) the withholding of Shares to satisfy all or a portion of any Tax obligations with respect to Stock Awards RSUs, PSUs and (C) the acquisition of Stock Awards in connection with the forfeiture of such similar equity awards;
(d) other than cash dividends made by any direct one or indirect more wholly owned Subsidiary Subsidiaries of the Company to the Company or one or more of its Subsidiaries, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other similar 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;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the transactions contemplated hereby, including the Merger);
(f) (i) incur or assume any long-term or short-term debt or issue any debt securities, except for loans or advances to direct or indirect wholly owned Subsidiaries or letters of credit put in place, operating leases entered into, or (A) short-term, immaterial term debt incurred, in each case and/or revolving credit debt incurred under the Existing Credit Agreement (provided the Company shall not be permitted to increase the borrowing capacity as of the date of this Agreement under such agreement) to fund operations of the business in the ordinary course of businessbusiness consistent with past practice and (B) loans or advances to wholly owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person except for loans and advances of travel and other business expenses made in the ordinary course of business consistent with past practice or made by the Company and/or one or more wholly owned Subsidiaries to employees one or more wholly owned Subsidiaries of the Company or any of its Subsidiaries the Company or (iv) mortgage or pledge any of its or its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens);
(g) except as may be required by the existing terms of any Applicable Law or required by an Employee Plan or Contract in effect as of the date hereof or by Applicable LawPlan, (i) enter into, adopt, amend (including acceleration of vestingvesting or funding), modify modify, grant, commence participation in, alter a prior interpretation of or terminate (or commit to enter into, adopt, amend (including acceleration of vesting or funding), modify, grant, commence participation in or terminate) any bonus, profit sharing, compensation, severanceretention, termination, option, restricted stock, restricted stock unit, appreciation right, performance unit, stock equivalent, Stock Award, share purchase agreement, pension, retirement, deferred compensation, collective bargaining agreement, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of (A) any director director, employee, consultant or officer or (B) independent contractor, other than in the ordinary course of businessadoption, any consultant, independent contractor amending or employee (including offer letters with new employee hires and new contractor or consultant engagements in the ordinary course of business), in each case, in any manner; (ii) increase in any manner the compensation or benefits of (A) any director or officer or (B) other than modifying welfare benefit plans in the ordinary course of business consistent with past practicepractice in a manner that does not materially increase the costs of administering or maintaining such welfare benefit plans, (ii) increase, or agree to increase, in any employee who is Vice President level and below (manner the compensation, severance or benefits of any director, officer or employee, other than a Vice President level employee who is a direct report to merit increases in annual base salary or regular wages in the Company’s Chief Executive Officer); ordinary course of business consistent with past practice for any non-officer employees, (iii) grant, pay or increase (or commit to grant, pay or increase) any bonus, special bonus remuneration, severance, retirement or special remuneration termination pay to any director, officer, employee, consultant, or independent contractor or employee or (iv) pay hire or terminate the employment or services of (other than for cause) any benefit not required by director or made pursuant to any plan or arrangement as in effect as officer of the date hereof, other than in the ordinary course Company or any of businessits Subsidiaries;
(h) 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 Employee Plans or agreements subject to the Employee Plans or any other Contract of the Company other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any agreements subject to the Employee Plans in effect as of the date hereof;
(i) acquire, sell, lease, abandon (other than in the Company’s reasonable business discretion), license or dispose of any property or assets in any single transaction or series of related transactions, except for (i) transactions with an aggregate value of less than $2,500,000 individually or $5,000,000 in connection with the marketingaggregate, development, manufacturing, sale, distribution, support (ii) the sale of goods or maintenance of Company Products or for grants of non-exclusive licenses of with respect to Company Intellectual Property Rights, in each case, Rights in the ordinary course of businessbusiness consistent with past practice and (iii) capital expenditure(s) that, individually or in the aggregate, are not in excess of $500,000 individually and $1,000,000 in the aggregate, or any capital expenditure (or series of related capital expenditures) that are consistent in all material respects with the Company’s annual capital expenditure budget for periods following the date of this Agreement, as made available or furnished to Newco or its Representatives;
(j) except as may be required by Applicable Law or GAAP, make any change in any of the accounting principles or practices used by it;
(k) except as required by Applicable Law or GAAP, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, in any case other than in the ordinary course of businessbusiness consistent with past practice;
(l) (i) make or change any material Tax election, (ii) file any amended income Tax Return, Return or any other amended Tax Return that would materially increase the Taxes payable by the Company or its Subsidiaries, (iii) settle or compromise any material Liability for Taxes Taxes, (iv) adopt or change any material Tax accounting method, (v) surrender any right to claim a material Tax refund, (vi) enter into any “closing agreement” within the meaning of Section 7121 of the Code, or (ivvii) consent to any extension or waiver of any limitation period with respect to any material claim or assessment for Taxes, or (v) fail to pay any material Taxes as they become due and payable (including estimated taxes), except to the extent such Taxes are contested in good faith and adequate reserves have been established for such Taxes in accordance with GAAP;
(m) (i) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) involving payments of more than $250,000 in the aggregate per year or (ii) modify, amend or exercise any right to renew any lease or sublease of real property (other than renewals of a lease or sublease which is terminable upon notice of three (3) months or less or which involves payments of no more than $100,000 in the aggregate per year) or waive or violate any term or condition thereof or grant any consents thereunder; grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment, Lien or charge affecting any real property or any part thereof (other than a Permitted Lien);
(i) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, therein or (ii) other than in the ordinary course of business, enter into, renew or amend any Material Contract renew, amend, terminate or grant any release or relinquishment of any rights under any Material Contract or (iii) incur any new capital expenditure(s), individually or other than in the aggregate, ordinary course of business consistent with obligations to the Company or any of its Subsidiaries in excess of $4,000,000 per fiscal quarter for each fiscal quarter beginning January 1, 2019past practice;
(on) 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 (i) reflected or reserved against in full in the Balance Sheet or incurred since the date of the Balance Sheet in the ordinary course of business or (ii) the settlement, compromise, payment, discharge or satisfaction of which does not include any obligation (other than the payment of moneymoney not in excess of $1,000,000 individually or $2,500,000 in the aggregate) to be performed by the Company or its Subsidiaries following the Effective Time that would be material to the Company and its Subsidiaries, taken as a whole;
(p) disclose, deliver, license, escrow or otherwise make available any (i) Technology or Trade Secrets of the Company to any Person (other than such disclosure, delivery, license or escrow pursuant to a written confidentiality agreement or agreement containing confidentiality provisions, in each case, entered into in the ordinary course of business and with reasonable protections of, and preserving all rights of the Company and its Subsidiaries in and to, such Technology and/or Trade Secrets), or (ii) source code for Company Software or Company Products to any Person (other than employees, consultants and independent contractors who require such source code to perform his or her duties for the Company or its Subsidiaries and are subject to a written confidentiality agreements to reasonably protect against unauthorized disclosure of such source code)Time; or
(qo) enter into a Contract or otherwise authorize or commit to do any of the foregoing. If the Company or any of its Subsidiaries desires to take an action that would be prohibited pursuant to the foregoing clauses (a)-(p) without the written consent of Newco, prior to taking such action, the Company may request such written consent (which consent shall not be unreasonably withheld, conditioned or delayed) by sending an e-mail to the representatives of Newco listed on Section 5.1 of the Company Disclosure Letter.
