Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time and except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries to: (i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments; (ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses; (iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement; (iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities; (v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries; (vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company); (vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock; (viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination; (ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice; (x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure; (xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000; (xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto; (A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement; (xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries; (xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement; (xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property; (xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company; (xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or (xix) agree, authorize or commit to do any of the foregoing. (b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication. (c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 2 contracts
Sources: Merger Agreement (Medicis Pharmaceutical Corp), Merger Agreement (Valeant Pharmaceuticals International, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time and except or the termination of this Agreement in accordance with its terms (A) as unless Parent shall otherwise expressly required by this Agreementapprove in writing, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent approval not to be unreasonably withheld, delayed conditioned or conditioned) delayed), and except as otherwise expressly contemplated or (D) permitted by this Agreement or required by applicable Law or as set forth in Section 6.1(a7.1(a) of the Company Disclosure Schedule, the Company and its Subsidiaries shall cause the business of it and its Subsidiaries shall to be conducted in the ordinary course and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributorsofficers, creditorsemployees, lessors, employees lenders and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. associates.
(b) Without limiting the generality ofof the foregoing, and in furtherance of, the foregoingthereof, from the date hereof until the Effective Time or the termination of this Agreement until the Effective Timein accordance with its terms, except (A) as otherwise expressly required specifically contemplated or permitted by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to approve in writing (such consent approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed), (C) as is required by applicable Law or (D) as set forth in Section 6.1(a7.1(b) of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its (A) the certificate of incorporation or by-laws bylaws of the Company or (B) the other applicable governing instrumentsinstruments of the Subsidiaries of the Company that, in the case of clause (B), would adversely affect Parent;
(ii) merge except pursuant to a transaction expressly permitted by any of Sections 7.1(b)(iii) or 7.1(b)(xiv), merge, amalgamate or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire make any acquisition in excess of $50 million for all acquisitions in the aggregate, of the capital stock or other ownership interests of any other Person or the business or assets outside that comprise a business or product line of any other Person, whether by way of stock purchase, asset purchase, merger, consolidation or otherwise, except for acquisitions of inventory or supplies in the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreementbusiness;
(iv) other than (A) the issuance of Shares upon the settlement of Company Equity Awards outstanding as of the date hereof or issued in accordance with Section 7.1(b)(xvii) (and dividend equivalents thereon, if applicable), (B) the issuance of shares of Company Subsidiary stock to the Company or any wholly owned Subsidiary of the Company, (C) as required to comply with any Benefit Plan, Benefit Agreement or other written agreement as in effect on the date of this Agreement and set forth on Section 7.1(b)(iv) of the Company Disclosure Schedule, or (D) dispositions permitted by clause (xiv), issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, grant any shares of capital stock or other ownership interests of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stockstock or other ownership interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock stock, ownership interests or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees advances or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in (A) to the Company or any direct or indirect its wholly owned Subsidiary Subsidiaries, (B) as required pursuant to any Contract made available to Parent in the data room prior to the date hereof, (C) extensions of trade credit in the Companyordinary course of business and (D) loans, advances or capital contributions in the aggregate of less than $15,000,000);
(viivi) authorize, declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, other ownership interests or other securities, property or otherwise, with respect to any of its capital stock or other ownership interests (except for (A) dividends paid or distributions by any direct or indirect wholly owned Subsidiary of the Company to the Company or to any other wholly owned direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement ); provided, that the Company may, at its election, pay quarterly cash dividends in accordance with its past practice (including with respect to timing of declaration, record and payment dates and amount) but in no event in an amount that would exceed $0.23 per Share per fiscal quarter; provided, further, that the voting of its capital stockCompany shall in no event declare any dividend that would be payable after the Effective Time;
(viiivii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its the capital stock of the Company or other ownership interests or securities convertible or exchangeable into or exercisable for any shares of its the capital stockstock of the Company or other ownership interests of the Company (other than acquisitions in connection with cashless exercises of Company Stock Options or vesting or payment of Company Equity Awards, except from or Tax withholdings on the vesting or payment of Company Equity Awards);
(viii) incur, assume, issue, modify, renew, syndicate, guarantee, prepay, refinance or otherwise become liable for any Indebtedness (directly, contingent or otherwise) (other than (A) holders any letters of credit issued in the ordinary course of business consistent with past practice, (B) for borrowings in the ordinary course of business under (1) the Existing Credit Facility or (2) the Company’s commercial paper program, (C) any Indebtedness between the Company Options in full and any of its Subsidiaries or partial payment of between the exercise thereof and/or any applicable Taxes payable by such holder upon exercise Subsidiaries of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (BD) former employeesin an amount not to exceed $50,000,000) or acquire or redeem, directors offer to acquire or consultants following termination of their relationship with redeem, or exercise any right to make an offer to acquire or redeem the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination3.375% Notes due November 1, 2020;
(ix) incur make any indebtedness for borrowed money or guarantee such indebtedness of another Personcapital expenditures, or issue or sell any debt securities or warrants or other rights to acquire any debt security than (A) capital expenditures in 2014 not in excess of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as aggregate amount set forth in the Company’s capital budgets expenditure plan for 2014 previously provided to Parent or capital expenditures in 2015 in an amount not in excess of 110% of the aggregate amount set forth in Section 6.1(a)(x) of the Company Disclosure Schedule Company’s 2014 capital expenditure plan and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference additional capital expenditures not described in clause (A) so long as the aggregate amount of the definition of Material Contract shall be changed such capital expenditures made pursuant to $5,000,000; the monetary reference in this clause (B) of does not exceed $10,000,000 in the definition of Material Contract aggregate; provided, however, that the Company and its Subsidiaries shall be changed permitted to make emergency capital expenditures in an amount not to exceed $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference 10,000,000 in the definition of Personal Property Leases shall be changed to $2,500,000aggregate;
(xiix) make any material changes with respect to financial or Tax accounting policies methods of reporting income, deductions or proceduresother items to financial accounting purposes, except as required by applicable Law or by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect theretoGAAP;
(xi) other than (A) Dissenting Shares (which are the subject of Section 4.2(f)), (B) stockholder litigation (which is the subject of Section 7.16) and (C) as contemplated by Section 7.5, settle or propose to settle any litigation litigation, arbitration or other proceedings proceeding by or before a Governmental Entity except where (x) for a monetary amount in excess of $10,000,000 in the settlement is limited solely to aggregate, (Iy) that imposes any material equitable or material non-monetary relief on the release Company, any of claims and its Subsidiaries or any of its officers or directors or (IIz) that requires the monetary payment admission of wrongdoing by the Company or any Subsidiary does not exceed $2,000,000 of its Subsidiaries of a nature that would reasonably be expected to have any material adverse effect on any division of the Company or any of its Subsidiaries or that disparages Parent or any of its Subsidiaries;
(xii) change its fiscal or $15,000,000 in Tax year or, except to the aggregate for all such settlements) or (B) commence, joinextent required by Law, make an appeal or change any material Tax election;
(xiii) enter into any settlement, compromise or closing agreement with respect to a lawsuit, action, claim any material Tax Liability or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing Tax refund or taking of file any action amended Tax Return with respect to such lawsuit, action, any material Tax or surrender any right to claim or similar proceeding, or a material refund of Taxes (III) pursuant except to this Agreementthe extent the consequences thereof are adequately reserved in accordance with GAAP in the Company Reports);
(xiv) file sell, lease, license, transfer or amend otherwise dispose of any of its properties or assets (including capital stock of any Subsidiary of the Company) with a value in excess of $20,000,000 (including the value of any assumed liabilities), other than (A) sales or other dispositions of inventory and other assets in the ordinary course of business, (B) the licensing or sublicensing of Intellectual Property in the ordinary course of business or (C) as required pursuant to existing Contracts made available to Parent in the dataroom prior to the date hereof;
(xv) (A) abandon, voluntarily permit to lapse before expiration, any Company IP that is material Tax Return to the Company and its Subsidiaries, taken as a whole, or (B) sell, transfer or license to any third-person or otherwise extend any Company IP that is material to the Company and its Subsidiaries, taken as a whole, other than non-exclusive licenses of Intellectual Property rights granted by the Company or any of its Subsidiaries in the ordinary course of business consistent with past practice;
(xvi) except in the ordinary course of business, settle enter into or compromise assume any material Tax liabilityswap, makecap, change floor, collar, futures contract, forward contract, option and any other derivative financial instrument, contract or revoke arrangement, based on any material Tax election except to the extent consistent with past practice commodity, security, instrument, asset, rate or as required by lawindex of any kind or nature whatsoever, change any material method of Tax accountingwhether tangible or intangible, (including for interest rate and foreign exchange rate hedging), except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products foreign exchange hedging on customary commercial terms in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute compliance with the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Propertyhedging policies in effect on the date hereof;
(xvii) except as required pursuant to make changes that are required by applicable Law a Benefit Plan or to satisfy contractual obligations existing as of Benefit Agreement in effect on the date hereof pursuant to Contracts or Benefit Plans which are listed on as set forth in Section 6.1(a)(xvii7.1(b)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend grant or renew (provide any severance or communicate termination payments or benefits to any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans Employees or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costsOther Service Providers, (B) increase the compensation or pay or establish any award or bonus to or for any Employees or Other Service Providers, (C) establish, adopt, terminate or materially amend any Benefit Plan or Benefit Agreement or any plan, program, arrangement, policy or agreement that would be a Benefit Plan or Benefit Agreement if it were in any manner existence on the compensationdate hereof, bonusother than with respect to Benefit Plans and Benefit Agreements that are not described in clause (D) below and in cases where such adoption, pension, welfare, fringe termination or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants amendment applies only to non-Executive Officers of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess Subsidiary of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made Company in the ordinary course of business consistent with past practice and are to the extent that such action would not reasonably be expected to result in material expense or Liability to the Company or any of its Subsidiaries, (D) grant any equity or equity-based awards, long-term incentive awards or retention awards, (E) hire any new employee of the Company or any Subsidiary of the Company or engage any other individual to provide services to the Company or any Subsidiary of the Company, other than with respect to non-Executive Officers of the Company or any Subsidiary of the Company in the ordinary course of business consistent with the other requirements set forth in this Agreementpast practice and with respect to Executive Officers as needed to replace such Executive Officer, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (KF) terminate without cause the employment of any officer current Employee or the engagement of any current contractor of the Company or any Subsidiary of the Company, other than in the ordinary course of business consistent with past practice or for cause, (G) negotiate, enter into, amend, modify or terminate any Collective Bargaining Agreement, or (H) waive, limit, release or condition any Restrictive Covenant obligation or any Employee or Other Service Provider; provided, however, that the foregoing clauses (A) – (H) shall not restrict the Company or any of its Subsidiaries from entering into or making available to newly hired employees or to Employees in the context of promotions based on job performance or workplace requirements, including replacement of an open position, in each case in the ordinary course of business, plans, agreements, benefits and compensation arrangements (but not including equity or equity-based awards) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees in similar positions; provided, further, that the consent of Parent shall be required in the event of a promotion or hiring to the Executive Officer level unless such promotion or hiring is to replace an Executive Officer. For purposes of this Section 7.1(b), the “Executive Officers” are those individuals listed on Section 7.1(b)(xvii) of the Company Disclosure Schedule;
(xviii) adopt or enter into a plan or agreement of complete or partial liquidation or dissolution of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize or commit to do grant any of the foregoing.
(b) Prior to making Lien on any formal written communications or group oral presentations to the directors, officers or employees material assets of the Company or any of its Subsidiaries pertaining other than Permitted Liens;
(xx) enter into any new line of business that would be material to compensation or benefit matters that are affected the Company and its Subsidiaries, taken as a whole, outside the businesses being conducted by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment its Subsidiaries on the communication (which comments shall not be unreasonably withheld or delayed)date hereof and any reasonable extensions thereof, and Parent and other than in the Company shall cooperate in providing any such mutually agreeable communication.ordinary course;
(cxxi) Subject enter into any Contract that, after giving effect to Section 6.5the Merger, would limit or otherwise restrict in any material respect Parent shall not take or permit any of its Subsidiaries respective Affiliates (other than the Company and its Subsidiaries), from engaging or competing in any line of business, in any location or with any Person;
(xxii) materially amend or modify, extend, terminate, sublease or grant any waiver under, any Material Contract or any Contract that would constitute a Material Contract if entered into prior to take the date hereof (other than the expiration or renewal of any action Material Contract in accordance with its terms), in ease case, other than in the ordinary course of business;
(xxiii) enter into any transactions, agreements, arrangements or understandings with any significant holder of Shares or their respective affiliated entities (other than the Company and its Subsidiaries) that is reasonably likely would be required to preventbe disclosed under Item 404 of Regulation S-K promulgated under the Securities Act;
(xxiv) terminate the employment of any Executive Officer without cause or change the terms and conditions of employment of any Executive Officer in a manner which would constitute “good reason” under a Contract between the Company and such Executive Officer; or
(xxv) agree, interfere with authorize or delay the consummation of the Merger commit, whether or result not in writing, to do any of the conditions to the Merger set forth in Article VII not being satisfied.foregoing
Appears in 2 contracts
Sources: Merger Agreement, Merger Agreement (Sigma Aldrich Corp)
Interim Operations. (a) The Company Each of the Partnership and Parent covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless Parent or the Partnership, as applicable, shall otherwise approve in writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except (A) as otherwise expressly required contemplated by this Agreement, (B) as provided in any Contract in effect as of the date of this Agreement, or as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure ScheduleLaw, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course Ordinary Course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agentsassociates. Without limiting the generality of, of and in furtherance of, of the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly expressly: (i) contemplated by this Agreement; (ii) contemplated by any Contract entered into prior to, concurrently with or after the date of this Agreement by Parent with respect to the Other Parent Transactions (as such Contract may be amended, supplemented or otherwise modified from time to time); (iii) required by applicable Law or the terms of any Contract in effect on the date of this Agreement, (Biv) as required by applicable Laws, (C) as Parent may consent to approved in writing (such consent which approval shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed) by the other Party; or (Dv) as set forth in the corresponding subsection of Section 6.1(a) 8.1 of the Company Partnership Disclosure ScheduleLetter, as it relates to the Company will Partnership and its Subsidiaries, or on Section 8.1 of the Parent Disclosure Letter, as it relates to Parent and its Subsidiaries, each Party, on its own account, shall not and will shall not permit its Subsidiaries to:
(i) adopt or propose make any material change in to the nature of its certificate of incorporation or by-laws or other applicable governing instrumentsbusiness and operations;
(ii) make any change to its Organizational Documents as in effect on the date of this Agreement in any manner that would reasonably be expected to prohibit, prevent or materially impede, hinder or delay the ability of such Party to satisfy any of the conditions to, or the consummation of, the Merger or the other Transactions;
(iii) (A) merge or consolidate the Company itself or any of its Subsidiaries with any other PersonPerson (expressly excluding, for the avoidance of doubt, any of the Other Parent Transactions), or (B) adopt a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization, in each case, except for any (1) such transactions among solely between or among, or solely involving, such Party and one or more of its wholly owned Subsidiaries, or a Subsidiary of such Party and one or more wholly owned Subsidiaries of the Companysuch Subsidiary, (2) as would not reasonably be expected to result in a Partnership Material Adverse Effect or Parent Material Adverse Effect, as applicable, or restructure(3) as would not reasonably be expected to prohibit, reorganize prevent or completely materially impede, hinder or partially liquidate or otherwise enter into delay the ability of such Party to satisfy any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value conditions to, or purchase price in the aggregate in excess consummation of, individually the Merger or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this AgreementTransactions;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, transfer or authorize the issuance, sale, pledge, disposition, sale or grant, transfer, lease, license, guarantee or encumbrance otherwise enter into any Contract with respect to the voting of, any of its partnership interests, limited liability company interests, shares of capital stock of the Company or any of its Subsidiaries equity interests, as applicable (other than the issuance of partnership interests, limited liability company interests, shares of capital stock or equity interests, as applicable, (A) by a its wholly owned Subsidiary to it or another of its wholly owned Subsidiaries, (B) by the Company Partnership to the Company or another wholly owned Subsidiary or the issuance of Shares GP Delegate pursuant to Company Options, Company Restricted Shares the Partnership Agreement or the Convertible Senior Notes (C) in respect of equity-based awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the plan documents as in effect on the date of this Agreement) ), or securities convertible or exchangeable into or exercisable for any such partnership interests, limited liability company interests, shares of such capital stockstock or equity interests, as applicable, or any options, warrants or other rights of any kind to acquire any partnership interests, limited liability company interests, shares of such capital stock or equity interests, as applicable, or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its partnership interests, limited liability company interests, shares of capital stock or equity interests, as applicable, or securities convertible or exchangeable into or exercisable for any partnership interests, limited liability company interests, shares of its capital stockstock or equity interests, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationas applicable;
(ixvi) incur waive, release, assign, settle or compromise any indebtedness for borrowed money claim, action or guarantee such indebtedness of another Personproceeding, including any state or issue federal regulatory proceeding seeking damages or sell any debt securities or warrants injunction or other rights equitable relief, which waiver, release, assignment, settlement or compromise would reasonably be expected to acquire any debt security of the Company result in a Partnership Material Adverse Effect or any of its SubsidiariesParent Material Adverse Effect, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practiceas applicable;
(xvii) except as set forth other than in the capital budgets set forth Ordinary Course, make, change or revoke any material Tax election, adopt or change any material Tax accounting method, file any material amended Tax Return, settle any material Tax claim, audit, assessment or dispute for an amount materially in Section 6.1(a)(x) excess of the Company Disclosure Schedule and consistent therewithamount reserved or accrued on such Party’s most recent consolidated balance sheet included in the Parent Reports or Partnership Reports, make as applicable, or authorize surrender any capital expenditureright to claim a refund of a material amount of Taxes;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xiiviii) make any material changes with respect to accounting policies or procedurespolicies, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect theretoGAAP;
(Aix) settle make or declare any litigation dividends or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior distributions to the filing holders of Common Units or taking of any action with respect to such lawsuitParent Common Stock, actionin each case, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of businessOrdinary Course, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied8.12; or
(xixx) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations Notwithstanding anything to the directorscontrary in this Agreement, officers a Party’s obligations under Section 8.1(a) to take an action or employees not to take an action, or to cause its Subsidiaries to take an action or not to take an action, shall, with respect to any Persons (and their respective Subsidiaries) controlled by such Party, or in which such Party otherwise has a voting interest, but that are not wholly owned Subsidiaries of such Party or have public equity holders, only apply (i) to the Company extent permitted by the organizational documents and governance arrangements of such entity and its subsidiaries, (ii) to the extent a Party is authorized and empowered to bind such entity and its subsidiaries and (iii) to the extent permitted by the Party’s or its Subsidiaries’ duties (fiduciary or otherwise) to such entity and its subsidiaries or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communicationequity holders.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 2 contracts
Sources: Merger Agreement (Enbridge Inc), Merger Agreement (Enbridge Energy Partners Lp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing (which approval shall not be unreasonably withheld or delayed) and except (A) as otherwise expressly required contemplated by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed Agreement or conditioned) or (D) as set forth in Section 6.1(a) 6.1 of the Company Disclosure Schedule, Letter):
(a) the business of it and its Subsidiaries shall be conducted in the ordinary course consistent with past practice, and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to protect and (i) preserve in all material respects its assets and to preserve intact present business organization substantially intact, (ii) maintain its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other employees, business associates and other third parties with which the Company has material business relations consistent with past practice, (iii) keep available the services of its current officers and its Subsidiaries’ present employees and agents. Without limiting the generality ofkey employees, and (iv) maintain in furtherance ofeffect all material foreign, the foregoingfederal, from the date of this Agreement until the Effective Timestate and local licenses, except (A) as otherwise expressly approvals and authorizations, including without limitation, all material licenses and permits that are required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of for the Company Disclosure Scheduleor any of its Subsidiaries to carry on its business;
(b) it shall not, the Company will not and will shall not permit any of its Subsidiaries to:
, and shall not commit to, (i) adopt issue, sell, pledge, dispose of or propose encumber any change capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws or term of any outstanding security of the Company or its Subsidiaries; (iii) split, combine or reclassify any shares of capital stock or issue or authorize the issuance of any other applicable governing instruments;
(ii) merge securities in respect of, in lieu of or consolidate in substitution for shares of capital stock, of the Company or any less-than-wholly-owned Subsidiary of the Company; (iv) declare, set aside or pay any dividend payable in cash, stock or property or make any other actual, constructive or deemed distribution (whether in cash, stock or property or any combination thereof) in respect of any capital stock, other than dividends by a direct or indirect wholly-owned Subsidiary of the Company to its parent; or (v) purchase, redeem or otherwise acquire, or modify or amend, or offer to redeem, purchase or otherwise acquire, or modify or amend, any Company equity or equity related securities or any equity or equity related securities of any of the Company’s Subsidiaries;
(c) it shall not, and shall not permit any of its Subsidiaries with to, and shall not commit to, offer, issue or sell, any other Personshares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, except for any such transactions among wholly owned Subsidiaries of that the Company may (i) issue up to 20,000 Shares pursuant to the Company’s Amended and Restated Employee Qualified Stock Purchase Plan dated November 13, 1998, (ii) issue Shares upon exercise of Company Options outstanding on the date hereof or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
hereafter granted in accordance with the provisions of subclause (iii) acquire assets outside of this clause (c) or pursuant to the Company Warrants, or (iii) grant Company Options to purchase up to an aggregate of 57,500 Shares to non-employee directors for their attendance at board meetings, in accordance with the terms of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts Directors Plan as in effect on the date hereof and consistent with past practice and with an exercise price per Share no less than the fair market value of a Share as of the date of this Agreementgrant;
(ivd) issueit shall not, selland shall not permit any of its Subsidiaries to, pledgeand shall not commit to, dispose of, grant, transfer, encumber, or authorize (i) other than in the issuance, sale, pledge, disposition, grantordinary and usual course of business consistent with past practice, transfer, lease, license, guarantee guarantee, sell, mortgage, pledge, dispose of or encumbrance of, encumber any shares of material property or assets (including capital stock of Subsidiaries of the Company Company); (ii) without prior written notice to Parent, make, authorize or commit or agree to make any capital expenditures or any of its Subsidiaries obligations or liabilities in respect thereof, except for those which do not exceed $10,000; (other than the issuance of shares by a wholly owned Subsidiary of the Company iii) make, authorize or commit or agree to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for make any shares of such capital stock, expenditures or any optionsobligations or liabilities in respect thereof, warrants except for those which do not exceed $25,000; (iv) acquire or propose to acquire (whether by merger, consolidation, purchase of equity or assets or otherwise) any assets or stock of or other rights interest in any other Person or entity, except in connection with capital expenditures permitted hereunder and except for acquisitions of any kind to acquire any shares inventory and other assets in the ordinary course of such capital stock or such convertible or exchangeable securities;
business; (v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees advances or capital contributions to to, or investments in in, any other Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet loans (not prohibited under Section 13(k) of the Company and other than Exchange Act) to employees in the Company or any direct or indirect wholly owned Subsidiary ordinary course of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, business consistent with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends past practice not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B5,000 to any individual or $50,000 in the aggregate) any cash dividends paid to or investments by the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company to or in the Company or any wholly-owned Subsidiary of the Company, or incur (including by drawing upon the Company’s existing line of credit) or enter into adversely modify any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness Indebtedness for borrowed money money, or guarantee any such indebtedness Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security securities of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) guarantee any debt securities of the Company Disclosure Schedule and consistent therewithanother Person, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing (or incur or modify any other material liability), (vi) terminate, cancel or request any adverse change in, or agree to any adverse change in, any Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by which the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceedingSubsidiaries is a party, or (III) pursuant to this Agreement;
(xiv) file waive, release or amend assign any material Tax Return except in the ordinary course rights, claims of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position benefits of the Company or of any of its Subsidiaries;
Subsidiaries thereunder, (xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvivii) other than in the ordinary course of business consistent with past practice, enter into any new Contract, or fail to use reasonable business efforts to renew any Contract, to which the Company or any of its Subsidiaries is a party, which is material to the Company and its Subsidiaries taken as a whole; (viii) enter into any non-competition Contracts or other Contracts that purport to limit in any respect either the type of business in which it (or, after giving effect to the Merger, Parent or its Subsidiaries) may engage or the manner or locations in which any of them may so engage in any business; (ix) enter into any partnership, joint venture, strategic alliance, revenue or profit sharing agreement or similar arrangement with any Person; or (x) change or modify its line of business from the line of business in which it is engaged as of the date hereof or enter into any new line of business;
(e) it shall not, and shall not permit any of its Subsidiaries to, and shall not commit to, (i) terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Benefit Plans, except as provided in Section 6.1(c) and Section 6.10(a)(v), (ii) except in the ordinary course of business or as required by Law or the terms of any Benefit Plan, make any contribution to any existing Benefit Plan, (iii) grant any pension, retirement, severance, retention, change of control or termination pay or rights to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, or amend or modify the terms of any Company Option, except as required by Law, (iv) increase the salary, wage, bonus or other compensation or benefits of any directors, officers or employees, or consultants, except for (A) transferannual salary increases to non-executive employees made in the ordinary course of business consistent with past practice at the regularly scheduled times; provided that the aggregate dollar amount of such increases shall not exceed the corresponding amount for the calendar year 2003, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, and (B) grantsubject to Section 6.1(c), extendthe grant of options to non-employee directors of the Company pursuant to the Directors Plan, amend or abandon (v) make payments or distributions (other than normal salaries) to or enter into any transaction with any affiliate of the Company, (vi) enter into any consulting agreement (A) with any consultant (other than surgeon consultants) providing for payments in excess of $50,000, or (B) with any surgeon consultant regardless of the amount of payments to be made thereunder, (vii) accelerate the payment of compensation or benefits to any director, officer, employee or consultant, except as required by applicable Law, agreements in effect as of the diligent prosecution date of Owned Intellectual Propertythis Agreement or Section 6.10(a).
(f) it shall not, waive and shall not permit any of its Subsidiaries to, and shall not commit to, (i) prior to consulting with Parent, commence any litigation or modify arbitration proceeding or any regulatory or other governmental action or proceeding with or before any Governmental Entity other than ordinary contract and commercial litigation that the Company does not reasonably expect to result in total costs to the Company in excess of $300,000, (ii) waive, release or assign any material rights or claims, or (iii) pay, discharge, settle, compromise or satisfy any claims, liabilities or obligations (absolute, accrued, contingent, asserted, unasserted or otherwise), other than the payment, discharge, settlement, compromise or satisfaction, in the ordinary course of business consistent in amount and kind with past practice, of claims, liabilities or to Owned Intellectual Property, (C) fail to diligently prosecute obligations reflected in the Company’s and its Subsidiaries’ patent applications, most recent financial statements (including the notes thereto) filed with the Company Filed Reports prior to the date hereof or (D) fail to exercise a right incurred since the date of removal or extension under any material Owned Intellectual Propertysuch financial statements in the ordinary course of business consistent with past practice;
(xviig) it shall not, and shall not permit any of its Subsidiaries to, and shall not commit to, change its (i) methods or principles of accounting in effect at the Audit Date, except to make as required by changes that are in GAAP after the date of this Agreement, as concurred by its independent public accountants, or as required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization Governmental Entity or (Kii) terminate without cause the employment of any officer of the Companyfiscal year;
(xviiih) subject it and its Subsidiaries shall use commercially reasonable efforts to Section 6.2keep in place any material insurance policy naming it as a beneficiary or loss-payable payee; and
(i) it shall not, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in and shall not permit any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) its Subsidiaries to, agree, authorize authorize, commit to do, enter into an agreement to do or commit publicly announce an intention to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 2 contracts
Sources: Merger Agreement (Biomet Inc), Merger Agreement (Interpore International Inc /De/)
Interim Operations. (a) The Company covenants shall, from and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing, with such approval not to be unreasonably withheld, conditioned or delayed), and except (A) as otherwise expressly required by this Agreement, (B) Agreement or as required by applicable LawsLaw, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the conduct its business of it and its Subsidiaries shall be conducted in the ordinary and usual course Ordinary Course of Business and, to the extent consistent therewith, it and its Subsidiaries shall use their respective its reasonable best efforts to protect and to, preserve in all material respects its assets and to preserve intact its business organizations organization intact and maintain existing satisfactory relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, of and in furtherance of, of the foregoingforegoing sentence, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable LawsLaw, (C) as required by the express terms of any Company Material Contract made available to Parent may consent prior to the date of this Agreement, or approved in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Scheduleby Parent, the Company will not and will not permit its Subsidiaries toshall not:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instrumentsOrganizational Documents;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, Person or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesbusiness;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000Person, other than acquisitions pursuant to Contracts of raw materials, inventory, equipment, tooling, and supplies in effect as the Ordinary Course of the date of this AgreementBusiness;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee guarantee, Encumber, or encumbrance otherwise enter into any Contract or understanding with respect to the voting of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company OptionsCompany, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any such shares of such capital stock, or any options, warrants or other rights of any kind to acquire any such shares of such capital stock or such convertible or exchangeable securities;
securities (v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms in respect of Contracts in effect Company Options outstanding as of the date of this Agreement and provided to Parent prior to in accordance with their terms and, as applicable, the Equity Plan as in effect on the date of this Agreement);
(v) enter into any Contracts or other arrangements between the Company, on the one hand, and any director or officer of the Company or any Person beneficially owning one percent or more of the outstanding Shares, on the other hand, except for compensatory arrangements entered into in the Ordinary Course of Business with Company Employees consistent with Section 7.1(a)(xxiii) and transactions with Parent or its Affiliates;
(vi) create or incur any Encumbrance that is not incurred in the Ordinary Course of Business on any of the assets of the Company;
(vii) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company)Person;
(viiviii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stockCommon Stock;
(viiiix) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock Common Stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationCommon Stock;
(ixx) incur any indebtedness for borrowed money or guarantee such indebtedness Indebtedness (including the issuance of another Person, or issue or sell any debt securities or securities, warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expendituresecurity);
(xi) (A) enter into any Contract that would have been a Company Material Contract had it been entered into prior to this Agreement Agreement;
(xii) other than with respect to Company Material Contracts related to Indebtedness, which shall be governed by Section 7.1(a)(x), terminate or (B) amend, modify modify, supplement or terminate waive, or assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Company Material Contract, except for (x) expirations of any such Contract in the Ordinary Course of Business and in accordance with the terms of such Contract with no further action by the Company or other party to such Contract, except for any ministerial actions, (y) non-exclusive licenses under Intellectual Property Rights owned or purported to be owned by the Company granted in the Ordinary Course of Business or (z) terminations, amendments, modifications, assignments, conveyances, transfers or expirations where, concurrent therewith, the Company enters into a replacement Contract providing substantially similar property, products or services on substantially similar terms;
(xiii) cancel, modify or waive any debts, rights debts or claims thereunder; for purposes of this Section 6.1, held by the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000Company or waive any material rights;
(xiixiv) except as expressly provided for by Section 7.13, amend, modify, terminate, cancel or let lapse an Insurance Policy, unless simultaneous with such termination, cancellation or lapse of any such Insurance Policy, a replacement self-insurance program is established by the Company or a replacement policy underwritten by an insurance company of nationally recognized standing is in full force and effect, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed Insurance Policy for substantially similar premiums, as applicable, as in effect as of the date of this Agreement;
(xv) other than with respect to Transaction Litigation, which shall be governed by Section 7.16, and settlement of trade accounts payable in the Ordinary Course of Business, settle or compromise any Proceeding for an amount in excess of $100,000 individually or $250,000 in the aggregate during any calendar year;
(xvi) make any material changes with respect to the legal structure of the Company or to the Company’s accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect theretoLaw;
(Axvii) settle enter into any litigation or line of business in any geographic area other proceedings before a Governmental Entity except where than the settlement is limited solely existing lines of business of the Company and lines of products and services reasonably ancillary to any existing line of business;
(Ixviii) make any material changes to the release existing lines of claims and (II) the monetary payment by business of the Company or adopt or make any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior modifications to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this AgreementCompany’s strategic plan;
(xivxix) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by lawelection, change an annual Tax accounting period, adopt or change any material method of Tax accountingaccounting method, except as required by lawfile any amended Tax Return, enter into any closing agreement with respect to Taxes, settle any Tax claim, audit, assessment or dispute, surrender any right to claim a refund or take any action which would materially adversely affect be reasonably expected to result in an increase in the Tax position liability of the Company or Company, or, in respect of any taxable period (or portion thereof) ending after the Closing Date, the Tax liability of Parent or its SubsidiariesAffiliates;
(xvxx) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, allow to lapse or expire, or otherwise dispose of or transfer, or permit or suffer to exist the creation of any Encumbrance upon, any assets (tangible or intangible, including any Company Intellectual Property Rights), Licenses, product lines or business of the Company, except in connection with services provided in the Ordinary Course of Business or sales of obsolete assets;
(xxi) cancel, abandon or otherwise allow to lapse or expire any Company Intellectual Property Rights, except in the Ordinary Course of Business with respect to Company Intellectual Property Rights that are not material to any business of the Company;
(xxii) adopt or otherwise dispose implement any shareholder rights plan or similar arrangement;
(xxiii) except as required pursuant to the terms of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts Benefit Plan in effect prior to as of the date of this Agreement;
(xvi) other than in the ordinary course of businessAgreement or as required by Law, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensationcompensation or fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any Company Employee, except reasonable holiday bonuses payable to all employees, reasonable compensation adjustments for customer service employees, and reasonable compensation adjustments required for exceptional performance or specific needs not to exceed $100,000 in the aggregate unless approved in advance by the Board, (B) become a party to, establish, adopt, amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to the date of the current or former directors, officers, employees or consultants of the Company or its Subsidiariesthis Agreement, (C) pay grant any bonus new awards, or incentive compensation amend or modify the terms of any outstanding awards, under any Company Benefit Plan in excess of the amount earned based on actual performancePlan, (D) take any action to accelerate the vesting of or lapsing of restrictions with respect to or payment, or fund or in any equity-based other way secure the payment, of compensation or other long-term incentive compensation benefits under any Company Benefit Plan, (E) grant forgive any new award, amend loans or make any extensions of credit in the terms form of outstanding awards or change a personal loan to any Company Employee (other than routine travel advances issued in the compensation opportunity under any Benefit PlanOrdinary Course of Business), (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant engage any independent contractor (who is a natural person) with maximum an annual salary or wage rate or consulting fees and target cash compensation opportunities bonus opportunity in excess of $200,000100,000 or (G) terminate the employment of any executive officer other than for cause;
(xxiv) become a party to, providedestablish, that such new hire’s compensation and benefits are made adopt, amend, commence participation in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into or terminate any collective bargaining agreement or other agreement with a labor union, labor organization, works council or similar organization or (K) terminate without cause the employment of any officer of the Companyorganization;
(xviiixxv) fail to maintain policies and procedures designed to ensure compliance with the FCPA and Other Anti-Bribery Laws;
(xxvi) fail to maintain policies and procedures designed to ensure compliance with the Export and Sanctions Regulations in each jurisdiction in which the Company operates or is otherwise subject to Section 6.2, jurisdiction;
(xxvii) take any action or omit fail to take any action that is reasonably likely expected to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII VIII not being satisfied;
(xxviii) create a Subsidiary of the Company; or
(xixxxix) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger Nothing set forth in Article VII not being satisfied.this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s operations prior to the Effective Time
Appears in 2 contracts
Sources: Merger Agreement (AeroGrow International, Inc.), Merger Agreement (SMG Growing Media, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after After the date of this Agreement and prior to the earlier of the Effective Time and the termination of this Agreement in accordance with its terms, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (Ci) as Parent may shall otherwise consent to in writing (such consent not to be unreasonably withheld, delayed or conditionedconditioned and such consent to be deemed given if Parent provides no written response within 3 business days after a written request by the Company for such consent) or request, (Dii) as otherwise expressly contemplated by this Agreement, (iii) as required by applicable Laws, (iv) as set forth in Section 6.1(a) 5.1 of the Company Disclosure ScheduleLetter or (v) as necessary to comply with the express obligations of any Company Material Contract in effect on the date hereof (the exceptions described in the foregoing clauses (i) through (v), each, a “General Exception”), the business of it Company shall use commercially reasonable efforts to conduct its and its Subsidiaries shall be conducted Subsidiaries’ business in the ordinary and usual course of business consistent with past practice, and, to the extent consistent therewith, it shall, and it shall cause its Subsidiaries shall to, use its and their respective commercially reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its their business organizations and maintain existing relations and goodwill with Governmental Entitiesorganizations; provided, customersthat, licensees, development collaboration no action by the Company or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services any of its and its Subsidiaries’ present employees and agents. Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1(b) shall be deemed a breach of Section 5.1 unless such action or omission would constitute a breach of such provision of Section 5.1(b).
(b) Without limiting the generality of, of and in furtherance of, of the foregoingforegoing but subject to the proviso in Section 5.1(a), from the date of this Agreement until the earlier of the Effective TimeTime and the termination of this Agreement in accordance with its terms, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent pursuant to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedulea General Exception, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its the Company’s or any Subsidiary’s certificate of incorporation or by-laws bylaws or other applicable comparable governing instrumentsdocuments;
(ii) merge or consolidate the Company itself or any of its Subsidiaries with any other Person, Person (except for any such transactions transaction among its wholly owned Subsidiaries of the Companysubsidiaries), or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesliquidate;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts (A) in effect connection with the exercise, vesting or settlement of Company Equity Awards outstanding as of the date hereof and in accordance with the terms thereof (including sales of this Agreement;
Shares in order to satisfy tax withholding obligations) or (ivB) as disclosed in Section 5.1(b)(iii) of the Company Disclosure Letter, issue, sell, pledge, dispose of, grant, transfer, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance by it or any of its Subsidiaries of, any shares of its capital stock or of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly its wholly-owned Subsidiary of the Company to the Company it or another wholly of its wholly-owned Subsidiary or the issuance of Shares pursuant to Company OptionsSubsidiaries), Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(viiiv) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly wholly-owned Subsidiary to the Company it or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the CompanySubsidiary) or enter into any agreement with respect to the voting of its capital stock;
(viiiv) other than (A) acquisitions of Shares tendered by holders of Company Equity Awards outstanding as of the date hereof and in accordance with the terms thereof, in order to satisfy obligations to pay the exercise price and/or tax withholding obligation with respect thereto, and (B) the acquisition by the Company of Shares in connection with the forfeiture of Company Equity Awards, reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its the Company’s capital stock or securities convertible or exchangeable into or exercisable for any shares of its the Company’s capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ixvi) (A) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security securities of the Company or of any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries (x) (1) indebtedness incurred in the ordinary course of business under its credit agreements and facilities as in effect on the date of this Agreement, including under the Sub Debt Facility or (2) as necessary to operate the business in the ordinary course of business consistent with past practices, or (y) interest rate swaps on customary commercial terms, (B) except for credit default protection provided in connection with services and products in the ordinary course of business consistent with past practice;
, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person (xother than any of its Subsidiaries) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (AC) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate arrangement having the economic effect of any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in foregoing clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause or (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000);
(xiivii) except as may be required by GAAP or any other applicable accounting standard (including the Current Expected Credit Loss accounting standard), make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(Aviii) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, (A) settle or compromise any material Tax liabilityclaim, audit, or assessment for an amount materially in excess of the amount reserved or accrued on the Audited Company Balance Sheet (or most recent consolidated balance sheet included in the Company Reports), (B) make, change or revoke any material Tax election except to the extent consistent with past practice or as required by lawelection, change any material method of Tax accountingaccounting or any annual Tax accounting period, except as required by law(C) amend any material Tax Returns or file claims for material Tax refunds, or take (D) enter into any action which would materially adversely affect material closing agreement, surrender in writing any right to claim a material Tax refund, offset or other reduction in Tax liability or consent to any extension or waiver of the limitation period applicable to any material Tax position of claim or assessment relating to the Company or of any of its Subsidiaries;
(xvix) transfer, sell, lease, exclusively license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse (except with respect to patents expiring in accordance with their terms) or expire or otherwise dispose of any of its material assets, licenses, operations, rights, product lines, lines or businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products (A) in connection with services and products provided in the ordinary course of business consistent with past practice and sales of obsolete assets, other than (B) incurrence of Permitted Liens, (C) for assets with a fair market value not in excess of $350,000 in the aggregate, in the ordinary course of business consistent with past practice, or (D) pursuant to Contracts in effect prior to the date of this Agreement;
(xvix) other than (A) as set forth on Section 5.1(b)(x) of the Company Disclosure Letter, or (B) as required by any Company Benefit Plan in effect on the date of this Agreement, (1) materially increase any compensation or benefit provided or to be provided to any current or former employee or other service provider of the Company or any of its Subsidiaries, (2) enter into or adopt any new Company Benefit Plan or amend in any material respect or terminate any Company Benefit Plan except for routine amendments or renewals of health and welfare plans in the ordinary course of businessbusiness consistent with past practice, or (3) accelerate the funding or vesting of any material compensation or benefit;
(xi) except in connection with services and products provided in the ordinary course of business consistent with past practices or pursuant to Contracts, copies of which shall be publicly filed with the SEC or shall have been provided to Parent, in effect prior to the date of this Agreement, (A) transferacquire, sellby merger, licenseconsolidation, mortgageacquisition of stock or assets, pledgeor otherwise, encumber, divest, cancel, abandon any business or allow to lapse Person or expire division thereof or otherwise dispose of any Intellectual Property Rights, (B) grantexcept in favor of its Subsidiaries, extendmake any loans, amend advances, or abandon capital contributions to or investments in any Person (except as required other than advances of expenses to employees in the diligent prosecution ordinary course of Owned Intellectual Property), waive or modify any material rights in or business and loans and other credit products to Owned Intellectual Property, (C) fail to diligently prosecute and for the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Propertycommercial counterparties);
(xviixii) except other than (A) in the ordinary course of business consistent with past practice or (B) as permitted under Section 5.1(b)(iii), 5.1(b)(v) or 5.1(b)(x), enter into or amend or modify in any material respect, or consent to make changes that are required by applicable Law the termination of (other than at its stated expiry date), any Company Material Contract or any Lease with respect to satisfy contractual obligations existing material real property or any other Contract or Lease that, if in effect as of the date hereof pursuant would constitute a Company Material Contract or Lease with respect to Contracts material real property hereunder;
(xiii) settle or Benefit Plans which are listed on Section 6.1(a)(xvii) compromise any Action involving the payment of monetary damages by the Company Disclosure Scheduleor any of its Subsidiaries of any amount exceeding $350,000 in the aggregate (not including any amounts payable or reimbursable by insurance), other than (A) terminateany Action brought against or by Parent, enter intoMerger Sub, amend Sponsor or renew (any of their respective Affiliates and Financing Sources arising out of a breach or communicate any intention to take such action) any Benefit Planalleged breach of this Agreement, other than routine amendments to qualified retirement plans the Confidentiality Agreement, the Equity Commitment Letter or health the Limited Guarantee, and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase the settlement of claims, liabilities, or obligations specifically reserved against on the Audited Company Balance Sheet (or most recent consolidated balance sheet included in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (CReports) pay any bonus or incentive compensation under any Benefit Plan in an amount not in excess of the amount earned based specific reserve with respect to such claim, liability or obligation; provided, that, neither the Company nor any of its Subsidiaries shall settle or agree to settle any Action which settlement involves a conduct remedy or injunctive or similar relief that has a material restrictive impact on actual performancethe Company’s business;
(xiv) enter into any material agreement, (D) accelerate the vesting agreement in principle, letter of intent, memorandum of understanding, or lapsing of restrictions similar Contract, in each case with respect to any joint venture, strategic partnership, or alliance (excluding, for avoidance of doubt, strategic relationships not involving equity-based compensation , alliances, reseller agreements, and relationships that are commercial in nature);
(xv) terminate or other long-term incentive compensation under modify in any Benefit Planmaterial respect, (E) grant or fail to exercise renewal rights with respect to, any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made material insurance policy except in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement of business or other agreement with if such material insurance policy is replaced by a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedsubstantially comparable policy; or
(xixxvi) agree, authorize or commit to do any of the foregoing.
(bc) Prior Nothing contained in this Agreement is intended to making any formal written communications give Parent, directly or group oral presentations indirectly, the right to control or direct the directors, officers or employees operations of the Company or any of its Subsidiaries pertaining prior to compensation or benefit matters that are affected by the transactions contemplated by this AgreementEffective Time in violation of applicable Law. Prior to the Effective Time, the Company shall provide Parent exercise, consistent with a copy the terms and conditions of the intended communicationthis Agreement, Parent shall have a reasonable period of time to review complete control and comment on the communication (which comments shall not be unreasonably withheld or delayed), supervision over its and Parent and the Company shall cooperate in providing any such mutually agreeable communicationits Subsidiaries’ operations.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 2 contracts
Sources: Merger Agreement (Elevate Credit, Inc.), Merger Agreement (Elevate Credit, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time and except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from From the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(aSECTION 5.2(a) of the Company Disclosure ScheduleOF THE COMPANY DISCLOSURE LETTER, unless Parent has consented in writing thereto, the Company will not shall, and will not permit shall cause its Subsidiaries to:
(i) adopt or propose any change in conduct its certificate of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of operations according to its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from consistent with past practice and in compliance in all material respects with all applicable Laws; (ii) use its commercially reasonable efforts to preserve intact its business organizations and goodwill, keep available the services of its officers, employees and consultants, and maintain satisfactory relationships with those Persons having business relationships with them; (iii) upon the discovery thereof, promptly notify Parent of the existence of any other Person with a value breach of any representation or purchase price warranty contained herein (or, in the aggregate case of any representation or warranty that makes no reference to Company Material Adverse Effect or materiality, any breach of such representation or warranty in excess ofany material respect) or the occurrence of any event that would cause any representation or warranty contained herein no longer to be true and correct (or, individually or in the aggregatecase of any representation or warranty that makes no reference to Company Material Adverse Effect or materiality, $2,500,000to no longer be true and correct in any material respect); (iv) promptly deliver to Parent true and correct copies of any report, other than acquisitions pursuant statement or schedule filed with the SEC subsequent to Contracts in effect as of the date of this Agreement;; and (v) pay its Taxes when due.
(b) From and after the date of this Agreement until the Effective Time, except as set forth in SECTION 5.2(b) OF THE COMPANY DISCLOSURE LETTER, unless Parent has consented in writing thereto (which consent shall not be unreasonably withheld or delayed), the Company shall not, and shall cause its Subsidiaries not to: (i) amend its Certificate of Incorporation or By- Laws; (ii) offer, issue, sell or pledge any shares of its capital stock or other ownership interest in the Company or its Subsidiaries, or any securities convertible into or exchangeable for any such shares or ownership interest, or any rights, warrants or options to acquire or with respect to any such shares of capital stock, ownership interest, or convertible or exchangeable securities; (iii) effect any stock split or otherwise change its capitalization as it exists on the date hereof; (iv) issue, sell, pledge, dispose of, grant, transferconfer or award any option, encumberwarrant, convertible security or authorize other right to acquire any shares of its or its Subsidiaries' capital stock; (v) declare, set aside or pay any dividend or make any other distribution or payment with respect to any shares of its capital stock or other ownership interests (other than such payments by the issuanceSubsidiaries to the Company); (vi) directly or indirectly redeem, sale, pledge, disposition, grant, transfer, lease, license, guarantee purchase or encumbrance of, otherwise acquire any shares of its capital stock or capital stock of its Subsidiaries or any securities that are convertible into or exchangeable for any shares of capital stock of the Company of, or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stockequity interests in, or any outstanding options, warrants or other rights of any kind to acquire any shares of such capital stock of, or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of other equity interests in, the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
; (vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divesttransfer, cancel, abandon or allow to lapse or expire exchange or otherwise dispose of any of its properties or assets, licenses, operations, rights, product lines, businesses whether tangible or interests therein of the Company or its Subsidiaries, intangible (including capital stock of any of its Subsidiaries), other than the sale or disposition of inventory in the ordinary course of business consistent with past practice or the sale, lease or other disposition of assets which individually or in the aggregate, are obsolete or not material to the Company and its Subsidiaries taken as a whole; (viii) acquire by merger or consolidation with, by purchase of any equity interest of or by any other manner, any business or entity or otherwise acquire any assets which would be material, individually or in the aggregate, to the Company and its Subsidiaries taken as a whole, except sales for purchases of Company Products inventory, supplies or capital equipment in the ordinary course of business and sales except for the acquisition of obsolete assetsany business, entity or assets not having aggregate individual consideration greater than $50,000 or aggregate consideration greater than $100,000; (ix) incur or assume any long-term or short-term debt, except for working capital purposes and the purchase of capital equipment in the ordinary course of business under the Company's existing credit agreements set forth in Section 5.2(b) of the Company Disclosure Letter; (x) assume, guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except its Subsidiaries; (xi) make or forgive any loans, advances or capital continuations to, or investments in, any other Person other than pursuant loans and advances to Contracts in effect prior to the date of this Agreement;
(xvi) other than officers or employees in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow not to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required exceed $100,000 in the diligent prosecution of Owned Intellectual Property), waive aggregate; (xii) increase the compensation (or modify any material rights in benefits) payable to or to Owned Intellectual Propertybecome payable to any director, officer or other employee, except for increases in salary or wages of non-officer employees in the ordinary course of business and consistent with past practice; (Cxiii) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applicationsestablish, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminateadopt, enter into, amend materially amend, or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund accelerate any rights or secure the payment of any amounts benefits under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or any Plan; (xiv) effect any reorganization or recapitalization; (xv) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise) in excess of $250,000 individually and $500,000 in the aggregate, other agreement than the payment, discharge, settlement or satisfaction in the ordinary course of business or in accordance with a labor uniontheir terms, works council of liabilities disclosed, reflected or similar organization reserved against in the most recent consolidated financial statements (or (Kthe notes thereto) terminate without cause the employment of any officer of the Company;
Company included in the Company SEC Reports or incurred since the date of such financial statements in the ordinary course of business, or cancel any indebtedness in excess of $10,000 individually and $50,000 in the aggregate; (xviiixvi) subject to Section 6.2, take any action or omit to take any action that is would reasonably likely to be expected to: (A) prevent, interfere with impair or materially delay the consummation ability of the Company, Parent or Merger Sub to consummate the Merger or result in (B) cause any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger not to be satisfied; (xvii) make or result change any Tax election, file any amended Tax Return, enter into any closing agreement, settle or compromise any liability with respect to Taxes, agree to any material adjustment of any Tax attribute, file any claim for a refund of Taxes, or consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment; or (xviii) agree in writing or otherwise to take any of the conditions to the Merger set forth in Article VII not being satisfiedforegoing actions.