Appears in 1 contract
Samples: Merger Agreement (Informatica Corp)
Restrictions on Company Operations. Except as expressly required or permitted by this Agreement, as set forth in Section 5.2 of the Company Disclosure Letter or as approved in advance by Newco Parent in writing (which approval will not be unreasonably withheld, delayed conditioned or conditioneddelayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article VIII IX and the Effective Time, the Company shall not, and shall not permit its Subsidiaries to:
(a) amend its certificate of incorporation or bylaws or comparable organizational documents;
(b) 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 Company Securities or any Subsidiary Securities, except for (Ai) the issuance and sale of Shares pursuant to Stock Awards the exercise of Company Options outstanding prior to as of the date hereof, (B) subject to Section 1.4(d)the vesting of Restricted Stock Units and similar equity awards outstanding as of the date hereof, or the exercise of options under the Company ESPP issuable in accordance with the terms of the Company ESPP as of the date hereofhereof and (ii) grants of Company Options, (C) issuances Restricted Stock Units or sales other incentive equity awards in the ordinary course of Subsidiary Securities business to those individuals who are actively employed by the Company or another wholly owned Subsidiary its Subsidiaries at the time of such grants, subject to the Company or (D) grants of Stock Awards described in limitations set forth on Section 5.2(b) of the Company Disclosure Letter (provided, that such Stock Awards shall not be subject to or include any acceleration of vesting conditions in connection with the Merger or the transactions contemplated by this Agreement)Letter;
(c) acquire acquire, repurchase or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities other than (A) the acquisition by the Company of Shares Securities, except in connection with the surrender of Shares by holders of Company Options in order to pay all any net exercise or a portion of the exercise price of the net share withholding arrangement regarding Company Options, (B) the withholding Restricted Stock Units, and similar equity awards; Table of Shares to satisfy all or a portion of any Tax obligations with respect to Stock Awards and (C) the acquisition of Stock Awards in connection with the forfeiture of such awards;Contents
(d) other than cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or one of its Subsidiaries(i) adjust, split, subdivide, combine or reclassify any shares of capital stock, or issue or authorize or propose the issuance of any other Company Securities or Subsidiary Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity or voting interest; (ii) declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) (other than cash dividends made by any one or more wholly owned Subsidiaries of the Company to the Company or one or more of its wholly owned Subsidiaries) in respect of any shares of capital stockstock or other equity or voting interest, or make any other actual, constructive or deemed distribution in respect of the shares of capital stockstock or other equity or voting interest; (iii) pledge or encumber any shares of its capital stock or other equity or voting interest; or (iv) modify the terms of any shares of its capital stock or other equity or voting interest;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the transactions contemplated hereby, including the Merger);
(f) (i) incur incur, assume or assume modify the existing terms of any Indebtedness (including any long-term or short-term debt debt) or issue any debt securities, except for loans or advances to direct or indirect wholly owned Subsidiaries or letters of credit put in place, operating leases entered into, or (A) short-term, immaterial term debt incurred, in each case and/or revolving credit debt incurred to fund operations of the business in the ordinary course of businessbusiness consistent with past practice to fund working capital requirements (subject to the limitations set forth in Section 5.2(f) of the Company Disclosure Letter) and (B) loans or advances to wholly owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person except for loans and advances of travel and other business expenses in made by the ordinary course of business Company and/or one or more wholly owned Subsidiaries to employees one or more wholly owned Subsidiaries of the Company or any of its Subsidiaries the Company or (iv) mortgage or pledge any of its or its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens);
(g) except as set forth in Section 5.2(g) of the Company Disclosure Letter or as may be required by Applicable Law and other than as required pursuant to the existing terms of any Employee Plan or Contract in effect as of on the date hereof or by Applicable Lawhereof, (i) except as would be related to the taking of any actions permitted by the remainder of this Section 5.2(g), enter into, adopt, amend (including acceleration of vesting), modify or terminate any bonusEmployee Plan, profit sharingother than routine amendments to health and welfare plans (other than severance plans) that do not materially increase benefits or result in a material increase in administrative costs, compensation, severance, termination, option, restricted stock, restricted stock unit, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of (ii) enter into any (A) employment, consulting or severance agreement with any director current or former director, officer or (B) employee of the Company or any of its Subsidiaries other than in the ordinary course of business, any consultant, independent contractor or employee (including offer letters and employment agreements (x) with current employees or new employee hires and new contractor or consultant engagements in the ordinary course of business)hires, in each case, in other than those at a Xxxxxxx level of 0 or 7 and (y) that are terminable at-will without severance obligations other than those required by Applicable law and the terms of which are consistent with similarly situated employees of the Company and past practices of the Company or (B) severance, termination or other agreement containing change of control provisions with any manner; current or former director, officer or employee of the Company or any of its Subsidiaries, (iiiii) increase in any manner the cash compensation or material benefits of any current or former director, officer or employee, other than increases in the ordinary course of business and consistent with past practice not to exceed five percent (5%) in the aggregate during any 12-month period, (iv) pay any special bonus or special remuneration to any current or former director, officer, employee, consultant or independent contractor, (v) grant any annual cash incentive compensation (A) to any director employees at Xxxxxxx level 0 or officer or 7 and (B) other than in the ordinary course of business and consistent with past practice, practice to any other employees or (vi) terminate any officer or any employee who is Vice President at a Xxxxxxx level and below (other than a Vice President level employee who is of 0 or 7, except as a direct report result of such officer’s or employee’s (A) willful failure to perform the Company’s Chief Executive Officer); duties or responsibilities of his employment, (iiiB) pay any special bonus engaging in serious misconduct, or special remuneration (C) being convicted of or entering a plea of guilty to any director, officer, consultant, independent contractor or employee or (iv) pay any benefit not required by or made pursuant to any plan or arrangement as in effect as of the date hereof, other than in the ordinary course of businesscrime;
(h) except as required by Applicable Law, (i) modify, extend, or enter into any Collective Bargaining Agreement with any Labor Organization, or (ii) recognize or certify any Labor Organization as the bargaining representative for any employees of the Company or any of its Subsidiaries; Table of Contents
(i) 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 Employee Plans or agreements subject to the Employee Plans or any other Contract of the Company other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any agreements subject to the Employee Plans in effect as of the date hereof;
(ij) acquire, sell, lease, abandon license (other than in the Company’s reasonable business discretionor grant a covenant not to xxx or similar rights under), license subject to a Lien, sublicense, transfer, or otherwise dispose of any property or assets of the Company or any of its Subsidiaries in any single transaction or series of related transactions, except in connection for (i) transactions involving property or assets that are not material to the Company or its Subsidiaries with an aggregate value of less than $500,000 and (ii) the marketing, development, manufacturing, sale, distribution, support sale of goods or maintenance of Company Products or for grants of non-exclusive licenses of with respect to Company Intellectual Property Rights, in each case, Rights in the ordinary course of business;
(jk) except as may be required by Applicable Law or GAAP, make any change in any of the accounting principles or practices used by it;
(kl) except as required by Applicable Law or GAAP, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, in any case other than in the ordinary course of business;
(lm) (i) make make, change or change revoke any material Tax election, (ii) file any amended income Tax Return, Return or any other material amended Tax Return that would materially increase the Taxes payable by the Company or its SubsidiariesReturn, (iii) settle or compromise any audit, controversy or claim with respect to a material Liability for Taxes or amount of Taxes, (iv) adopt or change any Tax accounting method, (v) surrender any claim for a refund of a material amount of taxes, (v) consent to any extension or waiver of any limitation period with respect to any material claim or assessment for Taxes, or (v) fail to pay any material Taxes as they become due and payable (including estimated taxes), except to the extent such Taxes are contested in good faith and adequate reserves have been established for such Taxes in accordance with GAAP;
(m) (ivi) enter into any lease or sublease “closing agreement” within the meaning of real property Section 7121 of the Code (whether as a lessor, sublessor, lessee or sublessee) involving payments of more than $250,000 in the aggregate per year or (ii) modify, amend or exercise any right to renew any lease or sublease of real property (other than renewals of a lease or sublease which is terminable upon notice of three (3) months or less or which involves payments of no more than $100,000 in the aggregate per year) or waive or violate any term or condition thereof or grant any consents thereunder; grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment, Lien or charge affecting any real property or any part thereof (other than similar provision of state, local or non-United States law) with respect to a Permitted Lien)material amount of Taxes;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest thereintherein or any material assets thereof, (ii) other than enter into any Contract that if so entered into prior to the date hereof would constitute a Material Contract, except for the entry into of revenue-generating Contracts in the ordinary course of business, enter intoor (iii) modify, renew renew, amend, extend (other than extensions and renewals arising pursuant to the terms thereof) or amend any Material Contract terminate (or grant any release or relinquishment of any rights under under) any Material Contract Contract, except, in each case, for the extension or (iii) incur any new capital expenditure(s), individually or renewal of revenue-generating Contracts in the aggregate, with obligations to ordinary course of business or the Company termination or expiration of any other Contracts arising in the ordinary course of its Subsidiaries in excess of $4,000,000 per fiscal quarter for each fiscal quarter beginning January 1, 2019business;
(o) settle settle, release, waive or compromise any pending or threatened Legal Proceeding or agree to any remedies with respect to any 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 ;
(p) (i) reflected incur, authorize or reserved against in full in the Balance Sheet or incurred since the date of the Balance Sheet commit to incur any capital expenditures other than in the ordinary course of business or business, subject to the limitations set forth on Section 5.2(p) of the Company Disclosure Letter; (ii) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice, if reasonably available on commercially reasonable terms; (iii) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the settlementCompany 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; (iv) grant any material refunds, compromisecredits, paymentrebates or other allowances to any end user, discharge customer, reseller or satisfaction distributor or materially accelerate, or materially alter practices and policies relating to, the rate of which does not include collection of accounts receivable or payment of accounts payable, in each case other than in the ordinary course of business; or (v) waive, release, grant, encumber or transfer any obligation right of material value other than in the ordinary course of business; Table of Contents
(q) convene any regular or special meeting (or any adjournment thereof) of the stockholders of the Company, or establish a record date or provide notice with respect to any such meeting, other than the payment Company Stockholder Meeting;
(r) make or forgive any loans to employees, officers or directors of money) to be performed by the Company or any of its Subsidiaries following the Effective Time Subsidiaries;
(s) take or omit to take any action that would cause any material Company Registered IP, including with respect to any registrations or applications for registration, to lapse, be abandoned or canceled, except for any lapse, abandonment or cancellation which would not be material to the Company and its Subsidiaries, taken as a whole;
(p) disclose, deliver, license, escrow or otherwise make available any (i) Technology or Trade Secrets of the Company to any Person (other than such disclosure, delivery, license or escrow pursuant to a written confidentiality agreement or agreement containing confidentiality provisions, in each case, entered into in the ordinary course of business and with reasonable protections of, and preserving all rights of the Company and its Subsidiaries in and to, such Technology and/or Trade Secrets), or (ii) source code for Company Software or Company Products to any Person (other than employees, consultants and independent contractors who require such source code to perform his or her duties for the Company or its Subsidiaries and are subject to a written confidentiality agreements to reasonably protect against unauthorized disclosure of such source code); or
(qt) enter into, authorize or commit to enter into a Contract or otherwise commit or agree to do any of the actions prohibited by the foregoing. If the Company or any of its Subsidiaries desires to take an action that would be prohibited pursuant to the foregoing clauses (a)-(p) without the written consent of Newco, prior to taking such action, the Company may request such written consent (which consent shall not be unreasonably withheld, conditioned or delayed) by sending an e-mail to the representatives of Newco listed on Section 5.1 of the Company Disclosure Letter.
Appears in 1 contract
Samples: Merger Agreement
Restrictions on Company Operations. Except Without limiting the generality of the foregoing Section 5.1, except (w) as expressly required or permitted by this Agreement, (x) as set forth required by the express terms of any Material Contract in Section 5.2 effect as of the Company Disclosure Letter date hereof or as approved in advance by Newco in writing (which approval will not be unreasonably withheld, delayed or conditionedmade available to Parent under Section 5.2(l)(i), (y) as required by Applicable Laws or actions taken to implement the express terms of Orders issued as of the date hereof or made available to Parent under Section 5.2(h), or (z) with Parent’s prior written consent: at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article VIII IX and the Effective Time, the Company shall will not, and shall not permit will cause each of its Subsidiaries not to, and will use its reasonable best efforts to cause its and their respective Affiliates not to:
(a) amend any provision of the Charter Documents of the Company or any of its certificate direct or indirect Subsidiaries, except as may be required by Applicable Law or the rules and regulations of incorporation the SEC or bylaws or comparable organizational documentsNASDAQ;
(b) issue, sell deliver, sell, grant, transfer, dispose of, pledge, encumber or deliver subject to any Lien (other than Liens imposed by securities laws), or authorize the issuance, delivery, sale, grant, transfer, disposal of, pledge, encumbrance or subjecting to any Lien (other than Liens imposed by securities laws) the Share Capital or any share capital of any Subsidiary of the Company, or any other equity or voting interests, or any securities or rights convertible into, exchangeable or exercisable for or evidencing the right to subscribe for, any shares of its capital stock or other equity or voting interests, or any rights, warrants or options to purchase any shares of its capital stock or other equity or voting interests, other than (i) the issuance of Company Ordinary Shares (A) upon the vesting or settlement of Company Share Awards issued prior to the date of this Agreement in accordance with the terms thereof or (B) as required by the terms of the Company Share Award issued before the date of this Agreement; or (ii) as required by the express terms of any other Company Securities or any other Subsidiary Securities, as the case may be, issued before the date of this Agreement;
(i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, shares or property or any combination thereof) in respect of, any Company Securities or any Subsidiary Securities, as the case may be, or make any other actual, constructive or deemed distribution in respect of any Company Securities or any Subsidiary Securities, as the case may be; (ii) split, combine, subdivide or reclassify or amend any Company Securities or any Subsidiary Securities, as the case may be, or issue or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for any Company Securities or any Subsidiary Securities, as the case may be; (iii) issue, sell, deliver, pledge, grant, dispose of or encumber any share capital, or grant to any Person (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (A) as the case may be, other than the issuance and sale of Company Ordinary Shares pursuant to Stock Company Share Awards outstanding prior to the date hereof, (B) subject to Section 1.4(d), under the Company ESPP issuable in accordance with the terms of the Company ESPP as of the date hereof, (C) issuances or sales of Subsidiary Securities to the Company or another wholly owned Subsidiary of the Company ; or (Div) grants of Stock Awards described in Section 5.2(b) of the Company Disclosure Letter (providedrepurchase, that such Stock Awards shall not be subject redeem or otherwise acquire, or offer to repurchase, redeem or include any acceleration of vesting conditions in connection with the Merger or the transactions contemplated by this Agreement);
(c) acquire or redeemotherwise acquire, directly or indirectly, or amend any Company Securities or any Subsidiary Securities other than (A) Securities, as the acquisition by case may be, except as required pursuant to the terms of a Contract in effect prior to the date hereof which provides governing terms for the applicable Company of Shares in connection with the surrender of Shares by holders of Company Options in order to pay all or a portion of the exercise price of the Company Options, (B) the withholding of Shares to satisfy all or a portion of any Tax obligations with respect to Stock Awards and (C) the acquisition of Stock Awards in connection with the forfeiture of such awardsShare Award;
(d) other than cash dividends made by (i) make, depart from, or adopt any direct change in any accounting methods, principles, policies or indirect wholly owned Subsidiary practices of the Company to the Company or one any of its Subsidiaries, splitexcept as required by a change in GAAP or Applicable Law, combine or reclassify (ii) revalue any shares properties, rights or assets of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property the Company or any combination thereof) in respect of any shares of capital stockits Subsidiaries, including waiving, forgiving, canceling, discharging or make any other actualotherwise writing off notes or accounts receivable, constructive except as required by GAAP or deemed distribution in respect of the shares of capital stockApplicable Law;
(e) other than (x) for sales or licenses of products or services, in each case in the ordinary course of business, consistent with past practices, or (y) pursuant to Contracts in existence and effective on the date of this Agreement: directly or indirectly (i) acquire (or agree to acquire) (whether by merger, consolidation, sale of stock or assets, or otherwise) any Person (or division thereof) or any assets or equity interests in or businesses of such Person, (ii) form a Subsidiary, (iii) adopt a plan or agreement of complete or partial liquidation, liquidation or dissolution, merger, amalgamation, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the transactions contemplated herebyTransactions, including the Merger), or (iv) sell, transfer, lease, license, assign or otherwise dispose of (whether by merger, consolidation, sale of stock or assets, or otherwise), or pledge, mortgage, sell and leaseback, encumber or otherwise subject to any Lien (other than Permitted Liens), any material properties, rights or assets of the Company or any of its Subsidiaries (including any share capital or other Subsidiary Securities of any Subsidiary of the Company);
(f) (i) incur abandon, allow to lapse, sell, assign, transfer, exclusively license, grant any security interest in or assume otherwise encumber or dispose of any longCompany-term Owned Intellectual Property Rights owned by the Company or short-term debt or issue any debt securities, except for loans or advances to direct or indirect wholly owned Subsidiaries or letters of credit put in place, operating leases entered intoits Subsidiaries, or short(ii) grant any right or license to any Intellectual Property Rights other than pursuant to grants of non-term, immaterial debt incurredexclusive licenses of products or services, in each case in the ordinary course of businessbusiness consistent with past practices, including in respect of any terms and conditions;
(g) (i) incur, assume, repurchase or prepay any long-term or short-term Indebtedness; (ii) issue or sell any debt securities (including letters of credit) of the Company or any of its Subsidiaries, or any options, warrants, calls or other rights to acquire any such debt securities; (iii) guarantee any Indebtedness or debt securities of another Person, or assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly owned Subsidiaries of the Company, another Person; (iiiiv) make any loans, advances or capital contributions to or investments in another Person; (v) enter into any “keep well” or other Person except for advances Contract to maintain any financial statement condition of travel another Person; or (vi) enter into any arrangement having the economic effect of any of the foregoing;
(h) institute, settle or compromise any pending or threatened Legal Proceeding, including, paying, discharging or satisfying (or agree to pay, discharge or satisfy) any claim, liability or obligation (whether absolute or accrued, asserted or unasserted, contingent or otherwise), other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings, claims and other business expenses Liabilities reflected or reserved against in full in the ordinary course consolidated financial statements of business the Company and its Subsidiaries included in the latest Quarterly Report on Form 10-Q filed by the Company prior to employees the date hereof;
(i) (i) change or modify, directly or indirectly, the compensation or benefits payable to any current or former director, officer, employee, independent contractor, consultant or other representative of the Company or any of its Subsidiaries Subsidiaries, including changes and/or modifications with respect to (x) the compensation and/or benefits payable to any officer (including C-suite level employees), senior management-level employee (including senior vice presidents) or (iv) mortgage other employee with a similar executive or pledge managerial role or responsibilities with the Company or any of its Subsidiaries, (y) the bonus opportunity available for any other employee of the Company or its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon Subsidiaries (other than Permitted Lienssuch a change in bonus opportunity that is limited to within five percent (5%) of the bonus opportunity applicable to such employee as of the date hereof) and (z) any transaction, success, change of control, retention and similar bonuses and/or any severance payments, payable by or on behalf of the Company or any of its Subsidiaries, to such a director, officer, employee, consultant or other representative in connection with the consummation of the Transactions (including the provision of such a bonus or the making of such a payment to any Person other than those set forth on Section 5.2(i)(i) of the Company Disclosure Letter);
(g) except , except, in each case, as may be required by the existing terms of otherwise provided for in any Employee Plan or Contract Plans in effect as of the date hereof (provided, that the Company made available to Parent such Employee Plan) or as required by Applicable Law; (ii) hire, (i) enter intoengage, adoptpromote, amend (including acceleration of vesting)terminate, modify or terminate change the employment terms and conditions with respect to, any bonus, profit sharing, compensation, severance, termination, option, restricted stock, restricted stock unit, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of (A) any director or officer or (B) employee or independent contractor of the Company or any of its Subsidiaries, other than non-executive and non-managerial hires or promotions to fill a vacancy in the ordinary course of business, any consultant, independent contractor or employee (including offer letters with new employee hires and new contractor or consultant engagements in the ordinary course of business), in each case, in any manner; (ii) increase in any manner the compensation or benefits of (A) any director or officer or (B) other than in the ordinary course of business consistent with past practice, any employee who is Vice President level and below practices during the past three (other than a Vice President level employee who is a direct report to the Company’s Chief Executive Officer)3) years; (iii) pay any special bonus or special remuneration to any director, officer, consultant, independent contractor or employee or (iv) pay any benefit not required by or made pursuant to any plan or arrangement as in effect as of the date hereof, other than in the ordinary course of business;