Appears in 2 contracts
Sources: Merger Agreement (Integrated Defense Technologies Inc), Merger Agreement (Integrated Defense Technologies Inc)
Interim Operations. 1
(a) The Company covenants and agrees as to itself and its Subsidiaries that, after during the period from the date of this Agreement and prior to through the Effective Time and except (A) as otherwise expressly required by earlier of the Closing or the termination of this Agreement, except (B1) as required by applicable Laws, (C) as to the extent Parent may shall otherwise give its prior consent to in writing (such consent not to be unreasonably withheld, delayed conditioned or conditioned) or delayed), (D2) as set forth in Section 6.1(a4.1(a) of the Company Disclosure Schedule, (3) as may be required by applicable Legal Requirements, or (4) as expressly required by this Agreement, the Company shall, and shall cause the Company Subsidiaries to, use commercially reasonable efforts to conduct its business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to of business; provided that any action expressly permitted by the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available remaining provisions of this Section 4.1(a) (including Section 4.1(a) of the services Company Disclosure Schedule) will not constitute a violation of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, . During the period from the date of this Agreement until through the Effective Timeearlier of the Closing or the termination of this Agreement, except (A) as to the extent Parent shall otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may give its prior consent to in writing (in the case of subsections (iv), (vi), (viii), (ix), (x), (xii), (xiii), and (xvii) of this Section 4.1(a), such consent not to be unreasonably withheld, delayed conditioned or conditioned) or delayed), (DB) as set forth in Section 6.1(a4.1(a) of the Company Disclosure Schedule, (C) as may be required by applicable Legal Requirements, or (D) as expressly required by this Agreement, the Company will shall not (and will shall not permit its Subsidiaries any Company Subsidiary to:):
(i) adopt amend the Company’s Organizational Documents or propose amend the Organizational Documents of any change in its certificate of incorporation or by-laws or other applicable governing instrumentsCompany Subsidiary;
(ii) merge split, combine, subdivide, change, exchange, amend the terms of or consolidate the Company or reclassify any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries shares of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of ’s capital stock or other equity interests of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiesSubsidiary;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(viiiii) declare, set aside, make or pay any dividend or other distribution, distribution (whether payable in cash, stock, property stock or otherwise, property) with respect to any shares of its the Company’s capital stock (except for (A) or the capital stock or other equity interest of any Company Subsidiary, other than dividends or distributions only to the extent paid by any direct or indirect wholly owned Company Subsidiary to the Company or to another wholly owned Company Subsidiary;
(iv) acquire (by merger, consolidation, operation of law, acquisition of stock, other equity interests or assets, formation of a joint venture or otherwise) (A) any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per SharePerson, declared and paid consistent with prior timing, and (B) any equity interest in any other Person (other than investments in equity securities that constitute short term investments that are accounted for as cash dividends paid to equivalents), (C) any business or division of another Person, or (D) any material assets except, (1) acquisitions by the Company from any wholly owned Company Subsidiary or one among any wholly owned Company Subsidiaries; (2) the purchase of equipment, supplies and inventory in the ordinary course of business or (3) inbound licenses or other grants or assignments of Intellectual Property in the ordinary course of business;
1 Note to W&S: Subject to ongoing review by the Company.
(v) except in connection with any transaction between the Company and any wholly owned Company Subsidiary or among any wholly owned Company Subsidiaries, issue, sell, grant or otherwise permit to become outstanding any additional shares of, or securities convertible or exchangeable for, or options, warrants or rights to acquire, any shares of its wholly-capital stock or other equity interests, other than shares of Company Common Stock issuable upon exercise of outstanding Company Options;
(vi) except in connection with any transaction between the Company and any wholly owned Subsidiaries Company Subsidiary or among any wholly owned Company Subsidiaries, sell, assign, transfer, lease or license to any third party, or incur any Lien on any of its material tangible property or tangible assets, except for Company Permitted Encumbrances, or otherwise dispose of (by a wholly-owned Subsidiary merger, consolidation, operation of law, division or otherwise), any material Company IP or material tangible assets of the Company, other than: (A) sales of inventory, goods or enter services in the ordinary course of business in a manner consistent with past practice or of obsolete equipment or assets in the ordinary course of business consistent with past practice; (B) pursuant to written Contracts or commitments existing as of the date of this Agreement; or (C) as security for any borrowings permitted by Section 4.1(a)(viii); or (D) licenses granted to customers or other third parties in the ordinary course of business in a manner consistent with past practice;
(vii) directly or indirectly repurchase, redeem or otherwise acquire any shares of the Company’s or any Company Subsidiary’s capital stock or equity interests, or any other securities or obligations convertible (currently or after the passage of time or the occurrence of certain events) into or exchangeable for any agreement with respect shares of the Company’s or any Company Subsidiary’s capital stock or equity interests, except: (A) shares of Company Common Stock repurchased from employees or consultants or former employees or consultants of the Company pursuant to the voting exercise of its capital stockrepurchase rights existing prior to the date of this Agreement; or (B) shares of Company Common Stock accepted as payment for the exercise price of Company Options or for withholding Taxes incurred in connection with the exercise, vesting or settlement of Company Options, as applicable, in accordance with the terms of the applicable award;
(viii) reclassifyincur (other than draws on existing revolving loans), split, combine, subdivide or redeem, purchase repurchase, prepay (other than prepayments of revolving loans), defease, or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur cancel any indebtedness for borrowed money or money, guarantee any such indebtedness of another Personindebtedness, or issue or sell any debt securities or warrants or other rights to acquire any debt security securities (directly, contingently or otherwise) or make any loans or capital contributions to any other Person, except for any indebtedness among the Company and its wholly owned Company Subsidiaries or among any wholly owned Company Subsidiaries (and guarantees by the Company or the Company Subsidiaries in respect thereof);
(ix) (A) adopt, terminate or amend any Company Plan except to the extent permitted by clauses (B), (C), (D) or (E) of this Section 4.1(a)(ix), (B) increase, or accelerate the vesting or payment of, the compensation or benefits of any member of the Company Board, current employee, or former employee of the Company or any Company Subsidiary, (C) grant any rights to severance, retention, change in control or termination pay to any member of its Subsidiaries, except for inter-company borrowings solely among the Company Board, current employee or former employee of the Company or any Company Subsidiary, (D) hire or promote any employee at or to the level of Vice President or above, or (E) terminate the employment of any employee of the Company or any Company Subsidiary whose annual base salary exceeds $100,000 (other than for cause); except, in each case, for: (1) amendments to Company Plans determined by the Company in good faith to be required to comply with applicable Legal Requirements; (2) hiring any Person for employment (including by means of internal promotion) to fill any currently existing Vice President or higher position that becomes vacant after the date of this Agreement, and, notwithstanding anything to the contrary in this Section 4.1(a)(ix), provide such Person with compensation and its wholly-owned Subsidiaries or among benefits for such position consistent with past practice; (3) hiring any Person for employment in accordance with the Company’s wholly-owned Subsidiaries present hiring plan made available to Parent or otherwise hiring an individual below the level of Vice President in the ordinary course of business in a manner consistent with past practice; (4) increases in compensation or benefits required pursuant to any Company Plan in effect on the date hereof; (5) increases to total target cash opportunities (i.e., annual base salary or wage rates and target annual cash bonus opportunities) in amounts that are in the ordinary course of business in a manner consistent with past practice; and (6) any other actions set forth in Section 4.1(a)(ix) of the Company Disclosure Schedule;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle (i)(A) amend or compromise terminate (except for terminations pursuant to the expiration of the existing term of any Material Contract) any Material Contract or (B) waive, release or assign any material Tax liabilityrights under any Material Contracts, makeor (ii) enter into any Contract or agreement that, if in effect on the date of this Agreement, would constitute a Material Contract;
(xi) change any of its methods of financial accounting or accounting practices in any material respect other than as required by changes in GAAP;
(xii) make (except for elections made in the ordinary course of business), change or revoke any material Tax election except to the extent consistent with past practice or as required by lawelection, change any Tax accounting period or material method of Tax accounting, except as required by lawamend any material Tax Return if such amendment would reasonably be expected to result in a material Tax liability, settle or compromise any material liability for Taxes or any Tax audit, claim, or take other proceeding relating to a material amount of Taxes, enter into any action which agreement with a Governmental Entity relating to Taxes if such agreement would materially adversely affect the reasonably be expected to result in a material Tax position liability, request any Tax ruling from any Governmental Entity, surrender any right to claim a material refund of the Company or of any of its Subsidiaries;
(xv) transferTaxes, sellor, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon agree to an extension or allow waiver of the statute of limitations with respect to lapse or expire or otherwise dispose a material amount of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual PropertyTaxes;
(xviixiii) except to other than consignment of Company Products in the ordinary course of business, make changes any capital expenditure that are required is not contemplated by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on capital expenditure budget (the “CapEx Budget”) set forth in Section 6.1(a)(xvii4.1(a)(xiii) of the Company Disclosure ScheduleSchedule (a “Non-Budgeted Capital Expenditure”), except that the Company or any Company Subsidiary may make any Non-Budgeted Capital Expenditure that, when added to all other Non-Budgeted Capital Expenditures made by the Company and the Company Subsidiaries since the date of this Agreement would not, in the aggregate, exceed the aggregate CapEx Budget by more than $100,000;
(xiv) except as expressly required by applicable Legal Requirements or the Company’s Organizational Documents, convene (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, special meeting of the Company’s shareholders other than routine amendments to qualified retirement plans the Company Shareholder Meeting or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer meeting of the Company;
(xviii) subject ’s shareholders to Section 6.2consider a proposal that would reasonably be expected to impair, take any action or omit to take any action that is reasonably likely to prevent, interfere with prevent or delay the consummation of the transactions contemplated hereby;
(xv) enter into any agreement, understanding or arrangement with respect to the voting of any capital stock or other equity interests of the Company (including any voting trust), other than with respect to awards under the Company Equity Plans otherwise permitted under this Agreement or in connection with the granting of revocable proxies in connection with any meeting of the Company’s shareholders;
(xvi) adopt a plan of (A) complete or partial liquidation of the Company or any Company Subsidiary or (B) dissolution, merger, consolidation, division, restructuring, recapitalization or other reorganization, other than, in the case of clause (B), transactions between or among direct or indirect wholly owned Company Subsidiaries;
(xvii) settle or compromise any litigation, claim, suit, action or proceeding, except for settlements or compromises other than (A) the payment, discharge or satisfaction, in the ordinary course of business in a manner consistent with past practice, of liabilities reflected or reserved against in the Most Recent Company Balance Sheet, or (B) those that do not (x) impose any injunctive relief on the Company or any Company Subsidiary (other than confidentiality obligations), (y) involve the payment of money greater than $100,000 in excess of existing insurance coverage, and (z) do not include an admission of liability or fault on the part of the Company or any Company Subsidiary;
(xviii) materially reduce the amount of insurance coverage or fail to renew or maintain any material existing insurance policies;
(xix) (A) amend any Company Permits in a manner that adversely impacts the Company’s ability to conduct its business in any material respect or (B) terminate or allow to lapse any material Company Permits;
(xx) (A) fail to pay any issuance, renewal, maintenance and other payments that become due with respect to any material Company Registered IP or otherwise abandon, cancel, or permit to lapse any material Company Registered IP, other than in its reasonable business judgment or in the ordinary course of business in a manner consistent with past practice, or (B) authorize the disclosure to any third party of any material Trade Secret included in the Company IP in a way that results in loss of trade secret protection, other than in the ordinary course of business in a manner consistent with past practice;
(xxi) take or cause to be taken any action, or knowingly fail to take or cause to be taken any action, which action or failure to act would reasonably be expected to (A) prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code or (B) result in any of the conditions to the Merger Mergers set forth in Article VII ARTICLE V not being satisfied; or
(xixxxii) agreeauthorize, authorize approve or commit enter into any agreement or make any commitment to do take any of the foregoingactions described in clauses (i) through (xxi) of this Section 4.1(a).
(b) Prior to making any formal written communications Parent agrees that, during the period from the date of this Agreement through the earlier of the Closing or group oral presentations the termination of this Agreement, except (1) to the directorsextent the Company shall otherwise give its prior consent in writing (such consent not to be withheld, officers conditioned or employees delayed), (2) as set forth in Section 4.1(b) of the Company Parent Disclosure Schedule, (3) as may be required by applicable Legal Requirements, or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated (4) as expressly required by this Agreement, Parent shall, and shall cause the Parent Subsidiaries to, use commercially reasonable efforts to conduct its business in the ordinary course of business. Parent agrees that, during the period from the date of this Agreement through the earlier of the Closing or the termination of this Agreement, except (A) to the extent the Company shall provide Parent with a copy otherwise give its prior consent in writing, (B) as set forth in Section 4.1(b) of the intended communicationParent Disclosure Schedule, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not C) as may be unreasonably withheld required by applicable Legal Requirements, or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(cD) Subject to Section 6.5as expressly permitted or required by this Agreement, Parent shall not take or (and shall not permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with Parent Subsidiary to):
(i) amend Parent’s or delay the consummation either of the Merger Acquisition Subs’ Organizational Documents or result amend the Organizational Documents of any Parent Subsidiary in any manner that would be adverse in any material respect to the holders of Company Common Stock (after giving effect to the Mergers) or materially delay or materially impair the ability of Parent to consummate the Mergers;
(ii) split, combine, subdivide, change, exchange, amend the terms of or reclassify any shares of Parent’s capital stock or other equity interests of the conditions Company, except for any such transaction involving only wholly owned Parent Subsidiaries;
(iii) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock or property) with respect to any shares of Parent’s capital stock or the capital stock or other equity interest of any Parent Subsidiary, other than dividends or distributions only to the Merger set forth extent paid by any wholly owned Parent Subsidiary to Parent or another wholly owned Parent Subsidiary;
(iv) acquire (by merger, consolidation, operation of law, acquisition of stock, other equity interests or assets, formation of a joint venture or otherwise) (A) any other Person, (B) any equity interest in Article VII not being satisfied.any other Person (other than investments in equity securities that constitute short term investments that are accounted for as cash equivalents), (C) any business or division of another Person, or (D) any assets material to the Company and the Company Subsidiaries, taken as a whole, except in each case, (1) acquisitions by Parent from any wholly owned Parent Subsidiary or among any wholly owned Parent Subsidiaries; (2) the purchase of equipment, supplies and inventory in the ordinary course of business; (3) inbound licenses or other grants or assignments of Intellectual Property in the ordinary course of business
Appears in 2 contracts
Sources: Merger Agreement (Superior Drilling Products, Inc.), Merger Agreement (Drilling Tools International Corp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time and Time, except (A) as otherwise expressly required contemplated or permitted by this Agreement, (B) as Agreement or required by applicable Laws, Law or with the prior written approval of Parent (C) as Parent may consent to in writing (such consent which shall not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of ), the Company Disclosure Scheduleshall, the business and shall cause each of it and its Subsidiaries shall be conducted to, conduct its business in the ordinary and usual course and, to course. To the extent consistent therewithwith the foregoing and except as otherwise consented to by Parent (which consent shall not be unreasonably withheld, it delayed or conditioned), the Company and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other Persons with whom the Company or its Subsidiaries has a material business associates and keep available the services of its and its Subsidiaries’ present employees and agentsrelationship. Without limiting the generality of, and in furtherance of, of the foregoing, from the date of this Agreement until the Effective Time, except (Aw) as otherwise expressly required contemplated or permitted by this Agreement, (Bx) as required by applicable Laws, with the prior written approval of Parent (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned), (y) as required by applicable Law or (Dz) as set forth in Section 6.1(a5.1(a) of the Company Disclosure Schedule, the Company will not and will not permit any of its Subsidiaries to:
(i) adopt or propose any change in amend its certificate of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire make any acquisition (whether by merger, consolidation, or acquisition of stock or assets) of any interest in any Person or any division or assets outside of thereof other than (A) acquisitions in the ordinary course of business from any other Person with a value or purchase price in the aggregate not in excess ofof $2,000,000 in any transaction or series of related transactions, individually or in the aggregate, $2,500,000, other than (B) acquisitions pursuant to Contracts in effect as of the date of this Agreement, true and complete copies of which have been made available to Parent;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumberencumber or otherwise dispose of any shares of capital stock of the Company or any of its Subsidiaries, or authorize the issuancesecurities convertible into or exchangeable for, saleor options, pledgewarrants, dispositioncalls, grant, transfer, lease, license, guarantee commitments or encumbrance ofrights of any kind to acquire, any shares of capital stock of the Company or any of its Subsidiaries (other than (A) the issuance of shares of Class A Common Stock upon the settlement of Company Options or Company Restricted Stock Awards, (B) in satisfaction of obligations pursuant to Contracts or Plans existing as of the date hereof, (C) by a wholly wholly-owned Subsidiary of the Company to the Company or another wholly wholly-owned Subsidiary or of the Company, (D) the issuance of Shares equity awards permitted by clause (xii) below or (E) the issuance of shares of Class A Common Stock pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as terms of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiesan ESPP offering permitted under Section 2.8(c));
(v) create or incur make any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
loans, advances (vi) other than pursuant to the terms of Government Contracts in effect as the ordinary course of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees business) or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly wholly-owned Subsidiary of the Company)) in excess of $2,000,000 in the aggregate;
(viivi) declare, set aside, establish a record date for, make or pay any dividend or other distribution, distribution (whether payable in cash, stock, property or otherwise, ) with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly wholly-owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stockSubsidiary);
(viiivii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from stock (A) holders other than the acquisition of Company Options any shares of Class A Common Stock tendered by current or former employees or directors in full or partial payment order to pay Taxes in connection with the settlement of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse Restricted Stock Awards and other than in connection with a customary cashless exercise of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationOptions);
(ixviii) incur or enter into any agreement to incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security securities of the Company or any of its Subsidiaries or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) for borrowed money, except to fund operations in the event the U.S. Congress allows for a lapse in federal agencies’ authority to appropriate funds or curtails funding for nonessential activities in certain federal agencies or departments under the Company’s existing revolving credit facility in an aggregate amount not to exceed the maximum amount authorized under that agreement at any time to be outstanding;
(ix) except (A) as set forth in Section 5.1(a)(ix) of the Company Disclosure Schedule, (B) in the ordinary course of business or (C) for expenditures related to operational emergencies, make or authorize any capital expenditure in excess of $2,000,000 in the aggregate;
(x) settle or compromise any litigation, claim or other proceeding against the Company or any of its Subsidiaries other than settlements or compromises where the amounts paid by the Company or any of its Subsidiaries in settlement or compromise do not exceed $2,000,000, in the aggregate; provided that the foregoing shall not permit the Company or any of its Subsidiaries to settle any litigation, claim or other proceeding that would impose material restrictions or changes on the business or operations of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of, or grant any Lien other than any Permitted Lien on, any material amount of any assets, licensesrights (including Intellectual Property), operations, rightsproperties, product lines, lines or businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xviA) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or pursuant to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations Contracts existing as of the date hereof or (C) transactions solely among the Company and/or its wholly-owned Subsidiaries;
(xii) except to satisfy contractual obligations pursuant to Contracts Contracts, or Benefit as required under Plans which are listed on existing as of the date hereof or as set forth in Section 6.1(a)(xvii5.1(a)(xii) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (A) terminategrant, enter into, amend pay or renew (commit to grant or communicate pay any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans material severance or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative coststermination pay, (B) increase in enter into any manner the compensation, bonus, pension, welfare, fringe Plan with any director or other benefits, severance or termination pay of any executive officer of the Company, (C) adopt any new employee benefit plan or arrangement or amend, modify or terminate any existing Plan or ERISA Plan in a manner that materially increases the cost associated with such Plan or ERISA Plan, (D) make any new equity awards to any current or former directorsdirector, officersexecutive officer, employees employee or consultants consultant of the Company or any of its Subsidiaries, (E) otherwise increase or commit to increase any compensation or employee benefits payable to any director, officer or employee of the Company or any of its Subsidiaries or (F) fund or in any way secure any payments or benefits under any Plan;
(xiii) adopt or enter into a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(A) modify, amend or terminate any Material Contract other than (1) in the ordinary course of business consistent with past practice or (2) modifications or amendments which are immaterial, or (B) enter into any new Contract or agreement that, if entered into prior to the date of this Agreement, would have been required to be listed in Section 3.15(a) of the Company Disclosure Schedule as a Material Contract other than in the ordinary course of business consistent with past practice (it being understood that the foregoing exception to this clause (B) shall not permit the entry into any Contract with an Affiliate or a “related person” (as such term is defined in item 404(a) of Regulation S-K under the Exchange Act));
(xv) except as may be required by a change in GAAP or applicable Law, make any material change in its financial accounting principles, policies, or practices;
(A) make any Tax election or take any position on a Tax Return filed on or after the date of this Agreement or adopt any method therein that is inconsistent with elections made, positions taken or methods used in preparing or filing similar returns in prior periods unless such position, election or method is pursuant to applicable Law or the Code, (B) enter into any settlement or compromise of any Tax liability, (C) pay file any bonus amended Tax Return that would result in a change in Tax liability, taxable income or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performanceloss, (D) accelerate the vesting change any annual Tax accounting period, (E) enter into any closing agreement relating to any Tax liability, or (F) give or request any waiver of or lapsing a statute of restrictions limitation with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000Tax Return, provided, that such new hire’s compensation and benefits are made election, settlement, amended Tax Return or any other action described in the ordinary course consistent with past practice and are consistent with foregoing portion of this Section 5.1(a)(xvi) shall not require prior written consent of Parent if all such actions, in the other requirements set forth in this Agreementaggregate, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject would not reasonably be expected to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions a cost to the Merger set forth Company and its Subsidiaries in Article VII not being satisfiedexcess of $500,000; or
(xixxvii) agree, authorize or commit to do any of the foregoing.
(b) Prior Nothing contained in this Agreement is intended to making any formal written communications give Parent or group oral presentations Merger Sub, directly or indirectly, the right to control or direct the directors, officers or employees of the Company Company’s or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions Subsidiaries’ operations prior to the Merger set forth in Article VII not being satisfiedEffective Time.
Appears in 2 contracts
Sources: Merger Agreement (Providence Equity Partners VI L P), Merger Agreement (Sra International Inc)
Interim Operations. (a) The Company covenants shall, and agrees as to itself and shall cause each of its Subsidiaries thatto, from and after the date hereof until the earlier of the Closing and the termination of this Agreement and prior to the Effective Time (unless Purchaser shall otherwise approve in writing), and except (A) as otherwise expressly required by this Agreement, (B) Agreement or as required by a Governmental Entity or applicable LawsLaw, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the conduct its business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it shall use and cause each of its Subsidiaries shall to use their respective commercially reasonable best efforts to protect maintain its and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing Subsidiaries’ relations and goodwill with Governmental Entities, customersclients, suppliers, licensors, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. .
(b) Without limiting the generality of, of and in furtherance of, of the foregoingforegoing sentence, from and after the date hereof until the earlier of the Closing and the termination of this Agreement until the Effective TimeAgreement, except (A) as otherwise expressly required by this Agreement, (B) as required by a Governmental Entity or applicable LawsLaw, expressly required by the terms of any Company Material Contract in effect prior to the date of this Agreement (Ccorrect and complete copies of which have been made available to Purchaser) or entered into following the date of this Agreement in accordance with the terms of this Section 3.1, as Parent may consent to approved in writing by Purchaser (such consent approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed) or (D) as set forth in Section 6.1(a3.1(b) of the Company Disclosure Schedule, the Company will shall not and will not permit shall cause its Subsidiaries not to:
(i1) adopt or propose any change in its certificate of incorporation Organizational Documents (other than to correct scrivener’s errors or by-laws immaterial or other applicable governing instrumentsministerial amendments);
(ii2) merge or consolidate the Company or any of its Subsidiaries with any other Personperson, except for any such transactions solely among wholly owned Subsidiaries of the CompanyCompany or in connection with any acquisition permitted by clause (3) below, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(iii3) acquire assets or equity interests outside of the ordinary course of business from any other Person person with a value or purchase price in the aggregate in excess ofof $10,000,000; provided, individually or however, that the Company shall provide notification to Purchaser in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as event that the Company or any of its Subsidiaries acquires assets or equity interests outside of the date ordinary course of this Agreementbusiness from any other person with a value or purchase price in the aggregate in excess of $1,000,000;
(iv4) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee guarantee, encumber, or encumbrance otherwise enter into any contract or other agreement, understanding or arrangement (whether oral or written) with respect to the voting of, any shares of capital stock of the Company or capital stock or other equity interests of any of its Subsidiaries Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than (A) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (I) by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or of the Company, (II) to the Other Investor (provided that notice shall be provided to Purchaser of any such issuance of Shares no less than five business days prior to such issuance), (III) pursuant to Company Optionsany present employee, Company Restricted Shares director or the Convertible Senior Notes outstanding as consultant benefit plan or program of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to assumed by the Company or any of its Subsidiaries on any assets of the Company or any present employee agreements or arrangements or programs, including the issuance of its Subsidiaries;
performance shares, restricted shares, options or similar securities in an aggregate amount and on the terms separately disclosed to Purchaser on February 20, 2024, (viIV) other than pursuant to in connection with any acquisition permitted by clause (3) above, or (V) in connection with any earn-out, deferred or contingent payment obligations required by the terms of Contracts any acquisition contract in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees Agreement or capital contributions to entered into following the date of this Agreement in accordance with the terms of this Section 3.1 or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments B) proxies or voting agreements solicited by or on the balance sheet behalf of the Company and other than in connection with the Company or any direct or indirect wholly owned Subsidiary of the Company20% Approval);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii5) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock stock, other equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stockstock or other equity interests, in each case except from (A) holders of Company Options in full or partial payment connection with tax withholding obligations of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationCompany;
(ix6) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made 10,000,000 in the ordinary course aggregate, except for (A) indebtedness in replacement of existing indebtedness for borrowed money on terms substantially consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions more favorable to the Merger set forth in Article VII not Company than the indebtedness being satisfied; or
(xix) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.replaced,
Appears in 2 contracts
Sources: Investment Agreement (AlTi Global, Inc.), Investment Agreement (AlTi Global, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after During the period from the date of this Agreement and prior to until the Effective Time Acceptance Date (or until termination of this Agreement in accordance with Article 7 hereof (the “Termination Date”)), and except (Ai) as otherwise expressly may be required by applicable Law, (ii) as may be agreed in writing by Parent (which consent, or lack thereof, may not be unreasonably delayed), (iii) as may be required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) Agreement or (Div) as set forth in Section 6.1(a) 5.1 of the Company Disclosure Schedule, the Company covenants and agrees with Parent that (A) the business of it the Company and its Subsidiaries shall be conducted in the ordinary course and usual course consistent with past practice, and, to the extent consistent therewith, it the Company and its Subsidiaries shall use their respective commercially reasonable best efforts to protect preserve intact their current business organizations, to keep available the services of their current officers and key employees, and to preserve their relationships with material customers, suppliers, licensors, licensees, advertisers, distributors and other third parties having business dealings with them, and to preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and the goodwill with Governmental Entitiesof their respective businesses; provided, customershowever, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required that no action by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with respect to matters addressed specifically by any specific provision of clause (B) of this Section 5.1 shall be deemed a breach of this clause (A) of Section 5.1 unless such action would constitute a breach of such specific provision of clause (B), and (B) the Company shall not, and (as applicable) shall not permit any of its Subsidiaries to:
(a) (i) authorize for issuance, issue, deliver, sell, or agree to issue, deliver or sell, or pledge or otherwise encumber, any shares of capital stock or any other Personsecurities convertible into, or any rights, warrants or options to acquire, any such shares, except for issuances of Shares upon the exercise of Options outstanding as of the date of this Agreement or purchase rights under the Company ESPP, or (ii) repurchase, redeem or otherwise acquire, any such transactions among shares of capital stock or other equity interests, except for the repurchase of Shares in connection with the vesting of Restricted Shares under, and in accordance with the terms of, the Stock Option Plans and the agreements executed thereunder;
(b) (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it, (ii) alter through merger, liquidation, reorganization, restructuring or in any other fashion its corporate structure or ownership, (iii) amend or otherwise change the Company Certificate or Company Bylaws or the certificate of incorporation, bylaws or equivalent organizational documents of any Subsidiary, or (iv) split, combine or reclassify any shares of its capital stock;
(c) declare, set aside or pay any dividends on (whether in cash, stock or property), or make any other distributions in respect of, any of its capital stock, except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or another of its wholly owned Subsidiaries with respect to capital stock;
(d) (i) grant or agree to any material increase in the Companycompensation or fringe benefits of, or restructure, reorganize pay any bonus to or completely or partially liquidate or otherwise enter into any new employment, severance or termination agreement, or amend any existing employment, severance or termination agreement with any current or former director, officer or employee except for (A) increases in compensation and payment of bonuses expressly required under employment agreements, bonus plans and other Company Plans, agreements and arrangements existing as of the date of this Agreement, (B) ordinary course raises granted to non-officer employees in connection with regularly scheduled performance reviews and (C) entering into offer letters with newly-hired non-officer employees, the terms and conditions of which shall be substantially similar to the terms and conditions of the forms previously provided to Parent and Purchaser, and which shall not provide for a term of employment or arrangements imposing material changes severance payments (other than those generally made pursuant to applicable Company policy, if any); (ii) become obligated under any employee benefit plan that was not in existence on the date hereof, or restrictions amend, modify or terminate any Company employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on its assetsthe date hereof, operations except as required by Law or businessesthe terms of any such plan; or (iii) pay any benefit not required by any plan or arrangement as in effect as of the date of this Agreement (including, without limitation, the granting of, acceleration of, exercisability of or vesting of stock options, stock appreciation rights or restricted stock, except as otherwise required or permitted by the terms of this Agreement);
(iiie) acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing all or substantially all the assets outside or capital stock or other equity interests of, any business or any corporation, limited liability company, partnership or other business organization, other than purchases of assets in the ordinary course of business from any other Person consistent with a value or purchase price in the aggregate past practice and not in excess of $100,000;
(f) sell, lease, license, mortgage or otherwise encumber or subject to any lien or otherwise dispose of, individually or agree to sell, lease, license, mortgage or otherwise encumber or subject to any lien or otherwise dispose of, any of its properties or assets other than (i) properties or assets not in excess of $100,000 in one instance or $200,000 in the aggregate, (ii) in the ordinary course of business consistent with past practice, (iii) non-exclusive trademark and logo licenses granted by the Company to partners for marketing purposes in the ordinary course of business and that have a term of one year or less remaining or that are terminable without penalty upon 60 days or less notice; (iv) nonexclusive licenses granted by the Company in the ordinary course of business to customers for such customers’ use of the Company’s products and services, (v) liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP, and (vi) liens of landlords, carriers, warehousemen, mechanics and materialmen that are incurred in the ordinary course of business, in each instance for amounts not yet due and payable;
(g) incur, assume or pre-pay any indebtedness for borrowed money or enter into any agreement to incur, assume or pre-pay any indebtedness for borrowed money, except for (i) payments required or permitted and the incurrence of indebtedness in the ordinary course of business consistent with past practice, and (ii) financing of capital expenditures in the ordinary course of business and not in excess of $2,500,00050,000;
(h) make or forgive any loans, advances or capital contributions to, guarantees for the benefit of, or investments in, any party, other than acquisitions loans between or among the Company and any of its Subsidiaries and cash advances to the Company’s or any such Subsidiary’s employees for reimbursable travel and other business expenses incurred in the ordinary course of business consistent with past practice and guarantees made by the Company of the obligations of any of its Subsidiaries for the benefit of such Subsidiary;
(i) assume, guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any person other than the Company and its Subsidiaries, enter into any “keep well” or other agreement to maintain any financial statement condition of any person other than the Company and its Subsidiaries, or enter into any arrangement having the economic effect of any of the foregoing;
(j) fail to maintain insurance covering risks of such types and in such amounts as are consistent with the Company’s past practices, or cancel or terminate any material insurance policy that names the Company as beneficiary or loss payable payee;
(k) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries, or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(l) amend, modify or waive any term of any of its outstanding securities;
(m) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, except as required by Law;
(n) settle or compromise any pending or threatened suit, action, claim or litigation, except in the ordinary course of business and where such settlement or compromise would result in payments (individually and not in the aggregate), net of insurance, by the Company of less than $100,000;
(o) change any of the material accounting policies, practices or procedures (including material Tax accounting policies, practices and procedures) used by the Company and its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(p) make or change any material tax election, make or change any material method of accounting with respect to Taxes or compromise any material Tax liability or file any material amended Tax Return, except in each case as required by applicable Law;
(q) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice, or payments otherwise expressly permitted by the terms of this Agreement;
(r) transfer or license to any third party any Company Intellectual Property (other than pursuant to Contracts a contract in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber), or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee amend or encumbrance of, modify any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts contract in effect as of the date of this Agreement and provided relating to Parent prior to the date of this AgreementCompany Intellectual Property, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products grant in the ordinary course of business of non-exclusive trademark and sales logo licenses that have a term of obsolete assetsone year or less remaining or that are terminable without penalty upon 60 days or less notice and that are granted by the Company to partners for marketing purposes, and other than pursuant non-exclusive licenses to Contracts customers in effect prior to connection with the date provision of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and or its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;services; and
(xviis) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize agree or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 2 contracts
Sources: Merger Agreement (Best Buy Co Inc), Merger Agreement (Napster Inc)
Interim Operations. (a) The Company covenants From and agrees as to itself and its Subsidiaries that, after the date execution and delivery of this Agreement until the earlier of the Effective Time and the termination of this Agreement and prior abandonment of the transactions contemplated by this Agreement pursuant to the Effective Time and Article IX, except (Ai) as otherwise expressly required required, contemplated or permitted by this Agreement, (B) Agreement or as required by a Governmental Entity or applicable LawsLaw, (Cii) as set forth in Section 7.1(a) of the Company Disclosure Schedule or (iii) as Parent may shall otherwise consent to in writing (such which consent shall not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of ), the Company Disclosure Schedule(A) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to conduct their respective businesses in the Ordinary Course of Business in all material respects, (B) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to (x) maintain all existing relationships and goodwill with key customers, suppliers and other persons having material business of it relationships with the Company and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and (y) keep available the services of its the officers and key employees of the Company and its Subsidiaries’ present employees , and agents. Without (C) without limiting the generality of, and in furtherance of, of the foregoing, from the date of this Agreement until the Effective Timeshall not, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will not and will not permit shall cause its Subsidiaries not to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instrumentsOrganizational Documents;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions solely among wholly owned Wholly Owned Subsidiaries of the Company,
(iii) adopt or enter into a plan of restructuring, reorganizing, dissolving, recapitalizing, complete or restructure, reorganize partial liquidation or completely or partially liquidate or otherwise similar transaction;
(iv) enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(iiiv) acquire or agree to acquire by merger, consolidation, acquisition of stock, equity or assets outside of the ordinary course of business or otherwise, any business, Person, division, properties or assets from any other Person Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price in the aggregate not in excess of, individually of $1 million in any individual transaction or $2 million in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(ivvi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a -50- fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(vii) issue, deliver, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee guarantee, Encumber or encumbrance of, otherwise enter into any Contract or understanding with respect to the voting of or transfer any shares of capital stock of the Company or capital stock or other equity or equity-based interests of any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company OptionsSubsidiaries, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any such shares of such capital stockstock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of such capital stock stock, other equity interests or such convertible or exchangeable securities;
securities (vother than (A) create the delivery of any Common Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated on the Preferred Shares) in accordance with the terms of the Preferred Shares or incur any Lien material (2) the conversion of the Company Notes in accordance with the Indenture and the exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations (B) the issuance of Preferred Shares in connection with the payment of dividends on the Preferred Shares in accordance with the terms of the Preferred Shares or (B) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (1) by a Wholly Owned Subsidiary of the Company to the Company or any of its Subsidiaries on any assets another Wholly Owned Subsidiary of the Company, (2) in respect of Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect Equity Awards outstanding as of the date of this Agreement and provided to Parent prior in accordance with their terms and, as applicable, the Stock Plans in effect as of the Capitalization Time or (3) pursuant to the date of this Agreement, ESPP in accordance with its terms and subject to Section 4.3(g));
(viii) make any loans, advances, guarantees or capital contributions to or investments in any Person in excess of $200,000 in the aggregate (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of between the Company and other than any of its Wholly Owned Subsidiaries in the Company or any direct or indirect wholly owned Subsidiary Ordinary Course of the CompanyBusiness);
(viiix) declare, set aside, establish a record date for accrue, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, otherwise with respect to any of its capital stock or other equity interests (and for the avoidance of doubt, excluding the Company Notes) of the Company or its Subsidiaries, except for (A) dividends paid by any direct or indirect wholly owned Wholly Owned Subsidiary to the Company or to any other direct Wholly Owned Subsidiary of the Company or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid payable to the Company holders of Preferred Shares, payable in cash or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary Preferred Shares, in accordance with the terms of the Company) or enter into any agreement with respect to the voting of its capital stockPreferred Shares;
(viiix) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquireacquire (or offer to do any of the foregoing), directly or indirectly, any of its capital stock stock, other equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stockstock or other equity interests, except from other than (A) holders the withholding of Company Options in full or partial Common Shares to satisfy the payment of the exercise thereof and/or any applicable Taxes payable by such holder price on the exercise of a Company Option or withholding Tax obligations upon the exercise, vesting or settlement of Company Equity Awards outstanding as of the date of this Agreement, in each case, in accordance with their terms and, as applicable, the Stock Plans as in effect as of the Capitalization Time and (B) pursuant to an exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company Capped Call Transactions in accordance with applicable agreements providing for the repurchase of shares upon such terminationtheir terms;
(ixxi) incur or assume any indebtedness for borrowed money, guarantee any indebtedness for borrowed money or guarantee enter into a “keep well” or similar arrangement in respect of indebtedness for borrowed money except for any such indebtedness of another Person, not to exceed $2.5 million individually or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries $5 million in the ordinary course consistent with past practiceaggregate;
(xxii) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewithincur, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contractpayment of, or cancelaccrual or commitment for, modify capital expenditures, or waive any debtsobligations or liabilities in connection therewith -51- except as contemplated by or reasonably related to, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) and which shall not exceed 107.5% of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or proceduresaggregate amounts set forth in, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on capital budget set forth in Section 6.1(a)(xvii7.1(a)(xii) of the Company Disclosure Schedule, ;
(Axiii) terminate, enter into, terminate or materially amend or renew (or communicate any intention Contract pursuant to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of which the Company or any of its Subsidiaries pertaining purchase from a third party service provider Software (“Third Party IT Contracts”) (other than in the Ordinary Course of Business with respect to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any Contract that involve aggregate annual payments of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.less than $300,000);
Appears in 2 contracts
Sources: Merger Agreement (Voya Financial, Inc.), Merger Agreement (Voya Financial, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after From the date of this Agreement hereof and prior to until the Effective Time and except (A) as otherwise expressly required by or earlier termination of this Agreement, except (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (Dw) as set forth in Section 6.1(a) of the Company Disclosure ScheduleLetter, (x) as otherwise expressly contemplated or permitted by this Agreement, (y) to the extent consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned; provided, however, that Parent shall have the right to withhold its consent for any reason or no reason if its consent is sought for purposes of clauses (i), (ii), (iii), (iv), (v), (xi), (xii), (xiii), (xv) or (xvi) or clause (xviii) (but only as it relates to any of the foregoing clauses) or (z) as required by applicable Law, the Company shall, and shall cause its Subsidiaries to, cause the business of it and its Subsidiaries shall to be conducted in the ordinary course and usual course andit shall, and shall cause its Subsidiaries, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its their business organizations and real property intact and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates (it being understood and keep available agreed that adverse changes in the services Company’s business, real property and existing relations and goodwill that result from or are caused by the announcement of the transaction, the identity of Parent or its affiliates and the plans of Parent with respect to operating the Company that have been disclosed to the public or to employees, suppliers, customers, distributors or business associates of the Company shall not constitute, or be taken into account in determining whether there has been, a breach by the Company of its and its Subsidiaries’ present employees and agentsobligation under this Section 6.1). Without limiting Notwithstanding the generality of, and in furtherance of, of the foregoing, from and subject to the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as exceptions set forth in Section 6.1(aclauses (w), (x), (y) and (z) of the Company Disclosure Scheduleimmediately preceding sentence, the Company will not shall not, and will not permit shall cause its Subsidiaries not to:
(i) adopt or propose any change in its amend the certificate of incorporation incorporation, bylaws or by-laws or other applicable comparable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets documents of the Company or any of its Subsidiaries;
(viii) issue, sell, pledge, dispose of or encumber any shares of capital stock, voting securities, partnership interest, membership interest or similar interest or any option, warrant, right or security convertible, exchangeable or exercisable therefor or other than pursuant to instrument or right the terms value of Contracts in effect as which is based on any of the date foregoing (collectively, “Equity Interests”) of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct of its Subsidiaries (including any Company Stock Options or indirect wholly owned Subsidiary Company Restricted Stock), other than (A) issuance of Shares pursuant to Company Stock Options outstanding on the date hereof under the Company Plans, (B) issuance or disposition of any Equity Interest of any of the Company)’s Subsidiaries to the Company or any other of its Subsidiaries, or (C) issuances of securities in connection with grants or awards of stock-based compensation made in accordance with Section 6.1(a)(vii) hereof;
(viiiii) split, combine, subdivide or reclassify any of its Equity Interests;
(iv) declare, set aside, make establish a record date for, or pay any dividend dividends on or make any other distribution, distributions (whether payable in cash, stock, property or otherwise, with a combination thereof) in respect to of any of its capital stock (except for (A) Equity Interests, other than any dividends paid by or distributions from any direct or indirect wholly wholly-owned Subsidiary of the Company to the Company or to another such Subsidiary of the Company;
(v) repurchase, redeem or otherwise acquire any shares of its Equity Interests, except for redemptions, purchases or acquisitions pursuant to the exercise or settlement of Company Stock Options, the vesting of Company Restricted Stock, employee severance, retention, termination, change of control and other direct contractual rights existing on the date hereof on the terms in effect on the date hereof, including with respect to Company Restricted Stock;
(vi) incur or indirect wholly owned Subsidiary modify in material respects the terms of, any indebtedness for borrowed money or regular quarterly dividends issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person for borrowed money, except for (i) indebtedness for borrowed money in a principal amount not to exceed $0.10 per Share250,000, declared and paid consistent with prior timing(ii) letters of credit issued in the ordinary course of business, and or (Biii) indebtedness owed by any cash dividends paid wholly-owned Subsidiary of the Company to the Company or one of its wholly-owned Subsidiaries by a any other wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viiivii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, (i) except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the by applicable Stock Plans and award agreements or Law, (B) former to the extent permitted by written agreements existing on the date of this Agreement that have been disclosed or made available to Parent, and/or (C) as listed in Section 6.1(a)(vii) of the Company Disclosure Letter, grant or announce any stock option, equity or incentive awards or increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security service providers of the Company or any of its Subsidiaries, (ii) hire any new employees (other than clerical employees), (iii) except to the extent required by applicable Law or required by written agreements existing on the date of this Agreement that have been disclosed or made available to Parent, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other employee benefit not required by any existing Company Plan or other agreement or arrangement in effect on the date of this Agreement to any employee, officer, director or other service provider of the Company or any of its Subsidiaries, whether past or present, or take any action to accelerate vesting of any right to compensation or benefits, (iv) except to the extent required by applicable Law or permitted by written agreements existing on the date of this Agreement that have been disclosed or made available to Parent, enter into or amend any Contracts of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for inter-company borrowings solely among the Company agreements for newly hired employees and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries retirement agreements entered into in the ordinary course of business, or (v) except as required to ensure that any Company Plan is not then out of compliance with applicable Law, enter into or adopt any new or renew, amend or terminate any existing Company Plan or benefit arrangement if such adoption, renewal, amendment or termination would result in a material cost to the Company or any of its Subsidiaries;
(viii) other than in the ordinary course of business (so long as any action taken in the ordinary course of business is consistent with past practicepractice and would not have the effect of materially increasing the Tax liability of the Company or any of its Subsidiaries or materially decreasing any Tax attribute of the Company or any of its Subsidiaries), make or change any material Tax election, adopt or change the Company’s or such Subsidiary of the Company’s method of accounting for Tax purposes, file any material amended Tax Return, enter into any material closing agreement, settle any material Tax claim or assessment relating to the Company or any of its Subsidiaries, surrender any right to claim a material refund of Taxes, consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action relating to the filing of any Tax Return or the payment of any Tax;
(ix) except as required by GAAP, the SEC or applicable Law, change any material accounting policies, principles or practices;
(x) except as set forth in the capital budgets set forth in contemplated or permitted by this Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith6.1, make or authorize any capital expenditure;
(xi) (Ai) enter into or assume any Contract that would have been a Company Material Contract had it been entered into prior to this Agreement the date hereof, or (ii) terminate, materially amend or waive any material rights under any Company Material Contract or any Contract that would have been a Company Material Contract had it been entered into prior to the date hereof excluding any termination upon expiration of a term in accordance with the terms of such Company Material Contract; provided in each case that the Company and any of its Subsidiaries shall be permitted to renew or replace any Company Material Contract with one or more Contracts on substantially similar or better terms;
(xi) (A) settle or compromise any action, litigation, claim or arbitration, or (B) amendimplement any settlement or compromise of any action, modify litigation, claim or terminate any Material Contract, arbitration other than in accordance with the expressed terms of such settlement or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference compromise as in clause (A) effect as of the definition date hereof; provided, however, that the Company shall not breach any material term of Material Contract any settlement or compromise and shall be changed not make any material discretionary decisions or take any material discretionary actions relating to $5,000,000; the monetary reference in clause (B) implementation of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000such settlement or compromise;
(xii) make acquire (including by merger, consolidation, or acquisition of stock or assets) any material changes with respect to accounting policies or procedures, except as required by changes interest in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company Person or any Subsidiary does not exceed $2,000,000 (division thereof or $15,000,000 in the aggregate for all such settlements) or (B) commenceany assets thereof, joinexcluding acquisitions of supplies, make an appeal with respect to a lawsuitparts, actionfuel, claim or similar proceeding materials and other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products inventory in the ordinary course of business and sales of obsolete assetsconsistent with past practice, or make any loan, advance or capital contribution to, or investment in, any Person or any division thereof, other than (i) any such acquisitions, loans, advances, contributions or investments that are for consideration not in excess of $100,000 individually or $250,000 for all such transactions by the Company and its Subsidiaries in the aggregate, (ii) any such acquisitions, loans, advances, contributions or investments made pursuant to Contracts in effect prior to any Contract entered into after the date of hereof in accordance with this AgreementSection 6.1 or (iii) loans, advances or capital contributions to or among the Company and wholly-owned Company Subsidiaries;
(xvixiii) sell, transfer, lease, license, assign, abandon, fail to maintain or otherwise dispose of (including, by merger, consolidation, or sale of stock or assets) any entity, business, assets (including material Intellectual Property), rights or properties of the Company or any of its Subsidiaries having a current value in excess of $100,000 individually, or $250,000 for all such transactions by the Company and its Subsidiaries in the aggregate, or otherwise material to the business of the Company or any of its Subsidiaries, other than (i) sales, transfers, leases, licenses assignments and other dispositions of inventory or other assets, including real property, in the ordinary course of businessbusiness consistent with past practice, (ii) pursuant to Contracts entered into after the date hereof in accordance with this Section 6.1, (iii) dispositions of obsolete or worthless assets or properties or (iv) transactions solely among the Company and/or any Company Subsidiaries;
(xiv) authorize or make any capital expenditure, other than (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute capital expenditure contemplated by the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed business plan set forth on Section 6.1(a)(xvii6.1(a)(xiv) of the Company Disclosure Schedule, (A) terminate, enter into, amend Letter or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase capital expenditures that are not, in any manner the compensationaggregate, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that 250,000 above the capital expenditures provided for in such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Companybusiness plan;
(xviiixv) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of such party or any Company Subsidiaries;
(xvi) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger Offer set forth in Article VII Exhibit A not being satisfied;
(xvii) enter into any Contract that restricts the ability of the Company or any or its Subsidiaries, taken as a whole, to compete, in any material respects, with any business or in any geographic area, or to solicit customers, except for use or radius restrictions that may be contained in Contracts entered into in the ordinary course of business; or
(xixxviii) agreeknowingly commit, authorize or commit agree to do take any of the foregoingforegoing actions or enter into any letter of intent (binding or non binding) or similar agreement or arrangement with respect to any of the foregoing actions.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company Neither Parent nor Merger Sub shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not knowingly take or permit any of its Subsidiaries their affiliates to take any action that is reasonably likely to prevent, interfere with prevent or delay the consummation of the Offer, the Merger or result the other transactions contemplated by this Agreement.
(c) Nothing contained in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time, and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations. Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
(d) The Company shall promptly give Parent written notice upon obtaining Knowledge of any material event, development or occurrence that would reasonably be expected to give rise to a failure of the conditions to the Merger condition precedent set forth in Article VII not being satisfied.clause (A) of paragraph (iii) of Exhibit A.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time and Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (CB) as Parent may consent to in writing otherwise required by this Agreement, or by the terms of any Contract, (such consent not to be unreasonably withheld, delayed or conditioned) or (DC) as set forth in Section 6.1(a) of the Company Disclosure ScheduleLetter or (D) as Parent may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), it and its Subsidiaries shall use their respective reasonable best efforts to conduct the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its their business organizations intact and maintain existing all of their Licenses and relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturerssubscribers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agentsassociates. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B1) as required by applicable Laws, (C2) as Parent may consent to in writing otherwise expressly required by this Agreement or by the terms of any Contract, (such consent not to be unreasonably withheld, delayed or conditioned) or (D3) as set forth in Section 6.1(a) of the Company Disclosure ScheduleLetter, (4) as Parent may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed) or (5) for intercompany transactions between or among the Company and any of its Subsidiaries in the ordinary course of business, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws bylaws or other applicable governing instrumentsinstruments (whether by merger, consolidation or otherwise);
(ii) merge or consolidate acquire assets (excluding pursuant to capital expenditures) from any other Person (x) with respect to fiscal year 2015, in excess of any remaining amounts budgeted in the Company Board approved budget for fiscal year 2015; (y) with respect to fiscal year 2016, in excess of the aggregate purchase price of assets (excluding pursuant to capital expenditures and excluding the acquisition of product lines, businesses or interests therein) acquired during fiscal year 2015; or (z) that constitute a product line, business or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesinterest therein;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly wholly-owned Subsidiary of the Company to the Company or another wholly wholly-owned Subsidiary or the issuance of Shares pursuant to in respect of Company Options, Company Restricted Shares or the Convertible Senior Notes Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans as in effect on the date of this Agreement) ), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(viv) create or incur any Lien (other than in connection with capital leases entered into in the ordinary course of business) material to the Company or any of its Subsidiaries not incurred in the ordinary course of business on any assets of the Company or any of its SubsidiariesSubsidiaries having a value in excess of $10 million in the aggregate;
(viv) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly wholly-owned Subsidiary of the Company)) in excess of $10 million in the aggregate;
(viivi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly wholly-owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the CompanySubsidiary) or enter into any agreement with respect to the voting of its capital stock;
(viiivii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from stock (A) holders other than the withholding of Shares to satisfy withholding Tax obligations and net share settlements to cover the exercise price of stock options in respect of Company Options in full or partial payment Equity Awards outstanding as of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise date of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company this Agreement in accordance with applicable agreements providing for their terms and, as applicable, the repurchase Stock Plans as in effect on the date of shares upon such terminationthis Agreement);
(ixviii) incur or assume any indebtedness for borrowed money or guarantee guarantee, indemnify, endorse or otherwise as an accommodation become responsible for any such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(ix) incur any capital expenditures, except (x) except to the extent reasonably necessary to avoid a material business interruption as set forth a result of any act of God, war, terrorism, earthquake, fire, hurricane, storm, flood, civil disturbance, explosion, partial or entire failure of utilities or information technology systems, or any other similar cause not reasonably within the control of the Company or its Subsidiaries or (y) in any six month period, commencing October 1, 2015, the capital budgets set forth Company may make aggregate Qualifying Capital Expenditures (as defined in Section 6.1(a)(xSchedule 6.1(a)(ix)) up to the Capex Cap (as defined in Schedule 6.1(a)(ix) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditureLetter) applicable to such six month period;
(xi) (Ax) enter into any Contract that would have been a Material Contract (substituting $10 million for any dollar thresholds set forth in the definition of “Material Contracts”) had it been entered into prior to the date this Agreement or (B) amendamend or modify, modify or terminate elect to terminate, in any material respect adversely to the Company or any of its Subsidiaries, any such Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes other than extensions of such Material Contracts in effect on the day of this Section 6.1Agreement for a period of up to one (1) year on terms and conditions at least as favorable to the Company and its Subsidiaries, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000aggregate, as the existing terms and conditions;
(xiixi) make commence, settle, compromise or discontinue any material changes with respect to accounting policies action, suit, claim, litigation, audit, investigation, arbitration, proceeding or proceduresother controversy, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle including any stockholder litigation or dispute against the Company or any of its officers or directors that relates to the Merger and the Transactions involving or against the Company or any of its Subsidiaries (“Merger Litigation”), other proceedings before a Governmental Entity except where the settlement is limited solely to than (I1) the release of claims and (II) the monetary payment settlements that require payments by the Company or any Subsidiary does of its Subsidiaries, net of insurance recoverables and any applicable reserves, not exceed in excess of $2,000,000 (or $15,000,000 10 million in the aggregate for all such settlementsand (2) claims or (B) commence, join, make an appeal with respect litigation to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection extent of bills, (II) the applicable reserves set forth in such cases where the Company in good faith determines that failure to commence suit would result Reports, that, in the material impairment case of a valuable aspect each of its businessclauses (i) and (ii), provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreementare not Merger Litigation;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xvxii) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales (A) for the sale, lease or license of Company Products the Company’s products, services or equipment to its customers in the ordinary course of business and consistent with past practice, (B) sales of obsolete assets, (C) except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $10 million in the aggregate and (D) other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvixiii) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required pursuant to the terms of any Company Plan in effect as of the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applicationsdate hereof, or as otherwise required by applicable Laws, take any of the director, officer or employee or employee benefit and compensation related actions set forth on Schedule 6.1(a)(xiii)(A) through (D) of the Company Disclosure Letter;
(xiv) take any of the employee related actions set forth in Schedule 6.1(a)(xiv) of the Company Disclosure Letter;
(xv) change an annual accounting period or adopt or change any of its accounting methods, principles or practices, in each case, including for Tax purposes (including with respect to reserves), except as required by applicable Law or GAAP;
(xvi) terminate, cancel or amend any insurance policy maintained by it covering the Company or any of its Subsidiaries or their respective properties that is not replaced by a comparable or greater amount of insurance coverage, or fail to exercise a right of removal or extension under use commercially reasonable efforts to maintain in full force and effect any material Owned Intellectual Propertyinsurance policy in a form and amount consistent with past practice; provided that the Company may agree to any increases or decreases in deductibles, policy amounts or coverage amounts in its reasonable discretion;
(xvii) except enter into any new line of business that is unrelated to make changes that are required any line of business conducted by applicable Law the Company or to satisfy contractual obligations existing any of its Subsidiaries as of the date hereof pursuant of this Agreement;
(xviii) amend or modify in any respect materially adverse to Contracts the Company, any material Franchise or Benefit Plans any material License issued by any Governmental Entity and held by the Company or any of its Subsidiaries;
(xix) fail to maintain all material Franchises and all material Licenses held by the Company or any of its Subsidiaries in full force and effect, except for such failure as would not, and would not reasonably be expected to, materially and adversely impact the Company and its Subsidiaries, taken as a whole;
(xx) fail to make any required contributions to the federal Universal Service Fund or any state equivalent thereto (other than any contributions that are not yet due and payable or the validity or amount of which are listed on Section 6.1(a)(xviiis being contested in good faith);
(xxi) make any payment that is a Restricted Payment (as defined in the Company’s indentures under which its existing indebtedness has been issued) under any existing indebtedness of the Company Disclosure Schedule, (Abut not a Restricted Payment by any Subsidiary of the Company to the Company or another Subsidiary of the Company that is not otherwise prohibited by the terms of such indebtedness); or
(xxii) terminate, enter into, amend or renew (modify any Contract with any Affiliate of the Company that is not a Subsidiary of the Company, or communicate any intention to take such action) any Benefit Planother Contract that would be a “Related Party Transaction” as defined under the Company’s Related Party Transaction Approval Policy, other than routine amendments to qualified retirement plans extensions of existing Contracts involving revenues or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase expenses in any manner fiscal year of less than $120,000 and only to the compensation, bonus, pension, welfare, fringe extent such Contract can be terminated at will without any cost or penalty at Closing; provided that Contracts for access to office space or other benefitsincidental matters need only be terminable at any time after thirty (30) days after the Closing.
(xxiii) make or change any material Tax election, severance file any material amended Tax Return, enter into any closing agreement with respect to a material amount of Taxes, settle any material Tax claim or termination pay of any of the current or former directors, officers, employees or consultants of assessment relating to the Company or any of its Subsidiaries, (C) pay surrender any bonus right to claim a refund of a material amount of Taxes, or incentive compensation under consent to any Benefit Plan in excess extension or waiver of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect limitation period applicable to any equity-based compensation material Tax claim or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend assessment relating to the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer Company or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedits Subsidiaries; or
(xixxxiv) agree, authorize or commit to do any of the foregoing. provided, however, that nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, any right to control or direct the operations of the Company and its Subsidiaries prior to the Effective Time. Prior to the Effective Time, each of the Company and Parent shall exercise, consistent with the other terms and conditions of this Agreement, complete control and supervision over their respective businesses, and notwithstanding anything to the contrary in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 6.1 or elsewhere in this Agreement to the extent the requirement of such consent would reasonably be expected to be a violation of applicable Laws.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay prevent the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedMerger.
Appears in 1 contract
Sources: Merger Agreement (CSC Holdings LLC)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the Shareholders agree during the period commencing on the date of this Agreement and prior to through the Effective Time and Closing Date or termination of the Agreement under Article VIII (except (A) as otherwise expressly required contemplated by this Agreement, (B) as required by applicable Lawsincluding any Exhibits and Schedules hereto, (C) as Parent may or to the extent that Purchaser shall otherwise consent to in writing (such writing, which consent shall not to be unreasonably withheld), delayed or conditionedthat as to the Company:
(1) or (D) as set forth in Section 6.1(a) of The Company shall carry on the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted Business in the ordinary Ordinary Course of Business and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective all commercially reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its present business organizations and maintain existing relations and goodwill with Governmental Entitiesorganization, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its present officers and its Subsidiaries’ present employees and agents. Without limiting the generality ofpreserve its relationships with customers, suppliers and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except others having business dealings with it.
(A2) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the The Company Disclosure Schedule, the Company will shall not and will shall not permit its Subsidiaries propose to:
: (i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(viia) declare, set aside, make aside or pay any dividend dividend, on, or make other distributiondistributions in respect of, payable in cash, stock, property or otherwise, with respect to any of its capital stock stock, except for: (except for i) those S Corporation distributions necessary to cover applicable pass-through taxes on the Company’s net income prior to Closing; or (Aii) dividends paid by any direct or indirect wholly owned Subsidiary such distributions of cash prior to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per ShareClosing, declared and paid consistent with prior timing, and (B) any cash dividends paid to provided the Company retains sufficient Working Capital in amounts at least equal to or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of greater than the CompanyMinimum Working Capital Amount; (b) purchase or enter into redeem any agreement with respect to the voting shares of its capital stock;
; (viiic) reclassify, split, combine, subdivide combine or redeem, purchase or otherwise acquire, directly or indirectly, reclassify any of its capital stock or issue, authorize or propose the issuance of any other securities convertible in respect of, in lieu of or exchangeable into in substitution for shares of its capital stock; (d) redeem, repurchase or exercisable for otherwise acquire any shares of its capital stock; or (e) otherwise change its capitalization.
(3) Except as contemplated by this Agreement, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options shall not sell, issue, pledge, authorize or propose the sale or issuance of, pledge or purchase or propose the purchase of, any shares of its capital stock of any class or securities convertible into, or rights, warrants or options to acquire, any such shares or other convertible securities.