(h) make any deposits or contributions of cash or other property (other than as required pursuant to the terms of the Employee Plans, or agreements subject to the Employee Plans, in effect as of the date hereof and made available to Parent prior to the date hereof) to, or accelerate the time of payment, vesting or funding of, or take any other action to fund or in otherwise secure payment of, any other way secure the payment of compensation or benefits under payable to any current or former director, officer, employee, independent contractor, consultant or other representative of the Company or any of its Subsidiaries, pursuant to the Employee Plans or agreements subject to the Employee Plans or any other Contract of the Company or any of its Subsidiaries; or (iv) amend any Employee Plans or Collective Bargaining Agreement, or terminate, adopt or enter into any plan, agreement, arrangement or other than deposits and contributions Contracts that are would be an Employee Plan or a Collective Bargaining Agreement if in effect on the date of this Agreement, in each case, except as required pursuant to by Applicable Law or by the terms of the Employee Plans or any agreements subject to the Employee Plans in effect as of the date hereof and made available to Parent prior to the date hereof;
(i) acquire, sell, lease, abandon make (other than in the Company’s reasonable business discretion), license or dispose outside of any property or assets in any single transaction or series of related transactions, except in connection with the marketing, development, manufacturing, sale, distribution, support or maintenance of Company Products or for grants of non-exclusive licenses of Intellectual Property Rights, in each case, in the ordinary course of business;
(j) except as may be required by Applicable Law ), change or GAAP, make any change in any of the accounting principles or practices used by it;
(k) except as required by Applicable Law or GAAP, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, in any case other than in the ordinary course of business;
(l) (i) make or change revoke any material Tax election, ; (ii) file any amended material income Tax Return, or any other amended Tax Return that would materially increase the Taxes payable by the Company or and its Subsidiaries, Subsidiaries in any non-de minimis respect; (iii) settle change or compromise revoke any Tax accounting method; (iv) enter into any closing agreement within the meaning of Section 7121 of the Code regarding any material Liability Tax liability or assessment; (v) enter into, change or revoke any Tax sharing, allocation, assumption, or indemnification agreement (other than any commercial contract the primary purpose of which is unrelated to Taxes, entered into in the ordinary course of business and containing customary Tax indemnification provisions); (vi) settle, compromise or resolve any controversy that relates to a material liability for Taxes or Taxes; (ivvii) consent to any extension or waiver of any limitation period with respect applicable to any material claim Tax audit, claim, assessment or assessment for Taxes, or other similar Tax matter (vother than automatic extensions granted in the ordinary course of business); (viii) fail to pay any material Taxes as they become due and payable (including estimated taxes), except to the extent such Taxes are contested in good faith and adequate reserves have been established for such Taxes in accordance with GAAP; or (ix) surrender any right to claim a material Tax refund, in each case, with respect to the Company or any of its Subsidiaries;
(mk) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance, profit and/or loss sharing arrangement, minority equity investment or similar arrangement;
(i) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) involving payments of more than $250,000 in the aggregate per year or (ii) modify, amend or exercise any right to renew any lease or sublease of real property (other than renewals of a lease or sublease which is terminable upon notice of three (3) months or less or which involves payments of no more than $100,000 in the aggregate per year) or waive or violate any term or condition thereof or grant any consents thereunder; grant or otherwise create or consent to the creation of any easementMaterial Contract, covenant, restriction, assessment, Lien or charge affecting any real property or any part thereof (other than a Permitted Lien);
(i) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, (ii) other than in the ordinary course of business, enter intoconsistent with past practices, renew including in respect of the terms and conditions, or (ii) terminate or materially amend any Material Contract Contract, or grant waive or release any release or relinquishment of any material rights under any Material Contract or with respect thereto;
(iiim) incur enter into any new capital expenditure(s)lease or sublease, individually or materially amend any Lease in effect as of the aggregatedate of this Agreement or any such lease or sublease of real property entered into after the date hereof, with obligations to or waive any material term or condition of such Lease or such other lease or sublease, as the case may be;
(n) (i) enter into any new line of business or activity, any class or any market in which the Company and its Subsidiaries do not operate as of the date of this Agreement; (ii) abolish, withdraw, terminate or otherwise exit from any line of business or activity, any class or any market in which the Company or any of its Subsidiaries operates or conducts any of its business as of the date of this Agreement; (iii) enter into any markets with respect to the business-to-consumer business segment of the business of the Company and its Subsidiaries; or (iv) engage in, or enter into, or propose to enter, a Gaming Business, or otherwise offer any gaming services or products, whether directly or indirectly, including through its and their respective Affiliates or Representatives or third-party contractors, in excess of $4,000,000 per fiscal quarter for each fiscal quarter beginning January 1any jurisdiction or market where such entry (or proposal to enter) or offering would be prohibited by Applicable Law, 2019including Gaming Laws;
(oi) settle relinquish, abandon, modify, rescind, waive or compromise terminate any pending Material Permit; (ii) fail to make expenditures as required under any Gaming Law or threatened Legal Proceeding by any Gaming Authority; (iii) enter into any material agreement or paycommitment with any Gaming Authority; or (iv) suspend, discharge withdraw or satisfy terminate any applications or agree to pay, discharge or satisfy any claim, Liability or obligation submissions for new Gaming Approvals outstanding as of the date of this Agreement;
(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 p) (i) reflected make, incur or reserved against authorize (other than in full accordance with the Company’s 2023 annual budget) capital expenditure(s), or (ii) not make, incur or authorize the capital expenditures contemplated in the Balance Sheet Company’s 2023 annual budget;
(q) enter into any Related Party Transaction;
(r) adopt a plan of complete or incurred since the date of the Balance Sheet partial liquation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(s) other than in the ordinary course of business or (ii) consistent with past practices, fail to maintain in full force and effect the settlement, compromise, payment, discharge or satisfaction of which does not include any obligation (other than the payment of money) to be performed by the Company or its Subsidiaries following the Effective Time that would be material to the Company and its Subsidiaries, taken as a whole;
(p) disclose, deliver, license, escrow or otherwise make available any (i) Technology or Trade Secrets of the Company to any Person (other than such disclosure, delivery, license or escrow pursuant to a written confidentiality agreement or agreement containing confidentiality provisions, in each case, entered into in the ordinary course of business and with reasonable protections of, and preserving all rights of insurance policies covering the Company and its Subsidiaries and their respective properties, businesses, assets and operation in a form and to, such Technology and/or Trade Secrets), or (ii) source code for Company Software or Company Products to any Person (other than employees, consultants and independent contractors who require such source code to perform his or her duties for amount consistent with those in place as of the Company or its Subsidiaries and are subject to a written confidentiality agreements to reasonably protect against unauthorized disclosure date of such source code)this Agreement; or
(qt) enter into a Contract otherwise agree or otherwise commit to do any of the foregoing. If the Company or any of its Subsidiaries desires to take an action that would be prohibited pursuant to the foregoing clauses (a)-(p) without the written consent of Newco, prior to taking such action, the Company may request such written consent (which consent shall not be unreasonably withheld, conditioned or delayed) by sending an e-mail to the representatives of Newco listed on Section 5.1 of the Company Disclosure Letter.
Appears in 1 contract
Samples: Merger Agreement (GAN LTD)
Restrictions on Company Operations. Except as expressly required or permitted by this Agreement, as set forth in Section Sections 5.1 or 5.2 of the Company Disclosure Letter or as approved in advance by Newco in writing (which approval will not be unreasonably withheld, conditioned or delayed with respect to clauses, (h) through (r), or conditioned(s) with respect to the foregoing), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time, the Company shall not, and shall not permit its Subsidiaries to:
(a) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws or comparable organizational documents;
(b) issue, sell sell, deliver, grant, pledge or deliver otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (A) the issuance and sale of Shares pursuant to Stock Awards Company Options outstanding prior to the date hereof, (B) subject the vesting of Shares of Restricted Stock, Restricted Stock Units, and similar equity awards outstanding prior to Section 1.4(d)the date hereof, or options under the Company ESPP issuable in accordance with the terms of the Company ESPP as of the date hereof, (C) issuances or sales of Subsidiary Securities to the Company or another wholly owned Subsidiary of the Company or (D) grants of Stock Awards described in Section 5.2(b) of the Company Disclosure Letter (provided, that such Stock Awards shall not be subject to or include any acceleration of vesting conditions in connection with the Merger or the transactions contemplated by this Agreement);
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities other than (A) the acquisition by the Company of Shares Securities, except in connection with the surrender of Shares by holders of Company Options in order to pay all any net exercise or a portion of the exercise price of the net share withholding arrangement regarding Company Options, (B) the withholding of Shares to satisfy all or a portion of any Tax obligations with respect to Restricted Stock, Restricted Stock Awards Units, and (C) the acquisition of Stock Awards in connection with the forfeiture of such similar equity awards;
(d) other than cash dividends made by any direct one or indirect more wholly owned Subsidiary Subsidiaries of the Company to the Company or one or more of its Subsidiaries, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other similar distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, stock or other equity interests or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the transactions contemplated hereby, including the Merger);
(f) (i) incur incur, create, assume or assume otherwise become liable for, or repay or prepay, any long-term Indebtedness or issue any debt securities or other similar instruments, except for (A) short-term debt or issue any and/or revolving credit debt securities, except for loans or advances incurred to direct or indirect wholly owned Subsidiaries or letters fund operations of credit put the business in place, operating leases entered into, or short-term, immaterial debt incurredthe ordinary course of business consistent with past practice, in each case in an amount not to exceed $2,500,000, individually or in the ordinary course of businessaggregate, and (B) loans or advances to wholly owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person except for loans and advances of travel and other business expenses made in the ordinary course of business consistent with past practice in an amount not to employees exceed $2,500,000, individually or in the aggregate, or made by the Company and/or one or more wholly owned Subsidiaries to one or more wholly owned Subsidiaries of the Company or any of its Subsidiaries the Company or (iv) mortgage or pledge any of its or its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens);
(g) except as may be required by the existing terms of any Employee Plan or Contract in effect as of the date hereof or by Applicable Law, (i) enter into, adopt, amend (including acceleration of vesting), modify or terminate any bonus, profit sharing, compensation, severance, termination, option, restricted stock, restricted stock unit, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of (AI) any director director, employee that has an annual salary above $200,000, consultant or officer or (B) other than in the ordinary course of business, any consultant, independent contractor or employee and (including offer letters with new employee hires and new contractor or consultant engagements in the ordinary course of business), in each case, in any manner; (ii) increase in any manner the compensation or benefits of (A) any director or officer or (BII) other than in the ordinary course of business consistent with past practice, any employee who is Vice President level and below (other employee, and, in all cases, other than a Vice President level (A) any separation agreements entered into in the ordinary course of business with any terminating employee who is a direct report in the United States that provide termination payments and benefits not in excess of $50,000 with respect to employees in the Company’s Chief Executive OfficerUnited States and (B) any separation agreements entered into in the ordinary course of business with any terminating employee outside the United States that provide termination payments and benefits not in excess of $50,000 (or any greater amount required under Applicable Law); , (ii) increase in any manner the compensation or fringe benefits of (I) any director, employee that has an annual salary above $200,000, consultant or independent contractor, and (II) other than in the ordinary course of business consistent with past practice, any other employee, (iii) pay any special bonus or special remuneration to (I) any director, officeremployee that has an annual salary above $200,000, consultant, or independent contractor or employee or contractor, and (ivII) pay any benefit not required by or made pursuant to any plan or arrangement as in effect as of the date hereof, other than in the ordinary course of business consistent with past practice, any other employee (including in respect of stock options, stock appreciation rights, performance units, restricted stock or other stock-based or stock-related awards or the removal or modification of any restrictions in any Employee Plan or awards made thereunder) or (iv) take any action to accelerate the vesting, funding or payment of any compensation or benefit under any Employee Plan or other Contract; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (i) - (iv), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Newco, to (a) issue any new Company Options, stock appreciation rights, performance units, restricted stock or other stock-based or stock-related awards or (b) amend or modify benefits, increase the base salaries of employees (other than providing initial base salaries to new hires), or pay any special bonus or special remuneration, even if in the ordinary course of business, that would result in additional benefits to employees, consultants and independent contractors having a value in excess of $750,000, individually or in the aggregate during any calendar quarter, except as permitted under Section 5.2(b), Section 5.2(g), or Section 5.2(o) of the Company Disclosure Letter;
(h) 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 Employee Plans or agreements subject to the Employee Plans or any other Contract of the Company other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any agreements subject to the Employee Plans in effect as of the date hereofhereof or as may be required by Applicable Law;
(i) acquire, sell, lease, abandon (other than in the Company’s reasonable business discretion), license or dispose of any property or assets (including the equity or business of any Person) in any single transaction or series of related transactions, except for (i) transactions with an aggregate value of less than $1,500,000 individually or $3,000,000 in connection with the marketingaggregate, development, manufacturing, sale, distribution, support (ii) the sale of goods or maintenance of Company Products services or for grants of non-exclusive licenses of with respect to Company Intellectual Property RightsRights in the ordinary course of business consistent with past practice, (iii) the purchase of inventory in each casethe ordinary course of business consistent with past practice, (iv) pursuant to Contracts in effect as of the date of this Agreement that are set forth on Section 3.11(a) or Section 5.2(i)(iv) of the Company Disclosure Letter, (v) the lease of real property in the ordinary course of business, and (vi) capital expenditure(s) with obligations to the Company or any of its Subsidiaries in accordance with the budget set forth on Section 5.2(i)(vi) of the Company Disclosure Letter or otherwise not in excess of $250,000, individually or in the aggregate, in any fiscal quarter;
(j) except as may be required by Applicable Law or GAAP, make any change in any of the accounting principles or practices used by itit or change its fiscal year;
(k) except as required by Applicable Law or GAAP, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, in any case other than in the ordinary course of businessbusiness consistent with past practice;
(l) (i) make or change any material Tax election, (ii) file any amended income material Tax Return, or any other amended Tax Return that would materially increase the Taxes payable by the Company or its Subsidiaries, (iii) settle or compromise any material Liability for Taxes or Taxes, (iv) change any Tax accounting method, (v) consent to any extension or waiver of any limitation period with respect to any material claim the collection or assessment for any Taxes, (vi) enter into any closing agreement pursuant to Section 7121 of the Code (or any similar provision of state, local or foreign law) with respect to any Tax, or (vvii) fail surrender any right to pay any claim a material Taxes as they become due and payable (including estimated taxes), except to the extent such Taxes are contested in good faith and adequate reserves have been established for such Taxes in accordance with GAAPTax refund;
(m) (i) enter into commence any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) involving payments of more than $250,000 in the aggregate per year or (ii) modify, amend or exercise any right to renew any lease or sublease of real property Legal Proceeding (other than renewals any Legal Proceeding (x) as a result of a lease or sublease which is terminable upon notice of three (3) months or less or which involves payments of no more than $100,000 in the aggregate per year) or waive or violate any term or condition thereof or grant any consents thereunder; grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment, Lien or charge affecting any real property or any part thereof (other than a Permitted Lien);
(i) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, (ii) other than in the ordinary course of business, enter into, renew or amend any Material Contract or grant any release or relinquishment of any rights under any Material Contract or (iii) incur any new capital expenditure(s), individually or in the aggregate, with obligations to Legal Proceeding against the Company or any of its Subsidiaries in excess or (y) against Newco, Merger Sub or any of $4,000,000 per fiscal quarter for each fiscal quarter beginning January 1their respective Affiliates), 2019;
(oii) settle, compromise or agree to settle or compromise any pending or threatened Legal Proceeding (other than a Legal Proceeding involving Newco, Merger Sub or any of their respective Affiliates, whether or not relating to this Agreement or the transactions contemplated hereby), (iii) or pay, discharge or satisfy or agree to pay, discharge or satisfy any claimclaim of, or Liability or obligation (absolute or accrued, asserted or unasserted, contingent or otherwise)) to, any Person (other than Newco, Merger Sub or any of their respective Affiliates) other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings, claims and other Liabilities (ix) reflected or reserved against in full in the Balance Sheet or incurred since the date of the Balance Sheet in the ordinary course of business or consistent with past practice, (iiy) the settlement, compromise, payment, discharge or satisfaction of which does not include any obligation (other than the payment of moneymoney not in excess of $250,000 individually or $2,000,000 in the aggregate) to be performed by the Company or its Subsidiaries, or (z) that relate to employment claims, in the ordinary course of business, and not in excess of $50,000 for any such claim; provided that, the provisions of this Section 5.2(m) shall not limit, and shall not be construed to limit, any rights, remedies or defenses of the Company or any of its Subsidiaries following against Newco, Merger Sub or any of their respective Affiliates;
(n) (i) modify, amend, terminate, or cancel any Material Contract or (ii) enter into any Contract that if in effect on the Effective Time that date hereof would be material a Material Contract; provided, that if another subsection of this Section 5.2 governs conduct or actions of the same type or nature as this Section 5.2(n), and such other subsection expressly permits such conduct or actions to be taken by the Company in conflict with this Section 5.2(n), then the Company or its Subsidiaries shall be permitted to take such conduct or action;
(o) hire any employees outside of the parameters set forth on Section 5.2(o) of the Company Disclosure Letter, other than any employees that are hired to replace any terminated employees or that resign and that are provided total compensation and benefits substantially similar, in the aggregate, to the Company and its Subsidiaries, taken as a wholeterminating employees being replaced;
(p) discloseenter into any new line of business outside of its existing business;
(q) renew or enter into any non-compete or exclusivity agreement that would restrict or limit, deliverin any material respect, license, escrow or otherwise make available any (i) Technology or Trade Secrets the operations of the Company to or any Person (other than such disclosure, delivery, license or escrow pursuant to a written confidentiality agreement or agreement containing confidentiality provisions, in each case, entered into in the ordinary course of business and with reasonable protections of, and preserving all rights of the Company and its Subsidiaries in and to, such Technology and/or Trade Secrets), or (ii) source code for Company Software or Company Products to any Person (other than employees, consultants and independent contractors who require such source code to perform his or her duties for the Company or its Subsidiaries and are subject to a written confidentiality agreements to reasonably protect against unauthorized disclosure of such source code); orSubsidiaries;
(qr) enter into any new lease or amend the terms of any existing lease of real property that would require payments in excess of $250,000;
(s) enter into a Contract or otherwise commit to do any of the foregoing. If the Company or any of its Subsidiaries desires to take an action that would be prohibited pursuant to the foregoing clauses (a)-(p) without the written consent of Newco, prior to taking such action, the Company may request such written consent (which consent shall not be unreasonably withheld, conditioned or delayed) by sending an e-mail to the representatives of Newco listed on Section 5.1 of the Company Disclosure Letter.
Appears in 1 contract
Samples: Merger Agreement (Gigamon Inc.)