(4) The Company SARs shall not amend its articles of incorporation or the lapse its bylaws.
(5) The Company shall not sell, lease, pledge, encumber or otherwise dispose of restriction on Company Restricted Shares or agree to sell, lease, pledge, encumber or otherwise dispose of, any of its assets that are material to the extent required Company’s Business or permitted under any other assets except in the terms Ordinary Course of Business and in no event amounting in the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;aggregate to more than $25,000.
(ix6) The Company shall not incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or guarantee any debt securities of others other than in the Ordinary Course of Business consistent with prior practice and in no event amounting in the aggregate to more than $25,000.
(7) The Company shall not make any capital expenditures in excess of $25,000 individually or $100,000 in the aggregate without the Purchaser’s prior written consent.
(8) The Company shall maintain the levels of materials and supplies used in the Business consistent with Company’s past practice for similar periods of the calendar year.
(9) The Company shall not accelerate the collection of its Subsidiariesaccounts receivable or delay the payment of its accounts payable or other liabilities, except for inter-company borrowings solely among in each case arising out of the Company and its wholly-owned Subsidiaries or among operation of the Company’s wholly-owned Subsidiaries Business in the ordinary course consistent a manner which would be inconsistent with past practice;.
(x10) except The Company shall not adopt or amend in any material respect any collective bargaining agreement or Employee Benefit Plan; provided, however, the Company shall arrange to terminate its 401K Plan, if any, as set forth of the Closing, with the understanding that all covered employee funds will be transferred to a 401K Plan maintained by Purchaser or Radiant.
(11) Except for (a) payment of bonuses described in the capital budgets set forth Shareholders’ Schedules and (b) wage increases or raises to non-officer or director employees in Section 6.1(a)(x) the Ordinary Course of Business, the Company Disclosure Schedule and consistent therewithshall not grant to any employees any increase in compensation (except for the Employment Agreements) or in severance or termination pay, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate employment agreement with any Material Contractemployee, or cancelgrant, modify pay or waive accrue to an employee, any debtsbonus or incentive compensation.
(12) The Company shall not acquire (by merger, rights consolidation or claims thereunder; for purposes acquisition of this Section 6.1stock or assets or otherwise) any corporation, the monetary reference in clause (A) partnership or other business organization or subdivision thereof, or make any investment by either purchase of the definition of Material Contract shall be changed stock or securities, contributions to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference capital, property transfer or, except in the definition Ordinary Course of Personal Property Leases shall be changed to $2,500,000;Business, purchase of any property or assets, of any other individual or entity.
(xii13) The Company shall not make any material changes with respect to accounting policies Tax election or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability.
(14) The Company will duly and timely file all reports or Tax Returns required to be filed with federal, makestate, change local and foreign authorities and will promptly pay all Tax, assessments and governmental charges levied or revoke any material Tax election except to the extent consistent with past practice assessed upon it or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;properties (unless contesting such in good faith and adequate provision has been made therefor).
(xv15) transferThe Company shall not waive, sellrelease, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon grant or allow to lapse transfer any rights of material value or expire modify or otherwise dispose of change in any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of material respect any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) Material Contract other than in the ordinary course Ordinary Course of business, Business.
(A16) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of The Company shall not take any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applicationsaction, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action action, that is not in the Ordinary Course of Business or that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to representations and warranties of the Merger Company and the Shareholders set forth in Article VII not being satisfied; or
(xix) agree, authorize or commit to do this Agreement becoming untrue in any of the foregoingmaterial respect.
(b17) Prior The Company shall maintain in full force and effect all insurance coverages for its properties and assets substantially comparable to making any formal written communications or group oral presentations to coverages existing on the directors, officers or employees date hereof.
(18) Within thirty (30) days of the Company or any close of its Subsidiaries pertaining to compensation or benefit matters that are affected by each month after the transactions contemplated by execution of this Agreement, the Company shall provide Parent with make available to the Purchaser a copy preliminary unaudited balance sheet and income statement for the Company disclosing the financial position and results of operations of the intended communication, Parent shall have a reasonable period of time Company for the preceding month and year to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communicationdate.
(c19) Subject to Section 6.5, Parent The Company shall not take enter into, or permit modify, any of its Subsidiaries to take contract with a Related Person.
(20) The Company will pay off and close the Company’s credit facility with ▇▇▇▇▇ Fargo simultaneously in connection with Closing; provided, however, that any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedUCC-3 termination statements related thereto will be delivered post-Closing.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after From the date of this Agreement and prior to until the Effective Time and Closing or the earlier termination of this Agreement in accordance with its terms, except (Aw) as set forth in Section 5.1(a) of the Disclosure Schedules, (x) as otherwise expressly contemplated or required by this AgreementAgreement (including compliance with Section 5.21), (By) as required by applicable Laws, (C) as Parent may consent consented to in writing by Buyer (such which consent shall not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (Bz) as required by applicable LawsLaw, Order, a Governmental Entity or by any Company Plan in effect as of the date of this Agreement, Seller shall cause the Company to, and the Company shall, and Seller and the Company shall cause the Company’s Subsidiaries to (C1) as Parent may consent conduct their respective businesses in the ordinary course of business consistent with past practice (it being understood that compliance by the Company or its applicable Subsidiary with the terms of a Company Material Contract listed in Section 2.17(a) of the Disclosure Schedules and made available to in writing (such consent Buyer prior to the date hereof shall not constitute a failure to be unreasonably withheld, delayed or conditioned) or (D) as comply with the obligations set forth in Section 6.1(athis clause (1)) and (2) use reasonable best efforts to preserve intact the present business organizations and lines of businesses of the Company Disclosure Scheduleand its Subsidiaries in all material respects and maintain material relationships with suppliers, distributors and customers and others having material business dealings with the Company and its Subsidiaries. Notwithstanding the generality of the foregoing, and subject to the immediately preceding sentence (including the exceptions set forth in clauses (w), (x), (y) and (z) thereof), the Company will shall not (and will not permit shall cause its Subsidiaries not to:):
(i) adopt or propose any change amend their respective Governing Documents as in its certificate effect on the date of incorporation or by-laws or other applicable governing instrumentsthis Agreement;
(ii) acquire any Equity Interests in, or assets, rights or properties of, any business or division (whether by merger, consolidation or otherwise) from any other Person (other than acquisitions of assets, properties or rights (A) from any Subsidiary of the Company or (B) in the ordinary course of business of the Company and its Subsidiaries consistent with past practice, but in each case excluding any acquisition of Equity Interests);
(iii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate (other than the disposition of obsolete or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire worn out assets outside of in the ordinary course of business from any other Person consistent with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreementpast practice);
(iv) issue, sell, pledge, dispose ofof or encumber any of their respective Equity Interests (or rights or options with respect to Equity Interests), grant, transfer, encumber, except for issuances or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, dispositions of any shares of capital stock of any of the Company’s Subsidiaries solely to the Company or any other of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiesSubsidiaries;
(v) create split, combine, subdivide or incur reclassify any Lien of their respective Equity Interests;
(vi) sell, assign, transfer, dispose of or encumber any assets, rights or properties (including Intellectual Property) with a fair market value in excess of $5,000,000 individually or $10,000,000 in the aggregate, except in connection with sales of inventory or the disposition of obsolete or worn out assets in the ordinary course of business consistent with past practice;
(vii) cancel, fail to renew, fail to continue to prosecute, fail to protect or defend, abandon or allow to lapse any registered or applied-for Company IP, other than any of the foregoing actions that is both (A) in the ordinary course of business consistent with past practice and (B) concerns Company IP determined by the Company in its reasonable judgment to no longer be material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(viviii) permit any Leakage other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct Permitted Leakage or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends (B) Leakage in an aggregate amount not to exceed $0.10 per Share9,000,000 and which, declared and paid consistent with prior timing, and in the case of this clause (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by ), is taken into account as a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options reduction in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationPurchase Price at Closing;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell Indebtedness (including any debt securities or warrants or other rights to acquire any debt security borrowings under existing revolving credit facilities of the Company or any of its Subsidiaries) in excess of $5,000,000 individually or $10,000,000 in the aggregate (other than any accounts payables and accounts receivables solely between the Company and/or one of its Subsidiaries incurred in the ordinary course of business and consistent with past practice) or cancel, except for inter-company borrowings solely release, assign, retire, settle or modify any Indebtedness existing between or among any of the Company and its wholly-owned Subsidiaries (other than cancellations, releases, assignments, retirements, settlements or among the Company’s wholly-owned Subsidiaries modifications made in the ordinary course of business and consistent with past practice of any accounts payables and accounts receivables solely between the Company and/or one of its Subsidiaries incurred in the ordinary course of business and consistent with past practice), provided, that it is agreed that accounts payables and accounts receivables do not include loans or advances of funds;
(x) except as set forth subject any of their respective material properties or assets (including material Intellectual Property) to any Lien, in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditureeach case other than Permitted Liens;
(xi) (A) enter into increase or announce any Contract increase in the compensation or benefits payable or to become payable to any Company Employee or any Company Independent Contractor (other than (i) increases in annual base salaries, wage rates, annual bonus targets or service or consulting fees made in the ordinary course of business consistent with past practice, which such increases, in the case of any Restricted Employee, shall not in the aggregate be more than a de minimis amount in the context of such Restricted Employee’s compensation as of the date hereof, or (ii) increases in benefits with respect to Company Employees that would have been are not Restricted Employees that are made in the ordinary course of business consistent with past practice and do not increase costs or obligations of the Company or any of its Subsidiaries by more than a Material Contract had it been entered into prior to this Agreement de minimis amount or respect), (B) amendaccelerate the time of vesting, modify funding or terminate payment of any Material Contractcompensation or benefits to any Company Employee or Company Independent Contractor, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed make any long-term incentive awards (whether settled in cash, equity or other property) to $2,500,000; the monetary reference in clause any Company Employee or Company Independent Contractor, (D) grant any new or additional entitlement to or pay any severance or termination pay to any Company Employee or Company Independent Contractor (other than payment of severance or termination pay in the ordinary course of business consistent with past practice that is (i) subject to the applicable recipient executing and not revoking a general release and waiver of claims in favor of the definition Company and its Subsidiaries and (ii) paid to any Company Employee who is not a Restricted Employee or any Company Independent Contractor) or, (E) grant to any Company Employee or Company Independent Contractor any right to a retention or transaction bonus (other than any such amount which, together with the employer portion of Material Contract shall be changed to $2,500,000; Taxes thereon, is treated as a Transaction Expense and the monetary reference which is included in the definition Closing Statement and reduces the Closing Purchase Price hereunder at the Closing) or (F) grant to any Company Employee or Company Independent Contractor any right to reimbursement, indemnification or payment for any Taxes, including any Taxes incurred under Section 409A or 4999 of Personal Property Leases shall be changed to $2,500,000the Code;
(xii) make establish, adopt, enter into, materially amend or terminate any material changes Company Plan or any plan, program, policy, agreement or other arrangement that would be a Company Plan if it were in existence as of the date of this Agreement (other than to replace or amend any Company Plan or any plan, program, policy, agreement or other arrangement that would be a Company Plan if it were in existence as of the date of this Agreement if the cost to the Company or its Subsidiaries thereunder is not materially increased); provided, that the Company and its Subsidiaries may enter into or amend (A) employment arrangements with Company Employees who are not and do not become Restricted Employees and (B) consulting arrangements with Company Independent Contractors or individual healthcare providers, in the case of each of clauses (A) and (B), in connection with promotions and new hires or engagements, so long as such employment and consulting arrangements, and such promotions, new hires and engagements, are in the ordinary course of business consistent with past practice; provided, further, that the Company or its applicable Subsidiary may establish and administer the annual bonus plan for the fiscal year ended December 31, 2020 as long as such plan (including in respect of its terms) is adopted in the ordinary course of business consistent with past practice (it being understood that such plan shall not incorporate the terms of any amendment to accounting policies or proceduresthe annual bonus plan in effect for the fiscal year ended December 31, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto2018);
(xiii) (A) settle terminate the employment of any litigation Company Employee who is a Restricted Employee as of the date of this Agreement other than for misconduct or other proceedings before acts constituting “cause” or due to expiration or non-renewal of a Governmental Entity except where the settlement is limited solely to Contract (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 other than, in the aggregate for all such settlementscase of a Restricted Employee who is not a Senior Restricted Employee, any termination that is in the ordinary course of business consistent with past practice) or (B) commence, join, make an appeal with respect hire any employee or promote any employee to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines any position that failure to commence suit would result in the material impairment of such employee being a valuable aspect of its business, provided, Restricted Employee (other than any such hiring or promotion to any position that the Company consults with Parent prior to the filing or taking of any action with respect to would result in such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products employee being a Restricted Employee who is not a Senior Restricted Employee that is in the ordinary course of business and sales consistent with past practice);
(xiv) (A) make, change, or rescind any material Tax election, (B) agree with any Taxing Authority to any material adjustment of obsolete assetsany Tax attribute, (C) file any material amended Tax Return, (D) enter into any closing agreement with respect to any material Tax or surrender any right to claim a material Tax refund, (E) agree to an extension or waiver of the statute of limitations with respect to a material amount of Taxes, (F) settle any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit, or controversy with a Taxing Authority relating to Taxes, (G) change in any material respect any method of accounting used for Tax purposes, or (H) take any action with the intention to or purpose of (i) accelerating the use of any material amount of loss, credit or other than pursuant to Contracts tax asset in effect a period prior to the date Closing or (ii) deferring the recognition of this Agreementany material amount of income, gain or any other Tax Liability to a period after the Closing;
(xv) except as required by GAAP, make any material changes to accounting, methods, practices, policies or principles of the Company or its Subsidiaries;
(xvi) other than in the ordinary course of businessbusiness consistent with past practice, (A1) transferenter into any Contract that would have been a Company Material Contract had it been entered into prior to the date of this Agreement or (2) terminate, sellamend, license, mortgage, pledge, encumber, divestaccelerate, cancel, abandon modify or allow waive any rights under any Company Material Contract in a manner materially adverse to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s Company and its Subsidiaries’ patent applications, excluding any termination upon expiration in accordance with the terms of such Company Material Contract; provided in each case that the Company and its Subsidiaries shall be permitted to extend, renew or (D) fail to exercise a right of removal replace any Company Material Contract with one or extension under any more Contracts on substantially similar terms and consistent with past practice in all material Owned Intellectual Propertyrespects;
(xvii) except to make changes that are required for the capital expenditures contemplated by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Company capital expenditures budget set forth in Section 6.1(a)(xvii5.1(a)(xvii) of the Company Disclosure ScheduleSchedules, make, enter into any Contract providing for, or authorize any capital expenditure in excess of $5,000,000 individually or $20,000,000 in the aggregate;
(xviii) compromise, settle or agree to settle any Actions, or investigations (A) terminateinvolving amounts paid or payable by the Company or its Subsidiaries in excess of $500,000 individually or $5,000,000 in the aggregate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in that would impose any manner material non-monetary restrictions on the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants business of the Company or its Subsidiaries that would continue after the Closing;
(xix) make any change to its publicly-facing privacy policies or the operation or security of its material IT Assets, in each case, in any manner that is materially adverse to the business of the Company and its Subsidiaries;
(xx) cancel, release or assign any material Indebtedness owed by any Person to the Company or its Subsidiaries or any material claims held by the Company or any of its Subsidiaries against any such Person;
(xxi) enter into any Contract with Seller or any Affiliate of Seller (other than the Company or any of its Subsidiaries);
(xxii) enter into a new line of business or abandon or discontinue any existing line of business, in each case, which is material to the Company and its Subsidiaries, taken as a whole, or, in the case of entry into any new line of business, could reasonably be expected to have any of the effects described in clauses (Ci), (ii) pay or (iii) in Section 5.2(d)(iv);
(xxiii) create any bonus Subsidiary of the Company or incentive compensation any of its Subsidiaries;
(xxiv) commute, terminate or let lapse any Company Insurance Policy (unless such policy is not a Specified Insurance Policy and is replaced by a substantially comparable policy) or amend, cancel, modify or waive any rights under any Benefit Plan in excess of the amount earned based on actual performanceSpecified Insurance Policy;
(xxv) (A) sell, assign or otherwise transfer (Dexcept to a Subsidiary) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (EB) grant a license (except to a Subsidiary), release, immunity or covenant not to ▇▇▇ under or in respect of, or otherwise encumber, any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, material Company IP (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess the grant of $200,000, provided, that such new hire’s compensation and benefits are made non-exclusive licenses to customers in the ordinary course of business consistent with past practice practice, to the extent such licenses are necessary for the respective customer’s use or receipt of Company Products and subject to terms and conditions (including as to confidentiality) that are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedpast practice); or
(xixxxvi) agree, resolve, authorize or commit to do any of the foregoing.
(b) Nothing contained in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Closing. Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this AgreementClosing, the Company shall provide Parent exercise, consistent with a copy the terms and conditions of the intended communicationthis Agreement, Parent shall have a reasonable period of time to review complete control and comment on the communication (which comments shall not be unreasonably withheld or delayed), supervision over its and Parent and the Company shall cooperate in providing any such mutually agreeable communicationits Subsidiaries’ respective operations.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Sources: Stock Purchase Agreement (3m Co)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time (unless Parent shall otherwise consent in writing (any request for consent to be considered by Parent in good faith and responded to within one (1) Business Day) or except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (CLaw or with respect to the transactions and commitments contemplated by this Agreement and the Arrangement) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) that the business of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course course, and, to the extent consistent therewith, it the Company and each of its Subsidiaries shall use their its respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations organization intact and maintain its existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, licensors, licensees, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agentsassociates. Without limiting the generality of, and in furtherance of, of the foregoing, from the Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement until hereof and prior to the Effective Time, Time (unless Parent shall otherwise consent in writing (any request for consent to be considered by Parent in good faith and responded to within one (1) Business Day) or except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent Law or with respect to in writing (such consent not to be unreasonably withheld, delayed the transactions and commitments contemplated by this Agreement and the Arrangement or conditioned) or (D) as set forth unless disclosed in Section 6.1(a3.1(a) of the Company Disclosure ScheduleLetter), neither the Company will not and will not permit nor any of its Subsidiaries toshall:
(i) adopt (A) declare, set aside or propose pay any change dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its certificate of incorporation or by-laws shares or other applicable governing instruments;
equity interests, (iiB) merge split, combine or consolidate reclassify any of its shares or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for its shares or (C) purchase, redeem or otherwise acquire any of its shares or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities, except for purchases, redemptions or other acquisitions of its shares or other securities required under the terms of any plans, arrangements or Contracts existing on the date hereof between the Company or any of its Subsidiaries with and any other Persondirector, except for any such transactions among wholly owned Subsidiaries of the Companyofficer, employee or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets consultant of the Company or any of its Subsidiaries;
(viii) (A) issue, deliver, sell, grant, pledge, dispose of or otherwise encumber any of its shares, any other than pursuant voting securities or any securities convertible into, or any rights, warrants or options to the terms of Contracts in effect as of the date of this Agreement and provided acquire, any such shares or voting securities, or any rights, warrants or options to Parent prior to the date of this Agreement, make acquire any loans, advances, guarantees or capital contributions to or investments in any Person such convertible securities (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet issuance of Company Common Shares upon the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders exercise of Company Options outstanding on the date hereof or pursuant to Company RSUs outstanding on the date hereof, in full or partial payment of each case in accordance with their terms on the exercise thereof and/or date hereof without any applicable Taxes payable action by such holder upon exercise the Company to accelerate the vesting of the Company Options or Company SARs RSUs), or the lapse of restriction on Company Restricted Shares to the extent required any “phantom” stock, “phantom” stock rights, stock appreciation rights or permitted under the terms of the applicable Stock Plans and award agreements stock based performance units, or (B) former employees, directors or consultants following termination amend any term of their relationship with any outstanding security of the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationor its Subsidiaries;
(ixiii) adopt or propose any change to its Organizational Documents;
(iv) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, or by purchasing assets or stock of, or by any other manner, any Person or division, business or equity interest of any Person or (ii) any assets which, individually have a purchase price in excess of $15,000,000 or, in the aggregate, have a purchase price in excess of $15,000,000, except for capital expenditures (which are subject to paragraph (viii) below) and purchases of raw materials, supplies and other inventory items in the ordinary and usual course of business;
(v) other than products sold to customers in the ordinary and usual course of business (without limitation as to dollar amount) or otherwise in the ordinary and usual course of business and not in an aggregate amount of more than $5,000,000, transfer, lease, license, guarantee, sell, dispose of or subject to any Lien any other property or assets (including share capital of any of its Subsidiaries);
(vi) incur or modify any indebtedness for borrowed money or guarantee any such indebtedness of another Person, or issue or sell any debt securities or calls, options, warrants or other rights to acquire any debt security securities of the Company or any of its Subsidiaries, except for inter-company borrowings guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, other than (A) indebtedness existing solely among between the Company and its wholly-wholly owned Subsidiaries or among the Company’s wholly-between such wholly owned Subsidiaries or (B) indebtedness in an aggregate amount less than $2,500,000;
(vii) make any loan, advance, or capital contribution to or investment in any Person other than loans in the ordinary and usual course of business and advances or capital contributions to or investments in any wholly owned Subsidiary in the ordinary and usual course of business;
(viii) make or authorize or commit for any capital expenditures or any obligations or liabilities in respect thereof;
(ix) (A) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary and usual course of business or in accordance with their terms, of liabilities disclosed, reflected or reserved against in the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company Reports (for amounts not in excess of such reserves) or incurred since the date of such financial statements in the ordinary and usual course of business, (B) cancel any indebtedness, (C) waive or assign any claims or rights of substantial value or (D) except as permitted by Section 3.2, waive any benefits of, fail to enforce, or agree to modify in any respect, or consent to any matter with respect to which consent is required under (x) any standstill or similar agreements to which the Company or any of its Subsidiaries is a party or (y) other than in the ordinary and usual course of business consistent with past practice, any confidentiality or similar agreements to which the Company or any of its Subsidiaries is a party;
(x) except as set forth materially modify, materially amend or terminate any Company Material Contract, waive, release or assign any material rights or claims thereunder, or enter into any Contract (other than purchase orders in the capital budgets set forth ordinary and usual course of business), that if it had been entered in Section 6.1(a)(x) of prior to the date hereof, would be a Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditureMaterial Contract;
(xi) sell, transfer or out-license to any Person or otherwise extend, amend, modify, abandon, or make part of the public domain any rights to the material Intellectual Property Rights owned by the Company or its Subsidiaries, other than pursuant to (Ai) confidentiality agreements entered into in the ordinary and usual course of business containing customary terms that do not impose any obligations on the Company or its Subsidiaries other than those relating to the treatment of confidential information and (ii) any Contracts currently in place (that have been disclosed in writing to Parent prior to the date hereof) in accordance with their terms as of the date hereof;
(xii) enter into any Contract that both (A) either provides for aggregate payments to or receipt by the Company in excess of $2,500,000, relates to a material product or material Intellectual Property Rights of the Company or is otherwise material to the Company, and (B) contains any restriction on the ability of the Company or any of its Subsidiaries to assign its rights, interests or obligations thereunder, unless such restriction would have been a Material Contract had it been not preclude any assignment to Parent or any of its Subsidiaries following the consummation of the Arrangement;
(xiii) except as required to ensure that any Employee Plan is not then out of compliance with applicable Law or to comply with any Company Compensation and Benefit Plan entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of businesshereof, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminateadopt, enter into, terminate or amend any collective bargaining agreement or renew (or communicate any intention to take such action) any Benefit Employee Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, bonus or fringe or other benefitsbenefits of, or pay any bonus of any kind or amount whatsoever to, any current or former director, officer, employee or consultant, (C) pay any benefit or amount not required under any Employee Plan, (D) grant or pay any severance or termination pay or increase in any manner the severance or termination pay of any of the current or former directorsdirector, officersofficer, employees employee or consultants consultant of the Company or any of its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Planbonus, incentive, performance or other compensation plan or arrangement, or any Employee Plan (including the grant of Company Equity Awards, “phantom” stock, “phantom” stock rights, stock based or stock related awards, performance units or the removal of existing restrictions in any Employee Plan or awards made thereunder), (F) pay amend or modify any severance in excess of what is legally required under the terms of any Benefit Plan or applicable LawCompany Equity Awards, (G) take any action to fund or in any other way secure the payment of any amounts compensation or benefits under any Benefit employee plan, agreement, Contract or arrangement or Employee Plan, (H) take any action to accelerate the vesting or payment of any compensation or benefit under any Employee Plan or (I) materially change any assumptions actuarial or other assumption used to calculate funding obligations with respect to any Company Pension Plan or contribution obligations under change the manner in which contributions to any Benefit Plan, other than Company Pension Plan are made or the basis on which such contributions are determined;
(xiv) except as required by Canadian GAAP or, for purposes of any reconciliation to US GAAP, by US GAAP, make any change in accounting methods, principles or practices, or write up, write down or write off the book value of any assets, individually or in the aggregate;
(Ixv) hire make any executive officer material Tax election or settle or compromise any material liability for Taxes, change any Tax accounting period or any employee or consultant with maximum annual cash compensation opportunities in excess method of $200,000Tax accounting (except as required by applicable Law), providedfile any amended material Tax Return, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining closing agreement relating to any material Tax, surrender any right to claim a material Tax refund, or other agreement with a labor union, works council consent to any extension or similar organization or (K) terminate without cause the employment of any officer waiver of the Companystatute of limitations period applicable to any material Tax claim or assessment;
(xviiixvi) subject to Section 6.2adopt a plan of complete or partial liquidation, take any action dissolution, or omit to recapitalization or a plan of reorganization;
(xvii) take any action that is would, or that could reasonably likely to preventbe expected to, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII IV not being satisfied; or
(xixxviii) agree, authorize or commit enter into any agreement or otherwise make any commitment to do any of the foregoing.
(b) Prior Parent covenants and agrees as to making any formal written communications or group oral presentations itself and its Subsidiaries that, after the date hereof and prior to the directors, officers Effective Time (unless the Company shall otherwise consent in writing and except as otherwise required by applicable Law or employees as expressly set forth in this Agreement or the corresponding subsection of Section 3.1(b) of the Company or Parent Disclosure Letter), neither Parent nor any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.shall:
(ci) Subject to Section 6.5declare, Parent shall not take set aside or permit pay any dividends (other than intercompany dividends) on, or make any other distributions (whether in cash, stock or property) in respect of, any of its Subsidiaries capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock;
(ii) in the case of Parent only, adopt or propose any change to its Organizational Documents;
(iii) adopt a plan of complete or partial liquidation, dissolution, or recapitalization or a plan of reorganization;
(iv) take any action that is would, or that could reasonably likely to preventbe expected to, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII IV not being satisfied; or
(v) authorize or enter into any agreement or otherwise make any commitment to do any of the foregoing.
Appears in 1 contract
Interim Operations. (a) The Company Yankees covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier of the Yankees Effective Time or the termination of this Agreement and prior to the Effective Time in accordance with its terms, unless Braves shall otherwise approve in writing, and except (A) as otherwise expressly required contemplated by this Agreement, (B) Agreement or except as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as otherwise set forth in Section 6.1(a4.1(a) of the Company Yankees Disclosure Schedule, Letter:
(i) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instrumentspast practice;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iiiA) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) it shall not issue, sell, pledge, dispose of, grant, transfer, encumber, of or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, encumber any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares owned by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or it in any of its Subsidiaries;
; (viB) it shall not amend its certificate of incorporation or bylaws; (C) it shall not split, combine or reclassify its outstanding shares of capital stock; (D) it shall not declare, set aside or pay any type of dividend, whether payable in cash, stock or property, in respect of any capital stock other than pursuant the quarterly dividends payable by Yankees (in an amount per share not to exceed its most recent quarterly per share dividend and with the terms timing of Contracts in effect as such dividend to be consistent with past practice) or, subject to Section 4.1(a)(viii) of the date of this Agreement and provided to Parent prior to the date of this AgreementYankees Disclosure Letter, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any dividends payable by its direct or indirect wholly owned Subsidiary Subsidiaries to it or another of the Company);
its direct or indirectly wholly owned Subsidiaries; and (viiE) declareit shall not repurchase, set asideredeem or otherwise acquire, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to permit any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary Subsidiaries to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly any interests or indirectly, any shares of its capital stock stock, as applicable, or any securities convertible into or exchangeable into or exercisable for any shares of its capital stock, except from ;
(iii) neither it nor any of its Subsidiaries shall (A) issue, sell, pledge, dispose of or encumber (w) any shares of, or (x) securities payable in, convertible into or exchangeable or exercisable for, or (y) options, warrants, calls, commitments or rights of any kind to acquire, capital stock of any class, as appropriate, or (z) any bonds, debentures, notes or other obligations the holders of Company Options in full which have the right to vote (or partial payment of convertible into or exercisable for securities having the exercise thereof and/or right to vote) with its stockholders on any applicable Taxes payable by such holder upon exercise of the Company Options matter or Company SARs any other property or the lapse of restriction assets other than Yankees Shares issuable pursuant to stock-based awards outstanding on Company Restricted Shares or awarded prior to the extent required or permitted date hereof under the terms of the applicable Yankees Stock Plans and award agreements or Plans; (B) former employees(1) increase the amount of net indebtedness for borrowed money, directors including any guarantee of such indebtedness, by $100,000,000 in excess of the net indebtedness set forth in the Yankees Financial Statement as of December 31, 2012 (it being understood that net indebtedness shall be calculated as the amount of debt less the sum of the amount of cash and marketable securities, in each case, set forth in the Yankees Financial Statements as of December 31, 2012; it being further understood that notwithstanding the amount set forth in such Yankees Financial Statements, the non-U.S. dollar-denominated portion of such calculation shall be determined using the exchange rates in effect as of the date hereof without regard to any subsequent changes in such rates) or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix2) incur any additional indebtedness for borrowed money with a tenor of greater than 90 days, including any guarantee of such indebtedness; or guarantee such indebtedness of another Person, (C) make or issue authorize or sell commit for any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiariescapital expenditures, except for inter-company borrowings solely among in accordance with the Company 2013 capital expenditure target for Yankees that has been provided to Braves prior to the date of this Agreement or such other capital expenditures targets as may be agreed by Yankees and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
Braves (xprovided that (1) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, Yankees shall be permitted to make or authorize or commit for any capital expenditure;
expenditures in an amount that is between 75% and 110% of its capital expenditure target and (xi2) (A) enter into any Contract that would if the Yankees Effective Time shall not have been a Material Contract had it been entered into occurred on or prior to this Agreement or (B) amendDecember 31, modify or terminate any Material Contract2013, or cancelthen, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.14.1(a)(iii), Yankees’s capital expenditure target will be adjusted upwards to take into account the monetary reference in clause (A) number of days between December 31, 2013 and the definition of Material Contract Yankees Effective Time and assuming that the 2014 capital expenditure target shall be changed equal to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,0002013 capital expenditure target);
(xiiiv) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of businessexisting written, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts binding agreements in effect prior to the date hereof and set forth in Section 4.1(a)(iv) of this Agreement;
(xvi) other than in the ordinary course Yankees Disclosure Letter, or as otherwise required by applicable Law, neither Yankees nor any of business, its Subsidiaries shall (A) transfergrant or provide any severance or termination payments or benefits to any director, sell, license, mortgage, pledge, encumber, divest, cancel, abandon officer or allow to lapse employee of Yankees or expire or otherwise dispose any of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefitsfringe, severance or termination other benefits of, pay any bonus to, or make any new equity awards to any current or former director, officer, employee or consultant of Yankees or any of its Subsidiaries (other than increases in base salary in the ordinary course of business for employees who are not officers), (C) become a party to, establish, adopt, commence participation in, amend or terminate any stock option plan or other stock-based compensation plan, or any compensation, severance, pension, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement with or for the benefit of any of the current or former directors, officers, employees or consultants of the Company Yankees or its Subsidiaries, Subsidiaries (Cor newly hired employees) pay or amend the terms of any bonus or incentive compensation under any Benefit Plan in excess of the amount earned outstanding equity-based on actual performanceawards, (D) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation benefits under any Benefit Plan, (E) grant to the extent not already provided in any new award, amend the terms of outstanding awards or change the compensation opportunity under any such Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (JE) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization organization, (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, (KG) terminate without cause the employment of any officer member of the Companymanagement committee of Yankees, or (H) forgive any loans or issue any loans to directors, officers or employees of Yankees or any of its Subsidiaries;
(xviiiv) neither Yankees nor any of its Subsidiaries shall lease, license, transfer, exchange or swap, mortgage (including securitizations), or otherwise dispose (whether by way of merger, consolidation, sale of stock or assets, or otherwise) of any material portion of its assets, including the capital stock of Subsidiaries (it being understood that the foregoing shall not prohibit the sale of inventory in the ordinary course of business), except for dispositions of assets that in total have an aggregate fair market value of less than $50,000,000;
(vi) neither Yankees nor any of its Subsidiaries shall (A) acquire or invest in or agree to acquire or invest in (whether by merger, consolidation, purchase or otherwise) any Person or assets, in which the expected gross expenditures and commitments (including the amount of any indebtedness assumed) (1) for all such acquisitions exceeds, in the aggregate, $50,000,000 or (2) is reasonably likely, individually or in the aggregate, to delay the satisfaction of the conditions set forth in Article V hereof or prevent the satisfaction of such conditions or (B) enter into any joint venture, partnership or similar agreement with any Person;
(vii) subject to Section 6.24.13, neither Yankees nor any of its Subsidiaries shall (A) settle or compromise any material claims or litigation if such settlement or compromise would involve, individually or together with all such other settlements or compromises, the payment of money by Yankees or its Subsidiaries of $60,000,000 (provided that Yankees shall consult in good faith with respect to any such proposed settlement or compromise individually in excess of $20,000,000) or more or would involve any admission of material wrongdoing or any material conduct requirement or restriction by Yankees or its Subsidiaries, (B) modify, amend or terminate in any material respect any of its Material Contracts or waive, release or assign any material rights or claims thereunder in excess of $10,000,000 individually or in the aggregate or (C) enter into any new clearing services agreement or arrangement or modify or amend in any material respect any existing clearing services agreement or arrangement to extend the term or to increase the commitments of Yankees or any of its subsidiaries thereunder;
(viii) except to the extent otherwise required by Law, neither Yankees nor any of its Subsidiaries shall (A) make or change any Tax election, change any method of Tax accounting, file any amended Tax Return, or settle or compromise any audit or proceeding relating to Taxes, in each case, if such action would reasonably be expected to have an adverse effect on Yankees and its Subsidiaries that is material, (B) take any action specified in Section 4.1(a)(viii)(B) of the Yankees Disclosure Letter or (C) permit any material insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated except in the ordinary and usual course of business;
(ix) neither Yankees nor any of its Subsidiaries shall permit any change in its financial accounting principles, policies or practice (including any of its practices with respect to accounts receivable or accounts payable), except to the extent that any such changes in financial accounting principles, policies or practices shall be required by changes in GAAP;
(x) neither Yankees nor any of its Subsidiaries shall enter into any Contract that includes a “non-compete,” exclusivity or similar provision that would materially restrict the business of Braves, Parent or any of their Subsidiaries (including Yankees and its Subsidiaries) following the Yankees Effective Time;
(xi) except as permitted pursuant to Section 4.1(a)(iv), neither Yankees nor any of its Subsidiaries shall enter into any Contract between itself, on the one hand, and any of its employees, officers or directors, on the other hand;
(xii) neither Yankees nor any of its Subsidiaries shall knowingly take or omit to take any action that is if such action or failure to act would be reasonably likely to prevent, interfere with prevent or delay the consummation impede (A) either of the Merger Mergers from qualifying as a reorganization within the meaning of Section 368(a) of the Code, or result (B) with respect to the Alternative Transaction, the Mergers, taken together, from qualifying as a transaction described in Section 351 of the Code;
(xiii) neither Yankees nor any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, its Subsidiaries will authorize or commit enter into an agreement to do any of the foregoing set forth in Section 4.1(a)(i) through Section 4.1(a)(xii) if Yankees would be prohibited by the terms of Section 4.1(a)(i) through Section 4.1(a)(xii) from doing the foregoing; and
(xiv) it shall not fail to make in a timely manner any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder.
(b) Prior Braves covenants and agrees as to making any formal written communications or group oral presentations to itself and its Subsidiaries that, after the directors, officers or employees date hereof and until the earlier of the Company Yankees Effective Time or the termination of this Agreement in accordance with its terms, unless Yankees shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement or except as otherwise set forth in Section 4.1(a) of the Braves Disclosure Letter:
(i) it shall not (A) split, combine or reclassify its outstanding shares of capital stock, (B) declare, set aside or pay any type of dividend, whether payable in cash, stock or property, in respect of any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed)capital stock, and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(cC) Subject to Section 6.5directly or indirectly repurchase, Parent shall not take redeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock, if such repurchase or acquisition is at a price above the then market value;
(ii) it shall not issue, sell, dispose of or grant, or authorize the issuance, sale, disposition or grant of, any shares of any class of its capital stock except (A) for fair market value or (B) upon the vesting of restricted stock units or the exercise of options, warrants, convertible securities or other rights of any kind to acquire any of its capital stock which were issued with an exercise or conversion price of not less than the market price at the time of issuance; provided, however, that the foregoing shall not prohibit issuances of common stock, restricted stock units, options or rights as part of normal employee compensation in the ordinary course of business; and provided, further, that this clause (B) shall not prohibit the issuance of capital stock, restricted stock units, options, warrants, convertible securities or other rights in connection with any equity financing contemplated by Braves or Parent in connection with the transactions contemplated by this Agreement;
(iii) it shall not fail to make in a timely manner any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(iv) neither it nor any of its Subsidiaries shall knowingly take or omit to take any action if such action or failure to act would be reasonably likely to prevent or impede (A) either of the Mergers from qualifying as a reorganization within the meaning of Section 368(a) of the Code, or (B) with respect to the Alternative Transaction, the Mergers, taken together, from qualifying as a transaction described in Section 351 of the Code;
(v) neither it nor any of its Subsidiaries shall acquire (other than with respect to any agreements entered into prior to the date of this Agreement) or agree to acquire (whether by merger, consolidation, purchase or otherwise, which have been previously publically disclosed or provided to Yankees) any Person or assets that is reasonably likely likely, individually or in the aggregate, to prevent, interfere with or delay the consummation of the Merger or result in any material respects the satisfaction of the conditions to the Merger set forth in Article VII not being satisfiedV hereof or prevent the satisfaction of such conditions; and
(vi) neither it nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing set forth in Section 4.1(b)(i) through Section 4.1(b)(v) if it would be prohibited by the terms of Section 4.1(b)(i) through Section 4.1(b)(v) from doing the foregoing.
Appears in 1 contract
Interim Operations. (a) The Company covenants shall, and agrees as to itself and shall cause each of its Subsidiaries thatto, from and after the date of this Agreement and prior to until the earlier of the Effective Time and the termination of this Agreement pursuant to Article VIII, unless Parent shall otherwise approve in writing, and except (A) as otherwise expressly required by this Agreement, (B) as required by in order to comply with applicable LawsLaw or required in order to comply with COVID-19 Measures, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the conduct its business of it and its Subsidiaries shall be conducted in the ordinary and usual course Ordinary Course of Business, in all material respects, and, to the extent consistent therewith, it shall use and cause each of its Subsidiaries shall to use their respective reasonable best efforts to protect maintain its and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing Subsidiaries’ relations and goodwill with Governmental Entities, customers, licenseessuppliers, development collaboration or similar commercialization partners, manufacturers, suppliersPayors, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agentsemployees. Without limiting the generality of, of and in furtherance of, of the foregoingforegoing sentence, from the date of this Agreement until the earlier of the Effective TimeTime and the termination of this Agreement pursuant to Article VIII, except (Ai) as otherwise expressly required (A) by this Agreement, (B) as required by applicable Lawsany Governmental Entity, (C) to comply with (1) applicable Law, or (2) the terms of any Material Contract binding on the Company or any of its Subsidiaries in effect prior to the date of this Agreement, (ii) as Parent may consent to approved in writing by Parent (such consent approval not to be unreasonably withheldconditioned, delayed withheld or conditioneddelayed) or (Diii) as set forth in the corresponding subsection of Section 6.1(a6.01(a) of the Company Disclosure Schedule, the Company will shall not and will not permit shall cause its Subsidiaries not to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instrumentsOrganizational Documents;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions solely among wholly owned Wholly Owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(iii) acquire acquire, directly or indirectly by merger, consolidation, acquisition of stock or assets outside of the ordinary course of business or otherwise, any business, Person, properties or assets from any other Person with a fair market value or purchase price in the aggregate excess of $5 million in excess of, individually any individual transaction or $20 million in the aggregate, $2,500,000in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation, other than acquisitions of inventory or other goods in the Ordinary Course of Business pursuant to Contracts the terms of a Contract binding on the Company or any of its Subsidiaries in effect as of prior to the date of this Agreement, correct and complete copies of which have been made available to Parent or entered into following the date of this Agreement in accordance with the terms of this Section 6.01;
(iv) transfer, sell, lease, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrances) upon, any properties or assets (tangible or intangible, including any Intellectual Property Rights), product lines or businesses of the Company or any of its Subsidiaries, including capital stock or other equity interests of any of its Subsidiaries, except in connection with (A) sales of obsolete assets, (B) sales, leases, or other dispositions of assets (not including services and Intellectual Property Rights) with a fair market value not in excess of $5 million individually or $10 million in the aggregate, (C) sales of inventory or other goods in the Ordinary Course of Business and (D) non-exclusive licenses of Intellectual Property Rights entered into in the Ordinary Course of Business;
(v) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee guarantee, Encumber, or encumbrance otherwise enter into any Contract or other agreement, understanding or arrangement with respect to the voting of, any shares of capital stock of the Company (including, for the avoidance of doubt, Shares) or capital stock or other equity interests of any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company OptionsSubsidiaries, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any such shares of such capital stockstock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of such capital stock stock, other equity interests or such convertible or exchangeable securities (other than the issuance of shares of such capital stock, other equity securities;
, or convertible or exchangeable securities (vA) create or incur any Lien material by a Wholly Owned Subsidiary of the Company to the Company or any of its Subsidiaries on any assets another Wholly Owned Subsidiary of the Company, (B) in respect of Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect Equity Awards outstanding as of the date of this Agreement in accordance with their terms and provided to Parent prior the applicable Stock Plan in effect on the Capitalization Date or (C) pursuant to the date of this Agreement, ESPP in accordance with its terms and subject to Section 3.03(e));
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of to or from the Company and other than in any of its Wholly Owned Subsidiaries, loans or advances to employees of the Company or any direct or indirect wholly owned Subsidiary of its Wholly Owned Subsidiaries in the Ordinary Course of Business pursuant to the terms of the Company)’s 401(k) Plans or advances to any Person pursuant to any advancement obligations under the Company’s Organizational Documents or any indemnification agreements as in effect on or prior to the date hereof) in excess of $5 million individually or $20 million in the aggregate;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or other equity interests (including with respect to the Company, for the avoidance of doubt, Shares), except for (A) dividends paid by any direct or indirect wholly owned Wholly Owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Wholly Owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
; (viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock stock, other equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stockstock or other equity interests (including with respect to the Company, except from (A) holders for the avoidance of Company Options in full doubt, Shares), other than the withholding or partial use of Shares to satisfy the payment of the exercise thereof and/or any applicable Taxes payable by such holder upon price on the exercise of a Company Option or withholding Tax obligations upon the exercise, vesting or settlement of Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms Equity Awards outstanding as of the applicable Stock Plans and award agreements or (B) former employeesdate of this Agreement, directors or consultants following termination of their relationship with the Company in each case, in accordance with applicable agreements providing for their terms and, as applicable, the repurchase of shares upon such terminationStock Plans as in effect on the Capitalization Date;
(ix) adopt or implement any stockholder rights plan or similar arrangement;
(x) form any Subsidiary or enter into any joint venture, partnership, limited liability corporation, strategic alliance or similar arrangement;
(xi) incur any indebtedness for borrowed money or guarantee such indebtedness Indebtedness (including the issuance of another Person, or issue or sell any debt securities or securities, warrants or other rights to acquire any debt security security), except for (A) Indebtedness in replacement of existing Indebtedness for borrowed money on terms substantially consistent with or more favorable to the Company than the Indebtedness being replaced, (B) Indebtedness incurred (1) by the Company that is owed to any Wholly Owned Subsidiary or (2) by any Wholly Owned Subsidiary that is owing to the Company or any other Wholly Owned Subsidiary, or (C) guarantees of Indebtedness of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Wholly Owned Subsidiaries or among the Company’s wholly-owned Subsidiaries otherwise incurred in the ordinary course consistent compliance with past practicethis Section 6.01(a);
(xxii) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any payment of, or accrual or commitment for, capital expenditures, except (A) those contemplated by the Company’s capital expenditure forecast for the relevant fiscal year, which capital expenditure forecast has been made available to Parent prior to the date of this Agreement and (B) any unforecasted capital expenditure, in an amount not to exceed $2 million in the aggregate;
(xi) (Axiii) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement Agreement, other than Contracts with customers or suppliers entered into in the Ordinary Course of Business;
(Bxiv) amendother than with respect to Material Contracts related to Indebtedness, which shall be governed by Section 6.01(a)(vi) and Section 6.01(a)(xi), terminate, fail to renew, or in any material respect amend or otherwise modify or terminate waive, or assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in, any Material Contract, other than expirations or non-renewals of any such Contract in the Ordinary Course of Business and in accordance with the terms of such Contract with no further action by the Company or any of its Subsidiaries, except for any ministerial actions, or non-exclusive licenses, covenants not to ▇▇▇, releases, waivers or other rights under Intellectual Property Rights owned or purported to be owned by the Company or any of its Subsidiaries, in each case, granted in the Ordinary Course of Business;
(xv) cancel, modify or waive any debtsdebts or similar claims held by the Company or any of its Subsidiaries having in each case a value in excess of $5 million individually or $10 million in the aggregate;
(xvi) amend any License contemplated by Section 4.05(d) in any material respect, rights or claims thereunder; allow any such License to lapse, expire or terminate (except where the lapse, expiration or termination of any such License is with respect to a License that has become obsolete, redundant or no longer required by applicable Law);
(xvii) other than with respect to Transaction Litigation, any Proceeding in connection with, arising out of or otherwise related to a demand for purposes appraisal under Section 262 of this the DGCL or any Tax claim, audit, assessment or dispute, which shall be governed by Section 6.16.11, Section 3.02(f) and Section 6.01(a)(xix), respectively, settle or compromise any Proceeding for an amount in excess of $1 million individually or $5 million in the monetary reference in clause aggregate, or which would reasonably be expected to (A) prevent, materially delay or materially impair the consummation of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause transactions contemplated by this Agreement, (B) have a materially negative impact on the operations and reputation of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause Company and its Subsidiaries or (C) involve any criminal liability, any admission of material wrongdoing or any material wrongful conduct by the definition Company or any of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000its Subsidiaries;
(xiixviii) make any material changes with respect to accounting policies or procedures, except except, in each case, as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect theretoGAAP;
(Axix) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice election, change an annual Tax accounting period, adopt or as required by law, change any material method Tax accounting method, file any material amended Tax Return, enter into any closing agreement with respect to material Taxes, settle any material Tax claim, audit, assessment or dispute, surrender any right to claim a material refund, agree to an extension or waiver of Tax accounting, except as required by lawthe statute of limitations with respect to the assessment or determination of any material Tax, or take any action which would materially adversely affect be reasonably expected to result in a material increase in the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein liability of the Company or its Subsidiaries, including capital stock or, in respect of any taxable period (or portion thereof) ending after the Closing Date, the Tax liability of Parent or its Affiliates;
(xx) cancel, abandon or otherwise allow to lapse or expire any material Intellectual Property Rights that are owned by or exclusively licensed to the Company or any of its Subsidiaries, except sales except, solely with respect to Intellectual Property Rights that are not material to the businesses of the Company Products and its Subsidiaries in the ordinary course Ordinary Course of business and sales of obsolete assets, other than Business;
(xxi) except as required pursuant to Contracts the terms of any Company Benefit Plan in effect prior to as of the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon Agreement or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as the terms of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedulethis Agreement, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensationcompensation or consulting fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directorsdirector, officer, employee or other service provider, except for (1) those employees who are not officers, increases in annual salary, wage rate or consulting fees in the Ordinary Course of Business that do not exceed 6 percent individually or 3 percent in the aggregate, and (2) the payment of annual bonuses for completed periods based on actual performance in the Ordinary Course of Business, (B) become a party to, establish, adopt, amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to the date of this Agreement (other than offer letters providing for an “employment at will” relationship without any right to contractual severance, entered into with new hire employees or consultants in the Ordinary Course of Business to the Company or its Subsidiariesextent such hire is expressly permitted by clause (G) of this Section 6.01(a)(xxi)), (C) pay grant any bonus new awards, or incentive compensation amend or modify the terms of any outstanding awards (including, in each case, Company Equity Awards), under any Company Benefit Plan in excess of the amount earned based on actual performancePlan, (D) take any action to accelerate the vesting of or lapsing of restrictions with respect to or payment, or fund or in any equity-based other way secure the payment, of compensation or other long-term incentive compensation benefits under any Company Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable Law to be funded or contribution obligations under any Benefit Planchange the manner in which contributions to such plans are made or the basis on which such contributions are determined, other than except as may be required by GAAP, (IF) forgive any loans or issue any loans to any current or former director, officer, employee or other service provider (other than routine travel advances issued in the Ordinary Course of Business and those loans or advances expressly permitted by Section 6.01(a)(vi)), (G) hire any executive officer or any employee or consultant engage any independent contractor (who is a natural person) with maximum total cash compensation (an annual salary or wage rate or consulting fees and target annual cash compensation opportunities bonus opportunity) in excess of $200,000, providedor (H) terminate the employment of any executive officer other than for cause;
(xxii) become a party to, that such new hire’s compensation and benefits are made establish, adopt, amend, commence participation in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into or terminate any collective bargaining agreement or other agreement with a labor union, labor organization, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedorganization; or
(xixxxiii) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Interim Operations. (a1) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the earlier of the Merger 1 Effective Time and except (A) as otherwise expressly required by the termination of this AgreementAgreement in accordance with its terms, (Bw) as required by applicable Laws, (C) as unless Parent may shall otherwise consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned), (x) except as otherwise expressly permitted by this Agreement, (y) except as required by applicable Laws, or (Dz) except as set forth in Section 6.1(a5.1(a) of the Company Disclosure ScheduleLetter, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course Ordinary Course of Business, and, to the extent consistent therewith, it shall, and it shall cause its Subsidiaries shall to, use its and their respective commercially reasonable best efforts to protect preserve their business organizations, preserve their assets and properties in good repair and condition and preserve in all material respects its assets their relationships with those persons having significant business dealings with them to the end that their good will and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available ongoing businesses shall be unimpaired at the services of its and its Subsidiaries’ present employees and agentsClosing. Without limiting the generality of, of and in furtherance of, of the foregoing, from the date of this Agreement until the earlier of the Merger 1 Effective TimeTime and the termination of this Agreement in accordance with its terms, except (AX) as otherwise expressly required permitted by this Agreement, (B) as required by applicable Laws, (CY) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) ), or (DZ) as set forth in Section 6.1(a5.1(a) of the Company Disclosure ScheduleLetter, the Company it will not and will not permit its Subsidiaries to:
(ia) adopt or propose any change in its certificate the Company’s articles of incorporation or by-laws bylaws or other applicable governing instrumentsthe organizational documents of any of the Company’s Subsidiaries;
(iib) merge or consolidate the Company itself or any of its Subsidiaries with any other Person, except for any such transactions among wholly its wholly-owned Subsidiaries of the Companyand except in connection with any transaction in accordance with Section 5.1(a)(xiii), or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesliquidate;
(iiic) acquire assets outside other than (A) in connection with the exercise or settlement of Company Equity Awards, (B) as permitted by Section 5.1(a)(xi), or (C) as disclosed in Section 5.1(a)(xi) of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess ofCompany Disclosure Letter, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its capital stock or of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly its wholly-owned Subsidiary of the Company to the Company it or another wholly of its wholly-owned Subsidiary or the issuance of Shares pursuant to Company OptionsSubsidiaries), Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, other than (i) grants of Company Equity Awards to new hires in the Ordinary Course of Business or (ii) grants of Company Equity Awards up to $100,000, in the aggregate, to non-executive officer employees;
(vd) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees advances or capital contributions to or investments in any Person (other than investments in cash between itself and cash equivalents and other investments that would constitute short-term investments on the balance sheet any of the Company and other than in the Company or any its direct or indirect wholly owned Subsidiary Subsidiaries), other than advances to employees in the Ordinary Course of the Company)Business;
(viie) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly wholly-owned Subsidiary to the Company it or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the CompanySubsidiary) or enter into any agreement with respect to the voting of its capital stock;
(viiif) other than in connection with tax withholdings related to a Company Equity Award, reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its the Company’s capital stock or securities convertible or exchangeable into or exercisable for any shares of its the Company’s capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ixg) incur any indebtedness for borrowed money or guarantee such any indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any of its debt security securities or of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and (A) guarantees incurred in compliance with this Section 5.1(a) by it of indebtedness of its wholly-owned Subsidiaries Subsidiaries, or among the Company’s wholly-owned Subsidiaries in the ordinary course (B) interest rate swaps on customary commercial terms consistent with past practice;
(xh) except as set forth may be required as a result of a change in applicable Law or GAAP or as required by the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewithCompany’s auditors or accountants, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(Ai) settle any litigation or other proceedings before except as may be required as a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except change in the ordinary course of business, settle or compromise any material Tax liabilityapplicable Law, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by lawelection, change any material method of Tax accounting, except as required by law, accounting or take any action which would materially adversely affect the annual Tax position of the Company or of any of its Subsidiariesaccounting period;
(xvj) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse (except with respect to patents expiring in accordance with their terms) or expire or otherwise dispose of any of its material assets, licenses, operations, rights, product lines, lines or businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products (A) in connection with services and products provided in the ordinary course Ordinary Course of business Business and sales of obsolete assets, other than (B) Liens securing indebtedness in accordance with Section 5.1(a)(vii), (C) pursuant to Contracts in effect prior to the date of this Agreement, and (D) assets with a fair market value of less than $500,000 in the aggregate;
(xvik) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed set forth on Section 6.1(a)(xvii5.1(a)(xi) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costsLetter, (B) as required by any Company Benefit Plan in effect on the date of this Agreement, or (C) as required by applicable Law, (1) materially increase any compensation or benefit provided or to be provided to any current or former employee or other service provider of the Company or any of its Subsidiaries, other than increases in the Ordinary Course of Businesses and increases in compensation to certain employees, who are non-executive officers, which are reasonably necessary to bring such compensation to market level compensation, (2) enter into or adopt any new Company Benefit Plan or amend in any manner material respect or terminate any Company Benefit Plan, (3) accelerate the compensationfunding or vesting of any compensation or benefit, bonusor (4) make any material contribution to any Company Benefit Plan other than contributions made in the Ordinary Course of Business;
(l) enter into, pensionmaterially amend or terminate any Company Material Contract (or any Contract that would be a Company Material Contract if it were in effect as of the date of this Agreement), welfareexcept that the Company and its Subsidiaries may (x) enter into Contracts of the types described in clauses (B), fringe (F)(II) or (F)(V) of Section 4.1(t)(i)) and (y) amend Company Material Contracts, so long as such Contracts and amendments will not, in the aggregate, increase the liabilities of the Company and its Subsidiaries by greater than $500,000;
(m) acquire (whether by merger, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other benefits, severance business organization or termination pay division thereof or substantially all of the assets of any of the current foregoing, other than (A) purchases of inventory and other assets in the Ordinary Course of Business or former directorspursuant to existing Contracts, officersand (B) assets with a fair market value of no greater than $500,000 in the aggregate;
(n) make any payment or accrual of, employees or consultants commit to, capital expenditures for any period that are greater than 105% of the capital expenditures reflected in the Company’s capital expenditure budget provided to Parent prior to the date hereof;
(o) compromise, settle or agree to settle any Action (including any Action relating to this Agreement or the transactions contemplated hereby), or consent to the same, other than compromises, settlements or agreements with no obligation of the Company or and its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or Subsidiaries other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the than payment of any amounts under any Benefit Plan, cash (HA) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization Ordinary Course of Business or (KB) terminate without cause not to exceed $300,000 in the employment of any officer of the Company;
aggregate for all such compromises, settlements and agreements under this clause (xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedB); or
(xixp) agree, authorize or commit to do any of the foregoing.
(2) Parent agrees that, after the date of this Agreement and prior to the earlier of the Merger 1 Effective Time and the termination of this Agreement in accordance with its terms, (w) unless the Company shall otherwise consent in writing (such consent not to be unreasonably withheld, delayed or conditioned), (x) except as otherwise expressly permitted by this Agreement, (y) except as required by applicable Laws, or (z) except as set forth in Section 5.1(b) of the Parent Disclosure Letter, the business of it and its Subsidiaries shall be conducted in the Ordinary Course of Business, and, to the extent consistent therewith, it shall, and it shall cause its Subsidiaries to, use its and their respective commercially reasonable efforts to preserve their business organizations, preserve their assets and properties in good repair and condition and preserve their relationships with those persons having significant business dealings with them to the end that their good will and ongoing businesses shall be unimpaired at the Closing. Without limiting the generality of and in furtherance of the foregoing, from the date of this Agreement until the earlier of the Merger 1 Effective Time and the termination of this Agreement in accordance with its terms, except (X) as otherwise expressly permitted by this Agreement, (Y) as the Company may consent in writing (such consent not to be unreasonably withheld, delayed or conditioned), or (Z) as set forth in Section 5.1(b) of the Parent Disclosure Letter, it will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in Parent’s certificate of incorporation or bylaws or the organizational documents of any of Parent’s Subsidiaries;
(b) Prior to making any formal written communications merge or group oral presentations to the directors, officers or employees of the Company consolidate itself or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the with any other Person, except for any such transactions contemplated by this Agreement, the Company shall provide Parent among its wholly-owned Subsidiaries and except in connection with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayedany transaction in accordance with Section 5.1(b)(xiii), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.or restructure, reorganize or completely or partially liquidate;
(c) Subject other than (A) in connection with the exercise or settlement of Parent Equity Awards, (B) issuances pursuant to redemptions of Common Units (as defined in Parent Certificate of Incorporation) pursuant to the GH LLC Agreement in the Ordinary Course of Business, (C) as permitted by Section 6.55.1(b)(xi), or (D) as disclosed in Section 5.1(b)(xi) of the Parent shall not take Disclosure Letter, issue, sell, pledge, dispose of, grant, transfer, encumber, or permit authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its capital stock or of any of its Subsidiaries (other than the issuance of shares by its wholly-owned Subsidiary to take it or another of its wholly-owned Subsidiaries), or securities convertible or exchangeable into or exercisable for any action that is reasonably likely shares of such capital stock, or any options, warrants or other rights of any kind to preventacquire any shares of such capital stock or such convertible or exchangeable securities, interfere other than (i) grants of Parent Equity Awards to new hires in the Ordinary Course of Business or (ii) grants of Parent Equity Awards up to $100,000, in the aggregate, to non-executive officer employees;
(d) make any loans, advances or capital contributions to or investments in any Person (other than between itself and any of its direct or indirect Subsidiaries), other than advances to employees in the Ordinary Course of Business;
(e) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by any direct or delay indirect wholly-owned Subsidiary to it or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the consummation voting of its capital stock;
(f) other than in connection with tax withholdings related to a Parent Equity Award, reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of Parent’s capital stock or securities convertible or exchangeable into or exercisable for any shares of Parent’s capital stock;
(g) incur any indebtedness or guarantee any indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any of its debt securities or of any of its Subsidiaries, except for (A) guarantees incurred in compliance with this Section 5.1(b) by it of indebtedness of its wholly-owned Subsidiaries, or (B) interest rate swaps on customary commercial terms consistent with past practice;
(h) except as may be required as a result of a change in applicable Law or GAAP or as required by Parent’s auditors or accountants, make any changes with respect to accounting policies or procedures;
(i) except as may be required as a result of a change in applicable Law, make, change or revoke any material Tax election, material method of Tax accounting or any annual Tax accounting period;
(j) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse (except with respect to patents expiring in accordance with their terms) or expire or otherwise dispose of any of its material assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries, except (A) in connection with services and products provided in the Ordinary Course of Business and sales of obsolete assets, (B) Liens securing indebtedness in accordance with Section 5.1(b)(vii), (C) pursuant to Contracts in effect prior to the date of this Agreement, and (D) assets with a fair market value of less than $500,000 in the aggregate;
(k) other than (A) as set forth on Section 5.1(b)(xi) of the Merger Parent Disclosure Letter, (B) as required by any Parent Benefit Plan in effect on the date of this Agreement, or result (C) as required by applicable Law, (1) materially increase any compensation or benefit provided or to be provided to any current or former employee or other service provider of Parent or any of its Subsidiaries, other than increases in the Ordinary Course of Businesses and increases in compensation to certain employees, who are non-executive officers, which are reasonably necessary to bring such compensation to market level compensation, (2) enter into or adopt any new Parent Benefit Plan or amend in any material respect or terminate any Parent Benefit Plan, (3) accelerate the funding or vesting of any compensation or benefit, or (4) make any material contribution to any Parent Benefit Plan other than contributions made in the Ordinary Course of Business;
(l) enter into, materially amend or terminate any Parent Material Contract (or any Contract that would be a Parent Material Contract if it were in effect as of the date of this Agreement), except that Parent and its Subsidiaries may (x) enter into Contracts of the types described in clauses (B), (F)(II) or (F)(V) of Section 4.2(t)(i)) and (y) amend Parent Material Contracts, so long as such Contracts and amendments will not, in the aggregate, increase the liabilities of Parent and its Subsidiaries by greater than $500,000;
(m) acquire (whether by merger, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or substantially all of the assets of any of the conditions foregoing, other than (A) purchases of inventory and other assets in the Ordinary Course of Business or pursuant to existing Contracts, and (B) assets with a fair market value of no greater than $500,000 in the aggregate;
(n) make any payment or accrual of, or commit to, capital expenditures for any period that are greater than 105% of the capital expenditures reflected in Parent’s capital expenditure budget provided to the Merger set forth Company prior to the date hereof;
(o) compromise, settle or agree to settle any Action (including any Action relating to this Agreement or the transactions contemplated hereby), or consent to the same, other than compromises, settlements or agreements with no obligation of Parent and its Subsidiaries other than payment of cash (A) in Article VII the Ordinary Course of Business or (B) not being satisfied.to exceed $300,
Appears in 1 contract
Interim Operations. Except (a1) The as required by applicable Law, (2) as Parent may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), (3) for commercially reasonable actions as required to comply with COVID-19 Measures, (4) as expressly disclosed in Section 6.1(a) of the Company Disclosure Letter or (5) as expressly provided for in this Agreement, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date execution of this Agreement and prior to the earlier of (x) the Effective Time and except or (y) termination of this Agreement in accordance with Article VIII (A) as otherwise expressly required the Company shall use its commercially reasonable efforts to conduct its business and the business of its Subsidiaries in the ordinary course of business consistent with past practice; provided, however that no action that is specifically permitted by any of subclauses (a) through (n) of Section 6.1(B) shall be deemed a breach of either this Agreement, clause (A) or any other subclause of Section 6.1(B)) and (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of foregoing the Company Disclosure Schedule, the Company will shall not and will not permit any of its Subsidiaries to:
(a) (i) adopt amend, supplement or propose any change in otherwise modify its certificate of incorporation or by-laws bylaws (or comparable governing documents), other than amendments to the governing documents of any wholly owned Subsidiary of the Company that would not prevent, materially delay or materially impair the Merger or the other transactions contemplated by this Agreement, (ii) split, combine, subdivide or reclassify its outstanding equity interests (except for any such transaction by a wholly owned Subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (iii) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any of its equity interests (except for any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company) or (iv) purchase, repurchase, redeem or otherwise acquire any of its equity interests or any securities convertible or exchangeable into or exercisable for any of its equity interests (other than (1) pursuant to the exercise of Company Options or the forfeiture of, or withholding of Taxes with respect to, Company Options, Restricted Stock Units or Performance Restricted Stock Units or (2) purchases, repurchases, redemptions or other applicable governing instrumentsacquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(iib) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumbermergers among, or authorize the issuancerestructuring, sale, pledge, disposition, grant, transfer, lease, license, guarantee reorganization or encumbrance of, liquidation of any shares of capital stock wholly owned Subsidiaries of the Company that would not prevent, materially delay or any of its Subsidiaries (other than materially impair the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary Merger or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of other transactions contemplated by this Agreement) or securities convertible or exchangeable into or exercisable for create any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets Subsidiary of the Company or any of its Subsidiaries;
(vic) (i) increase in any material respect the compensation or benefits payable to any current or former director, officer, employee, consultant or other service provider with an annual salary in excess of $250,000, other than increases in base salary for promotions or as a result of salary reviews made in the ordinary course of business and consistent with past practices, (ii) grant any extraordinary bonus or any equity compensation to any current or former director, officer, employee, consultant or other service provider, (iii) establish, adopt or enter into, other than in the ordinary course of business in accordance with past practice, any new bonus, pension, other retirement, deferred compensation, equity compensation, change in control, retention or other benefit agreement, plan or arrangement or other Company Plan (including any Contract that would be a Company Plan if it were in existence as of the date of this Agreement) for the benefit of any current or former director, officer, employee, consultant or other individual service provider or (iv) make any change to any Company Plan that would materially increase the costs to the Company in respect of such Company Plan;
(d) incur any Indebtedness, guarantee, endorse, assume or otherwise become liable or responsible (directly or indirectly) any Indebtedness of another Person or issue any rights to acquire any Indebtedness, except (i) in the ordinary course of business, borrowings under the Company’s revolving credit facility as in effect as of the date hereof, including pursuant to the Company’s Existing Credit Agreement, (ii) in replacement of existing Indebtedness which has matured or is scheduled to mature, in each case after the date of this Agreement, on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced, (iii) inter-company Indebtedness among the Company and its wholly owned Subsidiaries, (iv) (A) to the extent not drawn upon and payments are not triggered thereby, letters of Contracts credit, bank guarantees, security or performance bonds or similar credit support instruments and (B) overdraft facilities or cash management programs, in effect each case issued, made or entered into in the ordinary course of business consistent with past practice or (v) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice and not for speculative purposes;
(e) make or commit to any capital expenditures other than in the ordinary course of business consistent with past practice and which do not exceed, in the aggregate, for the period between the date hereof and the Effective Date, 110% of the capital expenditures provided for in the 2022 budget previously provided to Parent prior Parent;
(f) other than sales of inventory in the ordinary course of business consistent with past practice, transfer, lease, license, sell, assign, mortgage, pledge, encumber, place a Lien upon or otherwise dispose of any properties, rights or assets (including equity interests of any of its Subsidiaries), with a fair market value in excess of $5,000,000 individually or $20,000,000 in the aggregate (other than transactions among the Company and its wholly owned Subsidiaries);
(g) issue, deliver, sell, grant, transfer, assign, pledge or encumber, agree or commit to or authorize the issuance, delivery, sale, grant, transfer, assignment, pledge or encumbrance of, any shares of its capital stock or any other equity interest in the Company or any Company Subsidiary or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares or equity interest, except (i) for any Shares issued pursuant to Company Options, Restricted Stock Units and Performance Restricted Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans as of the date hereof and (ii) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company;
(h) other than in the ordinary course of business, spend or commit to spend in excess of $5,000,000 individually or $20,000,000 in the aggregate to acquire any business or to acquire assets or other property, whether by merger, consolidation, purchase of property or assets or otherwise (valuing any non-cash consideration at fair market value as of the date of the agreement for such acquisition);
(i) make any material change with respect to its financial accounting policies or procedures, except as required by changes in GAAP (or any authoritative interpretation thereof) or by applicable Law;
(j) abandon any material existing lines of business or enter into any material new line of business other than any line of business that is reasonably ancillary to and a reasonably foreseeable extension of any line of business as of the date of this Agreement;
(k) other than in the ordinary course of business consistent with past practice, make any loans, advances, guarantees advances or capital contributions to to, or investments in in, any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in loans, advances or capital contributions to the Company or any direct or indirect wholly owned Subsidiary of the Company);
(viil) declare, set aside, make (i) amend or pay modify in any dividend material respect or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock terminate (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary excluding terminations upon expiration of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise term thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
terms thereof) any Material Contract or waive, release or assign any material rights, claims or benefits under any Material Contract or (ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (Aii) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement or (B) amend, modify or terminate any Material Contractunless it is on terms substantially consistent with, or cancelon terms more favorable to the Company or its Subsidiaries (and to Parent and its Subsidiaries following the Closing) than, modify either a Contract it is replacing or waive a form of such Material Contract made available to Parent prior to the date hereof; provided that the foregoing shall not prohibit or restrict the ability of the Company or its Subsidiaries to take any debts, rights or claims thereunder; for purposes of action described in this Section 6.1, the monetary reference in clause (A6.1(l) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition ordinary course of Personal Property Leases business consistent with past practices with respect to Contracts or Material Contracts; provided, further that for the avoidance of doubt, this Section 6.1(l) shall be changed to $2,500,000not prohibit or restrict any Company Plans;
(xiim) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation action, suit, case, litigation, claim, hearing, arbitration, investigation or other proceedings Proceedings before or threatened to be brought before a Governmental Entity except where Entity, other than settlements if the amount of any such settlement is limited solely to not in excess of $1,000,000 individually or $5,000,000 in the aggregate, in each case in excess of amounts available under the Company’s applicable insurance policy, provided that such settlements do not involve any admission of guilt (I) through a plea or otherwise), non-de minimis injunctive or equitable relief or impose non-de minimis restrictions on the release business activities of claims and (II) the monetary payment by the Company and its Subsidiaries or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) Parent and its Subsidiaries, or (B) commencewaive, joinrelease, make an appeal with respect to a lawsuit, action, grant or transfer any material claim or similar proceeding other than (I) for the routine collection right of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior value or knowingly consent to the filing or taking termination of any action with respect to such lawsuit, action, material claim or similar proceeding, or (III) pursuant to this Agreementright of material value;
(xivn) file or amend any material Tax Return except other than in the ordinary course of businessbusiness consistent with past practice, settle make or compromise change any material Tax liabilityelection, make, change or revoke make any material change to any annual Tax election except to the extent consistent with past practice accounting period, adopt or as required by law, change any material method of Tax accounting, except as required by lawamend any material Tax Returns or file any claims for material Tax refunds, enter into any material closing agreement, settle any material Tax claim, audit or take assessment or surrender any action which would materially adversely affect the right to claim a material Tax position of the Company refund, offset or of any of its Subsidiariesother reduction in Tax liability;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (Jo) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedmaterial Affiliate Transaction; or
(xixp) agree, authorize resolve or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Sources: Merger Agreement (Covetrus, Inc.)
Interim Operations. (a) The Except (i) as expressly contemplated, required or permitted by this Agreement, (ii) as required by applicable Law, (iii) as approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned), or (iv) as set forth on Section 6.01 of the Company covenants and agrees as to itself and its Subsidiaries thatDisclosure Schedule, after from the date of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article 8 and prior to the Effective Time Time, the Company will, and except will cause its Subsidiaries to, use its and their commercially reasonable efforts to (A) conduct their businesses in the ordinary course of business in all material respects and (B) preserve intact their business organizations and relationships with customers, suppliers, distributors and other Persons with which it has material business dealings.
(b) Except (A) as otherwise expressly contemplated, required or permitted by this Agreement, (B) as required by applicable LawsLaw, (C) as Parent may consent to approved in writing by Parent (such consent approval not to be unreasonably withheld, delayed or conditioned) ), or (D) as set forth in on Section 6.1(a) 6.01 of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until earlier to occur of the termination of this Agreement pursuant to Article 8 and the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will not not, and will not permit cause its Subsidiaries not to:
(i) (x) adopt or propose any change in its the certificate of incorporation or by-laws bylaws of the Company or other applicable governing instruments(y) adopt any change in the organizational documents of any of the Company’s Subsidiaries, in each case whether by merger consolidation or otherwise;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize reorganize, recapitalize or completely or partially liquidate or dissolve or otherwise enter into any agreements agreement or arrangements arrangement imposing any material changes or restrictions on its the assets, operations or businessesbusiness of the Company or any of its Subsidiaries;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, deliver or agree to commit to issue, pledge, dispose of, grant, transfer, of or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee disposition or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company OptionsSubsidiaries, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
, in each case, other than (vA) create or incur any Lien material to such transaction among the Company or any of and its Subsidiaries on or among the Company’s wholly owned Subsidiaries in the ordinary course of business or (B) any assets issuance of the Company or any of its Subsidiaries;
(vi) other than Shares pursuant to the terms exercise or settlement of Contracts in effect Company Equity Awards outstanding as of the date of this Agreement and provided to Parent prior to the date of this Agreement, in accordance with their terms;
(iv) make any loans, advances, guarantees advances or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in to the Company or any direct or indirect of its wholly owned Subsidiary Subsidiaries in the ordinary course of the Companybusiness);
(viiv) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, otherwise with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company other equity or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stockinterests;
(viiivi) reclassify, split, combine, subdivide or redeem, repurchase, purchase or otherwise acquireacquire or amend the terms of, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, stock or other equity or voting interest (except from for (A) holders acquisitions of Shares in satisfaction of withholding obligations in respect of Company Options in full Equity Awards to the extent required by such Company Equity Awards, or partial (B) payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise price in respect of Company Options, in the case of this clause (B), outstanding as of the Company Options date of this Agreement pursuant to its terms or Company SARs or the lapse granted thereafter not in violation of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationthis Agreement);
(ixvii) incur create, incur, assume or guarantee or otherwise become liable for any indebtedness Indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants guarantees of the same or any other rights to acquire Indebtedness, except for (A) guarantees or credit support provided by the Company or any debt security of its Subsidiaries of the obligations of the Company or any of its SubsidiariesSubsidiaries in the ordinary course of business to the extent such Indebtedness is in existence on the date of this Agreement, except for inter-company borrowings or (B) any Indebtedness solely among the Company and its wholly-wholly owned Subsidiaries or among the Company’s wholly-wholly owned Subsidiaries in the ordinary course of business;
(viii) other than in the ordinary course of business consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement Agreement; provided, that no Contract of the type described in Section 5.01(k)(i)(N) or Section 5.01(k)(i)(O) shall be entered into without the prior written consent of Parent;
(Bix) other than in the ordinary course of business consistent with past practice, amend, modify or waive in any material respect or terminate any Material Contract, or cancel, modify or waive Contract in a manner adverse to the Company (other than expirations of any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference such Contract in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000accordance with its terms);
(xiix) make any material changes with respect to financial accounting policies or procedures, except as required by changes in Law or applicable by U.S. GAAP or statutory or regulatory accounting rules or official interpretations with respect theretothereto or by any Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization);
(Axi) settle any litigation Action for an amount in excess of $75,000 individually or $150,000 in the aggregate other proceedings before a Governmental Entity except than (A) any settlement or compromise where the settlement is limited solely amount paid or to (I) the release of claims and (II) the monetary payment be paid by the Company or any Subsidiary of its Subsidiaries is fully covered by insurance coverage or retention amounts maintained by the Company or any of its Subsidiaries and (B) settlements or compromises of any Action for an amount not in excess of the amount, if any, reflected or specifically reserved in the balance sheet (or the notes thereto) of the Company included in the Company Reports; provided, that, in the case of each of the foregoing clauses (A) and (B), the settlement or compromise of such Action does not exceed $2,000,000 (x) impose any material restriction on the business or operations of the Company or any of its Subsidiaries (or $15,000,000 in Parent or any of its Subsidiaries after the aggregate for all such settlementsClosing) or (y) include any non-monetary or injunctive relief, or the admission of wrongdoing, by the Company or any of its Subsidiaries or any of their respective officers or directors;
(xii) sell, assign, lease, license, sublicense or otherwise transfer or dispose of, abandon or permit to lapse, fail to take any action necessary to maintain, enforce or protect, or create or incur any Lien (other than Permitted Liens), on any material assets or property (including any Company Intellectual Property and Licensed Intellectual Property) except (A) pursuant to existing contracts or commitments (or refinancings thereof) or (B) commencein the ordinary course of business consistent with past practice and in no event in an amount exceeding $25,000 individually or $50,000 in the aggregate;
(xiii) except for such actions required by the terms of Benefit Plans as in effect on the date hereof or applicable Law: (A) materially increase the compensation or other benefits payable or provided to any Service Providers other than increases in base salary in the ordinary course of business for Service Providers with base salary of less than $250,000; (B) increase or accelerate or commit to accelerate the funding, joinpayment or vesting of compensation or benefits provided under any Benefit Plan, make an appeal with respect (C) grant or announce any cash, equity or equity-based, change of control, severance or retention award to any Service Provider; (D) establish, adopt, enter into terminate or amend (x) any Collective Bargaining Agreement or (y) any Benefit Plan (or any plan, program, agreement or arrangement that would be a lawsuitBenefit Plan if in effect on the date hereof); (E) recognize or certify any labor union, actionlabor organization, claim works council, or similar proceeding group of employees as the bargaining representative of any employees of the Company or its Subsidiaries or (F) hire or terminate the employment of any employee of the Company whose annualized base compensation exceeds $250,000, other than (Ix) hiring to replace departed employees or to fill vacancies or (y) terminations for the routine collection of bills, “cause” (II) in such cases where the Company in good faith determines that failure to commence suit would result as determined in the material impairment of a valuable aspect of its businessCompany’s reasonable discretion); provided, providedhowever, that the foregoing clauses (A), (B), (C), and (D) shall not restrict the Company consults with Parent prior or its Subsidiaries from making available to the filing newly hired employees or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or independent contractors (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business), settle or compromise plans, agreements, benefits and compensation arrangements (including cash incentive grants, but excluding any material Tax liability, make, change or revoke any material Tax election except to equity-related incentives) that are on substantially the extent same terms and conditions and have a value that is consistent with the past practice of making compensation and benefits available to newly hired employees or as required independent contractors in similar positions or for employees or independent contractors with similar levels of responsibility;
(xiv) acquire any business, assets or capital stock of any Person or division thereof, whether in whole or in part (and whether by lawpurchase of stock, change any material method purchase of Tax accountingassets, except as required by lawmerger, consolidation or take any action which would materially adversely affect otherwise), other than the Tax position acquisition of assets from vendors or suppliers of the Company or of any of its SubsidiariesSubsidiaries in the ordinary course of business;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon implement or allow to lapse announce any permanent plant closings or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of permanent facility shutdown that would implicate the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this AgreementWARN Act;
(xvi) other than in the ordinary course of business, business (A) transfermake, sell, license, mortgage, pledge, encumber, divest, cancel, abandon change or allow to lapse revoke any income or expire or otherwise dispose of any Intellectual Property Rights, other material Tax election; (B) grantmaterially change or amend its methods for reporting income, extend, amend deductions or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive accounting for Tax purposes or modify any material rights in or to Owned Intellectual PropertyTax accounting period, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applicationsfile any material amended Tax Return, or (D) fail settle or compromise any Action relating to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as amount of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure ScheduleTaxes, (AE) terminate, enter into, amend or renew (or communicate into any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costsmaterial closing agreement, (BF) increase in enter into any manner the compensationmaterial agreement with a Governmental Authority with respect to Taxes, bonus(G) enter into or change any material Tax sharing, pensionTax advance pricing, welfareTax allocation, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of Tax indemnification agreement that is binding on the Company or its Subsidiaries, (CH) pay any bonus consent to the extension or incentive compensation under any Benefit Plan in excess waiver of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect limitation period applicable to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms material amount of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAPtaxes, (I) hire make a request for a material Tax ruling to any executive officer Governmental Authority or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into surrender any collective bargaining agreement right to claim a material Tax refund, offset, abatement, reduction, deduction, exemption, credit or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result reduction in any of the conditions to the Merger set forth in Article VII not being satisfiedliability; or
(xixxvii) agree, authorize or commit to do any of the foregoing.
(bc) Prior to making any formal written communications or group oral presentations to Following the directors, officers or employees of date hereof and through the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this AgreementClosing Date, the Company shall provide agrees to use commercially reasonable efforts to keep Parent informed, at regular intervals, regarding its cash position and current and projected cash burn in accordance with a copy historical practice in keeping its own senior leadership informed of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed)such matters, and agrees to use commercially reasonable efforts to notify Parent reasonably promptly and the Company shall cooperate in providing any such mutually agreeable communicationreasonable detail upon becoming aware that its monthly cash burn has exceeded or may exceed $4,000,000.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Sources: Merger Agreement (Eargo, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier of the termination of this Agreement and prior pursuant to its terms or the Effective Time and (unless Buyer shall otherwise approve, such approval not to be unreasonably withheld if the request relates to any matters other than those described in clauses (i), (iii), (iv), (x), (xi), or (xv) below), except (A) as otherwise expressly required contemplated by this Agreement, (B) Agreement and except as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) the business of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course consistent with past practices and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its their business organizations intact and maintain existing relations and goodwill with Governmental Entities, material customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, key employees and other business associates and keep available the services of its and its Subsidiaries’ present employees key employees, to maintain all of its material operating assets in their current condition (normal wear and agentstear excepted) and to maintain and preserve its business organization and its material rights and franchises. Without limiting the generality of, of the foregoing and in furtherance of, the foregoingthereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A1) as otherwise expressly required by this Agreement, (B2) upon at least twenty-four hours prior written notice delivered to Buyer (if feasible), as may be required by applicable LawsLaws (including the rules of NASDAQ), (C3) as Parent Buyer may consent to in writing (approve, such consent approval not to be unreasonably withheldwithheld if the request relates to any matters other than those matters described in clauses (i), delayed or conditioned) (iii), (iv), (x), (xi), or (Dxv) below, or (4) as set forth in Section 6.1(a) 6.1 of the Company Disclosure ScheduleLetter, the Company will not and will not permit its Subsidiaries to:
(i) adopt a plan of complete or propose partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of such entity;
(ii) enter into any change in new line of business outside its certificate existing business segments (other than as permitted by clause (vi));
(iii) (A) amend its articles of incorporation or incorporation, by-laws or other applicable governing instruments; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property in respect of any capital stock; (D) enter into, amend or modify any shareholder rights agreement, rights plan, “poison pill” or other similar agreement or instrument; or (E) repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock (except pursuant to the forfeiture of Company Options, Company Restricted Shares or Common Stock Units or the acquisition by the Company of Company Shares in settlement of the exercise price of a Company Option or Tax withholding obligations of holders of Company Options, Company Restricted Shares or Common Stock Units);
(iiiv) merge or consolidate the Company itself or any of its Subsidiaries with with, acquire all or substantially all of the assets of, or acquire all or a substantial portion of any equity or voting interests of any other Person, except for any such transactions among wholly its wholly-owned Subsidiaries of the CompanySubsidiaries, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesbusinesses (other than as permitted by clause (vi));
(iiiv) form any Subsidiary of the Company or any of its Subsidiaries;
(vi) acquire any business, whether by merger, consolidation, purchase of property or assets outside or otherwise (valuing any non-cash consideration at its fair market value as of the ordinary course date of business from the agreement for such acquisition); provided that neither the Company nor any of its Subsidiaries shall make any acquisition that would, or would reasonably be expected to prevent, delay or impair the Company’s ability to consummate the transactions contemplated by this Agreement;
(vii) incur, prepay, repurchase, assume or materially modify any indebtedness for borrowed money or guarantee any indebtedness of another Person, or issue or sell any debt securities or warrants or other Person rights to acquire any of its debt securities or of any of its Subsidiaries, except for (A) indebtedness for borrowed money (x) interest rate swaps on customary commercial terms consistent with a value past practice and in compliance with its risk management policies in effect on the date of this Agreement or purchase price relating to acquisitions by the Company, collectively in the aggregate in excess of, individually or an amount not to exceed $10,000,000 in the aggregate, $2,500,000or (y) in replacement of existing indebtedness for borrowed money, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(viii) make or commit to any capital expenditures materially in excess of the aggregate amount reflected in the Company’s capital expenditure budget for the period in which such capital expenditures are made;
(ix) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its material assets, Intellectual Property, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries, other than acquisitions pursuant to Contracts in effect as of the date of this AgreementAgreement or sales or licenses in the ordinary course of business;
(ivx) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize or agree to the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock stock, or any other equity or voting interest of the Company or of any of its Subsidiaries (other than the issuance of shares by a wholly wholly-owned Subsidiary of the Company to the Company it or another wholly of its wholly-owned Subsidiary or the issuance of Shares pursuant to Company OptionsSubsidiaries), Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock stock, or such convertible or exchangeable securities, other than in connection with the exercise of the Top-Up Option or any Company Options issued as of the date hereof;
(vxi) create make any change with respect to accounting policies or incur any Lien material to the Company procedures, except as required by changes in GAAP or any of its Subsidiaries on any assets of the Company or any of its Subsidiariesby Law;
(vixii) other than pursuant to the terms of Contracts in effect except as of required by Law, (A) make, revoke or change any material Tax election or take any material position on any material Tax Return filed on or after the date of this Agreement and provided to Parent or adopt any material method therefor that is inconsistent with elections made, positions taken or methods used in preparing or filing similar Tax Returns in prior to the date of this Agreement, periods or (B) settle or resolve any material Tax controversy;
(xiii) make any material loans, advances, guarantees advances or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(viixiv) declareenter into any non-competition Contract or other Contract that limits in any material respect either the type of business in which the Company or its Subsidiaries (or, set asideafter the Effective Time, make Buyer or its Affiliates) may engage or the manner or locations in which any of them may so engage in any business;
(xv) except as required pursuant to Contracts in effect as of the date of this Agreement, or as otherwise required by this Agreement or applicable Law: (A) grant or provide any severance or termination payments or benefits to any of its directors, officers or employees; (B) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any dividend bonus to, or make any new equity awards, except as provided in Section 6.1(a)(x) above, to any of its directors, officers or employees (other than increases in compensation in connections with new-hires and promotions, compensation adjustments in the ordinary course of business consistent with the normal annual review cycle of the Company and payment of bonuses in the ordinary course of business and consistent with past practices); provided however, the Company may establish a cash retention program comprised of up to $375,000 in aggregate payments to employees of the Company who remain employed by the Company for at least 12 months following the Closing Date, provided that such amount will increase by $250,000 to a total of $625,000 in aggregate payments if the Offer Closing has not occurred within 90 days from the date hereof, and thereafter Buyer will reasonably consider an additional increase to such amount as reasonably requested by the Company; (C) establish, adopt, amend or terminate any Company Compensation and Benefit Plan or amend the terms of any outstanding equity-based awards; (D) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Compensation and Benefit Plans, to the extent not already provided in any such Company Compensation and Benefit Plan; (E) change any actuarial or other distribution, payable in cash, stock, property or otherwise, assumptions used to calculate funding obligations with respect to any Company Compensation and Benefit Plan or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (F) forgive any loans to any of its capital stock (except for (A) dividends paid by or of any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the CompanySubsidiaries’ directors, officers or employees;
(xvi) adopt or enter into any agreement with respect collective bargaining agreement, works council agreement, or other labor union Contract applicable to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security employees of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is would reasonably likely be expected to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions of the Offer set forth on Exhibit A or to the Merger set forth in Article VII not being satisfiedsatisfied or intended to prevent, delay or materially impair the ability of the Company to consummate or otherwise impede, interfere or be inconsistent with the Offer, the Merger or any transactions contemplated thereby;
(xviii) settle any litigation in any forum or any dispute, or any administrative or other proceedings before or threatened to be brought before a Governmental Entity, including but not limited to any claims of shareholders and any shareholder litigation relating to this Agreement or any transaction contemplated by this Agreement or otherwise, other than settlements solely for monetary compensation and/or the provision of services and/or products by the Company with an aggregate value of less than $500,000;
(xix) disclose any confidential or proprietary information of the Company or any of its Subsidiaries other than pursuant to a confidentiality agreement restricting the right of the recipient thereof to use and disclose such confidential or proprietary information;
(xx) fail to keep in force any material insurance policy or replacement or revised provisions providing insurance coverage with respect to the assets, operations and activities of the Company and its Subsidiaries as are currently in effect;
(xxi) except in the ordinary course of business consistent with past practice, (A) enter into any Contract that would constitute a Material Contract, or modify, amend (in the case of modifications or amendments, in a manner that is, taken as a whole, adverse in to the Company and its Subsidiaries) or terminate any Material Contract, or (B) waive, release or assign any material rights or claims under any Material Contract;
(xxii) convene any annual or special meeting (or any adjournment thereof) of the shareholders of the Company other than the Shareholders Meeting (if such a meeting is required by this Agreement and applicable Law); or
(xixxxiii) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees Within ten days of the Company or any end of its Subsidiaries pertaining to compensation or benefit matters that are affected by each month after the transactions contemplated by date of this Agreement, the Company shall covenants and agrees to provide Parent Buyer with a copy written notice of (i) any indebtedness for borrowed money incurred, prepaid, repurchased, assumed, materially modified or guaranteed in compliance with Section 6.1(a)(vii) during the prior month, (ii) any action taken under Section 6.1(a)(xii) during the prior month because required by Law, (iii) any material loans, advances or capital contributions to or investments in the Company or any Subsidiary permitted by Section 6.1(a)(xiii) during the prior month, (iv) any action taken during the prior month permitted under Section 6.1(a)(xv) because it was required by Contracts in effect as of the intended communicationdate of the Agreement or Law, Parent shall have a reasonable period of time to review and comment on (v) any increases in compensation during the communication (which comments shall not be unreasonably withheld or delayedprior month permitted under Section 6.1(a)(xv)(B), (vi) the name and Parent title of any employee receiving a retention payment during the prior month permitted under Section 6.1(a)(xv)(B) and the Company shall cooperate amount of such payment, (vii) any settlement of litigation during the prior month permitted under Section 6.1(a)(xviii), (viii) any action taken during the prior month which is permitted under Section 6.1(a)(xxi) because it was in providing any such mutually agreeable communicationthe ordinary course of business and (ix) all new employees hired and promotions during the prior month.
(c) Subject Buyer covenants and agrees as to Section 6.5itself and its Subsidiaries that, Parent shall after the date hereof and until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (i) as otherwise expressly required by this Agreement, (ii) as the Company may approve, such approval not take to be unreasonably withheld, conditioned or delayed, or (iii) pursuant to its obligations under a Contract in effect as of the date of this Agreement, Buyer will not and will not permit Merger Sub or any of its Buyer’s or Merger Sub’s Subsidiaries to take any action or omit to take any action that is would reasonably likely be expected to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Offer set forth on Exhibit A or to the Merger set forth in Article VII not being satisfiedsatisfied or otherwise would reasonably be expected to prevent, delay or impair Buyer’s or Merger Sub’s ability to consummate the Offer, the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time and except Except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (Di) as set forth in Section 6.1(a7.1(a) of the Company Disclosure ScheduleLetter, (ii) as expressly contemplated or permitted by this Agreement, (iii) as may be required to comply with applicable Law, any Order or any written notice from a Governmental Entity or (iv) with the business prior written consent of it and its Subsidiaries Parent (which consent shall not be conducted in unreasonably withheld delayed or conditioned), during the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, period from the date of this Agreement until the earlier of the Effective TimeTime and the date of termination of this Agreement in accordance with Section 10.1, except the Company shall, and shall cause each of its Subsidiaries to, conduct its respective business in all material respects, in the ordinary course.
(Ab) as otherwise expressly required by this Agreement, Except (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (Di) as set forth in Section 6.1(a7.1(b) of the Company Disclosure ScheduleLetter, (ii) as expressly contemplated or permitted by this Agreement, (iii) as may be required to comply with applicable Law, any Order or any written notice from a Governmental Entity, or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld delayed or conditioned), during the period from the date of this Agreement until the earlier of the Effective Time and the date of termination of this Agreement in accordance with Section 10.1, the Company will not shall not, and will shall not permit any of its Subsidiaries to:
(i) adopt (A) adjust, split, combine or propose any change in reclassify its certificate capital stock or the capital stock of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with Subsidiaries; (B) declare or pay any dividend or make any other Person, distribution in respect of the shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock (except for any such transactions among wholly owned Subsidiaries of the Company, dividend or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares distribution by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date Company); (C) directly or indirectly redeem, purchase or otherwise acquire any shares of this Agreement) its capital stock or any securities or obligations convertible into or exchangeable into or exercisable for any shares of its capital stock (except for the acquisition of Company Common Stock (1) tendered in connection with a cashless exercise of Company Options or in order to pay Taxes with respect to equity-based awards, or for the Company to satisfy withholding obligations in respect of such Taxes, in connection with Company Options or other equity-based awards or (2) in connection with the forfeiture of equity-based awards granted pursuant to the Company Equity Plans); or (D) except for transactions solely between the Company and its Subsidiaries, or between Subsidiaries of the Company, issue, deliver, sell, pledge, dispose of, grant, award or encumber any shares of capital stock, ownership interests or voting securities, or any options, warrants warrants, convertible securities or other rights of any kind to acquire or receive any shares of such capital stock, any other ownership interests or any voting securities (including restricted stock units, stock appreciation rights, phantom stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to similar instruments), of the Company or any of its Subsidiaries (except for issuances (1) of shares of Company Common Stock upon the exercise or settlement of Company Options, rights under the Company ESPP or pursuant to other equity-based awards in effect on the date hereof, (2) required to be made by virtue of the consummation of the Merger or the Offer, or (3) required to be made pursuant to this Agreement or any other agreement in effect on the date hereof to which the Company is a party, or otherwise permitted by this Section 7.1(b));
(ii) sell, transfer, mortgage, encumber, dispose of or otherwise subject to any Lien (other than a Permitted Lien) any of its material assets or material properties (other than to a wholly owned Subsidiary), by merger, consolidation, asset sale or other business combination (including formation of a joint venture) or cancel, release or assign any material Indebtedness or claim, in each case, except (A) such actions in the ordinary course of business consistent with past practice, including dispositions of obsolete or worthless assets, sales of receivables and other assets in the ordinary course of business and the licensing of Company Intellectual Property to customers in the ordinary course of business, (B) sales of immaterial assets for a purchase price of $2,000,000 or less in any single case or $8,000,000 in the aggregate and (C) leases and subleases of real property owned by the Company or any Company Subsidiary and leases of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in real property under which the Company or any direct Company Subsidiary is a tenant or indirect a subtenant and voluntary terminations or surrenders of such leases;
(iii) make any acquisition, by purchase or other acquisition of stock or other equity interests, by merger, joint venture, consolidation, asset purchase or other business combination, or by contributions to capital, or make any material purchases of any property or assets, in or from any other Person other than a wholly owned Subsidiary of the Company, except (A) in all cases as expressly required by the terms of any Contract in force on the date of this Agreement; and (B) as otherwise permitted by this Section 7.1(b);
(viiiv) declareenter into, renew, extend, amend or terminate any Contract that is or would constitute a Material Contract, in each case other than in the ordinary course of business;
(v) except as required by Law or any Contract in effect on the date hereof (including, without limitation, this Agreement and the Company Benefit Plans and Employment Agreements) or as set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any forth on Section 7.1(b)(v) of its capital stock (except for the Company Disclosure Letter: (A) dividends paid by amend materially or terminate any direct Company Benefit Plan or indirect wholly owned Subsidiary to the Company material Employment Agreement, or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Shareestablish, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) adopt or enter into any employment agreement with respect to or any plan, program, policy or arrangement that, if in effect on the voting date of its capital stock;
(viii) reclassifythis agreement, splitwould be a material Company Benefit Plan or material Employment Agreement, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employeesenter into any collective bargaining agreement or similar material labor agreement with a labor union, directors works council or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Personother employee representative, or issue (C) increase the salary or sell any debt securities or warrants wages, as applicable, bonus or other rights to acquire incentive compensation, or other benefits or compensation of any debt security director, officer or employee of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries (i) increases in the ordinary course of business consistent with past practice in connection with annual performance and salary reviews, not to exceed, in the aggregate, four percent (4%) of such person’s compensation or (ii) non material increases in benefits or compensation made in the ordinary course of business;
(vi) amend the Company Charter or Company By-Laws;
(vii) incur any Indebtedness, except, in each case, (A) intercompany guarantees or intercompany “keep well” or other agreements to maintain any financial statement condition of the Company or any Company Subsidiary, (B) letters of credit or guarantees issued in the ordinary course of business, (C) Indebtedness incurred through the revolving credit facility under the Credit Agreement (including in respect of letters of credit), (D) Indebtedness having an aggregate principal amount outstanding that is not in excess of $2,500,000 (provided that any such Indebtedness is prepayable without premium or penalty, other than customary breakage costs), (E) Indebtedness incurred in connection with the refinancing of any Indebtedness existing on the date hereof (other than the Notes under the Notes Indenture or the Credit Agreement) or permitted to be incurred, assumed or otherwise entered into hereunder (provided that any such Indebtedness is prepayable without premium or penalty, other than customary breakage costs) and (F) capital leases entered into in the ordinary course of business consistent with past practice;
(xviii) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the material position on any material Tax position Return, in each case that is inconsistent with elections made or positions taken in preparing or filing similar Tax Returns in prior periods; enter into any closing agreement or settle or compromise any material Tax liability of the Company or any of its Subsidiaries, or agree to any extension or waiver of the statute of limitations with respect to the assessment or determination of any material amount of Taxes, in each case except in the ordinary course of business;
(ix) make any material changes in its accounting methods, practices or policies, except as may be required under GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization;
(x) waive, settle or compromise any material pending or threatened suit, audit, action or claim, other than waivers, settlements or compromises that involve only the payment of monetary damages by the Company or any of its Subsidiaries;
(xvxi) transferfail to maintain and protect, sellor abandon, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or lapse, expire or otherwise dispose of be cancelled any assetsregistration or application for registration for, licensesmaterial Company Intellectual Property, operationsor knowingly disclose to any Person not an employee of, rightsor consultant or advisor to, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its SubsidiariesSubsidiaries bound by confidentiality obligations to the Company or such Subsidiary, except sales or otherwise knowingly disclose any trade secret, process or know-how not a matter of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect public knowledge prior to the date of this Agreement;
(xvi) other than , except pursuant to judicial order or process or commercially reasonable disclosures in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon business made under an existing Contract or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in agreement containing confidentiality obligations for the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants benefit of the Company or its SubsidiariesSubsidiary, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Companyapplicable;
(xviiixii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere communicate with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining regarding the future compensation, benefits or other treatment that they will receive following the Merger Closing, other than (i) any such communication which is consistent with prior directives or documentation provided to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide by Parent with a copy of the intended communication(in which case, Parent shall have a provide the Company with reasonable period of time prior notice of, and the reasonable opportunity to review and comment on the communication (which comments shall not be unreasonably withheld or delayedupon, any such communication), and Parent and (ii) any such communication which addresses any employee’s right to receive the Offer Price or the Merger Consideration or any employee’s treatment of his or her equity awards, (iii) any such communication which addresses any employee in their capacity as a Stockholder of the Company shall cooperate or (iv) any communication regarding matters addressed in providing any such mutually agreeable communication.Section 8.4 of this Agreement; or
(cxiii) Subject to Section 6.5agree to, Parent shall not or make any commitment to, take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedactions prohibited by this Section 7.1(b).
Appears in 1 contract
Interim Operations. Except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as agreed to in writing by Parent (a) The which shall not be unreasonably withheld or delayed, other than with respect to subsections 5.01(c), 5.01(d), 5.01(g), and 5.01(h), in which case such consent shall be given in Parent’s sole discretion), the Company covenants and agrees as to itself and its Subsidiaries that, after that during the period from the date of this Agreement and prior to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) operations of the Company Disclosure Schedule, and the business of it and its Subsidiaries shall be conducted in the ordinary course of business consistent with past practice;
(b) the Company shall, and usual course andshall cause each Subsidiary to, to the extent consistent therewith(i) maintain its existence in good standing under applicable Law, it and its Subsidiaries shall (ii) use their respective commercially reasonable best efforts to protect and preserve in all material respects its assets and to (A) preserve intact its assets, properties, contracts or other legally binding understandings, licenses and business organizations and maintain existing relations and goodwill with Governmental Entitiesorganizations, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and (B) keep available the services of its current officers and its Subsidiaries’ present key employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) preserve the current relationships of the Company Disclosure Scheduleand the Subsidiaries with payors, the Company will not customers, suppliers, distributors, lessors, licensors, licensees, creditors, employees, contractors and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate Persons with which the Company or any Subsidiary has business relations;
(c) the Company shall not (i) authorize for issuance, issue, deliver, propose, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its Subsidiaries with capital stock or the capital stock of any Subsidiary, any other Personsecurities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for any such transactions among wholly owned Subsidiaries issuances of Common Stock upon the Company, exercise of Options or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect Warrants outstanding as of the date of this Agreement;
hereof, (ivii) issuerepurchase, sell, pledge, dispose of, grant, transfer, encumberredeem or otherwise acquire, or authorize the issuancepermit any Subsidiary to repurchase, sale, pledge, disposition, grant, transfer, lease, license, guarantee redeem or encumbrance ofotherwise acquire, any shares of capital stock or other equity interests of the Company or any of its Subsidiaries Subsidiary (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Optionsincluding, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or without limitation, securities convertible or exchangeable into or exercisable for any shares of such capital stockfor, or any options, warrants warrants, calls, commitments or other rights of any kind to acquire any shares of such acquire, capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets other equity interests of the Company or any Subsidiary), (iii) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any Subsidiary, (iv) amend or otherwise change its certificate of incorporation or bylaws or permit any Subsidiary to amend its certificate of incorporation, bylaws or equivalent organizational documents or (v) adjust, split, combine or reclassify any shares of its Subsidiariescapital stock, or permit any Subsidiary to adjust, split, combine or reclassify any shares of its capital stock, except in the case of (ii) for purchases, redemptions or other acquisitions of capital stock or other equity interest required by the terms of the applicable Stock Plan;
(vid) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company shall not, and other than in the Company or shall not permit any direct or indirect wholly owned Subsidiary of the Company);
to (viii) declare, set aside, make establish a record date for, or pay any dividend or other distribution, payable dividends on (whether in cash, stockstock or other property), property or otherwisemake any other distributions in respect of, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary Subsidiaries to the Company Company), (ii) acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other direct manner, any business or indirect wholly owned any corporation, partnership, association or other business organization or division thereof, or (iii) authorize or make any monthly capital expenditures in excess of $100,000 in the aggregate (other than pursuant to commitments prior to the date hereof);
(e) the Company shall not, and shall not permit any Subsidiary to, except as expressly contemplated by this Agreement (including, without limitation, Section 2.03 hereof) (i) increase or regular quarterly dividends not agree to exceed $0.10 per Shareincrease in any manner the compensation or benefits of, declared or pay any bonus to, any current or former director, officer or employee except (A) for increases and paid consistent with prior timingbonuses expressly contemplated by or required under existing employment agreements or bonus plans, and (B) for increases in compensation to non-director and non-officer employees in the ordinary course of business consistent with past practice, (ii) become obligated under any cash dividends paid Benefit Plan that was not in existence on the date hereof or amend, modify or terminate any Benefit Plan or other benefit or compensation plan, program, agreement or arrangement or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof, excluding for this purpose any amendment or modification as may be necessary to comply with, or to avoid the imposition of penalties or excise taxes to the Company, any Subsidiary, or any Benefit Plan participant, under applicable Law, (iii) hire any new employees other than non-officer employees in the ordinary course of business consistent with past practice, or (iv) terminate any officer or key employee of the Company or one of its wholly-owned Subsidiaries any Subsidiary other than for good reason or for reasonable cause or (v) except as may be required to comply with applicable Law, pay any benefit not required by a wholly-owned Subsidiary any plan or arrangement as in effect as of the Company) date hereof (including, without limitation, securities exchangeable for, or enter into options, warrants, calls, commitments or rights of any agreement with respect kind to acquire, capital stock or other equity interests of the voting of its capital stockCompany or any Subsidiary);
(viiif) reclassifythe Company shall not, splitand shall not permit any Subsidiary to, combinesell, subdivide or redeemlease, purchase license, mortgage or otherwise acquireencumber or subject to any Lien or otherwise dispose of, directly or indirectlyagree to sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of (including through any sale-leaseback or similar transaction), any of its capital stock properties or securities convertible assets other than (i) pursuant to existing contracts and commitments, (ii) properties or exchangeable into assets (or exercisable for any shares portions of its capital stock, except from (Aproperties or assets) holders of Company Options in full or partial payment not material to the operation of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise business of the Company Options or Company SARs or and/or any Subsidiary with a fair market value less than $50,000, (iii) inventory in the lapse ordinary course of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or business consistent with past practice, (Biv) former employees, directors or consultants following termination of their relationship with licenses granted by the Company in accordance with applicable agreements providing the ordinary course of business to customers for such customers’ use of the repurchase of shares upon such terminationCompany’s products and services, and (v) Permitted Liens;
(ixg) incur the Company shall not, and shall not permit any Subsidiary to, (i) incur, assume or pre-pay any indebtedness for borrowed money or guarantee enter into any agreement to incur, assume or pre-pay any indebtedness for borrowed money, or guarantee, or agree to guarantee, any such indebtedness or obligation of another Person, or issue or sell sell, or agree to issue or sell, any debt securities or options, warrants or other calls or rights to acquire any debt security securities of the Company or any Subsidiary, guarantee any debt securities of its Subsidiariesothers, except enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, (ii) make or forgive any loans, advances or capital contributions to, guarantees for inter-company borrowings solely the benefit of, or investments in, any Person, other than loans between or among the Company and its wholly-any wholly owned Subsidiaries or among Subsidiary and cash advances to the Company’s wholly-owned Subsidiaries or any Subsidiary’s employees for reimbursable travel and other business expenses incurred in the ordinary course of business consistent with past practicepractice or (iii) assume, guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except for the obligations of the Subsidiaries permitted under this Agreement;
(xh) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule shall not, and consistent therewithshall not permit any Subsidiary to, make adopt or authorize any capital expenditure;
(xi) (A) enter put into any Contract that would have been effect a Material Contract had it been entered into prior to this Agreement plan of complete or (B) amendpartial liquidation, modify or terminate any Material Contractdissolution, or cancelmerger, modify or waive any debtsconsolidation, rights or claims thereunder; for purposes of this Section 6.1restructuring, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation recapitalization or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release reorganization of claims and (II) the monetary payment by the Company or any Subsidiary does (other than any transaction specifically contemplated by this Agreement or as permitted by Section 5.09);
(i) the Company shall not, and shall not exceed $2,000,000 permit any Subsidiary to, (i) enter into, or $15,000,000 in the aggregate for all such settlementsmaterially amend, modify, supplement or terminate any Material Contract or Lease, (ii) enter into, or amend, modify, supplement or terminate any contract that if so entered into, modified, amended or terminated could be reasonably likely to (A) have a Company Material Adverse Effect, (B) commence, join, make an appeal with impair in any material respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection ability of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in perform its obligations under this Agreement or (C) prevent or materially delay the material impairment consummation of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceedingTransactions, or (IIIiii) pursuant waive, release, grant, assign, transfer or fail to this Agreementenforce any of its material rights or claims (whether such rights or claims arise under a Material Contract or otherwise);
(xivj) file the Company shall, and shall cause the Subsidiaries to, (i) comply in all material respects with their obligations under the Material Contracts as such obligations become due, (ii) maintain insurance covering risks of such types and in such amounts as are consistent with the Company’s past practices and (iii) use commercially reasonable efforts not to permit any insurance policy naming it as beneficiary or amend loss payable payee to be canceled or terminated;
(k) the Company shall not, and shall not permit any material Tax Return except Subsidiary to, (i) pay, discharge, settle or satisfy any liabilities in excess of $100,000 (individually or in the aggregate), other than the payment, discharge or satisfaction of liabilities in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent business consistent with past practice practice, as required by any applicable Law or as required by law, change the terms of any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position contract of the Company or the Subsidiaries, (ii) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated under the Exchange Act that would be required to be disclosed under such Item 404, (iii) compromise or settle any Action directly relating to or affecting the Company or the Subsidiaries having a value or in an amount in excess of its Subsidiaries;
$250,000, (xviv) transfereffectuate a “plant closing” or “mass layoff,” as those terms are defined in the Worker Adjustment and Retraining Notification Act (WARN), sellaffecting in whole or in part any site of employment, leasefacility, licenseoperating unit or employee of the Company or any Subsidiary, mortgage, pledge, surrender, encumber, divest, cancel, or (v) abandon or allow to lapse or expire any registration or otherwise dispose application for material IP Rights;
(l) the Company shall not, and shall not permit any Subsidiary to, (i) change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any assetsSubsidiary as of the date hereof, licensesexcept as may be required as a result of a change in applicable Law or in GAAP, operations(ii) revalue in any material manner any of its assets (including, rightswithout limitation, product lineswriting down or writing off any notes or accounts receivable in any manner), businesses except as required by GAAP or interests therein (iii) make or change any Tax election, make or change any method of accounting with respect to Taxes except as may be required as a result of applicable Law, settle or compromise any Tax liability in excess of $250,000 (individually or in the aggregate) or file any amended Tax Return that would increase the Tax liability of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in Subsidiary after the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;Effective Time; and
(xvim) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Scheduleshall not, (A) terminateand shall not permit any Subsidiary to, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize agree or commit to do any of the foregoing.