Restrictions on Company Operations. Except as expressly required or permitted by this Agreement, as set forth in Section 5.2 of the Company Disclosure Letter or Letter, as approved in advance by Newco Parent in writing (which approval will not be unreasonably withheld, delayed or conditioned), at all times during or required by Applicable Law, from the period commencing with the execution and delivery date of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time, the Company shall will not, and shall will not permit any of its Subsidiaries to:
(a) amend its certificate of incorporation the Company Charter or bylaws Company Bylaws or comparable organizational constituent documents;
(b) issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (A) the issuance and sale of Shares pursuant to Stock Awards outstanding prior to the date hereof, (B) subject to Section 1.4(d), under the Company ESPP issuable in accordance with the terms of the Company ESPP as of the date hereof, (C) issuances or sales of Subsidiary Securities to the Company or another wholly owned Subsidiary of the Company or (D) grants of Stock Awards described in Section 5.2(b) of the Company Disclosure Letter (provided, that such Stock Awards shall not be subject to or include any acceleration of vesting conditions in connection with the Merger or the transactions contemplated by this Agreement);
(c) acquire or redeem, directly or indirectly, or amend any Company Securities (except as may be permitted or required under any Company Equity Incentive Plan) or Subsidiary Securities other than (A) the acquisition by the Company of Shares in connection with the surrender of Shares by holders of Company Options in order to pay all or a portion of the exercise price of the Company Options, (B) the withholding of Shares to satisfy all or a portion of any Tax obligations with respect to Stock Awards and (C) the acquisition of Stock Awards in connection with the forfeiture of such awardsSecurities;
(d) other than cash dividends made by any direct or indirect wholly wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or 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;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the transactions contemplated hereby, including the Merger)Subsidiaries;
(f) (i) incur or assume any long-term or short-term debt indebtedness or issue any debt securities, except for (A) short-term indebtedness incurred to fund operations of the business in the ordinary course of business consistent with past practice (B) loans or advances to direct or indirect wholly wholly-owned Subsidiaries or letters of Subsidiaries, and (C) indebtedness incurred under the Company’s existing credit put facilities, provided that with respect to its existing term loan from Wynnefield Partners Small Cap Value, L.P. and Wynnefield Partners Small Cap Value, L.P. I (the “Wynnefield Loan”), the Company may only incur any additional indebtedness thereunder in place, operating leases entered into, or short-term, immaterial debt incurred, in each case an amount that shall not result in the ordinary course of businessaggregate principal amount outstanding under the Wynnefield Loan to exceed Three Million Dollars ($3,000,000), (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person Person, except with respect to obligations of direct or indirect wholly wholly-owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person Person, except for travel advances of travel and other business expenses in the ordinary course of business consistent with past practice to employees of the Company or any of its Subsidiaries or except among direct or indirect wholly-owned Subsidiaries of the Company or (iv) mortgage or pledge any of its or its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens);
(g) except as may be required by the existing terms of any Employee Plan or Contract in effect as of the date hereof or by Applicable Law, (i) enter into, adopt, amend (including acceleration of vesting), modify or terminate any bonus, profit sharing, compensation, severance, termination, option, restricted stock, restricted stock unit, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of (A) any director or officer or (B) other than in the ordinary course of business, any consultant, independent contractor or employee (including offer letters with new employee hires and new contractor or consultant engagements in the ordinary course of business), in each case, in any manner; (ii) increase in any manner the compensation or benefits of (A) any director or officer or (B) other than in the ordinary course of business consistent with past practice, any employee who is Vice President level and below (other than a Vice President level employee who is a direct report to the Company’s Chief Executive Officer); (iii) pay any special bonus or special remuneration to any director, officer, consultant, independent contractor or employee or (iv) pay any benefit not required by or made pursuant to any plan or arrangement as in effect as of the date hereof, other than in the ordinary course of business;
(h) 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 Employee Plans or agreements subject to the Employee Plans or any other Contract of the Company Company, other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any agreements subject to the Employee Plans in effect as of the date hereof;
(h) increase the compensation of any of its employees, other than as provided for in any written agreements or in the ordinary course of business consistent with past practice;
(i) terminate the employment of or change the terms and conditions of employment with respect to any of its employees except for any terminations for cause;
(j) acquire, sell, lease, abandon (other than in the Company’s reasonable business discretion), license or dispose of any material property or material assets in any single transaction or series of related transactions, except in connection with for the marketing, development, manufacturing, sale, distribution, support or maintenance sale of Company Products or for grants of non-exclusive licenses of to Intellectual Property Rights, in each case, Rights in the ordinary course of businessbusiness consistent with past practice;
(jk) except as may be required by Applicable Law or GAAP, make any change in any of the accounting principles or practices used by it;
(kl) except as required by Applicable Law or GAAP, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, in any case other than in the ordinary course of businessbusiness consistent with past practice;
(lm) (i) make or change any material Tax election, (ii) file any amended income Tax Return, or any other amended Tax Return that would materially increase the Taxes payable by the Company or its Subsidiaries, (iii) settle or compromise any material Liability liability for Taxes or (iv) consent to any extension or waiver of any limitation period with respect to any material claim or assessment for Taxes, or (v) fail to pay any material Taxes as they become due and payable (including estimated taxes), except to the extent such Taxes are contested in good faith and adequate reserves have been established for such Taxes in accordance with GAAP;
(mn) (i) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) involving payments of more than $250,000 in the aggregate per year ), or (ii) modify, amend or exercise any right to renew any lease or sublease of real property (other than renewals of a lease or sublease which is terminable upon notice of three (3) months or less or which involves payments of no more than $100,000 in the aggregate per year) or waive or violate any term or condition thereof or grant any consents thereunder; grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment, Lien or charge affecting any real property or any part thereof (other than a Permitted Lien);
(io) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, ;
(iip) other than purchase orders made in the ordinary course of businessbusiness consistent with past practice, enter into, renew or amend any Material Contract or grant any release or relinquishment of any rights under any Material Contract, except for the renewal, expiration or non-renewal of any Material Contract or in accordance with its terms;
(iiiq) incur any new capital expenditure(s), individually or in the aggregate, with obligations to the Company or any of its Subsidiaries in excess of One Hundred Thousand Dollars ($4,000,000 100,000) per complete or partial fiscal quarter for each fiscal quarter beginning January 1, 2019quarter;
(or) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any claim, Liability 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 liabilities (i) reflected or reserved against in full in the Balance Sheet or incurred since the date of the Balance Sheet in the ordinary course of business consistent with past practice (ii) in an amount that does not exceed $25,000 in each instance or $100,000 in the aggregate, or (iiiii) the settlement, compromise, payment, discharge or satisfaction of which does not include any obligation (other than the payment of money) to be performed by the Company or its Subsidiaries following the Effective Time that would be material to the Company and its Subsidiaries, Subsidiaries taken as a whole, provided that Transaction Litigation shall be subject to Section 7.8;
(ps) disclose, deliver, license, escrow or otherwise make available any enter into Related Party Transaction;
(it) Technology or Trade Secrets of the Company to any Person (other than such disclosure, delivery, license or escrow pursuant to form a written confidentiality agreement or agreement containing confidentiality provisions, in each case, entered into in the ordinary course of business and with reasonable protections of, and preserving all rights of the Company and its Subsidiaries in and to, such Technology and/or Trade Secrets), or (ii) source code for Company Software or Company Products to any Person (other than employees, consultants and independent contractors who require such source code to perform his or her duties for the Company or its Subsidiaries and are subject to a written confidentiality agreements to reasonably protect against unauthorized disclosure of such source code)Subsidiary; or
(qu) enter into a Contract or otherwise commit to do any of the foregoing. If the Company or any of its Subsidiaries desires to take an action that would be prohibited pursuant to the foregoing clauses (a)-(p) without the written consent of Newco, prior to taking such action, the Company may request such written consent (which consent shall not be unreasonably withheld, conditioned or delayed) by sending an e-mail to the representatives of Newco listed on Section 5.1 of the Company Disclosure Letter.
Appears in 1 contract
Restrictions on Company Operations. Except as expressly required or permitted by this Agreement, as required by Applicable Law, as set forth in Section 5.2 of the Company Disclosure Letter or as approved in advance by Newco Parent in writing (which approval will not be unreasonably withheld, delayed or conditioned), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time, the Company shall not, and shall not permit its Subsidiaries to:
(a) amend its certificate of incorporation or bylaws or comparable organizational documents;
(b) issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (A) the issuance and sale of Shares pursuant to Stock Awards Company Options outstanding prior to the date hereof, (B) subject to Section 1.4(d), under the Company ESPP issuable in accordance with the terms of the Company ESPP as of the date hereof, (C) issuances or sales of Subsidiary Securities to the Company or another wholly owned Subsidiary of the Company or (D) grants of Stock Awards described in Section 5.2(b) of the Company Disclosure Letter (provided, that such Stock Awards shall not be subject to or include any acceleration of vesting conditions in connection with the Merger or the transactions contemplated by this Agreement)hereto;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities other than (A) the acquisition by the Company of Shares in connection with the surrender of Shares by holders of Company Options in order to pay all or a portion of the exercise price of the Company Options, (B) the withholding of Shares to satisfy all or a portion of any Tax obligations with respect to Stock Awards and (C) the acquisition of Stock Awards in connection with the forfeiture of such awardsSecurities;
(d) other than cash dividends made by any direct or indirect wholly wholly-owned Subsidiary of the Company to the Company or one or more of its Subsidiaries, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or 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;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the transactions contemplated hereby, including the Merger);
(f) (i) incur or assume any long-term or short-term debt or issue any debt securities, except for (A) short-term debt and short-term borrowings under the Company’s or any Subsidiary’s existing credit arrangements (including any refinancing of any existing credit arrangements at expiration thereof on substantially similar or more favorable terms) incurred to fund operations of the business in the ordinary course of business consistent with past practice and (B) loans or advances to direct or indirect wholly wholly-owned Subsidiaries or letters of credit put in place, operating leases entered into, or short-term, immaterial debt incurred, in each case in the ordinary course of businessSubsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly wholly-owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person except for travel advances of travel and other business expenses in the ordinary course of business consistent with past practice to employees of the Company or any of its Subsidiaries or (iv) mortgage or pledge any of its or its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens);
(g) except as expressly required by this Agreement or as may be required by Applicable Law or the existing terms of any Employee Plan or Contract in effect as on the date hereof, take any of the date hereof or by Applicable Law, following actions: (iA) enter into, adopt, amend (including acceleration of vestingvesting (other than with respect to Company Options pursuant to Section 1.4(c))), or modify in any respect or terminate any bonusEmployee Plan, profit sharing, compensation, severance, termination, option, restricted stock, restricted stock unit, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of (A) any director or officer or (B) other than in the ordinary course of business, any consultant, independent contractor or employee (including offer letters with new employee hires and new contractor or consultant engagements in the ordinary course of business), in each case, in any manner; (ii) increase in any manner the compensation or fringe benefits of (A) any director director, officer, consultant, independent contractor or officer or (B) employee, other than increases in compensation made in the ordinary course of business consistent with past practicepractice that do not exceed 3.0% of their base compensation as of the date hereof, any employee who is Vice President level and below (other than a Vice President level employee who is a direct report to the Company’s Chief Executive Officer); (iiiC) pay any special bonus or special remuneration to any director, officer, consultant, independent contractor or employee employee, or (ivD) pay any benefit not required by or made pursuant to any plan Employee Plan or other arrangement as in effect as of the date hereof, other than in the ordinary course of business;