(b) . Notwithstanding anything to the contrary set forth herein, it is understood and agreed that none of Parent, Merger Sub or their affiliates have the right to control or direct the Company’s operations prior to the Effective Time. Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this AgreementEffective Time, the Company shall provide Parent exercise, consistent with a copy the terms of the intended communicationthis Agreement, Parent shall have a reasonable period of time to review complete control and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communicationsupervision over its operations.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Interim Operations. (a) The Company covenants From and agrees as to itself and its Subsidiaries that, after the date execution and delivery of this Agreement until the earlier of the Effective Time and the termination of this Agreement and prior abandonment of the transactions contemplated by this Agreement pursuant to the Effective Time and Article IX, except (Ai) as otherwise expressly required required, contemplated or permitted by this Agreement, (B) Agreement or as required by a Governmental Entity or applicable LawsLaw, (Cii) as set forth in Section 7.1(a) of the Company Disclosure Schedule or (iii) as Parent may shall otherwise consent to in writing (such which consent shall not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of ), the Company Disclosure Schedule(A) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to conduct their respective businesses in the Ordinary Course of Business in all material respects, (B) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to (x) maintain all existing relationships and goodwill with key customers, suppliers and other persons having material business of it relationships with the Company and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and (y) keep available the services of its the officers and key employees of the Company and its Subsidiaries’ present employees , and agents. Without (C) without limiting the generality of, and in furtherance of, of the foregoing, from the date of this Agreement until the Effective Timeshall not, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will not and will not permit shall cause its Subsidiaries not to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instrumentsOrganizational Documents;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions solely among wholly owned Wholly Owned Subsidiaries of the Company,
(iii) adopt or enter into a plan of restructuring, reorganizing, dissolving, recapitalizing, complete or restructure, reorganize partial liquidation or completely or partially liquidate or otherwise similar transaction;
(iv) enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(iiiv) acquire or agree to acquire by merger, consolidation, acquisition of stock, equity or assets outside of the ordinary course of business or otherwise, any business, Person, division, properties or assets from any -52- other Person Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price in the aggregate not in excess of, individually of $1 million in any individual transaction or $2 million in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(ivvi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(vii) issue, deliver, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee guarantee, Encumber or encumbrance of, otherwise enter into any Contract or understanding with respect to the voting of or transfer any shares of capital stock of the Company or capital stock or other equity or equity-based interests of any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company OptionsSubsidiaries, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any such shares of such capital stockstock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of such capital stock stock, other equity interests or such convertible or exchangeable securities;
securities (vother than (A) create the delivery of any Common Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated on the Preferred Shares) in accordance with the terms of the Preferred Shares or incur any Lien material (2) the conversion of the Company Notes in accordance with the Indenture and the exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations (B) the issuance of Preferred Shares in connection with the payment of dividends on the Preferred Shares in accordance with the terms of the Preferred Shares or (B) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (1) by a Wholly Owned Subsidiary of the Company to the Company or any of its Subsidiaries on any assets another Wholly Owned Subsidiary of the Company, (2) in respect of Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect Equity Awards outstanding as of the date of this Agreement and provided to Parent prior in accordance with their terms and, as applicable, the Stock Plans in effect as of the Capitalization Time or (3) pursuant to the date of this Agreement, ESPP in accordance with its terms and subject to Section 4.3(g));
(viii) make any loans, advances, guarantees or capital contributions to or investments in any Person in excess of $200,000 in the aggregate (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of between the Company and other than any of its Wholly Owned Subsidiaries in the Company or any direct or indirect wholly owned Subsidiary Ordinary Course of the CompanyBusiness);
(viiix) declare, set aside, establish a record date for accrue, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, otherwise with respect to any of its capital stock or other equity interests (and for the avoidance of doubt, excluding the Company Notes) of the Company or its Subsidiaries, except for (A) dividends paid by any direct or indirect wholly owned Wholly Owned Subsidiary to the Company or to any other direct Wholly Owned Subsidiary of the Company or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid payable to the Company holders of Preferred Shares, payable in cash or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary Preferred Shares, in accordance with the terms of the Company) or enter into any agreement with respect to the voting of its capital stockPreferred Shares;
(viiix) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquireacquire (or offer to do any of the foregoing), directly or indirectly, any of its capital stock stock, other equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stockstock or other equity interests, except from other than (A) holders the withholding of Company Options in full or partial Common Shares to satisfy the payment of the exercise thereof and/or any applicable Taxes payable by such holder price on the exercise of a Company Option or withholding Tax obligations upon the exercise, vesting or settlement of Company Equity Awards outstanding as of the date of this Agreement, in each case, in accordance with their terms and, as -53- applicable, the Stock Plans as in effect as of the Capitalization Time and (B) pursuant to an exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company Capped Call Transactions in accordance with applicable agreements providing for the repurchase of shares upon such terminationtheir terms;
(ixxi) incur or assume any indebtedness for borrowed money, guarantee any indebtedness for borrowed money or guarantee enter into a “keep well” or similar arrangement in respect of indebtedness for borrowed money except for any such indebtedness of another Person, not to exceed $2.5 million individually or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries $5 million in the ordinary course consistent with past practiceaggregate;
(xxii) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewithincur, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contractpayment of, or cancelaccrual or commitment for, modify capital expenditures, or waive any debtsobligations or liabilities in connection therewith except as contemplated by or reasonably related to, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) and which shall not exceed 107.5% of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or proceduresaggregate amounts set forth in, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on capital budget set forth in Section 6.1(a)(xvii7.1(a)(xii) of the Company Disclosure Schedule, ;
(Axiii) terminate, enter into, terminate or materially amend or renew (or communicate any intention Contract pursuant to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of which the Company or any of its Subsidiaries pertaining purchase from a third party service provider Software (“Third Party IT Contracts”) (other than in the Ordinary Course of Business with respect to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any Contract that involve aggregate annual payments of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.less than $300,000);
Appears in 1 contract
Sources: Agreement and Plan of Merger (Voya Financial, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time and except (A) as unless Parent shall otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to approve in writing (such consent approval not to be unreasonably withheld, delayed or conditioned) )), and except as otherwise expressly contemplated by this Agreement or (D) required by applicable Laws or as set forth in on Section 6.1(a) of the Company Disclosure Schedule, the Company and its Subsidiaries shall cause the business of it and its Subsidiaries shall to be conducted in the ordinary course consistent with past practice and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agentsassociates. Without limiting the generality ofof the foregoing, and in furtherance of, the foregoingthereof, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required contemplated or specifically permitted by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to approve in writing (such consent approval not to be unreasonably withheld, delayed or conditionedconditioned (other than with respect to subsections (i), (ii), (iii), (iv), (vi), (vii), (viii), (x), (xiii), (xiv), (xvi), (xviii), (xix), (xx), (xxi), (xxii) (collectively, the “specified operating covenants”) or (xxiii) (but solely in the case of subsection (xxiii), with respect to the specified operating covenants), in which cases (involving the specified operating covenants) Parent may withhold its consent in its sole discretion)), (C) as required by applicable Law or any Governmental Entity or (D) as set forth in Section 6.1(a) 6.1 of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its the certificate of incorporation or by-laws bylaws or other applicable governing instrumentsinstruments of the Company or any of its Subsidiaries;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside other than capital expenditures, which shall be subject to subparagraph (ix) of this Section 6.1(a), make any acquisition of all or substantially all of the ordinary course capital stock or assets of business from any other Person Person, whether by way of stock purchase, asset purchase, merger or otherwise (any such transaction, an “Acquisition”), with a value or purchase price in the aggregate in excess ofof $10 million in any transaction or series of related transactions (and the Company shall provide reasonable advance notice to Parent of the consummation of any Acquisition with a value or purchase price in excess of $10 million), individually or make more than three Acquisitions in the aggregate, $2,500,000, other than acquisitions Acquisitions pursuant to Contracts in effect as of the date of this Agreement, copies of which have been provided to Parent or made available on the Company Data Site prior to the date hereof; (“Company Data Site,” as used in this Agreement, means the on-line data room established by the Company with Intralinks, Inc., by which the Company provided access to documents and materials to Parent and Merger Sub in connection with the transactions contemplated by this Agreement);
(iv) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than (A) the issuance of Shares upon the settlement of RSUs under the Stock Plan (and dividend equivalents thereon, if applicable) in accordance with the terms of the Stock Plan or (B) the issuance of shares by a wholly wholly-owned Subsidiary of the Company to the Company or another wholly wholly-owned Subsidiary or the issuance of Shares pursuant to Company OptionsSubsidiary), Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees advances or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly wholly-owned Subsidiary of the Company);
(viivi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly wholly-owned Subsidiary of the Company to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viiivii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stockstock (other than the acquisition of any Shares tendered by current or former employees or directors in order to pay Taxes in connection with the settlement of RSUs and other awards under the Stock Plan);
(viii) enter into any Contracts relating to interest rate protection, except from or incur, issue, modify, renew, syndicate or refinance any Indebtedness (Aother than (i) holders any letters of Company Options credit issued in full or partial payment the ordinary course of business, (ii) the exercise thereof and/or refinancing of any applicable Taxes payable by such holder upon exercise existing Indebtedness of the Company Options in the ordinary course of business (provided that any such refinancing Indebtedness so incurred must be voluntarily prepayable without premium, penalties or Company SARs or other costs in excess of $500,000 in the lapse aggregate) and (iii) any swap agreements and collar agreements entered into in the ordinary course of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship business consistent with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationpast practice);
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries reasonable expenditures related to operational emergencies that are not in excess of $1 million individually or among the Company’s wholly-owned Subsidiaries $2.5 million in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewithaggregate, make or authorize any capital expenditureexpenditures in excess of $6 million in the aggregate; provided, that in the case of any expenditures related to operational emergencies, Parent will respond to any request for consent hereunder within 24 hours of receiving such request;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xiix) make any material changes with respect to financial or Tax accounting policies or procedures, except as required by applicable Law or by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect theretoGAAP;
(Axi) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal other than with respect to a lawsuitany Tax audits, action, claim litigation or similar proceeding other than (Iproceedings) for the routine collection an amount in excess of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result $3 million individually or $10 million in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior aggregate;
(xii) except to the filing extent required by Law, make any material Tax election;
(xiii) enter into any settlement, compromise or taking of any action closing agreement with respect to such lawsuit, action, claim any material Tax liability or similar proceeding, Tax refund or (III) pursuant file any amended Tax Return with respect to this Agreementany material Tax;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material amount of assets, licenses, operations, rights, product lines, lines or businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except other than sales of Company Products inventory and parts in the ordinary course of business and sales consistent with past practice or pursuant to Contracts in force on the date of obsolete assetsthis Agreement, transactions solely among the Company and/or its wholly-owned Subsidiaries that would not result in any increase (other than a de minimis increase) in the Tax liability of the Company and its Subsidiaries or pursuant to Contracts in effect prior to the date of this Agreement, copies of which have been provided or made available to Parent prior to the date hereof;
(xv) except as required pursuant to a Benefit Plan in effect prior to the date of this Agreement or as otherwise required by applicable Law, (A) grant or provide any severance or termination payments or benefits to Service Providers of the Company Group except for new hires, in the ordinary course of business consistent with past practice, (B) increase the compensation to any Service Provider in excess, in the aggregate, of 3.75% of the current aggregate compensation of Service Providers as of the date hereof (provided that any such increase is in the ordinary course of business consistent with past practice), (C) other than, with respect to medical or dental Benefit Plans, as would not reasonably be expected, individually or in the aggregate, to result in material expense or liability to the Company or any of its Subsidiaries, establish, adopt, terminate or materially amend any Benefit Plan or any plan, program, arrangement, policy or agreement that would be a Benefit Plan if it were in existence on the date hereof or (D) grant any equity or equity-based awards; provided, that the Company may issue (i) RSUs in respect of not more than 200,000 Shares in the ordinary course of business consistent with past practice and (ii) additional RSUs on a contingent basis such that the issuance of such additional RSUs is subject to the termination of this Agreement; it being understood and agreed that the Company or a Subsidiary of the Company may make offers of employment to newly hired non-executive employees in the ordinary course of business consistent with past practice that are not inconsistent with the terms of this subsection (xv);
(xvi) other than in adopt a plan or agreement of complete or partial liquidation or dissolution of the ordinary course Company or any of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate grant any intention to take such action) any Benefit Plan, Lien other than routine amendments to qualified retirement plans or health Permitted Liens and welfare plans (other than severance plans) that do not increase benefits or result except in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation connection with Indebtedness permitted under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the CompanySection 6.1(a)(viii);
(xviii) subject in the case of Subsidiaries of the Company which are organized in jurisdictions other than a state of the United States, make any investment in debt or equity securities issued by the Company or any of its Subsidiaries organized under the laws of a state of the United States;
(xix) permit any of its Subsidiaries or any of its or their respective directors, officers, managers, employees, independent contractors, representatives or agents to promise, authorize or make any payment to, or otherwise contribute any item of value to, directly or indirectly, any non-U.S. official, in each case, in violation of the FCPA;
(xx) adopt or implement any stockholder rights plan or amend the Rights Plan, in each case, in any manner adverse to Parent or Merger Sub;
(xxi) unless such action is permitted by Section 6.2, take waive, release, fail to enforce, or consent to any action material matter with respect to which its consent is required under, any material confidentiality, standstill or omit similar agreement to take any action that is reasonably likely to prevent, interfere with which the Company or delay the consummation of the Merger or result in any of its Subsidiaries is a party;
(xxii) enter into, amend, waive or terminate any transaction that would be required to be disclosed pursuant to Section 5.1(r) if entered into at any time after the conditions Applicable Date and prior to or on the Merger set forth in Article VII not being satisfieddate hereof; or
(xixxxiii) agree, authorize or commit to do any of the foregoing.
(b) Prior Parent shall not knowingly take or permit any of its Affiliates to making take any formal written communications action that would reasonably be expected to adversely affect, prevent or group oral presentations to delay in any material respect the directors, officers or employees consummation of the Merger.
(c) If the Company obtains actual knowledge of any activities of the Company or any of its Subsidiaries pertaining Subsidiaries, including those activities of their respective directors, officers, managers, employees, independent contractors, representatives or agents, that the Company reasonably believes to compensation or benefit matters that are affected by be in violation of the transactions contemplated by this AgreementFCPA, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed)shall, and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any cause each of its Subsidiaries to use their reasonable best efforts to, cease such activities. The Company shall, and shall cause its Subsidiaries to use their reasonable best efforts to, take all actions required by law to remediate any action that is reasonably likely to preventactions taken by the Company or its Subsidiaries, interfere with or delay the consummation any of their respective directors, officers, managers, employees, independent contractors, representatives or agents in violation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedFCPA.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the date execution of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing (it being agreed that in the event the Company seeks such consent regarding COVID-19 Measures that are reasonably designed to protect the health or welfare of employees or other relevant individuals (as expressly noted in such request by the Company), Parent’s consent shall not be unreasonably withheld, conditioned or delayed; provided, that if Parent’s failure to respond in a timely manner would reasonably be expected to jeopardize the health or welfare of employees or other relevant individuals, Parent shall be deemed to have consented to such act or omission if it fails to expressly consent to or deny consent for such requested actions or inactions within one (1) Business Day of such request) and except as (Ai) as otherwise required by applicable Law, (ii) expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) Agreement or (Diii) as set forth otherwise expressly disclosed in Section 6.1(a) 6.1 of the Company Disclosure ScheduleLetter), the Company shall use its commercially reasonable efforts to (A) conduct its business and the business of it and its Subsidiaries shall be conducted in the ordinary course of business consistent with past practice and usual course and, (B) maintain the status of the Company as a “real estate investment trust” within the meaning of Sections 856 through and including 860 of the Code (a “REIT”) for all taxable periods ending on or prior to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agentsClosing Date. Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement until and prior to the Effective Time, except as (Aw) as otherwise expressly required by this Agreement, (B) as required by applicable LawsLaw, (Cx) as Parent may consent to approve in writing (such consent approval not to be unreasonably withheld, conditioned or delayed or conditionedwith respect to clauses (iv), (vi), (viii), (ix), (xiii), (xiv), (xvi), (xviii) or (Dxix)), (y) as set forth expressly disclosed in Section 6.1(a) 6.1 of the Company Disclosure ScheduleLetter or (z) expressly provided for in this Agreement, the Company will shall not and will not permit any of its Subsidiaries to:
(i) adopt (A) amend, supplement or propose any change in otherwise modify its certificate articles of incorporation or by-laws bylaws (or other applicable comparable governing instruments;
documents), (iiB) merge split, combine, subdivide or consolidate the Company or any reclassify its outstanding shares of its Subsidiaries with any other Person, capital stock (except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares transaction by a wholly owned Subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (other than (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company (other than a Taxable REIT Subsidiary) to another direct or indirect wholly owned Subsidiary of the Company or another wholly owned Subsidiary to the Company, (2) any distributions of the Company and its Subsidiaries, including under Sections 857, 858 or 860 of the issuance Code, as may be reasonably necessary to (x) maintain the status of Shares pursuant to the Company Optionsas a REIT or (y) avoid or reduce the imposition of any corporate level Tax or excise Tax under the Code and (3) dividend equivalents payable upon the vesting or settlement of Company Director-Granted RSUs, Company Restricted Shares or Service-Based RSUs and Company Market-Based RSUs) outstanding on the Convertible Senior Notes outstanding as date of this Agreement in accordance with the terms of such awards and the terms of the Company Stock Plans in effect on the date of this Agreement, (D) enter into any agreement with respect to the voting of its capital stock or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of such its capital stock, other than (I) pursuant to the cashless exercise of Company Options or the forfeiture of, or withholding of Taxes with respect to, Company Options, Company Director-Granted RSUs, Company Service-Based RSUs or Company Market-Based RSUs in connection with any Taxable event related to such awards, in each case, in accordance with past practice and with the terms of the applicable Company Stock Plan as in effect on the date of this Agreement or (II) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any options, warrants or other rights wholly owned Subsidiary of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiesthe Company;
(vii) create merge or incur consolidate with any Lien material other Person, or restructure, reorganize or completely or partially liquidate;
(A) except as required by the terms of a Company Plan, (1) modify the compensation or benefits payable to any current or former employee, director or individual service provider of the Company or any of its Subsidiaries on with an annual base salary greater than $100,000, (2) materially modify the compensation or benefits payable to any assets current or former employee, director or individual service provider of the Company or any of its Subsidiaries with an annual base salary less than $100,000 or (3) become a party to, establish, adopt, amend, terminate, provide discretionary benefits under or make any change to any Company Plan or any arrangement that would have been a Company Plan had it been entered into prior to the date of this Agreement, other than related to annual plan renewals in the ordinary course of business or (B) grant or make any bonus or other payment to any employee, director, executive officer or individual service provider of the Company or any of its Subsidiaries;
(viiv) hire any employees with an annual base salary greater than $100,000, other than pursuant any non-officer employees that are hired to replace any employees that were terminated or that resigned and that are provided total compensation and benefits substantially similar, in the aggregate, to the terms terminating employees being replaced;
(v) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) under the Existing Credit Facilities or the Revolving Promissory Note (as defined in Section 5.1(f)(ii) of Contracts the Company Disclosure Letter), (B) inter-company Indebtedness among the Company and its wholly owned Subsidiaries, (C)(1) Financial Assurances, so long as promptly reimbursed if drawn and (2) overdraft facilities or cash management programs, in effect each case issued, made or entered into in the ordinary course of business and (D) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice and provided not for speculative purposes; provided, that the Company and its Subsidiaries shall use commercially reasonable efforts to mitigate any material increase in their respective aggregate exposure to currency risk;
(vi) make or commit to any capital expenditures other than in the ordinary course of business consistent with past practice and which do not exceed, in the aggregate, for the period between the date hereof and the Effective Time, one hundred and twenty (120%) of the amounts per line item reflected for such period in the Company’s monthly capital expenditure projections for 2020 (pro-rated for any partial months during such period) and the provisional capital expenditure projections for the first two quarters of 2021, in each case which are set forth in Section 6.1(a)(vi) of the Company Disclosure Letter;
(vii) other than with respect to (A) Contracts related to any REO Properties and (B) other Company Properties that are set forth in Section 6.1(a)(vii) of the Company Disclosure Letter, in each case so long as such transactions are on bona fide, commercial, arms’ length terms to an unaffiliated party, transfer, lease (other than renewals and single-family home leases with tenants in the ordinary course of business consistent with past practice), license, sell, assign, mortgage, pledge, place a Lien (other than Permitted Liens) upon or otherwise dispose of any properties or assets (including capital stock of any of its Subsidiaries but not including any Intellectual Property), with a fair market value in excess of $200,000 individually or $2,000,000 in the aggregate (other than transactions among the Company and its wholly owned Subsidiaries), subject in all respects to any restrictions that secure any of the Existing Credit Facilities other than to the extent the disposition thereof is not prohibited by the relevant Existing Credit Facility; provided, that other than with respect to properties or assets referred to in clauses (A) and (B) above, the Company shall promptly (and in any event within twenty-four (24) hours) deliver to Parent prior written notice of any license, sale, assignment, mortgage, pledge, or other disposition of any Company Properties;
(viii) issue, deliver, sell, grant, transfer, or encumber (other than Permitted Liens), or authorize the issuance, delivery, sale, grant, transfer or encumbrance (other than Permitted Liens) of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Options, Company Director-Granted RSUs, Company Service-Based RSUs and Company Market-Based RSUs outstanding on the date of this Agreement in accordance with the terms of such awards and the Company Stock Plans, and (B) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company;
(ix) acquire any business or assets or other property, whether by merger, consolidation, purchase of property or assets or otherwise;
(x) make any material change with respect to its financial accounting policies or procedures, except as required by changes in GAAP (or any interpretation thereof) or by applicable Law;
(xi) enter into any new line of business or start to conduct a line of business of the Company or any of its Subsidiaries that is not conducted as of the date of this Agreement, ;
(xii) make any loans, advances, guarantees advances or capital contributions to to, or investments in in, any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in loans, advances or capital contributions to the Company or any direct or indirect wholly owned Subsidiary of the Company);
(viixiii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid amend or modify in any material respect or terminate (excluding terminations upon expiration of the term thereof or upon default by any direct or indirect wholly owned Subsidiary to other party thereto, in each case, in accordance with the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (Bterms thereof) any cash dividends paid Material Contract or waive, release or assign any material rights, claims or benefits under any Material Contract or take (or fail to the Company take) any action that would reasonably be expected to cause or one of its wholly-owned Subsidiaries by result in a wholly-owned Subsidiary of the Company) material breach of, or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectlymaterial default under, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements Material Contract or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement or (B) amend, modify or terminate any Material Contractunless it is on terms substantially consistent with, or cancelon terms more favorable to the Company or its Subsidiaries (and to Parent and its Subsidiaries following the Closing) than, modify either a Contract it is replacing or waive any debtsa form of such Material Contract made available to Parent and Merger Sub; provided, rights or claims thereunder; for purposes of that this Section 6.1, the monetary reference 6.1(a)(xiii) shall not prohibit or restrict any action in clause (A) respect of the definition of Material Contract shall be changed to $5,000,000; the monetary reference Existing Credit Facilities as provided for in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000Section 6.20;
(xiixiv) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation Proceeding before or other proceedings threatened in writing to be brought before a Governmental Entity except where Entity, other than settlements if the amount of any such settlement is limited solely not in excess of $250,000 individually or $1,000,000 in the aggregate with other settlements entered into between the date hereof and the Effective Time; provided, that such settlements do not involve any non-de minimis injunctive or equitable relief or impose non-de minimis restrictions on the business activities of the Company and its Subsidiaries or Parent and its Subsidiaries or (B) waive any material right with respect to (I) the release of claims and (II) the monetary payment any material claim held by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this AgreementSubsidiaries;
(xivxv) file enter into any collective bargaining agreement or recognize or certify any labor union, labor organization or other employee representative body as the bargaining representative for any employees of the Company or any of its Subsidiaries;
(xvi) make, change or revoke any material Tax election or change a material method of Tax accounting, amend any material Tax Return except in the ordinary course of businessReturn, settle or compromise any material Tax liability, makeaudit, change proceeding, claim or revoke assessment, enter into any Tax allocation, sharing or indemnity agreement (other than customary provisions in agreements or arrangements the primary subject of which is not Taxes), enter into any closing agreement in respect of material Taxes, seek or request any material Tax election except to the extent consistent ruling from a Governmental Entity, file any material Tax Return inconsistent with past practice or other than as required by law, change applicable Law or contribute any material method assets to a Taxable REIT Subsidiary (other than any assets that are expected to be sold prior to the Closing Date and are otherwise permitted to be sold prior to the Closing Date pursuant to the terms of Tax accounting, except as required by lawthis Agreement);
(xvii) take any action, or fail to take any action, which action which or failure to act would materially adversely affect reasonably be expected to cause (A) the Tax position Company to fail to qualify as a REIT or (B) any other Subsidiary of the Company to fail to preserve its status as set forth in Section 5.1(b)(iv) of the Company Disclosure Letter;
(xviii) terminate, cancel or make any material changes to the structure, limits or terms and conditions of any of its Subsidiariesinsurance policies, including allowing the policies to expire without renewing such policies or obtaining comparable replacement coverage, or prejudicing rights to insurance payments or coverage;
(xvxix) transfer, sell, leaseassign (other than Permitted Liens), license, mortgage, pledge, surrender, encumber, divest, cancel, abandon transfer or allow to lapse or expire or otherwise dispose of exclusively license any assets, licenses, operations, rights, product lines, businesses or interests therein of material Intellectual Property owned by the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales or permit the lapse of Company Products any right, title or interest to any such material Intellectual Property, including any material Registered IP, in the ordinary course of business and sales of obsolete assetseach case, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xixxx) agree, authorize resolve or commit to do any of the foregoing.
(b) Prior The Company covenants and agrees as to making any formal written communications or group oral presentations itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the directorsEffective Time, officers or employees each such Person shall comply with the covenants set forth on Section 6.1(b) of the Company Disclosure Letter. Notwithstanding the foregoing, nothing in this Section 6.1 shall prohibit the Company or any of its Subsidiaries pertaining from taking any action or refraining from taking any action, at any time or from time to compensation time, that in the reasonable judgment of the board of directors of the Company, upon written advice of nationally recognized REIT Tax counsel, is reasonably necessary for the Company to avoid incurring entity-level U.S. federal income or benefit matters U.S. federal excise Taxes under the Code or to maintain its qualification as a REIT for any period or portion thereof ending on or prior to the Effective Time, including making dividend or other distribution payments to stockholders of the Company in accordance with this Agreement (subject to the restrictions set forth in Section 6.1(a)(i)(C)); provided, that are affected by the transactions contemplated by this Agreementprior to taking any such action, the Company and its Subsidiaries shall provide inform Parent in writing of such action and shall consult with a copy and cooperate with Parent in good faith to minimize the adverse effect of the intended communication, Parent shall have a reasonable period of time such action to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communicationand Parent.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Interim Operations. (a) The Company covenants shall, and agrees as to itself and shall cause each of its Subsidiaries thatto, from and after the date of this Agreement and prior to until the earlier of the Effective Time and the termination of this Agreement in accordance with Article IX (the “Interim Period”), except (A1) as Parent shall otherwise approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), (2) as otherwise expressly contemplated or required by this Agreement, (B3) as required by applicable LawsLaw, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D4) as set forth in Section 6.1(a7.1(a) of the Company Disclosure ScheduleLetter or (5) for commercially reasonable actions as reasonably required to comply with or implement COVID-19 Measures, conduct its business in the business Ordinary Course of it Business and use and cause each of its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect conduct its business in accordance with applicable Law and preserve in all material respects maintain its and its Subsidiaries’ business and assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees employees, agents and other business associates and keep available the services of its and its Subsidiaries’ present employees and agentsassociates. Without limiting the generality of, of and in furtherance ofof the foregoing sentence, during the foregoing, from the date of this Agreement until the Effective TimeInterim Period, except (AI) as otherwise expressly contemplated or required by this Agreement, (BII) as required by applicable LawsLaw, (CIII) as Parent may consent to approved in writing by Parent (such consent approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed, except that Parent may withhold, condition or delay approval of actions contemplated by Section 7.1(a)(iii) or Section 7.1(a)(iv) in Parent’s sole discretion), (DIV) as set forth in Section 6.1(a7.1(a) of the Company Disclosure ScheduleLetter or (V) for commercially reasonable actions in deviation of the prohibitions set forth in clauses (xii) (Material Contracts) (other than with respect to the Contracts described in the proviso thereto) or (xvii) (Compensation) below to the extent reasonably required to comply with or implement COVID-19 Measures, the Company will shall not and will not permit shall cause its Subsidiaries not to:
(i) adopt or publicly propose any change in its certificate of incorporation the Company’s Organizational Documents (other than to correct scrivener’s errors or by-laws immaterial or other applicable governing instrumentsministerial amendments);
(ii) (A) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the CompanyWholly Owned Subsidiaries, or (B) solely with respect to the Company and its Wholly Owned Subsidiaries, restructure, reorganize reorganize, recapitalize or completely or partially liquidate or dissolve (provided, that the Company may effect or cause to be effected the actions referred to in this clause (ii) to the extent they involve only the Company’s Wholly Owned Subsidiaries and are reasonably required to be undertaken to effectuate transactions otherwise enter into any agreements permitted under clauses (iii) or arrangements imposing material changes or restrictions on its assets, operations or businesses(iv) below);
(iii) acquire acquire, directly or indirectly, by merger, consolidation, acquisition of stock or assets outside of the ordinary course of business or otherwise, any business, Person or assets from any other Person with a fair market value or purchase price in the aggregate excess of $30,000,000 in excess of, individually any individual transaction or series of related transactions or $75,000,000 in the aggregate, $2,500,000in each case, other than acquisitions pursuant including any amounts or value reasonably expected to Contracts be paid in effect as connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation (it being understood and agreed that this Section 7.1(a)(iii) shall not alter or limit the date applicability of this AgreementSection 7.6(f) to the Company in any respect);
(iv) transfer, sell, lease to a third Person, divest, abandon, allow to expire, license to a third Person, outsource to a third Person or otherwise dispose of, or grant any Encumbrance (other than any Permitted Encumbrance) upon, any properties or assets (tangible or intangible, including any Intellectual Property Rights), product lines or businesses of the Company or any of its Subsidiaries, including capital stock of any of its Subsidiaries, except (A) other than with respect to Intellectual Property Rights and outsourcing, in connection with services provided in the Ordinary Course of Business, (B) expiration, abandonment or sales of obsolete or unused assets in the Ordinary Course of Business, (C) sales, leases, licenses, outsourcing or other dispositions of assets with a fair market value not in excess of $10,000,000 individually or $25,000,000 in the aggregate, (D) with respect to licenses of Intellectual Property Rights, non-exclusive grants of licenses in the Ordinary Course of Business and (E) the grant of Encumbrances to secure Indebtedness permitted by Section 7.1(a)(ix);
(v) issue, sell, pledge, dispose of, grant, transfer, encumberlease to a third Person, license to a third Person, guarantee, encumber or authorize enter into any Contract or other agreement, understanding or arrangement (whether oral or written) with respect to the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance voting of, any shares of capital stock of the Company (including, for the avoidance of doubt, Shares) or of any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company OptionsSubsidiaries, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any such shares of such capital stock, or any options, warrants or other rights of any kind to acquire any such shares of such capital stock or such convertible or exchangeable securities;
securities (vother than (A) create proxies or incur voting agreements solicited by or on behalf of the Company in order to obtain the Requisite Company Vote and any Lien material other votes or consents contemplated by Section 7.4(f) or in connection with any annual meeting of the Company’s stockholders) or (B) issuances (1) by a Wholly Owned Subsidiary of the Company to the Company or any of its Subsidiaries on any assets another Wholly Owned Subsidiary of the Company, (2) solely with respect to shares of capital stock of the Company’s Non-Wholly Owned Subsidiaries, in connection with joint ventures, minority investments, venture capital investments or similar transactions permitted by Section 7.1(a)(iii) or Section 7.1(a)(vi), (3) in respect of Company Equity Awards and issuances under the Stock Plans in the Ordinary Course of Business or any of (4) pursuant to the ESPP in accordance with its Subsidiariesterms and subject to Section 4.2(g));
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of (A) to or from the Company and any of its Wholly Owned Subsidiaries or (B) for indemnification or advancements to any directors, officers or other than in fiduciaries of the Company or any direct of its Subsidiaries pursuant to any of their respective Organizational Documents or indirect wholly owned Subsidiary any Contracts with such Persons, in either case in effect as of the Company)date of this Agreement) outside the Ordinary Course of Business in excess of $10,000,000 individually or $40,000,000 in the aggregate;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (including with respect to the Company, for the avoidance of doubt, Shares), except for (A) cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) solely with respect to the Company and its material Subsidiaries, reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stockstock (including, except from for the avoidance of doubt, Shares) (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of provided, that the Company Options may effect or Company SARs or cause to be effected the lapse of restriction on Company Restricted Shares actions referred to in this clause (viii) to the extent they involve only the Company’s Wholly Owned Subsidiaries and are reasonably required or to be undertaken to effectuate transactions otherwise permitted under the terms of the applicable Stock Plans and award agreements clauses (iii) or (Biv) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationabove);
(ix) assume, guarantee, issue or incur any indebtedness for borrowed money or guarantee such indebtedness Indebtedness (including the issuance of another Person, or issue or sell any debt securities or any warrants or other rights to acquire any debt security security) or enter into any hedging agreements, except for (subject, in each case, to Section 7.1(a)(xii)) (A)
(1) Indebtedness of the type contemplated by clauses (a) and (b) of the definition thereof in the Ordinary Course of Business up to $75,000,000 and (2) other Indebtedness in the Ordinary Course of Business up to $25,000,000, (B) drawdowns under the Credit Agreement, (C) guarantees of Indebtedness of its Wholly Owned Subsidiaries otherwise incurred in compliance with this Section 7.1(a), (D) Indebtedness between the Company and any of its Wholly Owned Subsidiaries or between one Wholly Owned Subsidiary of the Company and another Wholly Owned Subsidiary of the Company, (E) hedging agreements entered into in the Ordinary Course of Business and not for speculative purposes, (F) extensions or renewals of any outstanding Indebtedness in the Ordinary Course of Business or (G) refinancings or replacements of any outstanding Indebtedness on terms that are substantially similar to the terms of such outstanding Indebtedness or are otherwise more favorable to the Company and its Subsidiaries; provided, that any Indebtedness assumed, guaranteed, issued or incurred by the Company or any of its Subsidiaries, except Subsidiaries or for inter-company borrowings solely among which the Company and or any of its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practiceotherwise becomes liable under this Section 7.1(a)(ix) shall permit prepayment at any time without penalty of any kind;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any payment of, or accrual or commitment for, capital expenditureexpenditures, except in the Ordinary Course of Business;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement Agreement, other than Contracts entered into in the Ordinary Course of Business;
(xii) other than in the Ordinary Course of Business, (A) terminate or fail to renew any Material Contract (other than expirations of any such Contract in accordance with its terms), (B) amend, modify, supplement or waive, or assign, convey, Encumber or otherwise transfer in whole or in part, rights or interests pursuant to or in, any Material Contract (other than assignments between or among the Company or any of its Wholly-Owned Subsidiaries that would not be adverse to Parent), or (C) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement; provided, however, that in no event may the Company take any of the foregoing actions with respect to (1) the Specified Tax Agreements and any Tax “hold harmless,” sharing, allocation or indemnification agreement or arrangement (other than, in each case, (x) such agreements or arrangements solely between or among the Company and any of its Wholly Owned Subsidiaries, (y) such agreements or arrangements contained in commercial contracts entered into, amended or terminated in the Ordinary Course of Business the principal subject of which is not Taxes and (z) customary Tax indemnification or Tax benefit provisions contained in merger agreements, stock purchase agreements, asset purchase agreements or other business combination agreements entered into in accordance with Section 7.1(a)), (2) the Credit Agreement, the Senior Notes Indenture (including, for the avoidance of doubt, by entering into a supplemental indenture pursuant thereto), the Senior Amortizing Notes Indenture (including, for the avoidance of doubt, by entering into a supplemental indenture pursuant thereto) and the Purchase Contract Agreement (in each case, except in connection with extensions or renewals permitted under Section 7.1(a)(ix)(F) or refinancings or replacements permitted under Section 7.1(a)(ix)(G)) (provided, that, notwithstanding anything to the contrary herein, in no event may the Company or any of its Subsidiaries amend, modify or terminate supplement the Credit Agreement such that the borrowing capacity thereunder is increased beyond such capacity as of the date hereof), (3) any Contract described in clause (iv) or (xv) of the definition of a “Material Contract”, or (4) the Contract set forth in Section 7.1(a)(xii) of the Company Disclosure Letter; provided, further, that this Section 7.1(a)(xii) shall not be construed to permit any action that would otherwise require the consent of Parent pursuant to any other provision of Section 7.1(a);
(xiii) cancel, modify or waive any debts, rights debts or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed held by or owed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed of its Subsidiaries having in each case a value in excess of $2,000,000 (5,000,000 individually or $15,000,000 20,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreementaggregate;
(xiv) file other than with respect to Transaction Litigation, any Proceeding in connection with, arising out of or amend otherwise related to a demand for appraisal under Section 262 of the DGCL or any material Tax Return except in the ordinary course of businessclaim, audit, assessment or dispute, which shall be governed by Sections 7.15, 4.3(f) and 7.1(a)(xvi), respectively, settle or compromise any material Tax liabilityProceeding for an amount in excess of $20,000,000 individually or $40,000,000 in the aggregate during any calendar year, makeor which would reasonably be expected to (A) prevent, change materially delay or revoke materially impair the consummation of the transactions contemplated by this Agreement, (B) impose any material Tax election except to restriction on the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position operations of the Company or its material Subsidiaries or (C) involve any criminal liability or any admission of material fault by the Company or any of its Subsidiaries;
(xv) transfermake any changes with respect to accounting policies, sellprocedures, leasemethods, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon principals or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiariespractices, except sales of Company Products as required by changes in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this AgreementGAAP or applicable Law;
(xvi) other than in make, change or revoke any material Tax election, change an annual Tax accounting period, adopt or change any Tax accounting method, file any amended material Tax Return, enter into any closing agreement with respect to material Taxes, settle any material Tax claim, audit, assessment or dispute, surrender any right to claim a refund of a material amount of Taxes, agree to an extension or waiver of the ordinary course statute of business, limitations with respect to the assessment or determination of any material Tax or take any action which would be reasonably expected to (A) transferaffect the Intended Tax-Free Treatment, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend render any part of the Tax Opinion (or abandon (except as required any Tax Representation Letter issued by the Company or Parent in connection with the diligent prosecution of Owned Intellectual Property), waive Tax Opinion) inaccurate or modify any material rights untrue in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Propertyother than de minimis respects;
(xvii) except as required pursuant to make changes that are required by applicable Law or to satisfy contractual obligations existing the terms of any Company Benefit Plan in effect as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedulethis Agreement, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensationcompensation or consulting fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any Company Employee, (B) become a party to, establish, adopt, amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to the date of the current or former directors, officers, employees or consultants of the Company or its Subsidiariesthis Agreement, (C) pay grant any bonus new awards, or incentive compensation amend or modify the terms of any outstanding awards, under any Company Benefit Plan in excess of the amount earned based on actual performancePlan, (D) take any action to accelerate the vesting of or lapsing of restrictions with respect to or payment, or fund or in any equity-based other way secure the payment, of compensation or other long-term incentive compensation benefits under any Company Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable Law to be funded or contribution obligations under any Benefit Planchange the manner in which contributions to such plans are made or the basis on which such contributions are determined, other than except as may be required by GAAP, (IF) forgive any loans or issue any loans to any Company Employee (other than routine travel or other business advances issued in the Ordinary Course of Business), (G) hire any executive officer or any employee or consultant engage any independent contractor (who is a natural person) with maximum an annual cash compensation opportunities salary or wage rate or consulting fees in excess of $200,000300,000 or (H) terminate the employment or service of any Company Employee with an annual salary or wage rate or consulting fees in excess of $300,000 other than for cause;
(xviii) become a party to, providedestablish, that such new hire’s compensation and benefits are made adopt, amend, commence participation in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into or terminate any collective bargaining agreement or other agreement with a labor union, labor organization, works council or similar organization or (K) terminate without cause the employment of any officer of the Companyorganization;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agreeenter into any new line of business, authorize other than new lines of business that are natural evolutions of, extensions to, or commit to do any of expansions of, the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees businesses of the Company or any of and its Subsidiaries pertaining to compensation or benefit matters conducted as of the date hereof, in each case, that are affected by the transactions contemplated by this Agreement, would not require the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.make expenditu
Appears in 1 contract
Interim Operations. (a) The Company Yankees covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement and prior to the Effective Time in accordance with its terms, unless Braves shall otherwise approve in writing, and except (A) as otherwise expressly required contemplated by this Agreement, (B) Agreement or except as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as otherwise set forth in Section 6.1(a4.1(a) of the Company Yankees Disclosure Schedule, Letter:
(i) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instrumentspast practice;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iiiA) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) it shall not issue, sell, pledge, dispose of, grant, transfer, encumber, of or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, encumber any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares owned by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or it in any of its Subsidiaries;
; (viB) it shall not amend its certificate of incorporation or bylaws; (C) it shall not split, combine or reclassify its outstanding shares of capital stock; (D) it shall not declare, set aside or pay any type of dividend, whether payable in cash, stock or property, in respect of any capital stock other than pursuant the quarterly dividends payable by Yankees (in an amount per share not to exceed its most recent quarterly per share dividend and with the terms timing of Contracts in effect as such dividend to be consistent with past practice) or, subject to Section 4.1(a)(viii) of the date of this Agreement and provided to Parent prior to the date of this AgreementYankees Disclosure Letter, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any dividends payable by its direct or indirect wholly owned Subsidiary Subsidiaries to it or another of the Company);
its direct or indirectly wholly owned Subsidiaries; and (viiE) declareit shall not repurchase, set asideredeem or otherwise acquire, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to permit any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary Subsidiaries to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly any interests or indirectly, any shares of its capital stock stock, as applicable, or any securities convertible into or exchangeable into or exercisable for any shares of its capital stock, except from ;
(iii) neither it nor any of its Subsidiaries shall (A) issue, sell, pledge, dispose of or encumber (v) any shares of, or (w) securities payable in, convertible into or exchangeable or exercisable for, or (x) options, warrants, calls, commitments or rights of any kind to acquire, capital stock of any class, as appropriate, or (y) any bonds, debentures, notes or other obligations the holders of Company Options in full which have the right to vote (or partial payment of convertible into or exercisable for securities having the exercise thereof and/or right to vote) with its stockholders on any applicable Taxes payable by such holder upon exercise of the Company Options matter or Company SARs any other property or the lapse of restriction assets other than Yankees Shares issuable pursuant to stock-based awards outstanding on Company Restricted Shares or awarded prior to the extent required or permitted date hereof under the terms of the applicable Yankees Stock Plans and award agreements or Plans; (B) former employees(1) increase the amount of net indebtedness for borrowed money, directors including any guarantee of such indebtedness, by $100,000,000 in excess of the net indebtedness set forth in the Yankees Financial Statement as of December 31, 2012 (it being understood that net indebtedness shall be calculated as the amount of debt less the sum of the amount of cash and marketable securities, in each case, set forth in the Yankees Financial Statements as of December 31, 2012; it being further understood that notwithstanding the amount set forth in such Yankees Financial Statements, the non-U.S. dollar-denominated portion of such calculation shall be determined using the exchange rates in effect as of the date hereof without regard to any subsequent changes in such rates) or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix2) incur any additional indebtedness for borrowed money with a tenor of greater than 90 days, including any guarantee of such indebtedness; or guarantee such indebtedness of another Person, (C) make or issue authorize or sell commit for any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiariescapital expenditures, except for inter-company borrowings solely among in accordance with the Company 2013 capital expenditure target for Yankees that has been provided to Braves prior to the date of this Agreement or such other capital expenditures targets as may be agreed by Yankees and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
Braves (xprovided that (1) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, Yankees shall be permitted to make or authorize or commit for any capital expenditure;
expenditures in an amount that is between 75% and 110% of its capital expenditure target and (xi2) (A) enter into any Contract that would if the Effective Time shall not have been a Material Contract had it been entered into occurred on or prior to this Agreement or (B) amendDecember 31, modify or terminate any Material Contract2013, or cancelthen, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.14.1(a)(iii), Yankees’s capital expenditure target will be adjusted upwards to take into account the monetary reference in clause (A) number of days between December 31, 2013 and the definition of Material Contract Effective Time and assuming that the 2014 capital expenditure target shall be changed equal to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,0002013 capital expenditure target);
(xiiiv) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of businessexisting written, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts binding agreements in effect prior to the date hereof and set forth in Section 4.1(a)(iv) of this Agreement;
(xvi) other than in the ordinary course Yankees Disclosure Letter, or as otherwise required by applicable Law, neither Yankees nor any of business, its Subsidiaries shall (A) transfergrant or provide any severance or termination payments or benefits to any director, sell, license, mortgage, pledge, encumber, divest, cancel, abandon officer or allow to lapse employee of Yankees or expire or otherwise dispose any of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefitsfringe, severance or termination other benefits of, pay any bonus to, or make any new equity awards to any current or former director, officer, employee or consultant of Yankees or any of its Subsidiaries (other than increases in base salary in the ordinary course of business for employees who are not officers), (C) become a party to, establish, adopt, commence participation in, amend or terminate any stock option plan or other stock-based compensation plan, or any compensation, severance, pension, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement with or for the benefit of any of the current or former directors, officers, employees or consultants of the Company Yankees or its Subsidiaries, Subsidiaries (Cor newly hired employees) pay or amend the terms of any bonus or incentive compensation under any Benefit Plan in excess of the amount earned outstanding equity-based on actual performanceawards, (D) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation benefits under any Benefit Plan, (E) grant to the extent not already provided in any new award, amend the terms of outstanding awards or change the compensation opportunity under any such Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (JE) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization organization, (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, (KG) terminate without cause the employment of any officer member of the Companymanagement committee of Yankees, or (H) forgive any loans or issue any loans to directors, officers or employees of Yankees or any of its Subsidiaries;
(xviiiv) neither Yankees nor any of its Subsidiaries shall lease, license, transfer, exchange or swap, mortgage (including securitizations), or otherwise dispose (whether by way of merger, consolidation, sale of stock or assets, or otherwise) of any material portion of its assets, including the capital stock of Subsidiaries (it being understood that the foregoing shall not prohibit the sale of inventory in the ordinary course of business), except for (i) dispositions of assets that in total have an aggregate fair market value of less than $50,000,000;
(vi) neither Yankees nor any of its Subsidiaries shall (A) acquire or invest in or agree to acquire or invest in (whether by merger, consolidation, purchase or otherwise) any Person or assets, in which the expected gross expenditures and commitments (including the amount of any indebtedness assumed) (I) for all such acquisitions exceeds, in the aggregate, $50,000,000 or (II) is reasonably likely, individually or in the aggregate, to delay the satisfaction of the conditions set forth in Article V hereof or prevent the satisfaction of such conditions or (B) enter into any joint venture, partnership or similar agreement with any Person;
(vii) subject to Section 6.24.13, neither Yankees nor any of its Subsidiaries shall (A) settle or compromise any material claims or litigation if such settlement or compromise would involve, individually or together with all such other settlements or compromises, the payment of money by Yankees or its Subsidiaries of $60,000,000 (provided that Yankees shall consult in good faith with respect to any such proposed settlement or compromise individually in excess of $20,000,000) or more or would involve any admission of material wrongdoing or any material conduct requirement or restriction by Yankees or its Subsidiaries, (B) modify, amend or terminate in any material respect any of its Material Contracts or waive, release or assign any material rights or claims thereunder in excess of $10,000,000 individually or in the aggregate or (C) enter into any new clearing services agreement or arrangement or modify or amend in any material respect any existing clearing services agreement or arrangement to extend the term or to increase the commitments of Yankees or any of its subsidiaries thereunder;
(viii) except to the extent otherwise required by Law, neither Yankees nor any of its Subsidiaries shall (A) make or change any Tax election, change any method of Tax accounting, file any amended Tax Return, or settle or compromise any audit or proceeding relating to Taxes, in each case, if such action would reasonably be expected to have an adverse effect on Yankees and its Subsidiaries that is material; (B) take any action specified in Section 4.1(a)(viii)(B) of the Yankees Disclosure Letter; or (C) permit any material insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated except in the ordinary and usual course of business;
(ix) neither Yankees nor any of its Subsidiaries shall permit any change in its financial accounting principles, policies or practice (including any of its practices with respect to accounts receivable or accounts payable), except to the extent that any such changes in financial accounting principles, policies or practices shall be required by changes in GAAP;
(x) neither Yankees nor any of its Subsidiaries shall enter into any Contract that includes a “non-compete,” exclusivity or similar provision that would materially restrict the business of Braves or any of its Subsidiaries (including Yankees and its Subsidiaries) following the Effective Time;
(xi) except as permitted pursuant to Section 4.1(a)(iv), neither Yankees nor any of its Subsidiaries shall enter into any Contract between itself, on the one hand, and any of its employees, officers or directors, on the other hand;
(xii) neither Yankees nor any of its Subsidiaries shall knowingly take or omit to take any action that is if such action or failure to act would be reasonably likely to prevent, interfere with prevent or delay impede the consummation Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Merger or result in Code;
(xiii) neither Yankees nor any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, its Subsidiaries will authorize or commit enter into an agreement to do any of the foregoing set forth in Section 4.1(a)(i) through Section 4.1(a)(xii) if Yankees would be prohibited by the terms of Section 4.1(a)(i) through Section 4.1(a)(xii) from doing the foregoing; and
(xiv) it shall not fail to make in a timely manner any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder.
(b) Prior Braves covenants and agrees as to making any formal written communications or group oral presentations to itself and its Subsidiaries that, after the directors, officers or employees date hereof and until the earlier of the Company Effective Time or the termination of this Agreement in accordance with its terms, unless Yankees shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement or except as otherwise set forth in Section 4.1(a) of the Braves Disclosure Letter:
(A) it shall not split, combine or reclassify its outstanding shares of capital stock; (B) it shall not declare, set aside or pay any type of dividend, whether payable in cash, stock or property, in respect of any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review capital stock; and comment on the communication (which comments C) it shall not be unreasonably withheld directly or delayed)indirectly repurchase, and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5redeem or otherwise acquire, Parent shall not take or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock, if such repurchase or acquisition is at a price above the then market value;
(ii) it shall not issue, sell, dispose of or grant, or authorize the issuance, sale, disposition or grant of, any shares of any class of its capital stock except (A) for fair market value or (B) upon the vesting of restricted stock units or the exercise of options, warrants, convertible securities or other rights of any kind to acquire any of its capital stock which were issued with an exercise or conversion price of not less than the market price at the time of issuance; provided, however, that the foregoing shall not prohibit issuances of common stock, restricted stock units, options or rights as part of normal employee compensation in the ordinary course of business; and provided, further, that this clause (B) shall not prohibit the issuance of capital stock, restricted stock units, options, warrants, convertible securities or other rights in connection with any equity financing contemplated by Braves in connection with the transactions contemplated by this Agreement;
(iii) it shall not fail to make in a timely manner any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(iv) neither it nor any of its Subsidiaries shall knowingly take or omit to take any action if such action or failure to act would be reasonably likely to prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(v) neither Braves nor any of its Subsidiaries shall acquire (other than with respect to any agreements entered into prior to the date of this Agreement) or agree to acquire (whether by merger, consolidation, purchase or otherwise, which have been previously publically disclosed or provided to Yankees) any Person or assets that is reasonably likely likely, individually or in the aggregate, to prevent, interfere with or delay the consummation of the Merger or result in any material respects the satisfaction of the conditions to the Merger set forth in Article VII not being satisfiedV hereof or prevent the satisfaction of such conditions; and
(vi) neither it nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing set forth in Section 4.1(b)(i) through Section 4.1(b)(v) if it would be prohibited by the terms of Section 4.1(b)(i) through Section 4.1(b)(v) from doing the foregoing.
Appears in 1 contract
Sources: Merger Agreement
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after From the date of this Agreement hereof and prior to until the Effective Time and except (A) as otherwise expressly required by or earlier termination of this Agreement, except (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (Dw) as set forth in Section 6.1(a) of the Company Disclosure ScheduleLetter, (x) as otherwise expressly contemplated or expressly permitted or required by this Agreement, (y) to the extent consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned) or (z) as required by applicable Law, the Company shall, and shall cause its Subsidiaries to, cause the business of it and its Subsidiaries shall to be conducted in the ordinary course, and usual course and, to the extent consistent therewith, it and its Subsidiaries Company shall use their respective reasonable best efforts to, and shall cause each of its Subsidiaries to protect and use reasonable best efforts to, preserve in all material respects its assets and to preserve intact its business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agentsassociates. Without limiting Notwithstanding the generality of, and in furtherance of, of the foregoing, from and subject to the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as exceptions set forth in Section 6.1(aclauses (w), (x), (y) and (z) of the Company Disclosure Scheduleimmediately preceding sentence, the Company will not shall not, and will not permit shall cause its Subsidiaries not to:
(i) adopt or propose any change in its amend the certificate of incorporation incorporation, bylaws or by-laws comparable governing documents of the Company or other applicable governing instrumentsany of its Subsidiaries;
(ii) issue, sell, pledge, dispose of, grant, transfer or otherwise encumber any shares of capital stock, voting securities, partnership interest, membership interest or similar interest or any option, warrant, right or security convertible, exchangeable or exercisable therefor or other instrument or right the value of which is based on any of the foregoing (collectively, “Equity Interests”) of the Company or any of its Subsidiaries (including any Company Equity Awards), other than (A) issuance of Shares pursuant to Company Stock Options outstanding on the date hereof under the Company Plans in accordance with the terms thereof, and (B) issuances of Shares in connection with the matching of contributions under the (1) Dynegy Midwest Generation, Inc. 401(k) Savings Plan for Employees Covered under a Collective Bargaining Agreement (As Amended and Restated Effective January 1, 2009); (2) Dynegy Midwest Generation, Inc. 401(k) Savings Plan (As Amended and Restated Effective January 1, 2009); (3) Dynegy Inc. 401(k) Savings Plan (As Amended and Restated Effective January 1, 2009); and (4) Dynegy Northeast Generation, Inc. Savings Incentive Plan (As Amended and Restated Effective January 1, 2009), in each case in accordance with the terms thereof;
(iii) split, combine, subdivide or reclassify any of its Equity Interests;
(iv) declare, set aside, establish a record date for, or pay any dividends on or make any other distributions (whether payable in cash, stock, property or a combination thereof) in respect of any of its Equity Interests, other than any dividends from any wholly owned Subsidiary of the Company to the Company or to another such Subsidiary of the Company;
(v) repurchase, redeem or otherwise acquire any of its Equity Interests, except for (A) mandatory sinking fund obligations existing on the date hereof and disclosed in Section 6.1(a)(v) of the Company Disclosure Letter and (B) redemptions, purchases or acquisitions pursuant to the exercise or settlement of Company Stock Options, employee severance, retention, termination, change of control and other contractual rights existing on the date hereof on the terms in effect on the date hereof, including with respect to Company Restricted Stock;
(vi) incur, issue, or modify in any material respect the terms of, any Indebtedness, or assume, prepay, defease, cancel, acquire, guarantee or endorse, or otherwise become responsible for (whether directly or indirectly, contingently or otherwise), the indebtedness of any Person, except for (A) advances of credit incurred under the Company’s existing credit facilities in an aggregate amount not to exceed $2,500,000, (B) letters of credit issued under the Credit Agreement (x) in the ordinary course of business consistent with past practices for non-trading activities but in any event in an aggregate amount not to exceed $25,000,000 or (y) in connection with the sale or purchase of Derivative Products, physical electricity products, or fuel commodities for the Company’s assets in accordance with Section 6.1(a)(xix) of the Company Disclosure Letter, (C) letters of credit issued under the Credit Agreement to support positions in place as of the date of this Agreement or (D) Indebtedness owed by any wholly owned Subsidiary of the Company to the Company or any other wholly owned Subsidiary of the Company;
(vii) grant or incur any Lien, other than (A) Permitted Liens, (B) Liens for current Taxes, assessments or other charges of a Governmental Entity not yet due and payable or which is being contested in good faith through appropriate proceedings, (C) pledges or deposits by the Company or any of its Subsidiaries in the ordinary course of business under workmen’s compensation Laws, unemployment insurance Laws or similar legislation, (D) good faith deposits in connection with Contracts (other than for the payment of Indebtedness) or leases to which the Company or one of its Subsidiaries is a party, in each case, in the ordinary course of business consistent with past practice, (E) deposits to secure public or statutory obligations of the Company or one of its Subsidiaries, or to secure surety or appeal bonds to which such entity is a party, or deposits as security for contested Taxes, in each case incurred or made in the ordinary course of business consistent with past practice, (F) licenses granted to third parties in the ordinary course of business consistent with past practice by the Company or its Subsidiaries, (G) Liens permitted under the outstanding Indebtedness of the Company and its Subsidiaries as of the date hereof, (H) Liens granted in connection with any Indebtedness permitted under Section 6.1(a)(vi), and (I) Liens granted or incurred in connection with the sale or purchase of Derivative Products, physical electricity products, or fuel commodities for the Company’s assets in accordance with Section 6.1(a)(xix) of the Company Disclosure Letter or to support positions in place as of the date of this Agreement;
(viii) (A) except (1) to the extent required by applicable Law or (2) to the extent required by written agreements existing on the date of this Agreement that have been disclosed or made available to Parent prior to the date hereof, grant or announce any stock option, equity or incentive awards or increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or other independent contractors who provide services in an individual capacity of the Company or any of its Subsidiaries, (B) except to the extent required by written agreements existing on the date of this Agreement that have been disclosed or made available to Parent, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other employee benefit not required by any existing Company Plan to any employee, officer, director or other independent contractors who provide services in an individual capacity of the Company or any of its Subsidiaries, whether past or present, or take any action to accelerate vesting of any right to compensation or benefits, (C) except to the extent required by written agreements existing on the date of this Agreement that have been disclosed or made available to Parent, enter into or amend any Contracts of employment or any consulting, bonus, severance, retention, retirement or similar agreement, (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, (E) change the accrual rate for the Company’s short-term incentive plans used to prepare the Company’s financial statements, (F) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries, or (G) except as required to ensure that any Company Plan is not then out of compliance with applicable Law, enter into or adopt any new or renew, amend or terminate any existing Company Plan or benefit arrangement if such adoption, renewal, amendment or termination would result in a material cost to the Company or any of its Subsidiaries;
(ix) (A) hire any employee or individual independent contractor with total expected annual base salary, including commissions, in excess of $100,000, other than to fill vacancies arising in the ordinary course of business at annual base salary levels not in excess of 120% of prevailing market rates or (B) subject to Section 6.9(f), terminate the employment of any Company Employee who participates in the Dynegy Inc. Executive Change in Control Severance Pay Plan (Effective April 3, 2008), except for “cause” thereunder or otherwise take any action that could reasonably result in the closure of the Company’s regional headquarters in California;
(x) other than in the ordinary course of business and consistent with past practice, (A) make or change any material Tax election, or change the Company’s or such Subsidiary of the Company’s method of accounting for Tax purposes, (B) file any amended Tax Return involving a material amount of additional Taxes, (C) settle or compromise any material Tax liability, or any claim for a material refund of Taxes or enter into any closing agreement with respect to any material amount of Tax, or (D) agree to an extension or waiver of the statute of limitations applicable to the assessment or collection of any material Taxes except, in each case, as required by applicable Law;
(xi) except as required by GAAP, the SEC or applicable Law, change any material accounting policies or principles;
(xii) (A) enter into or assume any Contract that would have been a Company Material Contract had it been entered into prior to the date hereof, (B) terminate, materially amend or waive any material rights under any Company Material Contract or any Contract that would have been a Company Material Contract had it been entered into prior to the date hereof excluding any termination upon expiration of a term in accordance with the terms of such Company Material Contract or (C) or waive any material default under, or release, settle or compromise any material claim against the Company or liability or obligation owing to the Company under any Company Material Contract; provided in each case that the Company or any of its Subsidiaries shall be permitted to renew or replace any Company Material Contract with one or more Contracts on substantially similar terms;
(xiii) subject to Section 6.16, waive, release, settle or compromise any pending or threatened action, litigation, claim or arbitration or other proceedings before a Governmental Entity if such waiver, release, settlement or compromise by the Company or any of its Subsidiaries (A) is for an amount in excess of $2,500,000 individually or $5,000,000 in the aggregate, or (B) would entail the incurrence of (1) any obligation or liability of the Company in excess of such amount, including costs or revenue reductions, (2) obligations that would impose any material restrictions on the business or operations of the Company or its Subsidiaries;
(xiv) acquire (including by merger, consolidation, or acquisition of stock or assets) any interest in any Person or any division thereof or any assets thereof, excluding acquisitions of supplies, parts, fuel, materials and other inventory in the ordinary course of business consistent with past practice, or make any loan, advance or capital contribution to, or investment in, any Person or any division thereof, other than (A) any such acquisitions, loans, advances, contributions or investments that are for consideration not in excess of $1,000,000 individually or $5,000,000 for all such transactions by the Company and its Subsidiaries in the aggregate or (B) loans, advances or capital contributions to or among the Company and wholly owned Subsidiaries of the Company;
(xv) sell, transfer, lease, license, assign, allow to lapse or otherwise dispose of (including, by merger, consolidation, or sale of stock or assets) any entity, business, assets, rights or properties of the Company or any of its Subsidiaries having a current value in excess of $1,000,000 individually, or $5,000,000 for all such transactions by the Company and its Subsidiaries in the aggregate other than (A) sales, transfers, leases, licenses assignments and other dispositions of inventory, electricity or, subject to Section 6.6(b), other commodities or Derivative Products in the ordinary course of business consistent with past practice, (B) dispositions of obsolete or worthless assets or properties in the ordinary course of business consistent with past practice or (C) transactions solely among the Company and/or any of its Subsidiaries;
(xvi) authorize or make any capital expenditure, other than (A) any capital expenditure contemplated by the Company’s business plan set forth on Section 6.1(a)(xvi) of the Company Disclosure Letter, (B) capital expenditures that are not, in the aggregate, in excess of $5,000,000 above the capital expenditures provided for in such business plan or (C) capital expenditures required by Law or in response to a casualty loss or property damage;
(xvii) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(xviii) merge or consolidate the Company or any of its Subsidiaries with and into any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iiixix) acquire assets outside of (A) modify in any material respect the ordinary course of business from Commodity Risk Policy, the Company Trading Guidelines or any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000similar policy, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company modifications that are more restrictive to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of and its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employeesthe sale or purchase of Derivative Products, directors physical electricity products, or consultants following termination of their relationship with fuel commodities for the Company Company’s assets that are not in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x6.1(a)(xix) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditureLetter;
(xi) (Axx) enter into into, with respect or related to Dynegy ▇▇▇▇ Landing, LLC, Dynegy Morro Bay, LLC, Dynegy Oakland, LLC and Casco Bay Energy Company, LLC, any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amendenergy, modify or terminate any Material Contractancillary services, fuel, emissions allowance, credit, or canceloffset, modify transmission, transportation, or waive any debtsstorage transactions with a term extending through the later of (i) November 15, rights or claims thereunder; for purposes of this Section 6.12010, and (ii) the monetary reference in clause (A) end of the definition of Material Contract shall be changed to $5,000,000; the monetary reference prompt month, other than electric capacity sales in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000organized markets requiring mandatory bidding;
(xiixxi) make any fail to maintain in full force and effect material changes with respect to accounting insurance policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by covering the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 and its Subsidiaries and their respective properties, assets and businesses in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent form and amount consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of unless the Company determines in its reasonable commercial judgment that the form or amount of any of its Subsidiariessuch insurance should be modified;
(xvxxii) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow permit any letters of credit to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, be issued other than pursuant to Contracts in effect prior to letters of credit issued under the date of this AgreementCredit Agreement by JPMorgan Chase Bank, N.A., Citibank, N.A, Credit Suisse, Cayman Islands Branch and ABN AMRO BANK N.V;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviiixxiii) subject to Section 6.2, take any action or omit which would reasonably be expected to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedsatisfied or delaying the satisfaction of any such conditions, or that would reasonably be expected to prevent, delay, impair or interfere with the ability of the Company to consummate the Merger; or
(xixxxiv) agreecommit, authorize or commit agree to do take any of the foregoingforegoing actions or enter into any letter of intent (binding or non binding) or similar agreement or arrangement with respect to any of the foregoing actions.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company Neither Parent nor Merger Sub shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries their Affiliates to take any action that is reasonably likely to prevent, interfere with prevent or delay the consummation of the Merger Merger, the NRG Sale or result the other transactions contemplated by this Agreement or the NRG PSA. In furtherance and not in any limitation of the conditions foregoing, Merger Sub shall, and Parent shall cause Merger Sub to, (x) not consent to the Merger set forth in Article VII not being satisfied.any request by NRG for approval to take any action, or waive NRG’s or its Affiliates’ failure to perfo
Appears in 1 contract
Sources: Merger Agreement (Dynegy Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time and except (A) as unless Parent shall otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to approve in writing (such consent approval not to be unreasonably withheld, delayed or conditioned) )), and except as otherwise expressly contemplated or (D) permitted by this Agreement or as set forth in Section 6.1(a) of the Company Disclosure Schedulerequired by a Governmental Entity or applicable Laws, the business of it and its Subsidiaries shall be conducted in all material respects in the ordinary and usual course of business and, to the extent consistent therewithwith the foregoing, it the Company and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its their business organizations and substantially intact, maintain existing relations and goodwill satisfactory relationships with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees customers and other suppliers having significant business associates dealings with them and keep available the services of their key employees; provided, however, that no action taken by the Company or its and its Subsidiaries’ present employees and agentsSubsidiaries with respect to matters specifically addressed by clauses (i)-(xviii) of this Section 6.1(a) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision. Without limiting the generality of, and in In furtherance of, of the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required contemplated or permitted by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to approve in writing (such consent approval not to be unreasonably withheld, delayed or conditioned), (C) as may be required by applicable Law or any Governmental Entity or (D) as set forth in Section 6.1(a) of the Company Disclosure ScheduleLetter, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws bylaws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly wholly-owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire make any material acquisition of assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000business, other than acquisitions (A) pursuant to Contracts in effect as of the date of this Agreement, or (B) that would be permissible under clause (ix) below;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or (A) the issuance of Shares pursuant to upon the exercise of Company Options, Company Restricted ; or (B) the issuance of Shares or to Novartis Pharma AG upon the Convertible Senior Notes outstanding as occurrence of the date of this Agreement) preceding subclause (A), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees advances or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly wholly-owned Subsidiary of the Company)) in excess of $2,000,000 in the aggregate other than loans, advances, capital contributions or investments made in the ordinary course of business;
(viivi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly wholly-owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the CompanySubsidiary) or enter into any agreement with respect to the voting of its capital stock;
(viiivii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, acquire any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from stock (A) holders other than the retention or acquisition of any Shares tendered by current or former employees or directors in order to pay Taxes in connection with the exercise of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationOptions);
(ixviii) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries other than (A) in the ordinary course consistent with past practiceof business (including to fund expenditures permissible under clauses (iii), (v) and (ix) of this Section 6.1(a)), (B) Permitted Liens or (C) other indebtedness in an aggregate principal amount not to exceed $2,000,000 outstanding at any time;
(xix) except as set forth for expenditures made in the capital budgets set forth in Section 6.1(a)(x) ordinary course of the Company Disclosure Schedule and consistent therewithbusiness or those related to operational emergencies, equipment failures or outages, make or authorize any capital expenditureexpenditure in excess of $2,000,000 in the aggregate during any calendar year;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xiix) make any material changes with respect to financial accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect theretoGAAP;
(Axi) settle or compromise any litigation or other proceedings before any arbitrator, court or a Governmental Entity except where that (A) relates to the settlement is limited solely transactions contemplated hereby, (B) does not relate to the transactions contemplated hereby and (I) involves the release payment of claims and monetary damages that exceed $2,000,000 individually or in the aggregate during any calendar year, net of any amount covered by insurance or indemnification or (II) imposes or requires actions that would have a material effect on the monetary payment by continuing operations of the Company or (C) relates to any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlementslitigation set forth on Section 5.1(a) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this AgreementDisclosure Letter;
(xivxii) file make or amend cause to be made any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by lawelection, change any material method of accounting or file or cause to be filed any amended Tax accounting, except as required by law, Return or take any action which would materially adversely affect the Tax position claim for refund of the Company or of any of its SubsidiariesTaxes;
(xvxiii) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, rights, operations, rights, product lines, lines or businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products other than Permitted Liens or transactions (A) in the ordinary course of business and sales of obsolete assetsbusiness, other than including with respect to any Intellectual Property or (B) pursuant to Contracts Contracts, including IP Contracts, in effect prior to the date of this Agreement;
(xvixiv) other than except as required pursuant to any Contract or Benefit Plan in effect on the ordinary course date of business, this Agreement or as required by applicable Law (A) transfergrant or provide any bonus, sellseverance, licensetermination, mortgagechange of control, pledgeor retention payments or benefits to, encumberor increase in any manner the bonus, divestseverance, canceltermination, abandon change of control, or allow to lapse retention payments or expire benefits of, any director, officer, employee or otherwise dispose independent contractor of any Intellectual Property Rightsthe Company or its Subsidiaries, (B) grant, extend, modify or amend any equity or abandon (except as required equity-based awards that may be settled in the diligent prosecution of Owned Intellectual Property), waive Shares or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants securities of the Company or its Subsidiaries, (C) increase the compensation, bonus, fringe or other benefits of any director, officer, employee or independent contractor, except for annual merit-based base pay any bonus or increases (and corresponding increases to cash incentive compensation under any Benefit Plan opportunities) to non-Designated Officers consistent with past practice and that do not exceed 3% per individual and 2% in excess of the amount earned based on actual performanceaggregate, (D) accelerate the vesting of establish, adopt, enter into, terminate or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Lawany other plan, agreement, program, policy or arrangement that would be a Benefit Plan if it were in existence as of the date of this Agreement (other than routine changes to welfare plans or any changes to Benefit Plans that would not result in more than a de minimis increase to the Company’s costs under such Benefit Plans), (GE) take any action to fund accelerate the vesting or secure the payment of any amounts compensation or benefits under any Benefit Plan, Plan except as provided in this Agreement or (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (IF) hire any executive officer or any employee or consultant officer with maximum an annual cash compensation opportunities base salary in excess of $200,000150,000 (other than the hiring of any employees or officers to replace any employees or officers who left the Company or its Subsidiaries after the date hereof or in fulfillment of open job requisitions on the date hereof), providedor terminate the employment of any employee of the Company or its Subsidiaries other than for just cause;
(xv) except as required by applicable Law, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreemententer into, (J) enter into adopt, or amend any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Companyorganization;
(xviiixvi) subject other than in the ordinary course of business or except for Contracts that relate to Section 6.2the Key Product (including any Intellectual Property related thereto) (A) enter into any contract or agreement that would be a Material Contract if it had been entered into prior to the date of this Agreement, (B) terminate, amend, modify, renew or waive any material rights under any Material Contract or (C) take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation set forth on Section 6.1(a)(xvi)(C) of the Merger Company Disclosure Letter with respect to any Material Contract;
(xvii) enter into, terminate, amend, modify, renew or result in waive any material rights under any IP Contracts, or sell, transfer or license to any Person or otherwise adversely amend or modify any rights to any Intellectual Property of the conditions to the Merger set forth in Article VII not being satisfiedCompany or any Company Subsidiary; or
(xixxviii) agree, authorize or commit to do any of the foregoing.
(b) Nothing contained in this Agreement is intended to give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time, and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations. Prior to making any formal written communications or group oral presentations to the directorsEffective Time, officers or employees each of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communicationexercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after during the period from the date of this Agreement and prior to through the Effective Time and except (A) as otherwise expressly required by earlier of the Closing or the termination of this Agreement, except (B1) as required by applicable Lawsto the extent Parent shall otherwise give its prior consent in writing, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D2) as set forth in Section 6.1(aPart 4.1(a) of the Company Disclosure Schedule, (3) as may be required by applicable Legal Requirements or (4) as expressly permitted or required by this Agreement, the business of it Company shall, and its shall cause the Company Subsidiaries shall be conducted in the ordinary and usual course andto, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect conduct its business in the ordinary course and preserve in all material respects its assets use reasonable best efforts to maintain and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entitiesorganization, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present current officers, key employees and agentskey consultants and maintain satisfactory relationships with customers, suppliers and distributors, Governmental Entities and other Persons with whom the Company or any Company Subsidiary has material business relations. Without limiting the generality of, and in furtherance of, the foregoing, during the period from the date of this Agreement until through the Effective Timeearlier of the Closing or the termination of this Agreement, except (A1) as to the extent Parent shall otherwise expressly required by this Agreementgive its prior consent in writing, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D2) as set forth in Section 6.1(aPart 4.1(a) of the Company Disclosure Schedule, (3) as may be required by applicable Legal Requirements or (4) as expressly permitted or required by this Agreement, the Company will shall not (and will shall not permit its Subsidiaries any Company Subsidiary to:):
(i) adopt or propose any change in its certificate amend the Organizational Documents of incorporation or by-laws or other applicable governing instrumentsthe Company;
(ii) merge split, combine, subdivide, change, exchange, amend the terms of or consolidate the Company or reclassify any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries shares of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of ’s capital stock or other equity interests of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiesSubsidiary;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(viiiii) declare, set aside, make or pay any dividend or other distribution, distribution (whether payable in cash, stock, property stock or otherwise, property) with respect to any shares of its the Company’s capital stock (except for (A) or the capital stock or other equity interest of any Company Subsidiary, other than dividends or distributions only to the extent paid by any direct or indirect wholly owned Company Subsidiary to the Company or to any other direct or indirect another wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company;
(iv) acquire (by merger, consolidation, operation of law, acquisition of stock, other equity interests or enter into assets, formation of a joint venture or otherwise) (A) any agreement with respect other Person, (B) any equity interest in any other Person, (C) any business owned by a third party, or (D) assets in a single transaction or series of related transactions for an aggregate purchase price in excess of $250,000, except, (1) acquisitions by the Company from any wholly owned Subsidiary or among any wholly owned Subsidiaries of the Company, (2) the purchase of equipment, supplies and inventory in the ordinary course of business or (3) inbound licenses of Intellectual Property in the ordinary course of business; provided that the issuance of any Insurance Contract by any Company Insurance Subsidiary will not be considered the acquisition of a business for purposes of this Section 4.1;
(v) issue, sell, grant or otherwise permit to the voting become outstanding any additional shares of, or securities convertible or exchangeable for, or options, warrants or rights to acquire, any shares of its capital stockstock or other equity interests, other than (A) shares of Company Common Stock issuable upon exercise of Company Options or the vesting or settlement of Company RSUs, in each case outstanding as of the date of this Agreement and in accordance with the terms of the applicable award; (B) pursuant to the Company ESPP in the ordinary course of business and in accordance with the terms thereof and of this Agreement (including Section 4.8 hereof); (C) in connection with the exercise of Company Warrants; and (D) the issuance of the Additional Shares pursuant to Section 2.17 of the INSU Merger Agreement;
(vi) sell, assign, transfer, lease or license to any third party, or encumber, or otherwise dispose of (by merger, consolidation, operation of law, division or otherwise), any Company IP or material assets of the Company, other than (A) sales of inventory, goods or services in the ordinary course of business or of obsolete equipment or assets in the ordinary course of business; (B) pursuant to written Contracts or commitments existing as of the date of this Agreement and set forth in Part 4.1(a)(vi) of the Company Disclosure Schedule; (C) as security for any borrowings permitted by Section 4.1(a)(viii); or (D) licenses granted to customers or other third parties in the ordinary course of business, including any licenses granted in the operation of the enterprise business solutions line of the Company (the “EBS Business”);
(vii) directly or indirectly repurchase, redeem or otherwise acquire any shares of the Company’s or any Company Subsidiary’s capital stock or equity interests, or any other securities or obligations convertible (currently or after the passage of time or the occurrence of certain events) into or exchangeable for any shares of the Company’s or any Company Subsidiary’s capital stock or equity interests, except (A) shares of Company Common Stock repurchased from employees or consultants or former employees or consultants of the Company pursuant to the exercise of repurchase rights binding on the Company and existing prior to the date of this Agreement; (B) shares of Company Common Stock accepted as payment for the exercise price of options to purchase Company Common Stock pursuant to the Company Equity Plans or for withholding Taxes incurred in connection with the exercise, vesting or settlement of Company Options and Company RSUs, as applicable, in accordance with the terms of the applicable award and (C) in connection with the exercise of Company Warrants;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full incur, redeem, repurchase, prepay, defease, or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur cancel any indebtedness for borrowed money or money, guarantee any such indebtedness of another Personindebtedness, or issue or sell any debt securities or warrants or other rights to acquire any debt security securities (directly, contingently or otherwise) or make any loans or advances or capital contributions to any other Person, other than in the ordinary course of business or (B) incur any Lien on any of its material property or assets, except for Company Permitted Encumbrances;
(ix) (A) adopt, terminate or amend in any material respect any Company Plan, (B) increase, or accelerate the vesting or payment of, the compensation or benefits of any director, individual independent contractor or current or former employee of the Company or any Company Subsidiary with an annual compensation of its Subsidiaries$200,000 or above, except for inter-company borrowings solely among other than as contemplated by Part 4.1(a)(ix) of the Company and its wholly-owned Subsidiaries Disclosure Schedule, (C) grant any rights to severance, retention, change in control, transaction or among termination pay to any current or former director, independent contractor or current or former employee of the Company’s wholly-owned Subsidiaries Company or any Company Subsidiary with an annual compensation of $200,000 or above, (D) hire or promote any employee with an annual compensation of $200,000 or above, or (E) terminate the employment of any employee of the Company or any Company Subsidiary with an annual compensation of $200,000 or above (other than for cause); except, in each case, for (1) amendments to Company Plans determined by the ordinary course consistent Company in good faith to be required to comply with past practice;
applicable Legal Requirements, (x2) except as otherwise expressly contemplated by this Agreement, (3) with respect to the annual renewal process for any Company Plan that is not reasonably expected to result in a material cost increase to the Company or any Company Subsidiary, (4) in connection with any employee hire (i) to replace departing employees with an annual compensation of less than $200,000, (ii) to fill open positions as set forth in on Part 4.1(a)(ix)(4)(ii) of the capital budgets Company Disclosure Schedule, (iii) who has already accepted an offer of employment and is set forth in Section 6.1(a)(xon Part 4.1(a)(ix)(4)(iii) of the Company Disclosure Schedule or (iv) otherwise in the ordinary course of business; or (5) for increases in compensation or benefits made in the ordinary course of business for any employee with an annual compensation of less than $200,000;
(x) (i)(A) amend or terminate (except for terminations pursuant to the expiration of the existing term of any Material Contract and consistent therewithamendments in the ordinary course of business and except with respect to Reinsurance Agreements) any Material Contract or (B) waive, make release or authorize assign any capital expenditurematerial rights under any Material Contracts (other than any Reinsurance Agreement), (ii) enter into or renew any Contract or agreement that, if in effect on the date of this Agreement, would constitute a Material Contract (except for renewals of any existing Material Contract in the ordinary course of business and Contracts entered into or renewed in connection with the EBS Business and except for Reinsurance Agreements), or (iii) enter into any Reinsurance Agreement that does not meet the criteria set forth on Part 4.1(a)(x)(iii) of the Company Disclosure Schedule;
(xi) change any of its methods of financial accounting or accounting practices in any material respect other than as required by changes in GAAP or SAP or as required by applicable Legal Requirements;
(Axii) make, change or revoke any material Tax election, change or adopt any Tax accounting period or material method of Tax accounting, amend any material Company Return if such amendment would reasonably be expected to result in a material Tax liability, file any material Company Return prepared in a manner materially inconsistent with past practice, settle or compromise any material liability for Taxes or any Tax audit, claim, or other proceeding relating to a material amount of Taxes, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar state, local or non-U.S. Legal Requirement) if such agreement would reasonably be expected to result in a material Tax liability or have a material impact on Taxes, request any Tax ruling from any Governmental Entity, surrender any right to claim a material refund of Taxes, or, other than in the ordinary course of business, agree to an extension or waiver of the statute of limitations with respect to a material amount of Taxes;
(xiii) sell, transfer, assign, license, or otherwise dispose of (by merger, consolidation, operation of law, division or otherwise), or mortgage, encumber or exchange any material Intellectual Property owned, or purported to be owned, by the Company or any Subsidiary of the Company, including, for the avoidance of doubt, any sale, transfer, assignment, license, or other disposition of, or mortgage, encumbrance or exchange of any such material Intellectual Property to or with any Affiliate of the Company (other than non-exclusive licenses granted in the ordinary course of business) or modify, amend, cancel, terminate, waive, release or assign any Company IP License or any rights, claims, obligations or benefits thereunder or enter into any Contract that would have been a Material Contract Company IP License had it been entered into prior to this Agreement the First Effective Time, in each case, with respect to any nonmaterial Company IP License, except, in each case, in the ordinary course of business and for licenses granted in the connection with the EBS Business;
(xiv) (i) make any capital expenditure that is not contemplated by the capital expenditure budget set forth in Part 4.1(a)(xiv)(i) of the Company Disclosure Schedule or (ii) incur any cash expenditures or obligations or liabilities except cash expenditures, obligations or liabilities incurred (A) in the ordinary course of business or (B) amendin connection with the transactions contemplated by this Agreement;
(xv) enter into any agreement, modify understanding or terminate arrangement with respect to the voting of any Material Contractcapital stock or other equity interests of the Company (including any voting trust), or cancel, modify or waive other than in connection with the granting of revocable proxies in connection with any debts, rights or claims thereunder; for purposes meeting of this Section 6.1, the monetary reference in clause Company’s stockholders;
(xvi) adopt a plan of (A) complete or partial liquidation of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in of the aggregate for all such settlements) Company or (B) dissolution, merger, consolidation, division, restructuring, recapitalization or other reorganization;
(xvii) commence, joinsettle or compromise any litigation, make an appeal claim, suit, action or proceeding, except for (x) ordinary course claims and related Legal Proceedings under or with respect to any Insurance Contract and (y) other settlements or compromises that (A) involve solely monetary remedies with a lawsuitvalue not in excess of $75,000, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuitany individual litigation, actionclaim, claim suit, action or similar proceedingmatter, or $250,000 in the aggregate to be paid by the Company and its Subsidiaries, (IIIB) pursuant do not impose any restriction on the Company’s business or the business of the Company Subsidiaries, (C) do not relate to any litigation, claim, suit, action or proceeding by the Company’s stockholders in connection with this AgreementAgreement or the Mergers and (D) do not include an admission of liability or fault on the part of the Company or any Company Subsidiary;
(xivxviii) file materially reduce the amount of insurance coverage under the material commercial insurance policies of the Company and the Company Subsidiaries or fail to use reasonable best efforts to renew or maintain any such material existing insurance policies;
(xix) (A) amend any material Tax Return except Company Permits in a manner that adversely impacts the Company’s ability to conduct its business in any material respect or (B) terminate or allow to lapse any material Company Permits;
(xx) (A) fail to pay any issuance, renewal, maintenance and other payments that become due with respect to any material Company Registered IP or otherwise abandon, cancel, or permit to lapse any material Company Registered IP, other than in its reasonable business judgment or in the ordinary course of business, settle or compromise (B) authorize the disclosure to any third party of any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of Trade Secret included in the Company or IP in a way that results in loss of any trade secret protection, other than in the ordinary course of its Subsidiariesbusiness;
(xvxxi) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assetsfor Contracts entered into in connection with the EBS Business, enter into any individual Contract under which the Company or any Company Subsidiary (A) grants or agrees to grant any right to material Company IP, other than pursuant non-exclusive licenses, or (B) agrees to Contracts pay any royalties in effect prior excess of $150,000 with respect to the date of this Agreementany Intellectual Property;
(xvixxii) except as expressly required by applicable Legal Requirements or the Company’s Organizational Documents, convene (A) any special meeting of the Company’s stockholders other than the Company Stockholder Meeting or (B) any other meeting of the Company’s stockholders to consider a proposal that would reasonably be expected to impair, prevent or delay the consummation of the transactions contemplated hereby;
(xxiii) enter into any new line of business;
(xxiv) (i) alter or amend in any existing financial, underwriting, claims, claims handling, risk retention, reserving, investment or actuarial practice, guideline or policy or any material assumption underlying an actuarial practice or policy, except as may be required by GAAP, SAP, any Governmental Entity or applicable law or (ii) enter into any Contract or commitment with any insurance regulatory authority, in the case of each of clauses (i) and (ii) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xixxxv) agreeauthorize, authorize approve or commit enter into any agreement or make any commitment to do take any of the foregoingactions described in clauses “(i)” through “(xxiv)” of this sentence.
(b) Prior to making any formal written communications Parent agrees that, during the period from the date of this Agreement through the earlier of the Closing or group oral presentations the termination of this Agreement, except (1) to the directors, officers or employees of extent the Company shall otherwise give its prior consent in writing, (2) as set forth in Part 4.1(b) the Parent Disclosure Schedule, (3) as may be required by applicable Legal Requirements or any of its Subsidiaries pertaining to compensation (4) as expressly permitted or benefit matters that are affected by the transactions contemplated required by this Agreement, Parent shall, and shall cause the Parent Subsidiaries to, conduct its business in the ordinary course in all material respects and use reasonable best efforts to maintain and preserve intact its business organization. Without limiting the foregoing, during the period from the date of this Agreement through the earlier of the Closing or the termination of this Agreement, except (1) to the extent the Company shall provide Parent with a copy of the intended communicationotherwise give its prior consent in writing, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Sources: Merger Agreement (Lemonade, Inc.)
Interim Operations. (a) The parties intend that the following covenants shall preserve the Company's business, finances, and operations as currently conducted, and shall not be interpreted in such a manner as to transfer such control of operations to Parent prior to the Effective Time. The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed in light of Parent's plans for the Company's and its Subsidiaries' business after the Closing Date, and except (A) as otherwise expressly required contemplated by this Agreement, ):
(Ba) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the business of it and its Subsidiaries Subsidiaries, including commercially reasonable efforts to bill ▇▇▇ collect accounts receivable, shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it the Company and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations organization intact and maintain its existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality ofemployees, and in furtherance ofbusiness associates; provided, the foregoinghowever, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of that the Company Disclosure Schedule, the Company will not shall operate to conserve its cash and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instrumentscash equivalents;
(iib) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
it shall not (iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(ivi) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, encumber any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares owned by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or it in any of its Subsidiaries;
; (viii) other than pursuant to the terms amend its or its Subsidiaries' certificate of Contracts in effect as incorporation or by-laws; (iii) split, combine, or reclassify its outstanding shares of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person stock; (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(viiiv) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, or property in respect of any capital stock other than dividends from its direct or otherwiseindirect wholly-owned Subsidiaries; or (v) repurchase, redeem, or otherwise acquire, except in connection with respect to the Stock Plans or permit any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary Subsidiaries to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any shares of its capital stock or any securities convertible into or exchangeable into or exercisable for any shares of its capital stock, except from ;
(Ac) holders neither it nor any of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder its Subsidiaries shall (i) other than upon exercise of the Company Options or Company SARs or the lapse of restriction securities outstanding on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employeesSeptember 30, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person1999, issue, sell, pledge, dispose of, or issue encumber any shares of, or sell securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments, or rights of any debt securities or warrants or other rights kind to acquire acquire, any debt security shares of the Company its capital stock of any class or any of its SubsidiariesVoting Debt or any other property or assets, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries (ii) other than in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary usual course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, guarantee, sell, mortgage, pledge, surrenderdispose of, encumber, divest, cancel, abandon or allow to lapse encumber any other property or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, assets (including capital stock of any of its Subsidiaries) or incur or modify any indebtedness or other liability, except sales of Company Products in the ordinary course of business and sales of obsolete assets, (iii) make or authorize or commit for any capital expenditures other than pursuant to Contracts the year 1999/2000 capital appropriations/spending budgets initialed by Parent and the Company and previously delivered to Parent or (iv) by any means, make any acquisition of, or investment in, assets or stock of any other person or entity, other than investments in effect prior to the date of this Agreement;
(xvi) cash equivalents, and other than in the ordinary course of business, (A) transferprovided, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose however that for purposes of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Propertythis Section 6.1(c), waive acquisitions of all or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as substantially all of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) assets of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do a business shall not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than be considered as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made done in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer business regardless of previous activities of the Company;
(xviiid) subject neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend, or otherwise modify, any Compensation and Benefit Plans, pay or agree to Section 6.2pay any bonuses, or increase the salary, wage, bonus, or other compensation of any employees;
(e) neither it nor any of its Subsidiaries shall settle or compromise any claims or litigation that, individually or in the aggregate, would have an adverse effect on the Company's financial condition equal to or in excess of $50,000, or, except in the ordinary and usual course of business, modify, amend, or terminate any of its material Contracts, waive, release, or assign any material rights or claims, or enter into any material Contracts or agreements;
(f) neither it nor any of its Subsidiaries shall make any Tax election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be canceled or terminated, except in the ordinary and usual course of business;
(g) neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely would cause any of its representations and warranties herein to prevent, interfere with or delay the consummation of the Merger or result become untrue in any of the conditions to the Merger set forth in Article VII not being satisfied; ormaterial respect;
(xixh) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or neither it nor any of its Subsidiaries pertaining to compensation shall establish, adopt, enter into, or benefit matters that are affected by the transactions contemplated by this Agreementmake any new leases, the Company shall provide Parent with a copy of the intended communicationcapital leases, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld operating lease commitments, or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.renewals or extensions thereof;
(ci) Subject to Section 6.5, Parent shall not take or permit neither it nor any of its Subsidiaries shall incur, authorize, or enter into any short-term or long-term debt;
(j) it and its Subsidiaries shall (i) maintain their respective properties and facilities, in as good working order and condition as at present, ordinary wear and tear excepted, except as would not, individually or in the aggregate, be reasonably expected to take have a Company Material Adverse Effect; and (ii) perform all of their respective material obligations under material agreements relating to or affecting their respective assets, properties or rights;
(k) it and its Subsidiaries shall not: (i) guarantee any action that is reasonably likely to preventindebtedness; (ii) create or assume any mortgage, interfere pledge or other lien or encumbrance upon any assets or properties whether now owned or hereafter acquired; (iii) sell, assign, lease, pledge or otherwise transfer or dispose of any property or equipment except in the ordinary course of business consistent with past practice; (iv) acquire or delay negotiate for the consummation acquisition of (by merger, consolidation, purchase of a substantial portion of assets, or otherwise) any business or the Merger or result in start-up of any new business; (v) commence a lawsuit other than for routine collection of the conditions to the Merger set forth in Article VII not being satisfied.bills; or
Appears in 1 contract
Sources: Merger Agreement (Comps Com Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the date execution of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing and except as (Ai) as otherwise required by applicable Law, (ii) expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) Agreement or (Diii) as set forth otherwise expressly disclosed in Section 6.1(a) 6.1 of the Company Disclosure ScheduleLetter), the Company shall use its commercially reasonable efforts to (A) conduct its business and the business of it and its Subsidiaries shall be conducted in the ordinary course of business consistent with past practice and usual course and, (B) maintain the status of the Company as a “real estate investment trust” within the meaning of Sections 856 through and including 860 of the Code (a “REIT”) for all taxable periods ending on or prior to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agentsClosing Date. Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement until and prior to the Effective Time, except as (Aw) as otherwise expressly required by this Agreement, (B) as required by applicable LawsLaw, (Cx) as Parent may consent to approve in writing (such consent approval not to be unreasonably withheld, conditioned or delayed or conditionedwith respect to clauses (d), (f), (h), (i), (m), (n), (p), (r) or (Ds)), (y) as set forth expressly disclosed in Section 6.1(a) 6.1 of the Company Disclosure ScheduleLetter or (z) expressly provided for in this Agreement, the Company will shall not and will not permit any of its Subsidiaries to:
(a) (i) adopt amend, supplement or propose any change in otherwise modify its certificate articles of incorporation or by-laws bylaws (or other applicable comparable governing instruments;
documents), (ii) merge split, combine, subdivide or consolidate the Company or any reclassify its outstanding shares of its Subsidiaries with any other Person, capital stock (except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares transaction by a wholly owned Subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (iii) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (other than (A) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company (other than a Taxable REIT Subsidiary) to another direct or indirect wholly owned Subsidiary of the Company or another wholly owned Subsidiary to the Company, (B) regular quarterly cash dividends not to exceed $0.15 per Share, with customary record and payment dates on the Shares in accordance with past practice (including, for the avoidance of doubt, any dividends or distributions declared and publicly announced on or prior to the issuance date hereof), (C) any distributions of Shares pursuant the Company and its Subsidiaries, including under Sections 857, 858 or 860 of the Code, as may be reasonably necessary to (I) maintain the status of the Company Optionsas a REIT or (II) avoid or reduce the imposition of any corporate level Tax or excise Tax under the Code and (D) dividend equivalents payable upon the vesting or settlement of Company Director-Granted RSUs, Company Restricted Shares Service-Based RSUs and Company Market-Based RSUs), (iv) enter into any agreement with respect to the voting of its capital stock or the Convertible Senior Notes outstanding as (v) purchase, repurchase, redeem or otherwise acquire any shares of the date of this Agreement) its capital stock or any securities convertible or exchangeable into or exercisable for any shares of such its capital stock, other than (A) pursuant to the cashless exercise of Company Options or the forfeiture of, or withholding of Taxes with respect to, Company Options, Company Director-Granted RSUs, Company Service-Based RSUs or Company Market-Based RSUs in connection with any Taxable event related to such awards, in each case, in accordance with past practice and with the terms of the applicable Company Stock Plan as in effect on the date of this Agreement or (B) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company;
(b) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate;
(i) except as required by the terms of a Company Plan, (A) increase the compensation or benefits payable to any current or former employee, director or individual service provider of the Company or any of its Subsidiaries with an annual base salary greater than $100,000, (B) materially increase the compensation or benefits payable to any current or former employee, director or individual service provider of the Company or any of its Subsidiaries with an annual base salary less than $100,000 or (C) become a party to, establish, adopt, amend, or make any change to any Company Plan or any arrangement that would have been a Company Plan had it been entered into prior to the date of this Agreement, other than related to annual plan renewals in the ordinary course of business or (ii) grant or make any bonus or other payment to any employee, director, executive officer or individual service provider of the Company or its Subsidiaries;
(d) hire any employees with an annual base salary greater than $100,000, other than any non-officer employees that are hired to replace any employees that were terminated or that resigned and that are provided total compensation and benefits substantially similar, in the aggregate, to the terminating employees being replaced;
(e) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (i) in the ordinary course of business consistent with past practice, borrowings under the Existing Credit Facilities as in effect as of the date hereof, (ii) inter-company Indebtedness among the Company and its wholly owned Subsidiaries, (iii)(A) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (B) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business or (iv) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice and not for speculative purposes; provided, that the Company and its Subsidiaries shall use commercially reasonable efforts to mitigate any material increase in their respective aggregate exposure to currency risk;
(f) make or commit to any capital expenditures other than in the ordinary course of business consistent with past practice and which do not exceed the amounts per line item reflected in the Company’s monthly capital expenditure projections for 2020 (pro-rated for any partial months during such period), which have previously been made available to Parent;
(g) other than with respect to (i) Contracts related to any REO Properties and (ii) other Company Properties that are set forth in Section 6.1(g) of the Company Disclosure Letter, in each case so long as such transactions are on bona fide, commercial, arms’ length terms to an unaffiliated party, transfer, lease (other than renewals and single-family home leases with tenants in the ordinary course of business consistent with past practice), license, sell, assign, mortgage, pledge, place a Lien (other than Permitted Liens) upon or otherwise dispose of any properties or assets (including capital stock of any of its Subsidiaries but not including any Intellectual Property), (x) with a fair market value in excess of $200,000 individually or $2,000,000 in the aggregate (other than transactions among the Company and its wholly owned Subsidiaries) but for the avoidance of doubt subject in all respects to the additional restrictions of Section 6.15(a) with respect to Subject Company Properties, (y) that secure any of the Existing Credit Facilities other than to the extent the disposition thereof is permitted by the relevant Existing Credit Facility but for the avoidance of doubt subject in all respects to the additional restrictions of Section 6.15(a) with respect to Subject Company Properties, or (z) that would reasonably be expected to interfere with Merger Sub’s ability to obtain the Debt Financing; provided, that other than with respect to properties or assets referred to in clauses (i) and (ii) above, the Company shall promptly (and in any event within twenty-four (24) hours) deliver to Parent written notice of any license, sale, assignment, mortgage, pledge, or other disposition of any Company Properties;
(h) issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (i) for any Shares issued pursuant to Company Options, Company Director-Granted RSUs, Company Service-Based RSUs and Company Market-Based RSUs outstanding on the date of any kind to acquire any shares this Agreement in accordance with the terms of such capital stock awards and the Company Stock Plans, and (ii) by wholly owned Subsidiaries to the Company or such convertible or exchangeable securitiesto any other wholly owned Subsidiary of the Company;
(vi) create other than pursuant to the agreements forth in Section 6.1(i) of the Company Disclosure Letter, acquire any business or incur assets or other property, whether by merger, consolidation, purchase of property or assets or otherwise;
(j) make any Lien material change with respect to its financial accounting policies or procedures, except as required by changes in GAAP (or any interpretation thereof) or by applicable Law;
(k) enter into any new line of business or start to conduct a line of business of the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect that is not conducted as of the date of this Agreement and provided to Parent prior to the date of this Agreement, ;
(l) make any loans, advances, guarantees advances or capital contributions to to, or investments in in, any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in loans, advances or capital contributions to the Company or any direct or indirect wholly owned Subsidiary of the Company);
(viii) declare, set aside, make amend or pay modify in any dividend material respect or other distribution, payable in cash, stock, property terminate (excluding terminations upon expiration of the term thereof or otherwise, with respect to any of its capital stock (except for (A) dividends paid upon default by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Shareparty thereto, declared and paid consistent with prior timingin each case, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
terms thereof) any Material Contract or waive, release or assign any material rights, claims or benefits under any Material Contract or take (ixor fail to take) incur any indebtedness for borrowed money action that would reasonably be expected to cause or guarantee such indebtedness of another Personresult in a material breach of, or issue material default under, any Material Contract or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (Aii) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement unless it is on terms substantially consistent with, or on terms more favorable to the Company or its Subsidiaries (and to Parent and its Subsidiaries following the Closing) than, either a Contract it is replacing or a form of such Material Contract made available to Parent prior to the date hereof; provided, this Section 6.1(m) shall not prohibit or restrict any action in respect of (A) Company Plans or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this the Existing Lender Consents (as defined in Section 6.1, the monetary reference in clause (A6.1(m) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000Company Disclosure Letter);
(xiin) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation Proceeding before or other proceedings threatened in writing to be brought before a Governmental Entity except where Entity, other than settlements if the amount of any such settlement is limited solely not in excess of $250,000 individually or $1,000,000 in the aggregate; provided, that such settlements do not involve any non-de minimis injunctive or equitable relief or impose non-de minimis restrictions on the business activities of the Company and its Subsidiaries or Parent and its Subsidiaries or (B) waive any material right with respect to (I) the release of claims and (II) the monetary payment any material claim held by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this AgreementSubsidiaries;
(xivo) file enter into any collective bargaining agreement or recognize or certify any labor union, labor organization or other employee representative body as the bargaining representative for any employees of the Company or any of its Subsidiaries;
(p) make, change or revoke any material Tax election or change a material method of Tax accounting, amend any material Tax Return except in the ordinary course of businessReturn, settle or compromise any material Tax liability, makeaudit, change proceeding, claim or revoke assessment, enter into any Tax allocation, sharing or indemnity agreement (other than customary provisions in agreements or arrangements the primary subject of which is not Taxes), enter into any closing agreement in respect of material Taxes, seek or request any material Tax election except to the extent consistent ruling from a Governmental Entity, file any material Tax Return inconsistent with past practice or other than as required by law, change applicable Law or contribute any material method assets to a Taxable REIT Subsidiary (other than any assets that are expected to be sold prior to the Closing Date and are otherwise permitted to be sold prior to the Closing Date pursuant to the terms of Tax accounting, except as required by lawthis Agreement);
(q) take any action, or fail to take any action, which action which or failure to act would materially adversely affect reasonably be expected to cause (i) the Tax position Company to fail to qualify as a REIT or (ii) any other Subsidiary of the Company to fail to preserve its status as set forth in Section 5.1(b)(iv) of the Company Disclosure Letter;
(r) terminate, cancel or make any material changes to the structure, limits or terms and conditions of any of its Subsidiariesinsurance policies, including allowing the policies to expire without renewing such policies or obtaining comparable replacement coverage, or prejudicing rights to insurance payments or coverage;
(xvs) transfer, sell, leaseassign, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon transfer or allow to lapse or expire or otherwise dispose of exclusively license any assets, licenses, operations, rights, product lines, businesses or interests therein of material Intellectual Property owned by the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales or permit the lapse of Company Products any right, title or interest to any such material Intellectual Property, including any material Registered IP, in the ordinary course of business and sales of obsolete assetseach case, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xviit) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as take any of the date hereof pursuant to Contracts or Benefit Plans which are listed actions set forth on Section 6.1(a)(xvii6.1(t) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedLetter; or
(xixu) agree, authorize resolve or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to . Notwithstanding the directorsforegoing, officers or employees of nothing in this Section 6.1 shall prohibit the Company or any of its Subsidiaries pertaining from taking any action or refraining from taking any action, at any time or from time to compensation time, that in the reasonable judgment of the board of directors of the Company, upon written advice of nationally recognized REIT Tax counsel, is reasonably necessary for the Company to avoid incurring entity-level U.S. federal income or benefit matters U.S. federal excise Taxes under the Code or to maintain its qualification as a REIT for any period or portion thereof ending on or prior to the Effective Time, including making dividend or other distribution payments to stockholders of the Company in accordance with this Agreement (subject to the restrictions set forth in Section 6.1(a)(iii)); provided, that are affected by the transactions contemplated by this Agreementprior to taking any such action, the Company and its Subsidiaries shall provide inform Parent in writing of such action and shall consult with a copy and cooperate with Parent in good faith to minimize the adverse effect of the intended communication, Parent shall have a reasonable period of time such action to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communicationand Parent.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to during the Effective Time and Period, except (Ai) as otherwise expressly required or contemplated by this AgreementAgreement or the Restructuring Term Sheet, (Bii) as required by applicable Laws, Law (Cincluding the Bankruptcy Code) or (iii) as Parent may consent consented to in writing by the Requisite Supporting Lenders (such which consent shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed), (x) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the business of it and its Subsidiaries Business shall be conducted in the ordinary course of business consistent with past practice and usual course and, to in accordance with applicable Law and (y) the extent consistent therewith, it Company and its Subsidiaries shall use their respective commercially reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations the Business and maintain existing relations and goodwill their relationship with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditorswholesalers, lessorsretailers, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Governmental Entities.
(b) Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until during the Effective TimePeriod, except (Ax) as otherwise expressly required or contemplated by this AgreementAgreement or the Restructuring Term Sheet, (By) as required by applicable Laws, Law (Cincluding the Bankruptcy Code) or (z) as Parent may consent consented to in writing by the Requisite Supporting Lenders (such which consent shall not to be unreasonably withheld, delayed conditioned or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Scheduledelayed), the Company will not shall not, and will shall not permit any of its Subsidiaries to, directly or indirectly:
(i) adopt or propose any change in its amend the certificate of incorporation or by-laws incorporation, bylaws or other applicable governing instrumentsorganizational documents of the Company or its Subsidiaries;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries or otherwise enter into any agreements or arrangements imposing providing for the sale of their respective material changes or restrictions on its assets, operations or businessesbusiness;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this AgreementPerson;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee transfer or encumbrance of, any shares of capital stock or Equity Interests of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company OptionsSubsidiary), Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stockstock or Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiesthe foregoing;
(v) incur, create or incur assume any Lien material to the Company or any of its Subsidiaries Encumbrance (other than Permitted Encumbrances) on any assets properties or assets, tangible or intangible, of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement(A) incur, assume or guarantee any Indebtedness or capitalized lease obligations or issue any debt securities or (B) make any loans, advances, guarantees or capital contributions to to, or investments in in, any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company)Person;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or Equity Interests (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the CompanySubsidiary) or enter into any agreement with respect to the voting of its capital stockstock or Equity Interests (other than this Agreement);
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or Equity Interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationforegoing;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of except in accordance with the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries Budget (as defined in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewithCash Collateral Orders), make or authorize any capital expenditure;
(xi) (Ax) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement Agreement;
(xi) other than in the ordinary course of business, cancel or terminate (B) amendother than, for the avoidance of doubt, any expiration in accordance with its terms), or modify or terminate amend in any material respect, or waive any material rights under, any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to material accounting policies or procedures, except as required by changes in applicable Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect theretoGAAP;
(xiii) settle or compromise any (A) settle any litigation or Cause of Action (other proceedings before a Governmental Entity except where the settlement is limited solely to than settlements involving only unsecured claims with an allowed amount of less than one hundred thousand dollars (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) 100,000)), or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection patent-related Cause of bills, (II) in such cases where Action involving any of the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this AgreementIntellectual Property;
(xiv) file or amend any material Tax Return except transfer, assign, sell, lease, grant (other than in the ordinary course of business) any license with respect to, settle or compromise any material Tax liabilityor, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect within the Tax position control of the Company or of any of its Subsidiaries, abandon or permit to lapse, any material Intellectual Property;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon terminate or allow fail to lapse or expire or otherwise dispose of renew any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreementmaterial Business Permit;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumberdispose of, divesttransfer or authorize the sale, cancelpledge, abandon disposition or allow to lapse or expire or otherwise dispose transfer of any Intellectual Property Rights, (B) grant, extend, amend assets or abandon (except as required in properties of the diligent prosecution of Owned Intellectual Property), waive Company or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except grant any material licenses, sublicenses, covenants not to make changes that are required by applicable Law assert or similar rights with respect to any assets or properties, whether tangible or intangible, of the Company or its Subsidiaries;
(xviii) fail to use commercially reasonable efforts to maintain the Insurance Policies or to satisfy contractual obligations existing renew or replace the Insurance Policies following their termination;
(xix) except as required pursuant to the terms of any Debtor Plan in effect as of the date hereof pursuant to Contracts of this Agreement or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure ScheduleApproved ▇▇▇▇, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, consulting fees, incentive, bonus, pensionretirement, welfare, fringe or other benefits, severance or termination pay of any of the current employee or former directorsindependent contractor, officers(B) become a party to, employees establish, adopt, amend, commence participation in or consultants of the Company terminate any Debtor Plan or its Subsidiariesany arrangement that would have been a Debtor Plan had it been entered into prior to this Agreement, (C) pay grant any bonus new awards, or incentive compensation amend or modify the terms of any outstanding awards, under any Benefit Plan in excess of the amount earned based on actual performanceDebtor Plan, (D) take any action to accelerate the vesting of or lapsing of restrictions with respect to or payment, or fund or in any equity-based other way secure the payment, of compensation or other long-term incentive compensation benefits under any Benefit Debtor Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any actuarial or other assumptions used to calculate funding obligations with respect to any Debtor Plan that is required by applicable Law to be funded or contribution obligations under any Benefit Planchange the manner in which contributions to such plans are made or the basis on which such contributions are determined, other than except as may be required by GAAP, (IF) hire forgive any executive officer loans or issue any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made loans (other than routine travel advances issued in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreementof business) to any employee, (JG) enter into hire any employee or engage any independent contractor (who is a natural person) other than the engagement of independent contractors to fill vacancies or staff currently existing or contemplated projects to the extent not currently staffed or (H) terminate the employment of any officer other than for cause other than any officer who was provided with written notice of termination prior to the date of this Agreement and who is listed on Section 7.1(b)(xix) of the Company Disclosure Letter;
(xx) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Companyorganization;
(xviiixxi) subject (A) change in any material respect any material method of accounting of the Company or its Subsidiaries for Tax purposes; (B) enter into any agreement with any Taxing Authority (including a “closing agreement” under Code Section 7121) with respect to Section 6.2, any material Tax or Tax Returns of the Company or its Subsidiaries; (C) surrender a right of the Company or its Subsidiaries to a material Tax refund; (D) change an accounting period of the Company or its Subsidiaries with respect to any material Tax; (E) file an amended Tax Return; (F) change or revoke any material election with respect to Taxes; (G) make any material election with respect to Taxes that is inconsistent with past practice; (H) file any Tax Return that is inconsistent with past practice; (I) consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment (other than in the ordinary course of business); or (J) take any action (or omit fail to take any action) that would result in a loss of any material Tax losses, credits or other attributes that may be used to reduce Tax liabilities (provided that, for the avoidance of doubt, the Company shall not be deemed to have violated the covenant in this clause (J) as the result of any action that is reasonably likely to prevent, interfere with or delay taken at the consummation direction of the Merger Supporting Lenders in connection with the Interfund Transfers);
(xxii) revalue any assets or result in any properties of the conditions Company or its Subsidiaries (including Inventory), except to the Merger set forth in Article VII not being satisfiedextent required by GAAP; or
(xixxxiii) agree, authorize or commit commit, in writing or otherwise, to do take any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communicationforegoing actions.
(c) Subject to Section 6.5, Parent The Supporting Lenders shall not knowingly take or permit any of its their Subsidiaries to take any action that is reasonably likely to prevent, interfere with prevent or delay materially impede the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedTransactions.
Appears in 1 contract
Sources: Restructuring Support Agreement (Melinta Therapeutics, Inc. /New/)
Interim Operations. (a) The Company covenants From and agrees as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time and except (A) as otherwise expressly required by earlier of the termination of this AgreementAgreement or the consummation of the Merger, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) the businesses of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be operated and conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Timecourse, except (A) as otherwise expressly required contemplated by this Agreement, (B) as set forth in Schedule 7.1 of the Company Disclosure Letter, as required by applicable Laws, (C) Laws or as Parent may shall otherwise consent to in writing (such which consent shall not to be unreasonably withheld, delayed conditioned or conditioned) delayed). Parent shall not take or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than including, for the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date purpose of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stocksentence, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant ) to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or (i) result in any of the conditions to of the Merger set forth in Article VII VIII not being satisfied; or
satisfied or (xixii) agree, authorize or commit to do any prevent the consummation of the Merger. Without limiting the generality of the foregoing.
(b) Prior to making any formal written communications or group oral presentations , from and after the date hereof and prior to the directorsearlier of the termination of this Agreement or the consummation of the Merger, officers the Company shall not, and shall not permit any of its Subsidiaries to, issue, sell, pledge, grant, transfer, encumber or employees otherwise dispose of any shares of capital stock or other equity interests of the Company or any of its Subsidiaries, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock or other equity interests of the Company or any of its Subsidiaries pertaining or declare, set aside or pay any dividend or other distribution payable in cash, stock or property (or any combination thereof) with respect to compensation its capital stock or benefit matters that are affected other equity interests (except dividends or other distributions in cash, stock or property paid by any direct or indirect wholly-owned Subsidiary of the transactions contemplated by Company to the Company or to any other direct or indirect wholly-owned Subsidiary of the Company).
(b) Nothing contained in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time, and notwithstanding anything to the contrary contained in this Agreement, no consent of Parent or Merger Sub will be required with respect to any matter set forth in this Agreement to the extent the requirement of such consent would violate any applicable Law. Prior to the Effective Time, the Company shall provide Parent exercise, consistent with a copy the terms and conditions of the intended communicationthis Agreement, Parent shall have a reasonable period of time to review complete control and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent supervision over its operations and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any operations of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedSubsidiaries.