(h) 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 Employee Plans or agreements subject to the Employee Plans or any other Contract of the Company other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any agreements subject to the Employee Plans in effect as of the date hereof;
(i) acquire, sell, lease, abandon (other than in the Company’s reasonable business discretion), license or dispose of any property or assets in any single transaction or series of related transactions, except in connection with for (i) the marketing, development, manufacturing, sale, distribution, support or maintenance sale of Company Products or for grants of non-exclusive licenses of to Intellectual Property Rights, in each case, Rights in the ordinary course of business consistent with past practice, (ii) purchases of assets used in the manufacture of the Company’s Products or the conduct of its business, in each case in the ordinary course of business consistent with past practice and (iii) dispositions of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice;
(j) except as may be required by Applicable Law or GAAP, make any change in any of the accounting principles or practices used by it;
(k) except as required by Applicable Law or GAAP, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, in any case other than in the ordinary course of businessbusiness consistent with past practice;
(l) (i) make or change any material Tax election, (ii) file any amended income Tax Return, or any other amended Tax Return that would materially increase the Taxes payable by the Company or its Subsidiaries, (iii) settle or compromise any material Liability for Taxes Taxes, or (iv) consent to any extension or waiver of any limitation period with respect to any material claim or assessment for Taxes, or (v) fail to pay any material Taxes as they become due and payable (including estimated taxes), except to the extent such Taxes are contested in good faith and adequate reserves have been established for such Taxes in accordance with GAAP;
(m) (i) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) involving payments of more other than $250,000 in to replace existing leases that are expiring and cannot be renewed and such new lease has a term not to exceed two years and is otherwise on substantially the aggregate per year or same terms as the expiring lease, (ii) modify, amend or exercise any right to renew any lease or sublease of real property (property, other than renewals of expiring leases having a lease or sublease which is terminable upon notice of three (3) months or less or which involves payments term of no more than $100,000 in the aggregate per yeartwo years or (iii) or waive or violate any term or condition thereof or grant any consents thereunder; grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment, Lien (other than a Permitted Lien) or charge affecting any real property or any part thereof (other than a Permitted Lien)thereof;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, therein or (ii) make any capital expenditure (or series of related capital expenditures) in excess of the Company’s capital expenditure budget for periods following the date of this Agreement as set forth on Schedule 5.2(n);
(o) enter into, renew, amend in any material respect or terminate any Material Contract, or grant any release or relinquishment of any material rights under any Material Contract in each case (subject to the obligations and other prohibitions set forth in Sections 5.1 and 5.2) other than in the ordinary course of business, enter into, renew or amend any Material Contract or grant any release or relinquishment of any rights under any Material Contract or (iii) incur any new capital expenditure(s), individually or in the aggregate, business consistent with obligations to the Company or any of its Subsidiaries in excess of $4,000,000 per fiscal quarter for each fiscal quarter beginning January 1, 2019past practice;
(op) 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 (i) reflected or reserved against in full in the Balance Sheet or incurred since the date of the Balance Sheet in the ordinary course of business consistent with past practice or (ii) the settlement, compromise, payment, discharge or satisfaction of which does not include any obligation (other than the payment of money) to be performed by the Company or its Subsidiaries following the Effective Time that would be material to the Company and its Subsidiaries, Subsidiaries taken as a whole;
(p) disclose, deliver, license, escrow or otherwise make available any (i) Technology or Trade Secrets of the Company to any Person (other than such disclosure, delivery, license or escrow pursuant to a written confidentiality agreement or agreement containing confidentiality provisions, in each case, entered into in the ordinary course of business and with reasonable protections of, and preserving all rights of the Company and its Subsidiaries in and to, such Technology and/or Trade Secrets), or (ii) source code for Company Software or Company Products to any Person (other than employees, consultants and independent contractors who require such source code to perform his or her duties for the Company or its Subsidiaries and are subject to a written confidentiality agreements to reasonably protect against unauthorized disclosure of such source code); or
(q) enter into a Contract or otherwise commit to do any of the foregoing. If the Company or any of its Subsidiaries desires to take an action that would be prohibited pursuant to the foregoing clauses (a)-(p) without the written consent of Newco, prior to taking such action, the Company may request such written consent (which consent shall not be unreasonably withheld, conditioned or delayed) by sending an e-mail to the representatives of Newco listed on Section 5.1 of the Company Disclosure Letter.
Appears in 1 contract
Samples: Merger Agreement (Coherent Inc)
Restrictions on Company Operations. Except as expressly required or permitted by this Agreement, as set forth in Section 5.2 of the Company Disclosure Letter or as approved in advance by Newco in writing (which approval will not be unreasonably withheld, delayed or conditioned), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time, the Company shall not, and shall not permit its Subsidiaries to:
(a) amend its certificate of incorporation or bylaws or comparable organizational documents;
(b) issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (A) the issuance and sale of Shares pursuant to Stock Awards outstanding prior to the date hereofhereof or, (B) subject to Section 1.4(d), under the Company ESPP issuable in accordance with the terms of the Company ESPP as of the date hereof, (C) issuances or sales of Subsidiary Securities to the Company or another wholly owned Subsidiary of the Company or (D) grants of Stock Awards described in Section 5.2(b) of the Company Disclosure Letter (provided, that such Stock Awards shall not be subject to or include any acceleration of vesting conditions in connection with the Merger or the transactions contemplated by this Agreement);
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities other than (A) the acquisition by the Company of Shares in connection with the surrender of Shares by holders of Company Options in order to pay all or a portion of the exercise price of the Company Options, (B) the withholding of Shares to satisfy all or a portion of any Tax obligations with respect to Stock Awards and (C) the acquisition of Stock Awards in connection with the forfeiture of such awardsSecurities;
(d) other than cash dividends made by any direct or indirect wholly wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or 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;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the transactions contemplated hereby, including the Merger);
(f) (i) incur or assume any long-term or short-term debt or issue any debt securities, except for (A) short-term debt incurred to fund operations of the business in the ordinary course of business consistent with past practice and (B) loans or advances to direct or indirect wholly wholly-owned Subsidiaries or letters of credit put in place, operating leases entered into, or short-term, immaterial debt incurred, in each case in the ordinary course of businessSubsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly wholly-owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person except for travel advances of travel and other business expenses in the ordinary course of business consistent with past practice to employees of the Company or any of its Subsidiaries or except among direct or indirect wholly-owned Subsidiaries of the Company or (iv) mortgage or pledge any of its or its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens);
(g) except as may be required by the existing terms of any Employee Plan or Contract in effect as of the date hereof or by Applicable Law, (i) enter into, adopt, amend (including acceleration of vesting), modify or terminate any bonus, profit sharing, compensation, severance, termination, option, restricted stock, restricted stock unit, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of (A) any director or officer or (B) officer, or, other than than, subject to Section 5.2(b), in the ordinary course of businessbusiness consistent with past practice, any consultant, independent contractor or employee (employee, including offer letters with the hiring of any new employee hires and new contractor or consultant engagements in the ordinary course of business)employee, in each case, in any manner; (ii) manner or increase in any manner the compensation or fringe benefits of (A) any director or director, officer or (B) or, other than in the ordinary course of business consistent with past practice, any employee who is Vice President level and below (other than a Vice President level employee who is a direct report to the Company’s Chief Executive Officer); (iii) employee, pay any special bonus or special remuneration to any director, officer, consultant, independent contractor or employee employee, or (iv) pay any benefit not required by or made pursuant to any plan or arrangement as in effect as of the date hereof, other than in the ordinary course of businessbusiness consistent with past practice;
(h) 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 Employee Plans or agreements subject to the Employee Plans or any other Contract of the Company other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any agreements subject to the Employee Plans in effect as of the date hereof;
(i) acquire, sell, lease, abandon (other than in the Company’s reasonable business discretion), license or dispose of any property or assets in any single transaction or series of related transactions, except in connection with for the marketing, development, manufacturing, sale, distribution, support or maintenance sale of Company Products or for grants of non-exclusive licenses of to Intellectual Property Rights, in each case, Rights in the ordinary course of businessbusiness consistent with past practice;
(j) except as may be required by Applicable Law or GAAP, make any change in any of the accounting principles or practices used by it;
(k) except as required by Applicable Law or GAAP, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, in any case other than in the ordinary course of businessbusiness consistent with past practice;
(l) (i) make or change any material Tax election, (ii) file any amended income Tax Return, or any other amended Tax Return that would materially increase the Taxes payable by the Company or its Subsidiaries, (iii) settle or compromise any material Liability for Taxes or (iv) consent to any extension or waiver of any limitation period with respect to any material claim or assessment for Taxes, or (v) fail to pay any material Taxes as they become due and payable (including estimated taxes), except to the extent such Taxes are contested in good faith and adequate reserves have been established for such Taxes in accordance with GAAP;
(m) other than in the ordinary course of business consistent with past practice, (i) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) involving payments of more than $250,000 in the aggregate per year ), or (ii) modify, amend or exercise any right to renew any lease or sublease of real property (other than renewals of a lease or sublease which is terminable upon notice of three (3) months or less or which involves payments of no more than $100,000 in the aggregate per year) or waive or violate any term or condition thereof or grant any consents thereunder; grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment, Lien or charge affecting any real property or any part thereof (other than a Permitted Lien);
(in) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, ;
(iio) other than in the ordinary course of businessbusiness consistent with past practice, enter into, renew or amend any Material Contract or grant any release or relinquishment of any rights under any Material Contract, except for the renewal, expiration or non-renewal of any Material Contract or in accordance with its terms;
(iiip) incur any new capital expenditure(s), individually or in the aggregate, with obligations to the Company or any of its Subsidiaries in excess of $4,000,000 4 million per fiscal quarter for each fiscal quarter beginning January September 1, 20192017, with a pro rated portion of $4 million per fiscal quarter for the period from the date of this Agreement to September 1, 2017;
(oq) 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 (i) reflected or reserved against in full in the Balance Sheet or incurred since the date of the Balance Sheet in the ordinary course of business consistent with past practice or (ii) the settlement, compromise, payment, discharge or satisfaction of which does not include any obligation (other than the payment of money) to be performed by the Company or its Subsidiaries following the Effective Time that would be material to the Company and its Subsidiaries, Subsidiaries taken as a whole;
(p) disclose, deliver, license, escrow or otherwise make available any (i) Technology or Trade Secrets of the Company to any Person (other than such disclosure, delivery, license or escrow pursuant to a written confidentiality agreement or agreement containing confidentiality provisions, in each case, entered into in the ordinary course of business and with reasonable protections of, and preserving all rights of the Company and its Subsidiaries in and to, such Technology and/or Trade Secrets), or (ii) source code for Company Software or Company Products to any Person (other than employees, consultants and independent contractors who require such source code to perform his or her duties for the Company or its Subsidiaries and are subject to a written confidentiality agreements to reasonably protect against unauthorized disclosure of such source code); or
(qr) enter into a Contract or otherwise commit to do any of the foregoing. If the Company or any of its Subsidiaries desires to take an action that would be prohibited pursuant to the foregoing clauses (a)-(p) without the written consent of Newco, prior to taking such action, the Company may request such written consent (which consent shall not be unreasonably withheld, conditioned or delayed) by sending an e-mail to the representatives of Newco listed on Section 5.1 of the Company Disclosure Letter.