Appears in 1 contract
Sources: Merger Agreement (Voltari Corp)
Interim Operations. (a) The Company covenants and agrees Except as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time and except (A) as required by applicable Law or otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedulecovenants and agrees that, from and after the date hereof and prior to the Effective Time, except with the prior written consent of Parent, the business of it Company shall, and shall cause its Subsidiaries shall be conducted to, conduct their business in the ordinary course consistent with past practice and usual course andshall, to the extent consistent therewith, it and shall cause its Subsidiaries shall to, use their respective commercially reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. associates.
(b) Without limiting the generality of, of the foregoing and in furtherance of, the foregoingthereof, from the date of this Agreement until the Effective Time, except as (A) as required by applicable Law, (B) otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in the relevant subsection of Section 6.1(a6.1(b) of the Company Disclosure ScheduleLetter, or (D) with the prior written consent of Parent ((X) which consent, solely with respect to the items and actions set forth in clauses (iii), (v), (ix), (xiii), (xv), (xvi) and (xvii), shall not be unreasonably withheld, conditioned or delayed so long as the action or omission (or series of related actions or omissions) the subject of such clauses would not reasonably be expected to result in (x) the Company being obligated to make payments in excess of $1,000,000 or (y) additional cost, expense or liability to Parent or Merger Sub hereunder in excess of $1,000,000, (Y) which consent, solely with respect to the items and actions set forth in clause (xi), shall not be unreasonably withheld, conditioned or delayed, and (Z) which consent, with respect to the other following clauses, may be given or withheld in Parent’s sole discretion), the Company will not shall not, and will not permit the Company shall cause its Subsidiaries not to:
(i) adopt amend, supplement or propose any otherwise change in its certificate of incorporation or by-laws incorporation, bylaws, limited liability company agreement or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, Person or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesliquidate;
(iii) acquire (by merger, consolidation, acquisition of stock or assets outside of the ordinary course of or otherwise) any corporation, partnership or other business organization or any material assets from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this AgreementPerson;
(iv) issue, deliver, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, delivery, sale, pledge, disposition, grant, transfer, lease, license, guarantee guaranty or encumbrance of, any shares of its capital stock or equity interests or the capital stock or equity interests of any of its Subsidiaries (other than (A) the issuance of Shares upon the exercise of Company Options or awards under the ESPP or the settlement of Company RSUs, in each case in accordance with the Stock Plans and that are outstanding as of the date hereof or that are issued after the date hereof in compliance with this Agreement or (B) the issuance or transfer of capital stock or equity interests of a wholly owned Subsidiary of the Company or any of its wholly-owned Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company OptionsSubsidiary), Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, stock units, stock awards, warrants or other rights of any kind to acquire any shares of such capital stock or such stock, equity interests, convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees advances or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company)) in excess of $250,000 or outside the ordinary course of business consistent with past practice;
(viivi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or equity interests (except for (A) cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the CompanySubsidiary) or enter into any agreement with respect to the voting of its capital stock;
(viiivii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from stock or equity interests (other than (A) holders the acquisition in the ordinary course of business consistent with past practice of any Shares tendered by current or former Service Providers in connection with the cashless exercise of Company Options or in full or partial payment of order to pay Taxes in connection with the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or the vesting of Company SARs or RSUs, (B) repurchases of Shares at a price per Share not exceeding the lapse of restriction on Company Restricted Shares Per Share Merger Consideration to the extent required or permitted pursuant to the terms and conditions of awards granted under the terms Stock Plans outstanding as of the applicable Stock Plans and award agreements date hereof, the form of which has been made available to Parent prior to the date hereof or (BC) former employees, directors or consultants following termination repurchases of their relationship with Shares pursuant to the Company Stock Repurchase Plan in accordance with applicable agreements providing for its terms until the repurchase of shares upon such termination;Stock Repurchase Plan is terminated pursuant to Section 6.17.
(ixviii) incur any indebtedness Indebtedness for borrowed money or guarantee such indebtedness Indebtedness of another PersonPerson (other than a wholly owned Subsidiary of the Company), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in each case other than in the ordinary course consistent with past practiceunder letters of credit, lines of credit or other credit facilities or arrangements in effect on the date hereof so long as the total Indebtedness incurred under all such letters of credit, lines of credit or credit facilities does not exceed $500,000 in the aggregate;
(xix) except as make or authorize any capital expenditures in excess of $250,000 individually or $500,000 in the aggregate, other than in accordance with the capital expenditure plan set forth in the capital budgets set forth in on Section 6.1(a)(x6.1(b)(ix) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditureLetter in the ordinary course of business;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xiix) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect theretoby a Governmental Entity;
(xi) institute, compromise, settle, come to an arrangement regarding or agree to compromise, settle or come to an arrangement regarding any claims (A) settle involving amounts in excess of $50,000 individually or $100,000 in the aggregate, (B) that would impose any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the non-monetary payment by obligation on the Company or any Subsidiary does not exceed $2,000,000 (its Subsidiaries or $15,000,000 in Affiliates that would continue after the aggregate for all such settlements) Effective Time or (BC) commenceinvolving any stockholder, join, make an appeal director or director nominee of the Company or that would grant any rights with respect to a lawsuit, action, claim appointment or similar proceeding other than (I) for the routine collection nomination of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreementdirectors;
(xivxii) file make, change or amend rescind any material Tax Return except in the ordinary course election or method of businessTax accounting, file any material amended Tax Return, settle or compromise any material Tax liability, makeconsent to or request any extension or waiver of any limitation period with respect to any claim or assessment of a material amount of Taxes (other than pursuant to extensions of time to file Tax Returns in the ordinary course of business consistent with past practices), change or revoke enter into any closing agreement with respect to any material Tax election except or surrender any right to the extent consistent with past practice or claim a material Tax refund, fail to pay any Taxes as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiariesthey become due and payable;
(xvxiii) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire expire, ▇▇▇▇▇ ▇ ▇▇▇▇ on or otherwise dispose of any material assets, licenses, operations, rights, product lines, businesses properties or interests therein rights of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products (A) in the ordinary course of business consistent with past practice (which, in the case of Intellectual Property, shall be limited to only nonexclusive licenses or subscriptions granted to customers in the ordinary course of business) and sales of obsolete assets, other than (B) pursuant to Contracts in effect on the date of this Agreement to the extent set forth on Section 6.1(b)(xiii) of the Company Disclosure Letter (and made available to Parent prior to the date of this Agreementhereof);
(xvixiv) except as required under applicable Law or the terms of any Benefit Plan in effect as of the date hereof (A) grant, provide or increase (or commit to grant, provide or increase) any severance or termination payments or benefits to any current or former Service Provider; (B) increase in any manner (or commit to increase in any manner) the compensation or benefits of any current or former Service Provider (other than in the ordinary course consistent with past practices in all respects (including as to number of promotions, identity of employees being promoted, timing thereof and amount of increases) for employees with aggregate annual compensation potential (after taking into account such increase) of $200,000 or less who are being promoted to a higher paying position), (C) become a party to, establish, adopt, terminate or amend (or commit to become a party to, establish, adopt, terminate or amend) any Benefit Plan or arrangement that would have been a Benefit Plan if in effect on the date hereof (other than routine changes to welfare plans in the ordinary course consistent with past practice) or accelerate the vesting of, or lapse of restrictions on, any compensation (including any Company Option, Company RSU or Company PSU) for the benefit of any Person; (D) establish, adopt, enter into or amend any collective bargaining agreement, plan, trust, fund, policy or arrangement for the benefit of any current or former Service Providers or any of their beneficiaries; (E) cause the funding of any rabbi trust or similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan; or (F) terminate the employment or services of any Service Provider with annual compensation in excess of $200,000 other than for cause, or hire any Service Provider for annual compensation (base salary and incentive opportunities) in excess of $200,000;
(xv) abandon, encumber, convey title (in whole or in part), exclusively license or grant any right or other licenses to material Intellectual Property owned or exclusively licensed to the Company or any of its Subsidiaries, or enter into licenses or agreements that impose material restrictions upon the Company or any of its Subsidiaries with respect to Intellectual Property owned by any third party, in each case other than in the ordinary course of business, business consistent with past practice;
(xvi) (A) transfermodify, sell, license, mortgage, pledge, encumber, divest, cancel, abandon amend or allow to lapse or expire or otherwise dispose of terminate any Intellectual Property RightsMaterial Contract, (B) grant, extend, amend or abandon (except as required enter into any successor agreement to an expiring Material Contract other than in the diligent prosecution ordinary course of Owned Intellectual Property), waive business consistent with past practice or modify any material rights in that does not change the terms of such expiring Material Contract or to Owned Intellectual Property, (C) fail enter into any new agreement that would have been considered a Material Contract if it were entered into on or prior to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Propertydate hereof;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter intocancel, materially amend or renew (or communicate materially modify any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedInsurance Policies; or
(xixxviii) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Sources: Merger Agreement (Sciquest Inc)
Interim Operations. (a) The Company covenants and agrees as Prior to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time and except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required ------------------ set forth in the Company Disclosure Letter or as contemplated by any other provision of this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to unless Sub has consented in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedulethereto, the Company will not and will not permit its Subsidiaries toCompany:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any shall, and shall cause each of its Subsidiaries with any other Personto, except for any such transactions among wholly owned Subsidiaries of the Companyconduct its operations and business according to their usual, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement regular and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(xii) except as set forth in shall use its best efforts, and shall cause each of its Subsidiaries to use its best efforts, to preserve intact their business organizations and goodwill, keep available the capital budgets set forth in Section 6.1(a)(x) services of the Company Disclosure Schedule their respective officers and consistent therewith, make or authorize any capital expenditureemployees and maintain satisfactory relationships with those persons having business relationships with them;
(xiiii) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement shall not, and shall cause its Subsidiaries not to, amend their respective Articles of Incorporation or (B) amend, modify bylaws or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000comparable governing instruments;
(xiiiv) make shall promptly notify Sub of (x) any material changes with respect to accounting policies change in its condition (financial or proceduresotherwise), except as required by changes in Law business, prospects, properties, assets, liabilities or applicable GAAP the normal course of its business or statutory of its properties, (y) any material litigation or regulatory accounting rules material governmental complaints, investigations or interpretations with respect theretohearings (or communications indicating that the same may be contemplated), or (z) the breach of any representation or warranty contained herein;
(Av) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely shall promptly deliver to (I) the release of claims Sub correct and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking complete copies of any action report, statement or schedule filed with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior SEC subsequent to the date of this Agreement;
(xvivi) shall not, and shall not permit any of its Subsidiaries to, authorize, propose or announce an intention to authorize or propose, or enter into an agreement with respect to, any merger, consolidation or business combination (other than the Merger), release or relinquishment of any material contract rights, or any acquisition or disposition of assets or securities in excess of $100,000 in the aggregate other than in the ordinary course of businessbusiness consistent with past practice;
(vii) shall not, and shall not permit any of its Subsidiaries to, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (Bx) grant, extendconfer or award any options, amend warrants, conversion rights or abandon (except as required in the diligent prosecution of Owned Intellectual Property)other rights, waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations not existing as of on the date hereof pursuant hereof, to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) acquire any shares of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe its capital stock or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants securities of the Company or its SubsidiariesSubsidiaries or (y) accelerate, (C) pay any bonus amend or incentive compensation change the period of exercisability of options or restricted stock granted under any Benefit Plan employee stock plan or, except as contemplated by Section 4.3(a)(i), authorize cash payments in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to exchange for any equity-based compensation or other long-term incentive compensation options granted under any Benefit Planof such plans;
(viii) shall not, (E) grant and shall not permit any new awardof its Subsidiaries to, amend in any material respect the terms of outstanding awards the Benefit Plans, including, without limitation, any employment, severance or change similar agreements or arrangements in existence on the date hereof, or adopt any new employee benefit plans, programs or arrangements or any employment, severance or similar agreements or arrangements;
(ix) shall not, and shall not permit any of its Subsidiaries to (x) increase or agree to increase the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan payable or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used become payable to calculate funding or contribution obligations under any Benefit Planits officers or, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities increases in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent accordance with past practice and which are consistent with the other requirements set forth in this Agreementnot material, to its employees or (Jy) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Companyagreement;
(xviiix) subject shall not, and shall not permit any of its Subsidiaries to, (x) incur, create, assume or otherwise become liable for borrowed money or assume, guarantee, endorse or otherwise become responsible or liable for the obligations of any other individual, corporation or other entity or (y) make any loans or advances to Section 6.2any other person, take except in the case of clause (x) for borrowings under existing credit facilities in the ordinary course of business and, except in the case of clause (y) for advances consistent with past practice which are not material;
(xi) shall not, and shall not permit any of its Subsidiaries to, (x) materially change any practice with respect to Taxes, (y) make, change or revoke any material Tax election, or (z) settle or compromise any material dispute involving a Tax liability;
(xii) shall not, and shall not permit any of its Subsidiaries to, (x) declare, set aside or pay any dividend or make any other distribution or payment with respect to any shares of its capital stock or other ownership interests or (y) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or capital stock of any of its Subsidiaries, or make any commitment for any such action or omit (z) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock;
(xiii) shall not, and shall not permit any of its Subsidiaries to, issue, deliver, sell, pledge or otherwise encumber any shares of its capital stock, any other securities or any securities convertible into, or any rights, warrants or options to take acquire, any action that such shares, securities or convertible securities (other than the issuance of shares of Company Common Stock upon the exercise of Company Stock Options outstanding on the date hereof in accordance with their present terms);
(xiv) shall not, and shall not permit any of its Subsidiaries to, make or agree to make any capital expenditure or expenditures with respect to property, plant or equipment which, individually or in a series of related transactions, is reasonably likely in excess of $100,000 or, in the aggregate, are in excess of $500,000 except as otherwise in the ordinary course of business consistent with past practice in order to preventsatisfy actual or expected contractual commitments to customers;
(xv) shall not, interfere and shall not permit any of its Subsidiaries to, change any accounting principles or practices;
(xvi) shall not, and shall not permit any of its Subsidiaries to, pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business consistent with past practice or delay in accordance with their terms, of liabilities reflected or reserved against in the consummation most recent consolidated financial statements (or the notes thereto) of the Merger Company included in the Company Reports or result incurred thereafter in the ordinary course of business consistent with past practice, or waive any material benefits of, or agree to modify in any of the conditions material respect, any confidentiality, standstill, nonsolicitation or similar agreement to the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of which the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this AgreementSubsidiary is a party; and
(xvii) shall not, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely take, or agree (in writing or otherwise) or resolve to preventtake, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedforegoing actions.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after From the date of this Agreement and prior to until the Effective Time and or the earlier termination of this Agreement in accordance with its terms (the “Pre-Closing Period”), except (Aw) as otherwise set forth in SECTION 4.1(a) of the Company Disclosure Letter, (x) as expressly required by this Agreement, (By) as required by applicable Laws, (C) as Parent may consent to the extent consented to in writing by Parent (such which consent shall not to be unreasonably withheld, delayed or conditioned) or (Dz) as set forth in Section 6.1(a) of required by applicable Law, the Company Disclosure Scheduleshall, and shall cause its Subsidiary to conduct the business of it and its Subsidiaries shall be conducted Subsidiary in the ordinary and usual course of business in all material respects and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries shall Subsidiary to, use their respective commercially reasonable best efforts to protect and preserve in all material respects its their business organizations intact, maintain their assets and to preserve intact its business organizations properties and maintain existing relations their relationships and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other Persons having business associates dealings with the Company or its Subsidiary, and keep available the services of its current officers, key managers and its Subsidiaries’ present other employees and agentsconsultants, all as necessary to conduct their business in the ordinary course; provided, however, for the avoidance of doubt, the Company shall in no event be required to increase compensation to employees or consultants or pay any special bonuses in connection with the foregoing. Without limiting Notwithstanding the generality of, and in furtherance of, of the foregoing, from and subject to the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as exceptions set forth in Section 6.1(aclauses (w), (x), (y) and (z) of the Company Disclosure Scheduleimmediately preceding sentence, the Company will not shall not, and will shall not permit its Subsidiaries Subsidiary to:
(i) adopt amend, supplement or propose any change in its modify (A) the certificate of incorporation or by-laws bylaws (or other applicable comparable formation and governing instrumentsdocuments) of the Company or its Subsidiary or (B) any policy related to Personal Data or the operation or security of any material IT Assets in any manner that would materially weaken the security or protection thereof;
(ii) acquire any equity interests in, or assets of any business or division (whether by merger, consolidation or otherwise) from, any other Person (other than the Company or its Subsidiary of the Company), except for purchases of inventory, services, products or materials in the ordinary course of business;
(iii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, Person or restructure, reorganize reorganize, dissolve, wind-up or completely or partially liquidate the Company or otherwise enter into its Subsidiary or take any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreementsimilar action;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance ofsubject to any Lien, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance Equity Interests, except for issuances of Shares pursuant to Company OptionsStock Options outstanding on the date of this Agreement under the Stock Incentive Plans;
(v) split, combine, subdivide, recapitalize, reclassify or effect any similar change in capitalization of any of the Equity Interests;
(vi) declare, accrue, set aside, establish a record date for, or pay any dividends on, or make any other distributions in respect of, the Equity Interests of the Company Restricted Shares (other than those paid in cash prior to the Reference Time);
(vii) repurchase, redeem or otherwise acquire any of the Equity Interests, except for redemptions, purchases or acquisitions pursuant to the exercise or settlement of Company Stock Options or the Convertible Senior Notes outstanding as exercise of any contractual repurchase rights existing on the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(vviii) incur, suffer to exist, guarantee or otherwise become liable with respect to any Indebtedness, except for short term working capital borrowings incurred in the ordinary course of business under the Credit Facilities;
(ix) divest, sell, convey or transfer, or create or incur any Lien material to the Company or (other than Permitted Liens) on, any of its Subsidiaries on any the assets of the Company or any its Subsidiary, other than sales of products or non-exclusive licenses granted by the Company or its SubsidiariesSubsidiary in the ordinary course of business;
(vix) (A) increase in any respect the compensation or benefits of any (1) Company Employee other than as expressly required pursuant to applicable Law or the terms of Contracts Company Plans in effect on the date of this Agreement that are set forth in SECTION 4.1(a)(x)(A) of the Company Disclosure Letter or (2) Company Employees (other than any Company Employee whose salary is equal to or less than $100,000 in the ordinary course of business consistent with past practice), (B) establish, adopt, enter into, modify, supplement, amend or terminate any Company Plan or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Plan if it were in existence as of the date of this Agreement and provided (other than as expressly required by the terms of any Company Plan as in effect on the date of this Agreement that has been made available to Parent Parent), (C) take any action to accelerate the vesting or payment of or to fund any benefit or payment to any Company Employee, except as contemplated pursuant to SECTION 2.4 of this Agreement or (D) pay or agree to pay any pension, retirement allowance or other employee benefit, including any severance, change in control, retention, transaction or termination payment to any Company Employee other than those included as Transaction Expenses (as contemplated pursuant to SECTION 4.7(d) of this Agreement) as required by law or pursuant to the terms of Company Plans in effect on the date of this Agreement that are set forth in SECTION 4.1(a)(x)(D)(2) of the Company Disclosure Letter, (E) grant any equity or equity-based awards to, or discretionarily accelerate the vesting or payment of any such awards held by any Company Employee, (F) hire any executive-level employee or (G) terminate any executive-level employee other than for cause;
(xi) other than in the ordinary course of business, make, change or revoke any Tax election, file any amended Tax Return, settle or compromise any Tax liability, enter into any closing agreement with respect to any Tax or surrender any right to claim a Tax refund, consent to any extension or waiver of the limitation period applicable to any Taxes, or change the Company’s or its Subsidiary’s method of accounting for Tax purposes, unless required by applicable Law;
(xii) except as required by GAAP or applicable Law, make any changes to its accounting policies or principles;
(A) other than in the ordinary course of business, enter into any Contract that would have been a Company Material Contract pursuant to SECTION 3.1(q)(i) had it been entered into prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements Agreement or (B) former employeesterminate, directors or consultants following materially amend, or waive any material rights under, any Company Material Contract, except for any such termination upon the expiration of their relationship with the such Company Material Contract in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among terms; provided in each case that the Company and its wholly-owned Subsidiaries Subsidiary shall be permitted to extend, renew or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent replace any Company Material Contract with past practiceone or more Contracts on substantially similar terms;
(xxiv) except as for the capital expenditures expressly approved in the Company capital expenditures budget set forth in the capital budgets set forth in Section 6.1(a)(xSECTION 4.1(a)(xiv) of the Company Disclosure Schedule and consistent therewithLetter, make or authorize any capital expenditure;
(xixv) except (A) as provided in SECTION 4.17 or (B) with respect to the settlement of an Action if such settlement imposes no liability or obligation on the Company other than the payment of money damages that do not exceed the amounts accrued in connection with the MSA Litigation on the unaudited consolidated balance sheet of the Company and its Subsidiary as of March 31, 2017 with respect to such Action, or $15,000 individually or $45,000 in the aggregate with respect to other Actions, (1) cancel, compromise, settle or agree to settle any material claims, (2) waive or release any material right with respect to any Action or (3) commence or settle any Action;
(xvi) (A) enter into delay or postpone any Contract that payment of any accounts payable or other payables or expenses from the date such payments would be made consistent with past practice, (B) accelerate or delay the collection of accounts receivable in advance of or beyond the date when the same would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products collected in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute make any material change in the Company’s and conduct of its Subsidiaries’ patent applicationsbusiness, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Propertychange in the methods of purchase, sale, lease, management, marketing, promotion or operation of its business;
(xvii) except to invest in, make changes that are required by applicable Law any capital contributions to, or to satisfy contractual obligations existing as of otherwise acquire the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe securities or other benefitsequity interests of, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what Person that is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with not a labor union, works council or similar organization or (K) terminate without cause the employment of any officer Subsidiary of the Company;
(xviii) subject form any new Subsidiary;
(xix) (A) cancel or fail to Section 6.2, take renew any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger Company Insurance Policies or fail to maintain commercially reasonable levels of insurance coverage provided by such Company Insurance Policies or (B) fail to maintain its insurance coverage, pay premiums, and report claims to the insurance carrier upon their occurrence;
(xx) act, or fail to act, in any manner that would (A) reasonably be expected to result in any loss, lapse, abandonment, invalidity or unenforceability of any material Intellectual Property owned or purported to be owned by the conditions Company or its Subsidiary, or (B) cause the Company or its Subsidiary to the Merger set forth be obligated to place any proprietary source code in Article VII not being satisfiedescrow;
(xxi) fail to pay any creditor any material amount owed to such creditor when due;
(xxii) enter into any agreement, arrangement or transaction with any of their respective directors, officers, or Stockholders (or with any relative, beneficiary, spouse or Affiliate of such Persons); or
(xixxxiii) agree, authorize authorize, resolve, commit or commit consent to do any of the foregoing.
(b) Nothing contained in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the Company’s operations prior to the Effective Time. Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this AgreementEffective Time, the Company shall provide Parent exercise, consistent with a copy the terms and conditions of the intended communicationthis Agreement, Parent shall have a reasonable period of time to review complete control and comment on the communication (which comments shall not be unreasonably withheld or delayed), supervision over its and Parent and the Company shall cooperate in providing any such mutually agreeable communicationits Subsidiary’ respective operations.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Interim Operations. (a) The Company covenants shall, and agrees as to itself and shall cause each of its Subsidiaries thatto, from and after the date of this Agreement and prior to until the Effective Time and except (A) as unless Parent shall otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to approve in writing (such consent which approval shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed) or (D) as otherwise required by applicable Law), and except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.1(a) of the Company Disclosure ScheduleLetter, the conduct its business of it and its Subsidiaries shall be conducted in the ordinary course of business and usual course andin accordance with applicable Law in all material respects, in each case consistent with past practice, as applicable, to the extent consistent therewithwith the foregoing, it shall use and cause each of its Subsidiaries shall to use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations comply with and maintain existing its Material Contracts and maintain its and its Subsidiaries’ relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present lessors employees and agents, except as otherwise expressly contemplated by this Agreement. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to approve in writing (such consent approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed), (B) as expressly contemplated by this Agreement, (C) as required by applicable Law or (D) as set forth in the corresponding subsection of Section 6.1(a) of the Company Disclosure ScheduleLetter, the Company will shall not and will not permit shall cause its Subsidiaries not to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instrumentsOrganizational Documents;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, Person or restructure, reorganize reorganize, recapitalize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesdissolve;
(iii) acquire any Person or any assets outside constituting a business unit or division, whether directly or indirectly and by any manner, from any other Person, or otherwise make any investments, including as related to research and development, or capital expenditures, in each case with or for a total volume of funds deployed, a fair market value or purchase price in excess of $500,000 in any individual transaction or series of related transactions or $1,000,000 in the aggregate, other than (A) as set forth in the line items of the Company’s capital budget set forth in Section 6.1(a)(iii) of the Company Disclosure Letter, (B) in accordance with the Company’s clinical development plans previously delivered to Parent and as set forth in Section 6.1(a)(iii)(B) of the Company Disclosure Letter and (C) for acquisitions of inventory or other goods in the ordinary course of business from and transactions among the Company and its Subsidiaries or among the Company’s Subsidiaries;
(iv) transfer, sell, lease, divest, cancel, abandon, license or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other Person than any Permitted Encumbrance) upon, any properties or assets (other than Intellectual Property Rights, which are addressed in Section 6.1(a)(v)), product lines or businesses of the Company or any of its Subsidiaries, including capital stock of any of its Subsidiaries, except (A) in the ordinary course of business (including sales of Company Products) and (B) sales, leases, licenses or other dispositions of assets (not including services) with a fair market value not in excess of $500,000 in any individual transaction or purchase price series of related transactions or $1,000,000 in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to the express terms of any Material Contracts in effect as of prior to the date of this Agreement, or entered into after the date of this Agreement in accordance with this Agreement;
(ivv) transfer, sell, lease, divest, assign, license, sublicense, grant a covenant not to sue with respect to, incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) on, or otherwise abandon, cancel, let lapse or dispose of, any Company Intellectual Property, except non-exclusive licenses granted in the ordinary course of business;
(vi) fail to make any filing, pay any fee, or take any other commercially reasonable action necessary to prosecute and maintain in full force and effect any material Registered Company IP for which the Company or any of its Subsidiaries controls prosecution and maintenance thereof;
(vii) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee guarantee, encumber, or encumbrance otherwise enter into any Contract or other agreement or arrangement with respect to the voting of, any shares of capital stock of the Company (including, for the avoidance of doubt, Shares) or of any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company OptionsSubsidiaries, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any such shares of such capital stock, or any options, warrants or other rights of any kind to acquire any such shares of such capital stock or such convertible or exchangeable securities;
securities (vother than (A) create proxies or incur any Lien material voting agreements solicited by or on behalf of the Company in order to obtain the Requisite Company Vote or (B) the issuance of shares of such capital stock (1) by a Wholly Owned Subsidiary of the Company to the Company or any of its Subsidiaries on any assets another Wholly Owned Subsidiary of the Company or any (2) in respect of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect Company Equity Awards outstanding as of the date of this Agreement and provided to Parent prior to or granted after the date of this Agreement not in violation of this Agreement in accordance with their terms and, as applicable, the Stock Plan in effect on the date of this Agreement, );
(viii) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of to or from the Company and other than any of its Wholly Owned Subsidiaries) outside the ordinary course of business in excess of $500,000 individually or $1,000,000 in the Company or any direct or indirect wholly owned Subsidiary of the Company)aggregate;
(viiix) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (including with respect to the Company, for the avoidance of doubt, Shares), except for (A) dividends paid by any direct or indirect wholly owned Wholly Owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Wholly Owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viiix) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from stock (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares including with respect to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employeesCompany, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase avoidance of shares upon such terminationdoubt, Shares);
(ixxi) assume, guarantee, issue or incur any indebtedness for borrowed money or guarantee such indebtedness Indebtedness (including the issuance of another Person, or issue or sell any debt securities or securities, warrants or other rights to acquire any debt security security), or enter into any hedging agreements, except for (A) Indebtedness in replacement of existing Indebtedness for borrowed money on terms substantially consistent with or more favorable to the Company than the Indebtedness being replaced up to $500,000, (B) guarantees of Indebtedness of its Wholly Owned Subsidiaries otherwise incurred in compliance with this Section 6.1(a), (C) interest, exchange rate and commodity swaps, options, futures, forward contracts and similar derivatives or other hedging Contracts entered into in the ordinary course of business and not for speculative purposes, (D) Indebtedness incurred pursuant to letters of credit, performance bonds or other similar arrangements in the ordinary course of business or (E) Indebtedness not in excess of $1,000,000 in the aggregate; provided, that any Indebtedness assumed, guaranteed, issued or incurred by the Company or any of its Subsidiaries, except Subsidiaries or for inter-company borrowings solely among which the Company and or any of its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practiceotherwise becomes liable under this Section 6.1(a)(xi) shall permit prepayment at any time without penalty of any kind;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (Axii) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement Agreement;
(xiii) other than with respect to Material Contracts related to Indebtedness, which shall be governed by Section 6.1(a)(xi), (A) terminate or fail to use commercially reasonable efforts to renew any Material Contract or (B) amend, modify modify, supplement or terminate waive, or assign, convey, encumber or otherwise transfer rights or interests under any Material Contract, except for, in each case, (x) expiration or non-renewals of any such Contract, (y) ministerial actions or (z) grants of non-exclusive licenses under Company Intellectual Property, in each case of (x), (y) and (z), in the ordinary course of business;
(xiv) terminate, fail to renew, fail to maintain, fail to comply with or perform its obligations under, amend, modify, supplement, or waive, or assign, convey, encumber or otherwise transfer rights or interests under, any Contract set forth on Section 6.1(a)(xiv) of the Company Disclosure Letter;
(xv) cancel, modify or waive any debts, rights debts or claims thereunder; held by or owed to the Company or any of its Subsidiaries having in each case a value in excess of $500,000 individually or $1,000,000 in the aggregate;
(xvi) for purposes the avoidance of doubt, except as expressly provided for by Section 6.12(a), adversely amend, modify, terminate, cancel or let lapse any material Insurance Policy, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by reputable insurance carriers are in full force and effect, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed Insurance Policies for substantially similar premiums, as applicable, as in effect as of the date of this Section 6.1Agreement;
(xvii) commence any Proceeding (other than counterclaims) for an amount in excess of $1,000,000 individually or $1,000,000 in the aggregate during any calendar year and/or settle or compromise any Proceeding for an amount in excess of $1,000,000 individually or $1,000,000 in the aggregate during any calendar year, the monetary reference in clause or which would reasonably be expected to (A) prevent, materially delay or materially impair the consummation of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause transactions contemplated by this Agreement, (B) have a materially negative impact on or impose any material restriction on the operations of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause Company and its Subsidiaries or (C) involve any criminal liability, any admission of material wrongdoing or any material wrongful conduct by the definition Company or any of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000its Subsidiaries;
(xiixviii) make any material changes with respect to accounting policies policies, procedures, methods, principals or procedurespractices, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect theretoGAAP;
(Axix) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, makeelection (unless consistent with past practices) or, change or revoke any material Tax election except to the extent consistent with past practice election, change an annual Tax accounting period, adopt or as required by law, change any material method Tax accounting method, file any amended material Tax Return, enter into any closing agreement within the meaning of Section 7121 of the Code (or any similar provision of state, local, or non-U.S. Law) with respect to Taxes, settle, compromise or otherwise resolve any material Tax accountingclaim, audit, assessment, dispute or Proceeding in respect of any Tax liabilities, surrender any right to claim a material Tax refund, withdraw any material Tax refund claim or agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of any material Tax;
(xx) except as required by law, or take any action which would materially adversely affect pursuant to the Tax position of the Company or terms of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts Benefit Plan in effect prior to as of the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s Agreement and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed set forth on Section 6.1(a)(xvii4.14(a) of the Company Disclosure ScheduleLetter, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensationcompensation or consulting fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any Company Employee, (B) become a party to, establish, adopt, materially amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to the date of the current or former directors, officers, employees or consultants of the Company or its Subsidiariesthis Agreement, (C) pay grant any bonus new awards, or incentive compensation amend or modify the terms of any outstanding awards, under any Company Benefit Plan in excess of the amount earned based on actual performancePlan, (D) take any action to accelerate the vesting of or lapsing of restrictions with respect to or payment, or fund or in any equity-based other way secure the payment, of compensation or other long-term incentive compensation benefits under any Company Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable Law to be funded or contribution obligations under change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, (F) forgive any Benefit Planloans or issue any loans to any Company Employee (other than routine travel advances issued in the ordinary course of business), (G) hire, promote or terminate (other than for cause) the employment of any employee of the Company or any of its Subsidiaries at the level of Senior Director or above, (H) engage or terminate the services of any independent contractor (who is a natural person) with an annual consulting fee in excess of $50,000, (I) hire or engage the services of, in the aggregate, more than fifteen additional employees or independent contractors (who are natural persons) of the Company or any of its Subsidiaries (taken together) excluding any employee hired for a vacant position directly resulting from a prior termination or (J) terminate (other than for cause) more than five Company Employees who are members of the Company’s medical affairs or sales force departments;
(xxi) (A) terminate any Clinical Trials in respect of any drug, combination product, compound, device, or product candidate (including for purposes of or in connection with diagnostics) being developed, tested, labeled, manufactured, or stored by the Company and/or its Subsidiaries (“Product Candidate”) that are ongoing as of the date of the Agreement, other than as required by GAAPa Governmental Entity, Institutional Review Board, or equivalent, duly constituted under applicable local law(s) (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that the Company promptly notifies Parent of any such requirement), or as recommended by a safety monitoring committee to address a safety concern, or (B) initiate or commit to initiate (alone or with any third party) any new hire’s compensation and benefits are made Clinical Trial in respect of any material Product Candidate other than (x) the ordinary course consistent with past practice and are consistent with the other requirements Clinical Trials set forth in this Agreementthe Company Disclosure Letter or (y) any Clinical Trial that would not result in aggregate expenditures (including clinical research organization fees, regulatory filing fees, study drug or materials, investigator fees, trial site costs and other outside expenses of such trials) over the course of such Clinical Trial of more than $2,000,000;
(xxii) (A) other than with respect to a Company PAP, create, implement, operate, participate in or offer any patient assistance or patient support program that offers, provides or intends to provide free drug product (including any Product Candidate) or any cost-sharing assistance, such as co-pay coupons or co-pay cards in relation to a drug product, to any patient, including any federal healthcare program beneficiaries (each, a “Patient Assistance Program”), (JB) enter into make any material changes to, including, for the avoidance of doubt, any material expansion of, any Patient Assistance Program provided by the Company as of the date of this Agreement and set forth on Section 6.1(a)(xxii) of the Company Disclosure Letter (each, a “Company PAP”) or (C) fail to operate the Company PAPs;
(xxiii) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement Contract with a labor union, labor organization, works council or similar organization organization;
(xxiv) amend, terminate or allow to lapse any material Licenses held by the Company or any of its Subsidiaries in a manner that materially and adversely impacts the ability of the Company and its Subsidiaries to conduct their respective businesses;
(Kxxv) terminate without cause amend or modify the employment of any officer engagement letter of the Company’s financial advisors (or grant any discretionary fee or any comparable additional fee thereunder) in a manner that increases the fee or commission payable by the Company or any of its Subsidiaries;
(xviiixxvi) subject pay any discretionary fees to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere its advisors in connection with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedMerger; or
(xixxxvii) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger Nothing set forth in Article VII not being satisfied.this Agreement shall give Parent, directly or indirectly, the right to control or direct the Co
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior Prior to the Effective Time and Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure ScheduleSchedule or as contemplated by any other provision of this Agreement, unless Parent has consented in writing thereto, the business of it Company:
(i) shall, and shall cause the Company Subsidiary to, conduct its Subsidiaries shall be conducted operations in the ordinary and usual course and, to consistent with the extent consistent therewith, it and its Subsidiaries manner as heretofore conducted;
(ii) shall use their respective commercially reasonable best efforts efforts, and shall cause the Company Subsidiary to protect and preserve in all material respects its assets and use commercially reasonable efforts, to preserve intact its their business organizations and maintain existing relations and goodwill with Governmental Entitiesgoodwill, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its their respective officers and its Subsidiaries’ present employees and agents. Without limiting the generality ofmaintain satisfactory relationships with those persons having business relationships with them;
(iii) shall not, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of shall cause the Company Disclosure ScheduleSubsidiary not to, the Company will not and will not permit its Subsidiaries to:
(i) adopt amend their respective Certificates of Incorporation or propose any change in its certificate of incorporation Bylaws or by-laws or other applicable comparable governing instruments;
(iiiv) merge shall give prompt notice to Parent of any representation or consolidate warranty made by it contained in this Agreement becoming untrue or inaccurate such that the condition set forth in Section 6.3(a)(ii) would not be satisfied; provided, however, that no such notification shall affect the representations, warranties, covenants or agreements of the parties or the conditions to the obligations of the parties under this Agreement;
(v) shall, upon receiving any written notice from any Taxing authority proposing any adjustment to any Tax relating to the Company or any of its Subsidiaries with any other Personthe Company Subsidiary, except for any such transactions among wholly owned Subsidiaries of the Companygive prompt written notice thereof to Parent, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesseswhich notice shall describe in detail each proposed adjustment;
(iiivi) subject to the provisions of Section 5.1, shall not, and shall not permit the Company Subsidiary to, (A) acquire or agree to acquire by merging or consolidating with, or by acquiring any capital stock of or purchasing a substantial portion of the assets outside of of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof, or (B) acquire or agree to acquire assets other than in the ordinary course of business from any other Person and except for capital expenditures made in accordance with a value or purchase price in clause (xviii) below and except for in-licenses of technology, the aggregate in excess of, cost of which does not exceed $1,000,000 individually or $2,000,000 in the aggregate, $2,500,000, other than acquisitions pursuant or (C) release or relinquish or agree to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, release or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, relinquish any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company)contract rights;
(vii) declareshall not, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to and shall not permit the Company or to Subsidiary to, effect any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase stock split or otherwise acquire, directly change its capitalization or indirectly, issue any shares of its capital stock or securities convertible into or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders upon exercise of options to purchase shares of Company Common Stock under the Company Stock Option Plans, and except (B) pursuant to the Stock Purchase Plan;
(viii) shall not, and shall not permit the Company Subsidiary to, grant, confer or award any options, warrants, conversion rights or other rights, not existing on the date hereof, to acquire any shares of its capital stock or other securities of the Company or the Company Subsidiary, other than (a) the issuance of Company Options to newly hired employees, consistent with past practice or (b) as set forth in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise Section 5.2(a)(viii) of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationDisclosure Schedule;
(ix) incur shall not, and shall not permit the Company Subsidiary to, take or fail to take any indebtedness for borrowed money or guarantee such indebtedness of another Personaction which would, or issue or sell any debt securities or warrants or other rights to acquire any debt security would be reasonably likely to, prevent the accounting for the Merger as a pooling of interests in accordance with APB No. 16, the interpretive releases issued thereto, and the pronouncements of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;SEC.
(x) except shall not, and shall not permit the Company Subsidiary to, take or fail to take any actions which would, or would be reasonably likely to, prevent the Merger from qualifying as set forth in a reorganization with the capital budgets set forth in meaning of Section 6.1(a)(x368(a) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditureCode;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amendshall not, modify or terminate any Material Contractand shall not permit the Company Subsidiary to, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference amend in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or proceduresrespect, except as required by applicable law or in response to changes in Law applicable law, the terms of any Company Plan, including, without limitation, any employment, severance or applicable GAAP similar agreements or statutory arrangements in existence on the date hereof, or regulatory accounting rules adopt any new employee benefit plans, programs or interpretations arrangements or any employment, severance or similar agreements or arrangements, or change in any respect any vesting schedule with respect thereto;
(A) settle to any litigation Company Plan or other proceedings before a Governmental Entity except where grant or award thereunder, or grant any salary increases to any employee of the settlement is limited solely to (I) Company or the release of claims and (II) the monetary payment Company Subsidiary above that amount previously disclosed in writing by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commenceto Parent, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent business consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position to non-officers of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its SubsidiariesSubsidiary, except sales of that (A) the Company Products may hire employees in the ordinary course of business consistent with past practice and (B) this subsection (xi) shall not preclude Company from making payments under Company Plans;
(xii) shall notify Parent in writing promptly upon receiving notice from any employee of the Company or the Company Subsidiary of such employee's intention to terminate employment with the Company or the Company Subsidiary;
(xiii) shall not, and shall not permit the Company Subsidiary to, except in the ordinary course of business consistent with past practice, change in any respect the compensation arrangements for the sales force of obsolete assetsthe Company or the Company Subsidiary;
(xiv) shall not, and shall not permit the Company Subsidiary to, except in the ordinary course of business consistent with past practice, grant any promotion to any management level employee of the Company or the Company Subsidiary;
(xv) shall not, and shall not permit the Company Subsidiary to, except in the ordinary course of business consistent with past practice, (x) incur, create, assume or otherwise become liable for borrowed money or assume, guarantee, endorse or otherwise become responsible or liable for the obligations of any other than pursuant individual, corporation or other entity or (y) make any loans or advances to Contracts in effect prior to the date of this Agreementany other person;
(xvi) other than in shall not, and shall not permit the ordinary course of businessCompany Subsidiary to, (Ax) transfermake, sell, license, mortgage, pledge, encumber, divest, cancel, abandon revoke or allow change any election with respect to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, Taxes or (Dy) fail to exercise a right of removal settle or extension under compromise any material Owned Intellectual PropertyTax liability;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of shall not, and shall not permit the Company Disclosure ScheduleSubsidiary to, (Ay) terminatedeclare, enter into, amend set aside or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus dividend or incentive compensation under make any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of other distribution or lapsing of restrictions payment with respect to any equity-based compensation shares of its capital stock or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization ownership interests or (Kz) terminate without cause the employment directly or indirectly redeem, purchase or otherwise acquire any shares of any officer its capital stock or capital stock of the CompanyCompany Subsidiary, or make any commitment for any such action;
(xviii) subject to Section 6.2shall not, take and shall not permit the Company Subsidiary to, make any action or omit to take any action that is reasonably likely to prevent, interfere with or delay capital expenditures which in the consummation aggregate are in excess of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or$1,000,000;
(xix) shall not, and shall not permit the Company Subsidiary to, solicit to hire or hire any employee of Parent; provided, however, that nothing in this Section 5.2(a)(xix) shall prevent the Company or the Company Subsidiary from publishing any general advertisement or similar notice in any newspaper or other publication or from hiring any person pursuant to such advertisement or notice;
(xx) shall use reasonable efforts to not, and shall use reasonable efforts to cause the Company Subsidiary to not, contact Parent's sales representatives, customers, vendors or strategic partners, the names of which have been provided by Parent to the Company, concerning Parent or the Merger, without Parent's prior written consent, which consent shall not be unreasonably withheld;
(xxi) shall not, and shall not permit the Company Subsidiary to, make any public disclosure regarding its understanding of Parent's plan for integrating the operations of the Company with those of Parent and any of its Subsidiaries; and
(xxii) shall not, and shall not permit the Company Subsidiary to, agree, authorize in writing or commit otherwise, to do take any of the foregoingforegoing actions.
(b) Prior to making any formal written communications the Effective Time, except as set forth in the Parent Disclosure Schedule or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions as contemplated by any other provision of this Agreement, unless the Company has consented in writing thereto, Parent:
(i) shall, and shall provide Parent with a copy cause Merger Sub to, give prompt notice to the Company of any representation or warranty made by it contained in this Agreement becoming untrue or inaccurate such that the condition set forth in Section 6.2(a)(ii) would not be satisfied; provided, however, that no such notification shall affect the representations, warranties, covenants or agreements of the intended communicationparties or the conditions to the obligations of the parties under this Agreement;
(ii) shall not, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to, take or fail to take any action that is which would, or would be reasonably likely to preventto, interfere prevent the accounting for the Merger as a pooling of interests in accordance with or delay APB No. 16, the consummation interpretive releases issued thereto, and the pronouncements of the SEC;
(iii) shall not, and shall not permit any of its Subsidiaries to, take or fail to take any actions which would, or would be reasonably likely to, prevent the Merger from qualifying as a reorganization with the meaning of Section 368(a) of the Code;
(iv) shall not, and shall not permit any of its Subsidiaries to, solicit to hire or result hire any employee of the Company; provided, however, that nothing in this Section 5.2(b)(iv) shall prevent Parent or any Subsidiary from publishing any general advertisement or similar notice in any newspaper or other publication or from hiring any person pursuant to such advertisement or notice;
(v) shall use reasonable efforts to not, and shall use reasonable efforts to cause its Subsidiaries to not, contact the Company's sales representatives, customers, vendors or strategic partners, the names of which have been provided by the Company to Parent, concerning the Company or the Merger, without the Company's prior written consent, which consent shall not be unreasonably withheld;
(vi) shall not, and shall not permit any of its Subsidiaries to, make any public disclosure regarding Parent's plan for integrating the operations of the Company with those of Parent and any of its Subsidiaries; and
(vii) shall not, and shall not permit any of its Subsidiaries to, agree, in writing or otherwise, to take any of the conditions to the Merger set forth in Article VII not being satisfiedforegoing actions.
Appears in 1 contract
Sources: Merger Agreement (Guidant Corp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time and except Except (A) as otherwise expressly required by this Agreement, (Bi) as required by applicable LawsLaw, (Cii) as Parent may consent otherwise expressly contemplated by this Agreement or (iii) as set forth in Schedule 6.01(b), (iv) as required by any Governing Documents of such entities or (v) as consented to in writing by HESM (such which consent shall not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of ), during the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, period from the date of this Agreement until the earlier of the Effective TimeTime or the termination hereof, each HIP Entity shall (A) conduct its business in the ordinary course of business consistent with past practice, (B) use commercially reasonable efforts to maintain and preserve intact its business organization and the goodwill of those having business relationships with it, (C) use commercially reasonable efforts to keep in full force and effect all material Permits and all material insurance policies maintained by the HIP Entities, other than changes to such policies made in the ordinary course of business, and (D) use commercially reasonable efforts to comply in all material respects with all applicable Laws and the requirements of all Material Contracts.
(b) Without limiting the generality of the foregoing, during the period from the date of this Agreement until the earlier of the Effective Time or the termination hereof, except (A) as otherwise expressly required by this Agreementapplicable Law, (B) as required otherwise expressly contemplated by applicable Laws, this Agreement or the other Transaction Documents or (C) as Parent may set forth in Schedule 6.01(b), none of the HIP Entities shall, without the prior written consent to in writing of HESM (such which consent will not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries to:):
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or to any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts their Organizational Documents as in effect as of on the date of this Agreement;
(ivii) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock equity securities of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company OptionsHIP Entities, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock equity securities or such convertible or exchangeable securities or interests;
(iii) declare, set aside or pay any distributions in respect of any of their equity securities or split, combine or reclassify any of their equity securities, other than cash distributions to their respective equity holders in accordance with their respective Organizational Documents;
(iv) settle, propose to settle or compromise any action before a Governmental Authority if such settlement, proposed settlement or compromise (A) with respect to the payment of monetary damages, involves the payment of monetary damages that exceed $1,000,000 in the aggregate (together with all other settlements or compromises after the date of this Agreement), net of any amounts covered by insurance that the HIP Entities expect to be promptly paid by the applicable insurer, (B) that imposes any material equitable or non-monetary relief, penalty or restriction on any HIP Entity or (C) that would reasonably be expected to affect the rights or defenses available to any HIP Entity in any related or similar claims that, individually or in the aggregate, are material to the HIP Entities, taken as a whole;
(v) create recommend, propose, announce, adopt or incur any Lien material vote to the Company adopt a plan of complete or any of its Subsidiaries on any assets of the Company partial dissolution or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts liquidation, in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreementeach case, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct prevent or indirect wholly owned Subsidiary to materially impede or delay the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary ability of the Company) or enter into any agreement with respect Parties to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, satisfy any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stockthe conditions to, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to consummation of, the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as transactions set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, adversely affect in a material way the rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) holders of the definition securities of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000any Party;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xvvi) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, cancel or abandon or allow to lapse or expire or otherwise dispose of any of the HIP Entities’ material assets, licenses, operations, rights, product lines, businesses lines or interests therein of the Company or its Subsidiariesbusinesses, including capital stock any equity interests of any of its Subsidiariesthe HIP Entities, except sales of Company Products (A) in connection with goods or services provided in the ordinary course of business and sales of obsolete assets, or (B) for sales, leases, licenses or other than pursuant to Contracts dispositions of assets with a fair market value not in effect prior to excess of $1,000,000 in the date of this Agreementaggregate;
(xvivii) except (w) as set forth in Schedule 6.01(b)(vii), (x) transactions solely between or among the HIP Entities and/or the HESM Entities that will not result in any obligation or liability to any party other than the HIP Entities and/or the HESM Entities, (y) borrowings permitted under the HIP Credit Agreement or (z) in connection with the ordinary course of businessFinancing Transactions, (A) transferincur, sell, license, mortgage, pledge, encumber, divest, cancel, abandon assume or allow to lapse or expire or otherwise dispose of guarantee any Intellectual Property Rightsindebtedness for borrowed money, (B) grantissue, extend, amend assume or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify guarantee any material rights in or to Owned Intellectual Propertydebt securities, (C) fail grant any option, warrant or right to diligently prosecute the Company’s and its Subsidiaries’ patent applicationspurchase any debt securities, or (D) fail to exercise issue any securities convertible into or exchangeable for any debt securities of others, other than any such actions contemplated in (A) through (D), as would not, taken together, result in the incurrence or guarantee of indebtedness or issuance of debt securities with a right value in excess of removal or extension under any material Owned Intellectual Property$1,000,000 in the aggregate;
(xviiviii) make any change to any of their accounting policies or procedures, except to make changes that are as required by applicable Law or to satisfy contractual obligations existing as of changes after the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xviiin accordance with GAAP;
(ix) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate change any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costsmaterial method of Tax accounting, (B) increase in make, change or revoke any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiariesmaterial Tax election, (C) pay settle or compromise any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performancematerial liability for Taxes, (D) accelerate the vesting of or lapsing of restrictions with respect to file any equity-based compensation or other long-term incentive compensation under any Benefit Planmaterially amended Tax Return, (E) grant enter into any new award, amend the terms of outstanding awards or change the compensation opportunity under written agreement with any Benefit PlanGovernmental Authority with respect to Taxes, (F) pay surrender any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Lawright to claim a refund for Taxes, (G) take consent to an extension of the statute of limitations applicable to any action to fund Tax claim or secure the payment of any amounts under any Benefit Planassessment, or (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit fail to take any action that is would reasonably likely be expected to preventcause any HIP Entity (other than HIP Holdings and ▇▇▇▇ Infrastructure Partners Finance Corporation) to be treated, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedfor U.S. federal income Tax purposes, as a corporation; or
(xixx) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject From the date of this Agreement until the Closing Date, each of HESM Entities and HIP Parties shall promptly notify the other Parties in writing of (i) any event, condition or circumstance that could reasonably be expected to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII V not being satisfiedsatisfied at the Effective Time, and (ii) any material breach by the notifying Party of any covenant, obligation or agreement contained in this Agreement; provided, however, that the delivery of any notice pursuant to this Section 6.01(c) shall not limit or otherwise affect the remedies available hereunder to the notified Party.
Appears in 1 contract
Sources: Partnership Restructuring Agreement (Hess Midstream Partners LP)
Interim Operations. (a) The Company covenants and agrees as Prior to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time and except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure ScheduleLetter or as contemplated by any other provision of this Agreement, unless Sub has consented in writing thereto, the Company will not and will not permit its Subsidiaries toCompany:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any shall, and shall cause each of its Subsidiaries with any other Personto, except for any such transactions among wholly owned Subsidiaries of the Companyconduct its operations and business according to their usual, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement regular and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(xii) except as set forth in shall use its best efforts, and shall cause each of its Subsidiaries to use its best efforts, to preserve intact their business organizations and goodwill, keep available the capital budgets set forth in Section 6.1(a)(x) services of the Company Disclosure Schedule their respective officers and consistent therewith, make or authorize any capital expenditureemployees and maintain satisfactory relationships with those persons having business relationships with them;
(xiiii) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement shall not, and shall cause its Subsidiaries not to, amend their respective Articles of Incorporation or (B) amend, modify by-laws or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000comparable governing instruments;
(xiiiv) make shall promptly notify Sub of (x) any material changes with respect to accounting policies change in its condition (financial or proceduresotherwise), except as required by changes in Law business, prospects, properties, assets, liabilities or applicable GAAP the normal course of its business or statutory of its properties, (y) any material litigation or regulatory accounting rules material governmental complaints, investigations or interpretations with respect theretohearings (or communications indicating that the same may be contemplated), or (z) the breach of any representation or warranty contained herein;
(Av) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely shall promptly deliver to (I) the release of claims Sub correct and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking complete copies of any action report, statement or schedule filed with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior SEC subsequent to the date of this Agreement;
(xvivi) shall not, and shall not permit any of its Subsidiaries to, authorize, propose or announce an intention to authorize or propose, or enter into an agreement with respect to, any merger, consolidation or business combination (other than the Merger), release or relinquishment of any material contract rights, or any acquisition or disposition of assets or securities in excess of $100,000 in the aggregate other than in the ordinary course of businessbusiness consistent with past practice;
(vii) shall not, and shall not permit any of its Subsidiaries to, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (Bx) grant, extendconfer or award any options, amend warrants, conversion rights or abandon (except as required in the diligent prosecution of Owned Intellectual Property)other rights, waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations not existing as of on the date hereof pursuant hereof, to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) acquire any shares of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe its capital stock or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants securities of the Company or its SubsidiariesSubsidiaries or (y) accelerate, (C) pay any bonus amend or incentive compensation change the period of exercisability of options or restricted stock granted under any Benefit Plan employee stock plan or, except as contemplated by Section 4.3(a)(i), authorize cash payments in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to exchange for any equity-based compensation or other long-term incentive compensation options granted under any Benefit Planof such plans;
(viii) shall not, (E) grant and shall not permit any new awardof its Subsidiaries to, amend in any material respect the terms of outstanding awards the Benefit Plans, including, without limitation, any employment, severance or change similar agreements or arrangements in existence on the date hereof, or adopt any new employee benefit plans, programs or arrangements or any employment, severance or similar agreements or arrangements;
(ix) shall not, and shall not permit any of its Subsidiaries to (x) increase or agree to increase the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan payable or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used become payable to calculate funding or contribution obligations under any Benefit Planits officers or, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities increases in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent accordance with past practice and which are consistent with the other requirements set forth in this Agreementnot material, to its employees or (Jy) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Companyagreement;
(xviiix) subject shall not, and shall not permit any of its Subsidiaries to, (x) incur, create, assume or otherwise become liable for borrowed money or assume, guarantee, endorse or otherwise become responsible or liable for the obligations of any other individual, corporation or other entity or (y) make any loans or advances to Section 6.2any other person, take except in the case of clause (x) for borrowings under existing credit facilities in the ordinary course of business and, except in the case of clause (y) for advances consistent with past practice which are not material;
(xi) shall not, and shall not permit any of its Subsidiaries to, (x) materially change any practice with respect to Taxes, (y) make, change or revoke any material Tax election, or (z) settle or compromise any material dispute involving a Tax liability;
(xii) shall not, and shall not permit any of its Subsidiaries to, (x) declare, set aside or pay any dividend or make any other distribution or payment with respect to any shares of its capital stock or other ownership interests or (y) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or capital stock of any of its Subsidiaries, or make any commitment for any such action or omit (z) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock;
(xiii) shall not, and shall not permit any of its Subsidiaries to, issue, deliver, sell, pledge or otherwise encumber any shares of its capital stock, any other securities or any securities convertible into, or any rights, warrants or options to take acquire, any action that such shares, securities or convertible securities (other than the issuance of shares of Company Common Stock upon the exercise of Company Stock Options outstanding on the date hereof in accordance with their present terms);
(xiv) shall not, and shall not permit any of its Subsidiaries to, make or agree to make any capital expenditure or expenditures with respect to property, plant or equipment which, individually or in a series of related transactions, is reasonably likely in excess of $100,000 or, in the aggregate, are in excess of $500,000 except as otherwise in the ordinary course of business consistent with past practice in order to preventsatisfy actual or expected contractual commitments to customers;
(xv) shall not, interfere and shall not permit any of its Subsidiaries to, change any accounting principles or practices;
(xvi) shall not, and shall not permit any of its Subsidiaries to, pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business consistent with past practice or delay in accordance with their terms, of liabilities reflected or reserved against in the consummation most recent consolidated financial statements (or the notes thereto) of the Merger Company included in the Company Reports or result incurred thereafter in the ordinary course of business consistent with past practice, or waive any material benefits of, or agree to modify in any of the conditions material respect, any confidentiality, standstill, non-solicitation or similar agreement to the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of which the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this AgreementSubsidiary is a party; and
(xvii) shall not, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely take, or agree (in writing or otherwise) or resolve to preventtake, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedforegoing actions.