Appears in 1 contract
Restrictions on Company Operations. Except as expressly required or permitted by this Agreement, as set forth in Section 5.2 of the Company Disclosure Letter or as approved in advance by Newco Parent in writing (which approval will not be unreasonably withheld, delayed conditioned or conditioneddelayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article VIII IX and the Effective Time, the Company shall not, and shall not permit its Subsidiaries to:
(a) amend its certificate of incorporation or bylaws or comparable organizational documents;
(b) 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 Company Securities or any Subsidiary Securities, except for (Ai) the issuance and sale of Shares pursuant to Stock Awards the exercise of Company Options outstanding prior to as of the date hereof, (B) subject to Section 1.4(d)the vesting of Restricted Stock Units and similar equity awards outstanding as of the date hereof, or the exercise of options under the Company ESPP issuable in accordance with the terms of the Company ESPP as of the date hereofhereof and (ii) grants of Company Options, (C) issuances Restricted Stock Units or sales other incentive equity awards in the ordinary course of Subsidiary Securities business to those individuals who are actively employed by the Company or another wholly owned Subsidiary its Subsidiaries at the time of such grants, subject to the Company or (D) grants of Stock Awards described in limitations set forth on Section 5.2(b) of the Company Disclosure Letter (provided, that such Stock Awards shall not be subject to or include any acceleration of vesting conditions in connection with the Merger or the transactions contemplated by this Agreement)Letter;
(c) acquire acquire, repurchase or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities other than (A) the acquisition by the Company of Shares Securities, except in connection with the surrender of Shares by holders of Company Options in order to pay all any net exercise or a portion of the exercise price of the net share withholding arrangement regarding Company Options, (B) the withholding Restricted Stock Units, and similar equity awards; Table of Shares to satisfy all or a portion of any Tax obligations with respect to Stock Awards and (C) the acquisition of Stock Awards in connection with the forfeiture of such awards;Contents
(d) other than cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or one of its Subsidiaries(i) adjust, split, subdivide, combine or reclassify any shares of capital stock, or issue or authorize or propose the issuance of any other Company Securities or Subsidiary Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity or voting interest; (ii) declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) (other than cash dividends made by any one or more wholly owned Subsidiaries of the Company to the Company or one or more of its wholly owned Subsidiaries) in respect of any shares of capital stockstock or other equity or voting interest, or make any other actual, constructive or deemed distribution in respect of the shares of capital stockstock or other equity or voting interest; (iii) pledge or encumber any shares of its capital stock or other equity or voting interest; or (iv) modify the terms of any shares of its capital stock or other equity or voting interest;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the transactions contemplated hereby, including the Merger);
(f) (i) incur incur, assume or assume modify the existing terms of any Indebtedness (including any long-term or short-term debt debt) or issue any debt securities, except for loans or advances to direct or indirect wholly owned Subsidiaries or letters of credit put in place, operating leases entered into, or (A) short-term, immaterial term debt incurred, in each case and/or revolving credit debt incurred to fund operations of the business in the ordinary course of businessbusiness consistent with past practice to fund working capital requirements (subject to the limitations set forth in Section 5.2(f) of the Company Disclosure Letter) and (B) loans or advances to wholly owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person except for loans and advances of travel and other business expenses in made by the ordinary course of business Company and/or one or more wholly owned Subsidiaries to employees one or more wholly owned Subsidiaries of the Company or any of its Subsidiaries the Company or (iv) mortgage or pledge any of its or its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens);
(g) except as set forth in Section 5.2(g) of the Company Disclosure Letter or as may be required by Applicable Law and other than as required pursuant to the existing terms of any Employee Plan or Contract in effect as of on the date hereof or by Applicable Lawhereof, (i) except as would be related to the taking of any actions permitted by the remainder of this Section 5.2(g), enter into, adopt, amend (including acceleration of vesting), modify or terminate any bonusEmployee Plan, profit sharingother than routine amendments to health and welfare plans (other than severance plans) that do not materially increase benefits or result in a material increase in administrative costs, compensation, severance, termination, option, restricted stock, restricted stock unit, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of (ii) enter into any (A) employment, consulting or severance agreement with any director current or former director, officer or (B) employee of the Company or any of its Subsidiaries other than in the ordinary course of business, any consultant, independent contractor or employee (including offer letters and employment agreements (x) with current employees or new employee hires and new contractor or consultant engagements in the ordinary course of business)hires, in each case, in other than those at a Xxxxxxx level of 0 or 7 and (y) that are terminable at-will without severance obligations other than those required by Applicable law and the terms of which are consistent with similarly situated employees of the Company and past practices of the Company or (B) severance, termination or other agreement containing change of control provisions with any manner; current or former director, officer or employee of the Company or any of its Subsidiaries, (iiiii) increase in any manner the cash compensation or material benefits of any current or former director, officer or employee, other than increases in the ordinary course of business and consistent with past practice not to exceed five percent (5%) in the aggregate during any 12-month period, (iv) pay any special bonus or special remuneration to any current or former director, officer, employee, consultant or independent contractor, (v) grant any annual cash incentive compensation (A) to any director employees at Xxxxxxx level 0 or officer or 7 and (B) other than in the ordinary course of business and consistent with past practice, practice to any other employees or (vi) terminate any officer or any employee who is Vice President at a Xxxxxxx level and below (other than a Vice President level employee who is of 0 or 7, except as a direct report result of such officer’s or employee’s (A) willful failure to perform the Company’s Chief Executive Officer); duties or responsibilities of his employment, (iiiB) pay any special bonus engaging in serious misconduct, or special remuneration (C) being convicted of or entering a plea of guilty to any director, officer, consultant, independent contractor or employee or (iv) pay any benefit not required by or made pursuant to any plan or arrangement as in effect as of the date hereof, other than in the ordinary course of businesscrime;
(h) 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 Employee Plans or agreements subject to the Employee Plans or any other Contract of the Company other than deposits and contributions that are required pursuant to the terms of the Employee Plans or any agreements subject to the Employee Plans in effect as of the date hereof;
(i) acquire, sell, lease, abandon (other than in the Company’s reasonable business discretion), license or dispose of any property or assets in any single transaction or series of related transactions, except in connection with the marketing, development, manufacturing, sale, distribution, support or maintenance of Company Products or for grants of non-exclusive licenses of Intellectual Property Rights, in each case, in the ordinary course of business;
(j) except as may be required by Applicable Law or GAAP, make any change in any of the accounting principles or practices used by it;
(k) except as required by Applicable Law or GAAPLaw, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, in any case other than in the ordinary course of business;
(l) (i) make or change any material Tax electionmodify, (ii) file any amended income Tax Returnextend, or any other amended Tax Return that would materially increase the Taxes payable by the Company or its Subsidiaries, (iii) settle or compromise any material Liability for Taxes or (iv) consent to any extension or waiver of any limitation period with respect to any material claim or assessment for Taxes, or (v) fail to pay any material Taxes as they become due and payable (including estimated taxes), except to the extent such Taxes are contested in good faith and adequate reserves have been established for such Taxes in accordance with GAAP;
(m) (i) enter into any lease or sublease of real property (whether as a lessorCollective Bargaining Agreement with any Labor Organization, sublessor, lessee or sublessee) involving payments of more than $250,000 in the aggregate per year or (ii) modify, amend recognize or exercise certify any right to renew Labor Organization as the bargaining representative for any lease or sublease employees of real property (other than renewals of a lease or sublease which is terminable upon notice of three (3) months or less or which involves payments of no more than $100,000 in the aggregate per year) or waive or violate any term or condition thereof or grant any consents thereunder; grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment, Lien or charge affecting any real property or any part thereof (other than a Permitted Lien);
(i) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, (ii) other than in the ordinary course of business, enter into, renew or amend any Material Contract or grant any release or relinquishment of any rights under any Material Contract or (iii) incur any new capital expenditure(s), individually or in the aggregate, with obligations to the Company or any of its Subsidiaries in excess of $4,000,000 per fiscal quarter for each fiscal quarter beginning January 1, 2019Subsidiaries;
(o) 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 (i) reflected or reserved against in full in the Balance Sheet or incurred since the date of the Balance Sheet in the ordinary course of business or (ii) the settlement, compromise, payment, discharge or satisfaction of which does not include any obligation (other than the payment of money) to be performed by the Company or its Subsidiaries following the Effective Time that would be material to the Company and its Subsidiaries, taken as a whole;
(p) disclose, deliver, license, escrow or otherwise make available any (i) Technology or Trade Secrets of the Company to any Person (other than such disclosure, delivery, license or escrow pursuant to a written confidentiality agreement or agreement containing confidentiality provisions, in each case, entered into in the ordinary course of business and with reasonable protections of, and preserving all rights of the Company and its Subsidiaries in and to, such Technology and/or Trade Secrets), or (ii) source code for Company Software or Company Products to any Person (other than employees, consultants and independent contractors who require such source code to perform his or her duties for the Company or its Subsidiaries and are subject to a written confidentiality agreements to reasonably protect against unauthorized disclosure of such source code); or
(q) enter into a Contract or otherwise commit to do any of the foregoing. If the Company or any of its Subsidiaries desires to take an action that would be prohibited pursuant to the foregoing clauses (a)-(p) without the written consent of Newco, prior to taking such action, the Company may request such written consent (which consent shall not be unreasonably withheld, conditioned or delayed) by sending an e-mail to the representatives of Newco listed on Section 5.1 of the Company Disclosure Letter.
Appears in 1 contract
Samples: Merger Agreement (Apigee Corp)