Appears in 1 contract
Sources: Merger Agreement (MTL Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after during the period from the date of this Agreement and prior to through the Effective Time and except (A) as otherwise expressly required by earlier of the Closing or the termination of this Agreement, except (B1) as required by applicable Lawsto the extent Parent shall otherwise give its prior consent in writing, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D2) as set forth in Section 6.1(aPart 4.1(a) of the Company Disclosure Schedule, (3) as may be required by applicable Legal Requirements or (4) as expressly permitted or required by this Agreement, the business of it Company shall, and its shall cause the Company Subsidiaries shall be conducted in the ordinary and usual course andto, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect conduct its business in the ordinary course and preserve in all material respects its assets use reasonable best efforts to maintain and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entitiesorganization, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present current officers, key employees and agentskey consultants and maintain satisfactory relationships with customers, suppliers and distributors, Governmental Entities and other Persons with whom the Company or any Company Subsidiary has material business relations. Without limiting the generality of, and in furtherance of, the foregoing, during the period from the date of this Agreement until through the Effective Timeearlier of the Closing or the termination of this Agreement, except (A1) as to the extent Parent shall otherwise expressly required by this Agreementgive its prior consent in writing, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D2) as set forth in Section 6.1(aPart 4.1(a) of the Company Disclosure Schedule, (3) as may be required by applicable Legal Requirements or (4) as expressly permitted or required by this Agreement, the Company will shall not (and will shall not permit its Subsidiaries any Company Subsidiary to:):
(i) adopt or propose any change in its certificate amend the Organizational Documents of incorporation or by-laws or other applicable governing instrumentsthe Company;
(ii) merge split, combine, subdivide, change, exchange, amend the terms of or consolidate the Company or reclassify any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries shares of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of ’s capital stock or other equity interests of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiesSubsidiary;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(viiiii) declare, set aside, make or pay any dividend or other distribution, distribution (whether payable in cash, stock, property stock or otherwise, property) with respect to any shares of its the Company’s capital stock (except for (A) or the capital stock or other equity interest of any Company Subsidiary, other than dividends or distributions only to the extent paid by any direct or indirect wholly owned Company Subsidiary to the Company or to any other direct or indirect another wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company;
(iv) acquire (by merger, consolidation, operation of law, acquisition of stock, other equity interests or enter into assets, formation of a joint venture or otherwise) (A) any agreement with respect other Person, (B) any equity interest in any other Person, (C) any business owned by a third party, or (D) assets in a single transaction or series of related transactions for an aggregate purchase price in excess of $250,000, except, (1) acquisitions by the Company from any wholly owned Subsidiary or among any wholly owned Subsidiaries of the Company, (2) the purchase of equipment, supplies and inventory in the ordinary course of business or (3) inbound licenses of Intellectual Property in the ordinary course of business; provided that the issuance of any Insurance Contract by any Company Insurance Subsidiary will not be considered the acquisition of a business for purposes of this Section 4.1;
(v) issue, sell, grant or otherwise permit to the voting become outstanding any additional shares of, or securities convertible or exchangeable for, or options, warrants or rights to acquire, any shares of its capital stockstock or other equity interests, other than (A) shares of Company Common Stock issuable upon exercise of Company Options or the vesting or settlement of Company RSUs, in each case outstanding as of the date of this Agreement and in accordance with the terms of the applicable award; (B) pursuant to the Company ESPP in the ordinary course of business and in accordance with the terms thereof and of this Agreement (including Section 4.8 hereof); (C) in connection with the exercise of Company Warrants; and (D) the issuance of the Additional Shares pursuant to Section 2.17 of the INSU Merger Agreement;
(vi) sell, assign, transfer, lease or license to any third party, or encumber, or otherwise dispose of (by merger, consolidation, operation of law, division or otherwise), any Company IP or material assets of the Company, other than (A) sales of inventory, goods or services in the ordinary course of business or of obsolete equipment or assets in the ordinary course of business; (B) pursuant to written Contracts or commitments existing as of the date of this Agreement and set forth in Part 4.1(a)(vi) of the Company Disclosure Schedule; (C) as security for any borrowings permitted by Section 4(a)(viii); or (D) licenses granted to customers or other third parties in the ordinary course of business, including any licenses granted in the operation of the enterprise business solutions line of the Company (the “EBS Business”);
(vii) directly or indirectly repurchase, redeem or otherwise acquire any shares of the Company’s or any Company Subsidiary’s capital stock or equity interests, or any other securities or obligations convertible (currently or after the passage of time or the occurrence of certain events) into or exchangeable for any shares of the Company’s or any Company Subsidiary’s capital stock or equity interests, except (A) shares of Company Common Stock repurchased from employees or consultants or former employees or consultants of the Company pursuant to the exercise of repurchase rights binding on the Company and existing prior to the date of this Agreement; (B) shares of Company Common Stock accepted as payment for the exercise price of options to purchase Company Common Stock pursuant to the Company Equity Plans or for withholding Taxes incurred in connection with the exercise, vesting or settlement of Company Options and Company RSUs, as applicable, in accordance with the terms of the applicable award and (C) in connection with the exercise of Company Warrants;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full incur, redeem, repurchase, prepay, defease, or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur cancel any indebtedness for borrowed money or money, guarantee any such indebtedness of another Personindebtedness, or issue or sell any debt securities or warrants or other rights to acquire any debt security securities (directly, contingently or otherwise) or make any loans or advances or capital contributions to any other Person, other than in the ordinary course of business or (B) incur any Lien on any of its material property or assets, except for Company Permitted Encumbrances;
(ix) (A) adopt, terminate or amend in any material respect any Company Plan, (B) increase, or accelerate the vesting or payment of, the compensation or benefits of any director, individual independent contractor or current or former employee of the Company or any Company Subsidiary with an annual compensation of its Subsidiaries$200,000 or above, except for inter-company borrowings solely among other than as contemplated by Part 4.1(a)(ix) of the Company and its wholly-owned Subsidiaries Disclosure Schedule, (C) grant any rights to severance, retention, change in control, transaction or among termination pay to any current or former director, independent contractor or current or former employee of the Company’s wholly-owned Subsidiaries Company or any Company Subsidiary with an annual compensation of $200,000 or above, (D) hire or promote any employee with an annual compensation of $200,000 or above, or (E) terminate the employment of any employee of the Company or any Company Subsidiary with an annual compensation of $200,000 or above (other than for cause); except, in each case, for (1) amendments to Company Plans determined by the ordinary course consistent Company in good faith to be required to comply with past practice;
applicable Legal Requirements, (x2) except as otherwise expressly contemplated by this Agreement, (3) with respect to the annual renewal process for any Company Plan that is not reasonably expected to result in a material cost increase to the Company or any Company Subsidiary, (4) in connection with any employee hire (i) to replace departing employees with an annual compensation of less than $200,000, (ii) to fill open positions as set forth in on Part 4.1(a)(ix)(4)(ii) of the capital budgets Company Disclosure Schedule, (iii) who has already accepted an offer of employment and is set forth in Section 6.1(a)(xon Part 4.1(a)(ix)(4)(iii) of the Company Disclosure Schedule or (iv) otherwise in the ordinary course of business; or (5) for increases in compensation or benefits made in the ordinary course of business for any employee with an annual compensation of less than $200,000;
(x) (i)(A) amend or terminate (except for terminations pursuant to the expiration of the existing term of any Material Contract and consistent therewithamendments in the ordinary course of business and except with respect to Reinsurance Agreements) any Material Contract or (B) waive, make release or authorize assign any capital expenditurematerial rights under any Material Contracts (other than any Reinsurance Agreement), (ii) enter into or renew any Contract or agreement that, if in effect on the date of this Agreement, would constitute a Material Contract (except for renewals of any existing Material Contract in the ordinary course of business and Contracts entered into or renewed in connection with the EBS Business and except for Reinsurance Agreements), or (iii) enter into any Reinsurance Agreement that does not meet the criteria set forth on Part 4.1(a)(ix)(iii) of the Company Disclosure Schedule;
(xi) change any of its methods of financial accounting or accounting practices in any material respect other than as required by changes in GAAP or SAP or as required by applicable Legal Requirements;
(Axii) make, change or revoke any material Tax election, change or adopt any Tax accounting period or material method of Tax accounting, amend any material Company Return if such amendment would reasonably be expected to result in a material Tax liability, file any material Company Return prepared in a manner materially inconsistent with past practice, settle or compromise any material liability for Taxes or any Tax audit, claim, or other proceeding relating to a material amount of Taxes, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar state, local or non-U.S. Legal Requirement) if such agreement would reasonably be expected to result in a material Tax liability or have a material impact on Taxes, request any Tax ruling from any Governmental Entity, surrender any right to claim a material refund of Taxes, or, other than in the ordinary course of business, agree to an extension or waiver of the statute of limitations with respect to a material amount of Taxes;
(xiii) sell, transfer, assign, license, or otherwise dispose of (by merger, consolidation, operation of law, division or otherwise), or mortgage, encumber or exchange any material Intellectual Property owned, or purported to be owned, by the Company or any Subsidiary of the Company, including, for the avoidance of doubt, any sale, transfer, assignment, license, or other disposition of, or mortgage, encumbrance or exchange of any such material Intellectual Property to or with any Affiliate of the Company (other than non-exclusive licenses granted in the ordinary course of business) or modify, amend, cancel, terminate, waive, release or assign any Company IP License or any rights, claims, obligations or benefits thereunder or enter into any Contract that would have been a Material Contract Company IP License had it been entered into prior to this Agreement the First Effective Time, in each case, with respect to any nonmaterial Company IP License, except, in each case, in the ordinary course of business and for licenses granted in the connection with the EBS Business;
(xiv) (i) make any capital expenditure that is not contemplated by the capital expenditure budget set forth in Part Section 4(a)(xiv)(i) of the Company Disclosure Schedule or (ii) incur any cash expenditures or obligations or liabilities except cash expenditures, obligations or liabilities incurred (A) in the ordinary course of business or (B) amendin connection with the transactions contemplated by this Agreement;
(xv) enter into any agreement, modify understanding or terminate arrangement with respect to the voting of any Material Contractcapital stock or other equity interests of the Company (including any voting trust), or cancel, modify or waive other than in connection with the granting of revocable proxies in connection with any debts, rights or claims thereunder; for purposes meeting of this Section 6.1, the monetary reference in clause Company’s stockholders;
(xvi) adopt a plan of (A) complete or partial liquidation of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in of the aggregate for all such settlements) Company or (B) dissolution, merger, consolidation, division, restructuring, recapitalization or other reorganization;
(xvii) commence, joinsettle or compromise any litigation, make an appeal claim, suit, action or proceeding, except for (x) ordinary course claims and related Legal Proceedings under or with respect to any Insurance Contract and (y) other settlements or compromises that (A) involve solely monetary remedies with a lawsuitvalue not in excess of $75,000, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuitany individual litigation, actionclaim, claim suit, action or similar proceedingmatter, or $250,000 in the aggregate to be paid by the Company and its Subsidiaries, (IIIB) pursuant do not impose any restriction on the Company’s business or the business of the Company Subsidiaries, (C) do not relate to any litigation, claim, suit, action or proceeding by the Company’s stockholders in connection with this AgreementAgreement or the Mergers and (D) do not include an admission of liability or fault on the part of the Company or any Company Subsidiary;
(xivxviii) file materially reduce the amount of insurance coverage under the material commercial insurance policies of the Company and the Company Subsidiaries or fail to use reasonable best efforts to renew or maintain any such material existing insurance policies;
(xix) (A) amend any material Tax Return except Company Permits in a manner that adversely impacts the Company’s ability to conduct its business in any material respect or (B) terminate or allow to lapse any material Company Permits;
(xx) (A) fail to pay any issuance, renewal, maintenance and other payments that become due with respect to any material Company Registered IP or otherwise abandon, cancel, or permit to lapse any material Company Registered IP, other than in its reasonable business judgment or in the ordinary course of business, settle or compromise (B) authorize the disclosure to any third party of any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of Trade Secret included in the Company or IP in a way that results in loss of any trade secret protection, other than in the ordinary course of its Subsidiariesbusiness;
(xvxxi) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assetsfor Contracts entered into in connection with the EBS Business, enter into any individual Contract under which the Company or any Company Subsidiary (A) grants or agrees to grant any right to material Company IP, other than pursuant non-exclusive licenses, or (B) agrees to Contracts pay any royalties in effect prior excess of $150,000 with respect to the date of this Agreementany Intellectual Property;
(xvixxii) except as expressly required by applicable Legal Requirements or the Company’s Organizational Documents, convene (A) any special meeting of the Company’s stockholders other than the Company Stockholder Meeting or (B) any other meeting of the Company’s stockholders to consider a proposal that would reasonably be expected to impair, prevent or delay the consummation of the transactions contemplated hereby;
(xxiii) enter into any new line of business;
(xxiv) (i) alter or amend in any existing financial, underwriting, claims, claims handling, risk retention, reserving, investment or actuarial practice, guideline or policy or any material assumption underlying an actuarial practice or policy, except as may be required by GAAP, SAP, any Governmental Entity or applicable law or (ii) enter into any Contract or commitment with any insurance regulatory authority, in the case of each of clauses (i) and (ii) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xixxxv) agreeauthorize, authorize approve or commit enter into any agreement or make any commitment to do take any of the foregoingactions described in clauses “(i)” through “(xxiv)” of this sentence.
(b) Prior to making any formal written communications Parent agrees that, during the period from the date of this Agreement through the earlier of the Closing or group oral presentations the termination of this Agreement, except (1) to the directors, officers or employees of extent the Company shall otherwise give its prior consent in writing, (2) as set forth in Part 4.1(b) the Parent Disclosure Schedule, (3) as may be required by applicable Legal Requirements or any of its Subsidiaries pertaining to compensation (4) as expressly permitted or benefit matters that are affected by the transactions contemplated required by this Agreement, Parent shall, and shall cause the Parent Subsidiaries to, conduct its business in the ordinary course in all material respects and use reasonable best efforts to maintain and preserve intact its business organization. Without limiting the foregoing, during the period from the date of this Agreement through the earlier of the Closing or the termination of this Agreement, except (1) to the extent the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate otherwise give its prior consent in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.writ
Appears in 1 contract
Sources: Merger Agreement (Metromile, Inc.)
Interim Operations. During the period (aif any) The Company covenants and agrees as to itself and its Subsidiaries that, after from the date of this Agreement and prior to the Effective Time and Closing Date or the date, if any, on which this Agreement is earlier terminated pursuant to Section 6.1 (except (Aw) as otherwise expressly may be required by this AgreementLaw, (Bx) as required by applicable Lawswith the prior written consent of Buyer, (C) as Parent may which consent to in writing (such consent shall not to be unreasonably withheld, delayed or conditioned, (y) as contemplated or permitted by this Agreement, or (Dz) as set forth in Section 6.1(a) 4.1 of the Company Disclosure ScheduleSchedules), the business of it the Companies and its the Company Subsidiaries shall be conducted only in the ordinary and usual course of business in all material respects consistent with past practice, and, to the extent consistent therewith, it the Sellers and its Subsidiaries the Companies shall use their respective commercially reasonable best efforts to protect and preserve in all material respects its assets and to (i) preserve intact its the Companies’ and the Company Subsidiaries’ current business organizations organization and maintain existing relations (ii) preserve the Companies’ and goodwill the Company Subsidiaries’ relationships with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees suppliers and other others having business associates and keep available the services of its and its Subsidiaries’ present employees and agentsdealings with them. Without limiting the generality of, and in furtherance of, of the foregoing, from the date of this Agreement until the Effective Time, except (Aw) as otherwise expressly may be required by this AgreementLaw, (Bx) as required by applicable Lawswith the prior written consent of Buyer, (C) as Parent may which consent to in writing (such consent shall not to be unreasonably withheld, delayed or conditioned, (y) as contemplated or permitted by this Agreement, or (Dz) as set forth in Section 6.1(a) 4.1 of the Company Disclosure ScheduleSchedules, prior to the Closing Date, the Companies and the Company Subsidiaries will not, and the Sellers will not and will not permit its cause the Companies or the Company Subsidiaries to:
(ia) adopt sell, pledge, dispose of or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or encumber any of its Subsidiaries with any other Persontheir significant assets, except for any such transactions among wholly owned Subsidiaries of the Company, inventory or restructure, reorganize obsolete or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of excess equipment sold in the ordinary course of business from any other Person consistent with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreementpast practice;
(ivb) with respect to the Companies, issue, sell, pledge, pledge or dispose of, grant, transfer, encumber, of any additional shares or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries interests (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stockapplicable), or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiesinterests (as applicable) with respect to the Companies;
(vc) create cause, or incur take or omit to take any Lien action to allow, any Material Contract to lapse (other than in accordance with its terms), to be modified in any materially adverse respect or otherwise to become impaired in any material manner with respect to the Company Companies or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vid) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees business organization or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company)division thereof;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ixe) incur any indebtedness Indebtedness for borrowed money or guarantee any such indebtedness of another Person, Indebtedness or issue or sell any debt securities or warrants or other rights to acquire guarantee any debt security securities of the Company or any of its Subsidiaries, others except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course of business consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xiif) make any material changes with respect increase in compensation to accounting policies any Company or proceduresCompany Subsidiary employees or any material change in personnel policies, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation employee benefits or other proceedings before a Governmental Entity except where compensation arrangements affecting the settlement is limited solely to (I) employees of the release of claims and (II) the monetary payment by Companies or the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Propertybusiness consistent with past practice;
(xviig) take any action to institute any new severance or termination pay practices with respect to any of their directors or managers (as applicable), officers or employees or to increase the benefits payable under their severance or termination pay practices except to make changes the extent that are any such increase is payable prior to or concurrently with the Closing;
(h) adopt or amend, in any material respect, except as contemplated hereby or as may be required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure ScheduleOrder, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Employee Benefit Plan, other than routine amendments to qualified retirement plans ;
(i) make or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus dividend, distribution or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of interest or lapsing of restrictions principal payment with respect to the Shares, Interests or Note, or make any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required payment under the terms of Intercompany Credit Agreement by and between Coinstar and CES dated June 4, 2009 or the Services Agreement by and between CES and Coinstar dated June 4, 2009;
(j) make any Benefit Plan change in accounting practices or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than policies except as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xixk) agree, authorize agree or otherwise commit to do take any of the actions described in the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Sources: Stock and Interest Purchase Agreement (Coinstar Inc)
Interim Operations. Except as (ax) The required by applicable Law, (y) expressly contemplated or permitted by this Agreement or (z) set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the Effective Time and Time, except with the written consent of Parent (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may which consent to in writing (such consent is not to be unreasonably withheld, delayed conditioned or conditioned) or (D) as set forth in Section 6.1(a) of delayed), the Company Disclosure Scheduleshall, the business and shall cause each of it and its Subsidiaries shall be conducted to conduct their business in the ordinary course of business and usual course in a manner consistent with past practice in all material respects and, to the extent consistent therewithwith and not in violation of any other provision of this Section 6.1, it the Company shall, and shall cause its Subsidiaries shall to, use their respective commercially reasonable best efforts to protect and preserve to, in all material respects its assets and to respects, (1) preserve intact its their business organizations intact and (2) maintain existing material relations and goodwill with Governmental Entities, suppliers, customers, licenseesCompany Independent Affiliates, development collaboration or similar commercialization partnersowner operators, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. key employees.
(a) Without limiting the generality of, of the foregoing and in furtherance of, the foregoingthereof, from and after the date execution and delivery of this Agreement until the Effective Time, except as (Ax) as otherwise required by applicable Law, (y) expressly required contemplated or permitted by this Agreement, or (Bz) as required set forth in Section 6.1 of the Company Disclosure Letter (it being understood and hereby agreed that if any action is expressly permitted by applicable Lawsany of the following subsections such action shall be expressly permitted under the first sentence of Section 6.1), except with the written consent of Parent (C) as Parent may which consent to in writing (such consent is not to be unreasonably withheld, delayed conditioned or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Scheduledelayed), the Company will not and will not permit shall cause its Subsidiaries not to:
(i) adopt or propose any change in its certificate the Company’s articles of incorporation or by-laws bylaws, or other adopt any change in the applicable governing instrumentsinstruments of any of its Subsidiaries;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other PersonPerson or restructure, reorganize or completely or partially liquidate, except for any such transactions among transaction between wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into between any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesseswholly owned Subsidiary of the Company and the Company;
(iii) acquire (by merger, consolidation, acquisition of stock or assets outside or otherwise) any corporation, partnership or other business organization or any assets, rights or properties from any other Person, in each case other than (x) purchases of goods, equipment, products, off–the–shelf software and other assets in the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess ofpursuant to existing Contracts, individually or (y) acquisitions not exceeding $5,000,000 in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its or its Subsidiaries’ capital stock of the Company or any of its Subsidiaries equity interests (other than (A) the issuance of Company Common Stock upon the exercise of Company Options and settlement of Company RSAs and Company PSAs in accordance with the Stock Plan, in each case that are outstanding as of the date hereof and (B) the issuance of shares by a wholly owned Subsidiary of the Company to the Company or to another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) Company), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, stock units, stock awards, warrants or other rights of any kind to acquire any shares of such capital stock or such stock, equity interests, convertible or exchangeable securities, other than in connection with the incurrence or granting of Liens and pledging of collateral required under, and pursuant to the terms of, the Credit Agreement or the Company Notes and their respective collateral documents (provided that prompt notice to the Buyer Parties will be provided by the Company in connection therewith);
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreementdeclare, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declareauthorize, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its or its Subsidiaries’ capital stock or equity interests (except for (A) dividends or other distributions paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock);
(viiivi) adjust, reclassify, split, combine, subdivide or redeem, purchase or otherwise acquireacquire or amend the terms of, directly or indirectly, any of its capital stock or equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from stock or equity interests (A) holders other than the acquisition of any Company Common Stock in connection with the exercise of Company Options or in full or partial payment of order to pay Taxes in connection with the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or the vesting of Company SARs or the lapse of restriction on RSAs and Company Restricted Shares PSAs, in each case, pursuant to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationPlan);
(ixvii) incur any indebtedness Indebtedness for borrowed money or guarantee such or otherwise become liable for, any indebtedness of another PersonPerson (other than a wholly owned Subsidiary of the Company), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in each case other than (A) in the ordinary course consistent of business with past practice;
(x) except as set forth a face value or principal amount not in excess of $5,000,000 in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewithaggregate, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition ordinary course under letters of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedurescredit, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation lines of credit or other proceedings before a Governmental Entity except where credit facilities or arrangements in effect on the settlement is limited solely to (I) date hereof, including amounts available under the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Credit Agreement;
(xivviii) file or amend any material Tax Return except in the ordinary course of business, settle (A) make or compromise change any material Tax liability, make, change or revoke election; (B) file any material amended Tax election except Return; or (C) enter into any settlement, compromise or closing agreement within the meaning of Code §7121 with respect to the extent consistent with past practice or as required by law, change any a material method amount of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its SubsidiariesTaxes;
(xvix) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire expire, or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses properties or interests therein rights of the Company or any of its Subsidiaries, including capital stock of any of its Subsidiaries, except (x) sales of Company Products or dispositions in the ordinary course of business and or pursuant to existing Contracts, (y) sales or dispositions by the Company or any of obsolete its wholly owned Subsidiaries to the Company or any of its wholly owned Subsidiaries, or (z) sales or dispositions not exceeding $3,000,000 in the aggregate;
(x) incur or ▇▇▇▇▇ ▇ ▇▇▇▇ (other than a Permitted Lien) on any material assets, properties or rights of the Company or any of its Subsidiaries other than (x) Liens granted in connection with any Indebtedness permitted under this Section 6.1 or (y) Liens required under the Credit Agreement or the Company Notes;
(xi) except, in each case, as required by a Benefit Plan in effect as of the date hereof or permitted under Section 6.1(a)(xi) of the Company Disclosure Letter, (A) grant or provide any severance or termination payments or benefits to any Service Providers, (B) increase the benefits or compensation to any Service Provider, other than pursuant merit or market-based increases in base salary, regular wages or annual bonus opportunities for employees with an annual base salary of less than $160,000 (the “Covered Employees”) in the ordinary course of business consistent with past practice; provided that such increases shall not increase compensation by more than three and a half percent (3.5%) in the aggregate, (C) grant any new awards or benefits to any Service Provider, (D) hire or engage the services of any Service Provider, except for the hiring or engagement of any Covered Employees in the ordinary course of business consistent with past practice, (E) establish, adopt, terminate or amend any Benefit Plan or any plan, program, arrangement, policy or agreement that would be a Benefit Plan if it were in existence on the date hereof, except amendments that do not materially increase the Company and its Subsidiaries cost of providing the benefits or as required by applicable Law and any actions taken solely by the “plan sponsor” (within the meaning of Section 3(16)(B)(iii) of ERISA) of any Multiemployer Plan, or (F) discretionarily accelerate the vesting or payment of any equity or equity-based award held by any Service Provider;
(xii) except (i) as permitted by this Section 6.1 and (ii) with respect to the Contracts set forth in effect Section 5.1(q)(J), (A) modify or amend, or terminate or grant a waiver of any right under, any Material Contract (other than (x) extensions at the end of term that do not materially modify or amend the terms of such Contract and (y) joinders and other amendments to the Credit Agreement and the Indenture in the ordinary course of business or as otherwise required thereunder, except in the case of clause (y) other than in a manner that would result in an increase in breakage fees or impose prepayment fees in connection with the termination or cancellation thereof), (B) enter into any successor agreement to an expiring Material Contract that modifies or amends in a manner materially adverse to the Company the terms of such expiring Material Contract or (C) enter into any new Contract that would have been considered a Material Contract if it were entered into at or prior to the date hereof other than (x) any such Contracts that may be cancelled, terminated or withdrawn without material liability to the Company or its Subsidiaries upon notice of this Agreement90 days or less and (y) to the extent such Contract is required to effect any action explicitly permitted by Section 6.1(a); provided, however, that, with respect to the Contracts set forth in Section 5.1(q)(J), no modification or amendment shall obligate the Company or its Subsidiaries to conduct business on an exclusive basis with any third party, a grant “most favored nation” terms to any third party;
(xiii) make any capital contributions or investments in any other Person (other than a wholly-owned Subsidiary);
(xiv) settle or compromise any litigation, claim or investigation other than settlements or compromises (x) where the amount paid or payable by the Company in a settlement or a compromise, in each case, does not exceed $2,000,000 and (y) that does not create material obligations that would impose any material restrictions on the business of the Company or any of its Subsidiaries;
(xv) except as provided for in the Company’s budget for the Company and its Subsidiaries for fiscal year 2015, incur or commit to incur any capital expenditures;
(xvi) other than in the ordinary course implement, adopt or make any change to its methods, policies or practices of businessaccounting, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive by GAAP or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Propertyapplicable Law;
(xvii) except to make changes purchase outstanding Company Notes in an amount that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of exceeds $200,000, provided, that such new hire’s compensation and benefits are made 30,000,000 in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Companyaggregate;
(xviii) subject to Section 6.2adopt, take modify, amend or terminate any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedCollective Bargaining Agreement; or
(xix) agree, authorize or commit to do any of the foregoing.
(b) Nothing contained in this Agreement is intended to give any Buyer Party, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this AgreementEffective Time, the Company shall provide Parent exercise, consistent with a copy the terms and conditions of the intended communicationthis Agreement, Parent shall have a reasonable period of time to review complete control and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communicationsupervision over its operations.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Interim Operations. (a) The Except (i) as described in Section 5.1(a) of the Company Disclosure Letter, (ii) as otherwise expressly required or permitted by this Agreement or any other Transaction Document, (iii) as required by applicable Law or COVID-19 Measures or (iv) as Parent shall otherwise consent to in writing (which consent shall not be unreasonably withheld, conditioned, delayed, or denied), the Company covenants and agrees as to itself and its Subsidiaries that, after during the period from the date of this Agreement and prior to until the Effective Time and except (A) as otherwise expressly required by this AgreementClosing, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, shall use commercially reasonable efforts to operate the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets with past practice and to preserve intact its their business organizations intact and maintain existing relations with the Company Top Suppliers, Company Top Customers and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Company’s executive officers.
(b) Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective TimeClosing, except (Aw) as described in the corresponding subsection of Section 5.1(b) of the Company Disclosure Letter, (x) as otherwise expressly required or permitted by this AgreementAgreement or any Transaction Document, (By) as required by applicable Laws, Law or COVID-19 Measures or (Cz) as Parent may shall otherwise consent to in writing (such which consent shall not to be unreasonably withheld, conditioned, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Scheduledenied), the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instrumentsits Subsidiaries’ Organizational Documents;
(ii) (A) merge or consolidate the Company itself or any of its Subsidiaries with any other Person, except for any such transactions among its wholly owned Subsidiaries or (B) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company, Company or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesSubsidiaries;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess ofof $100,000, individually or acquire any business or entity (whether by merger or consolidation, by purchase of substantially all assets or equity interests or by any other manner), in the aggregateeach case, $2,500,000in any transaction or series of related transactions, other than acquisitions or other transactions pursuant to Contracts to which the Company or any of its Subsidiaries are a party that are in effect as of the date of this Agreement;
(iv) sell, lease, license or otherwise dispose of any of its material assets or properties (other than Intellectual Property), except (A) for sales, leases, licenses or other dispositions in the ordinary course of business and (B) for sales, leases, licenses or other dispositions of assets and properties with a fair market value not in excess of $100,000 in the aggregate or (C) pursuant to Contracts to which the Company or any of its Subsidiaries are a party that are in effect as of the date of this Agreement;
(v) except pursuant to awards granted under the Company’s Stock Plan, issue, sell, pledge, dispose of, grant, transfer, encumber, grant or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee sale or encumbrance of, grant of any shares of capital stock or other securities of the Company or any of its Subsidiaries (other than the issuance of shares issuances by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stockCompany), or any options, warrants warrants, convertible securities, subscription rights or other similar rights of any kind entitling its holder to receive or acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets other securities of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms reclassify, split, combine, subdivide, redeem or repurchase, any of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet stock of the Company and other than or options, warrants or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except in connection with the Company net exercise or any direct or indirect wholly owned Subsidiary settlement of awards under the Company)’s Stock Plan;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassifymake any loans, splitadvances, combine, subdivide guarantees or redeem, purchase capital contributions to or otherwise acquire, directly investments in any Person (other than the Company or indirectly, any of its capital stock direct or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment indirect wholly-owned Subsidiary of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise Company), other than in the ordinary course of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationbusiness;
(ix) incur any indebtedness Indebtedness for borrowed money or guarantee any such indebtedness Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries Indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice, not to exceed $100,000 in the aggregate;
(x) except as set forth make or commit to make capital expenditures other than in an amount not in excess of $250,000, in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditureaggregate;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement Agreement, other than in the ordinary course of business;
(xii) amend or (B) amend, modify in any material respect or terminate any Material Contract, or cancelwaive or release any material rights, modify claims or waive benefits under any debtsMaterial Contract, rights or claims thereunder; for purposes of this Section 6.1in each case, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference other than in the definition ordinary course of Personal Property Leases shall be changed to $2,500,000business;
(xiixiii) make any material changes with respect to its accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this AgreementGAAP;
(xiv) file or amend settle any material Tax Return Proceeding, except in the ordinary course of business, settle business or compromise any material Tax liability, make, change where such settlement is covered by insurance or revoke any material Tax election except to involves only the extent consistent with past practice or as required by law, change any material method payment of Tax accounting, except as required by law, or take any action which would materially adversely affect monetary damages in an amount not more than $375,000 in the Tax position of the Company or of any of its Subsidiariesaggregate;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business consistent with past practice, file any material amended Tax Return, make, revoke or change any material Tax election in a manner inconsistent with past practice, adopt or change any material Tax accounting method or period, enter into any agreement with a Governmental Entity with respect to material Taxes, settle or compromise any examination, audit or other action with a Governmental Entity of or relating to any material Taxes or settle or compromise any claim or assessment by a Governmental Entity in respect of material Taxes, or enter into any Tax sharing or similar agreement (excluding any commercial contract not primarily related to Taxes), in each case, to the extent such action could reasonably be expected to have any adverse and sales material impact on Parent;
(xvi) except in the ordinary course of obsolete assets, other than business or pursuant to Contracts the terms of any Company Benefit Plan in effect prior to as of the date of this Agreement or as required by Law, (A) increase the annual salary or consulting fees or target annual cash bonus opportunity, of any Company Employee with an annual salary or consulting fees and target annual cash bonus opportunity in excess of $250,000 as of the date of this Agreement;
, (xviB) become a party to, establish, adopt, amend, or terminate any material Company Benefit Plan or any arrangement that would have been a material Company Benefit Plan had it been entered into prior to this Agreement, (C) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, (D) forgive any loans or issue any loans (other than routine travel advances issued in the ordinary course of business) to any Company Employee, (AE) transfer, hire any employee or engage any independent contractor (who is a natural person) with annual salary or consulting fees and target annual cash bonus opportunity in excess of $250,000 or (F) terminate the employment of any executive officer other than for cause;
(xvii) sell, assign, lease, exclusively license, mortgage, pledge, encumber, divest, cancelabandon, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Company Intellectual Property, (C) fail other than grants of non-exclusive licenses in the ordinary course of business to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as customers for use of the date hereof pursuant to Contracts products or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants services of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made otherwise in the ordinary course consistent with past practice and are consistent with the other requirements set forth of business;
(xviii) become a party to, establish, adopt, amend, commence participation in this Agreement, (J) or enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Companyunion Contract;
(xviiixix) subject fail to Section 6.2use commercially reasonable efforts to keep current and in full force and effect, take or to comply with the requirements of, or to apply for or renew, any action permit, approval, authorization, consent, license, registration or omit to take certificate issued by any action Governmental Entity that is reasonably likely material to prevent, interfere with or delay the consummation conduct of the Merger business of the Company and its Subsidiaries, taken as a whole;
(xx) file any prospectus supplement or result registration statement or consummate any offering of securities that requires registration under the Securities Act or that includes any actual or contingent commitment to register such securities under the Securities Act in the future;
(xxi) fail to maintain, cancel or materially change coverage under, in a manner materially detrimental to the Company or any of the conditions its Subsidiaries, any insurance policy maintained with respect to the Merger set forth in Article VII not being satisfiedCompany and its Subsidiaries and their assets and properties;
(xxii) enter into any material new line of business outside of the business currently conducted by the Company and its Subsidiaries as of the date of this Agreement; or
(xixxxiii) agree, agree or authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Interim Operations. (a) The Except as (x) required by applicable Law, (y) otherwise expressly contemplated or expressly required by this Agreement or (z) otherwise set forth in Section 4.1(a) of the Company Disclosure Letter, the Company covenants and agrees as to itself and its Subsidiaries that, after commencing on the date of this Agreement hereof and prior to ending at the Effective Time and except (A) or such earlier date as this Agreement may be terminated in accordance with its terms, unless Parent shall otherwise expressly required by this Agreementapprove in writing, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of , the Company Disclosure Scheduleshall, the business of it and shall cause its Subsidiaries shall be conducted to, conduct their respective businesses in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its their respective business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agentsassociates. Without limiting the generality of, of the foregoing and in furtherance ofthereof, the foregoing, from commencing on the date of hereof and ending at the Effective Time or such earlier date as this Agreement until the Effective Timemay be terminated in accordance with its terms, except as (A) as required by applicable Law, (B) otherwise expressly contemplated or expressly required by this Agreement, (B) as required by applicable Laws, Agreement or (C) as otherwise set forth in Section 4.1(a) of the Company Disclosure Letter, unless Parent may consent to shall otherwise approve in writing (writing, such consent approval not to be unreasonably withheld, delayed or conditioned, except in the cases of clauses (i), (ii), (iii), (iv), (v), (vi), (viii), (x), (xi), (xii)(A) or (DB), (xiii) as set forth in Section 6.1(aor (xv) or clause (xviii) (solely to the extent relating to one of the Company Disclosure Schedulepreceding clauses), as to each of which Parent shall have the right to approve in its sole discretion, the Company will not and will not permit any of its Subsidiaries to:
(i) adopt amend or propose any otherwise change in its certificate of incorporation or by-laws or other applicable governing instrumentsdocuments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, Person or restructure, reorganize or completely or partially liquidate the Company or otherwise enter into any agreements or arrangements imposing material changes or restrictions on of its assets, operations or businessesSubsidiaries;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transferconfer, encumberaward, transfer or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, encumber any shares of capital stock of the Company or any of its Subsidiaries (other than (A) the issuance of shares Common Shares upon the exercise of Company Options or the vesting of Company Restricted Stock in accordance with their terms or (B) the issuance or transfer of capital stock by a wholly wholly-owned Subsidiary of the Company to the Company or another wholly wholly-owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) Company), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(viiiv) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly wholly-owned Subsidiary of the Company to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock);
(viiiv) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from other than (A) holders the acquisition of any Common Shares tendered by Employees or current or former directors in connection with the cashless exercise of Company Options or in full or partial payment of order to pay Taxes in connection with the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of Company Options or the vesting of Company Restricted Stock, (B) pursuant to the forfeiture of Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (BC) from former employees, employees and directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationof capital stock in connection with any termination of services to the Company or any of its Subsidiaries;
(ixvi) incur any indebtedness for borrowed money or guarantee such indebtedness of another PersonPerson (other than a wholly-owned Subsidiary of the Company), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, other than with respect to letters of credit or similar agreements in the ordinary course of business;
(vii) make any material changes in accounting methods, principles or practices, except as required by changes in GAAP;
(viii) except as required pursuant to existing written agreements or Benefit Plans in effect as of the date hereof, (A) increase the compensation or other benefits payable or to become payable to directors or executive officers of the Company or any of its Subsidiaries (except, in the case of a director or executive officer of a Subsidiary of the Company that is not a management-level employee of the Company, in the ordinary course of business consistent with past practice), (B) grant or materially increase any retention, severance or termination pay to, or enter into or materially amend any retention agreement, severance agreement or termination agreement with any director or executive officer of the Company or any of its Subsidiaries (except, in the case of a director or executive officer of a Subsidiary of the Company that is not a management-level employee of the Company, in the ordinary course of business consistent with past practice), (C) enter into or materially amend any employment agreement with any executive officer of the Company or any of its Subsidiaries (except for interemployment agreements terminable on less than 30 calendar days’ notice without penalty to the Company or the applicable Subsidiary or to the extent to replace a departing Employee, in which case, only in the ordinary course of business consistent with past practice) or (D) establish, adopt, enter into or amend any collective bargaining agreement, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or Employees or any of their beneficiaries;
(ix) except as required pursuant to existing written agreements or Benefit Plans in effect as of the date hereof, (A) enter into any new, or amend, terminate or renew any existing, bonus or change in control or severance agreement with or for the benefit of any officers, directors or employees of the Company or its Subsidiaries (except, in the case of a director, executive officer or employee of a Subsidiary of the Company that is not a management-company borrowings solely level employee of the Company, in the ordinary course of business consistent with past practice), (B) establish, adopt, enter into, amend, renew or terminate any Benefit Plan, (C) 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, Benefit Plans or agreements subject to Benefit Plans or any other plan, agreement, contract or arrangement of the Company, except to the extent required by Law, such Benefit Plan or any other agreement, contract or arrangement in effect as of the date hereof or in accordance with the ordinary course of business consistent with past practice, or (D) hire or terminate (other than for cause) any employee, except in the ordinary course of business, and except, in the case of each of clauses (A) through (D), (1) to the extent required by applicable Law, this Agreement, any Benefit Plan or any other agreement in effect as of the date hereof and disclosed in the Company Disclosure Letter, (2) in conjunction with agreements or arrangements that are entered into in the ordinary course of business with new hire employees (other than officers and directors of the Company), and, in the case of any individual who is engaged to replace or succeed a then-current employee (other than officers and directors of the Company), the total target annual cash compensation for such individual may be increased above the level applicable to such replaced or succeeded employee, but only to the extent necessary on a commercially reasonable basis, (3) annual or other scheduled increases in salary, annual bonus targets, hourly wage rates, perquisites and benefits in the ordinary course of business consistent with past practice or (4) to comply with Section 409A of the Code and guidance applicable thereunder to the extent that such action would not reasonably be expected to result in the imposition of a penalty under Section 409A of the Code; provided, however, that, notwithstanding anything herein to the contrary, the Company shall not terminate its Long-Term Incentive Cash Award Plan or make payments thereunder in relation to the transactions contemplated by this Agreement;
(x) grant, confer or award options, convertible securities, restricted stock units or other rights to acquire any capital stock of the Company or any of its Subsidiaries or take any action to cause to be exercisable any otherwise unexercisable Company Option;
(xi) acquire (including by merger, consolidation, business combination, acquisition of stock or assets or otherwise), except in respect of any mergers, consolidations, business combinations or acquisitions among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) Subsidiaries, any Person or any division thereof, or all or substantially all of the Company Disclosure Schedule and consistent therewithassets of any Person in connection with acquisitions or investments, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement agreement, arrangement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes understanding with respect to accounting policies any such acquisition or procedures, except as required by changes in Law investment (other than any confidentiality or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect theretosimilar agreements);
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of businessbusiness consistent with past practice, modify or amend in any material respect any Material Contract with a term longer than one (A1) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon year which cannot be terminated without material penalty to the Company or allow to lapse its applicable Subsidiary upon notice of sixty (60) calendar days or expire or otherwise dispose of any Intellectual Property Rightsless, (B) grantwaive, extend, amend release or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify assign any material rights in or to Owned Intellectual Property, claims under any Material Contract or (C) fail enter into any Contract that if in existence on the date hereof would have been a Material Contract (other than a renewal or replacement of any existing Material Contract that is expiring by its terms, so long as the terms and conditions of which renewal or replacement Contract, in the aggregate, are not materially less favorable to diligently prosecute the Company or its applicable Subsidiary than the existing Material Contract);
(xiii) except for transactions among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries, sell, lease, license, transfer, exchange or swap, mortgage or otherwise encumber (including securitizations), or subject to any Lien (other than Permitted Liens), or otherwise dispose of, any material portion of its properties or assets (other than in the ordinary course of business consistent with past practice);
(xiv) file any amendment to any Tax Return or make any election relating to Taxes, change any election relating to Taxes already made, adopt or change any accounting method relating to Taxes, enter into any closing agreement relating to Taxes, settle any claim or assessment relating to Taxes or consent to any claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment if any of the foregoing would reasonably be expected to materially increase the Tax liability of the Company and its Subsidiaries or materially reduce a Tax attribute of the Company and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xviixv) except settle, compromise, discharge or agree to make changes that are required by applicable Law settle any litigation, investigation, arbitration or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, proceeding other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) those that do not increase benefits involve the payment by the Company or result any of its Subsidiaries of monetary damages in materially increased administrative costsexcess of $500,000 in the aggregate, (B) increase in after taking into account any manner the compensationapplicable reserves and any applicable insurance coverage, bonus, pension, welfare, fringe and do not involve any material injunctive or other benefits, severance material non-monetary relief or termination pay of any of impose material restrictions on the current business or former directors, officers, employees or consultants operations of the Company or its Subsidiaries;
(xvi) make any capital expenditures, except (CA) pay any bonus capital expenditures made in accordance with the Company’s annual budget and capital expenditure plan, copies of which have been previously provided to Parent, or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (DB) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made capital expenditures in the ordinary course of business consistent with past practice and are consistent with in an aggregate amount not to exceed One Million Dollars ($1,000,000);
(xvii) solely to the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement extent that the Company or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer Subsidiary of the Company;Company has the right, but not the obligation, whether by Contract or otherwise, to consent to an action by a Physician Practice which would be subject to the provisions of this Section 4.1(a) (assuming solely for these purposes, that references to a “Subsidiary” instead refer to such “Physician Practice”), grant such consent (it being understood that if the Company or the applicable Subsidiary determines in good faith (after reasonable prior notice to Parent) that it would be unreasonable to withhold its consent to such action, Parent shall be deemed to have consented to such action); or
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize or commit enter into any written agreement or otherwise make any commitment to do any of the foregoing.
(b) Prior to making any formal written communications Except as otherwise expressly contemplated or group oral presentations to expressly required by this Agreement, Parent and Merger Sub covenant and agree that, commencing on the directorsdate hereof and ending at the Effective Time or such earlier date as this Agreement may be terminated in accordance with its terms, officers or employees of unless the Company shall otherwise approve in writing, Parent and Merger Sub shall not enter into any agreement, arrangement or any understanding that would reasonably be expected to materially prevent, delay or impair the consummation of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with or propose, announce an intention, enter into any agreement, arrangement or understanding or otherwise make a copy of the intended communication, Parent shall have a reasonable period of time commitment to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing take any such mutually agreeable communicationaction.
(c) Subject Nothing contained in this Agreement is intended to Section 6.5give Parent or Merger Sub, Parent shall not take directly or permit any of indirectly, the right to Control or direct the Company’s or its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions Subsidiaries’ operations prior to the Effective Time, and notwithstanding anything to the contrary contained in this Agreement, no consent of Parent or Merger Sub will be required with respect to any matter set forth in Article VII not being satisfiedthis Agreement to the extent the requirement of such consent would violate any applicable Law. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its operations and the operations of its Subsidiaries.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after during the period from the date of this Agreement and prior to through the Effective Time and except (A) as otherwise expressly required by earlier of the Closing or the termination of this Agreement, except (B1) as required by applicable Laws, (C) as to the extent Parent may shall otherwise give its prior consent to in writing (such consent not to be unreasonably withheld, delayed conditioned or conditioned) or delayed), (D2) as set forth in Section 6.1(a4.1(a) of the Company Disclosure Schedule, (3) as may be required by applicable Legal Requirements (including COVID-19 Measures) or (4) as expressly required by this Agreement, the Company shall, and shall cause the Company Subsidiaries to, use commercially reasonable efforts to conduct its business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to of business; provided that any action expressly permitted by the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available remaining provisions of this Section 4.1(a) (including Section 4.1(a) of the services Company Disclosure Schedule will not constitute a violation of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, . During the period from the date of this Agreement until through the Effective Timeearlier of the Closing or the termination of this Agreement, except (A1) as to the extent Parent shall otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may give its prior consent to in writing (in the case of subsections (iv), (vi), (viii), (ix), (x), (xii), (xiii), (xvii), (xxviii), and (xxix)(B) of this Section 4.01(a), such consent not to be unreasonably withheld, delayed conditioned or conditioned) or delayed), (D2) as set forth in Section 6.1(a4.1(a) of the Company Disclosure Schedule, (3) as may be required by applicable Legal Requirements (including COVID-19 Measures) or (4) as expressly or required by this Agreement, the Company will shall not (and will shall not permit its Subsidiaries any Company Subsidiary to), in each case by merger, consolidation, division, operation of law, or otherwise:
(i) adopt amend the Company’s Organizational Documents or propose the Organizational Documents of any change in its certificate of incorporation or by-laws or other applicable governing instrumentsCompany Subsidiary;
(ii) merge split, combine, subdivide, change, exchange, amend the terms of or consolidate the Company or reclassify any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries shares of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of ’s capital stock or other equity interests of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiesSubsidiary;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(viiiii) declare, set aside, make or pay any dividend or other distribution, distribution (whether payable in cash, stock, property stock or otherwise, property) with respect to any shares of its the Company’s capital stock (except for (A) or the capital stock or other equity interest of any Company Subsidiary, other than dividends or distributions only to the extent paid by any direct or indirect wholly owned Company Subsidiary to the Company or to another wholly owned Company Subsidiary;
(iv) acquire (by merger, consolidation, operation of law, acquisition of stock, other equity interests or assets, formation of a joint venture or otherwise) (A) any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per SharePerson, declared and paid consistent with prior timing, and (B) any equity interest in any other Person (other than investments in equity securities that constitute short term investments that are accounted for as cash dividends paid to equivalents), (C) any business or division of another Person, or (D) any material assets except, (1) acquisitions by the Company from any wholly owned Company Subsidiary or one among any wholly owned Company Subsidiaries; (2) the purchase of equipment, supplies and inventory in the ordinary course of business or (3) inbound licenses or other grants or assignments of Intellectual Property in the ordinary course of business;
(v) except in connection with any transaction between the Company and any wholly owned Company Subsidiary of or among any wholly owned Company Subsidiaries, issue, sell, grant or otherwise permit to become outstanding any additional shares of, or securities convertible or exchangeable for, or options, warrants or rights to acquire, any shares of its wholly-capital stock or other equity interests, other than shares of Company Common Stock issuable upon exercise of outstanding Company Options;
(vi) except in connection with any transaction between the Company and any wholly owned Company Subsidiary or among any wholly owned Company Subsidiaries by a wholly-owned Subsidiary of the Company, sell, assign, transfer, lease or license to any third party, or incur any Lien on any of its material tangible property or tangible assets, except for Company Permitted Encumbrances, or otherwise dispose of (by merger, consolidation, operation of law, division or otherwise), any material Company IP or material tangible assets of the Company, other than: (A) sales of inventory, goods or enter services in the ordinary course of business in a manner consistent with past practice or of obsolete equipment or assets in the ordinary course of business consistent with past practice; (B) pursuant to written Contracts or commitments existing as of the date of this Agreement; or (C) as security for any borrowings permitted by Section 4.1(a)(viii); or (D) licenses granted to customers or other third parties in the ordinary course of business in a manner consistent with past practice;
(vii) directly or indirectly repurchase, redeem or otherwise acquire any shares of the Company’s or any Company Subsidiary’s capital stock or equity interests, or any other securities or obligations convertible (currently or after the passage of time or the occurrence of certain events) into or exchangeable for any agreement with respect shares of the Company’s or any Company Subsidiary’s capital stock or equity interests, except: (A) shares of Company Common Stock repurchased from employees or consultants or former employees or consultants of the Company pursuant to the voting exercise of its capital stockrepurchase rights existing prior to the date of this Agreement; or (B) shares of Company Common Stock accepted as payment for the exercise price of Company Options or for withholding Taxes incurred in connection with the exercise, vesting or settlement of Company Options, as applicable, in accordance with the terms of the applicable award;
(viii) reclassifyincur (other than draws on existing revolving loans), split, combine, subdivide or redeem, purchase repurchase, prepay (other than prepayments of revolving loans), defease, or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur cancel any indebtedness for borrowed money or money, guarantee any such indebtedness of another Personindebtedness, or issue or sell any debt securities or warrants or other rights to acquire any debt security securities (directly, contingently or otherwise) or make any loans or capital contributions to any other Person, except for any indebtedness among the Company and its wholly owned Company Subsidiaries or among any wholly owned Company Subsidiaries (and guarantees by the Company or the Company Subsidiaries in respect thereof);
(ix) (A) adopt, terminate or amend any Company Plan except to the extent permitted by clauses (B), (C), (D) or (E) of this Section 4.1(a)(ix), (B) increase, or accelerate the vesting or payment of, the compensation or benefits of any member of the Company Board, current employee, or former employee of the Company or any Company Subsidiary, (C) grant any rights to severance, retention, change in control or termination pay to any member of its Subsidiaries, except for inter-company borrowings solely among the Company Board, current employee or former employee of the Company or any Company Subsidiary, (D) hire or promote any employee at or to the level of Vice President or above, or (E) terminate the employment of any employee of the Company or any Company Subsidiary whose annual base salary exceeds $100,000 (other than for cause); except, in each case, for: (1) amendments to Company Plans determined by the Company in good faith to be required to comply with applicable Legal Requirements; (2) hiring any Person for employment (including by means of internal promotion) to fill any currently existing Vice President or higher position that becomes vacant after the date of this Agreement, and, notwithstanding anything to the contrary in this Section 4.1(a)(ix), provide such Person with compensation and its wholly-owned Subsidiaries or among benefits for such position consistent with past practice; (3) hiring any Person for employment in accordance with the Company’s wholly-owned Subsidiaries present hiring plan made available to Parent or otherwise hiring an individual below the level of Vice President in the ordinary course of business in a manner consistent with past practice; (4) increases in compensation or benefits required pursuant to any Company Plan in effect on the date hereof; (5) increases to total target cash opportunities (i.e., annual base salary or wage rates and target annual cash bonus opportunities) in amounts that are in the ordinary course of business in a manner consistent with past practice; and (6) any other actions set forth in Section 4.1(a)(ix) of the Company Disclosure Schedule;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle (i)(A) amend or compromise terminate (except for terminations pursuant to the expiration of the existing term of any Material Contract) any Material Contract or (B) waive, release or assign any material Tax liabilityrights under any Material Contracts, makeor (ii) enter into any Contract or agreement that, if in effect on the date of this Agreement, would constitute a Material Contract;
(xi) change any of its methods of financial accounting or accounting practices in any material respect other than as required by changes in GAAP;
(xii) make (except for elections made in the ordinary course of business), change or revoke any material Tax election except to the extent consistent with past practice or as required by lawelection, change any Tax accounting period or material method of Tax accounting, except as required by lawamend any material Tax Return if such amendment would reasonably be expected to result in a material Tax liability, settle or compromise any material liability for Taxes or any Tax audit, claim, or take other proceeding relating to a material amount of Taxes, enter into any action which agreement with a Governmental Entity relating to Taxes if such agreement would materially adversely affect the reasonably be expected to result in a material Tax position liability, request any Tax ruling from any Governmental Entity, surrender any right to claim a material refund of the Company or of any of its Subsidiaries;
(xv) transferTaxes, sellor, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon agree to an extension or allow waiver of the statute of limitations with respect to lapse or expire or otherwise dispose a material amount of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual PropertyTaxes;
(xviixiii) except to other than consignment of Company Products in the ordinary course of business, make changes any capital expenditure that are required is not contemplated by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on capital expenditure budget (the “CapEx Budget”) set forth in Section 6.1(a)(xvii4.1(a)(xiii) of the Company Disclosure ScheduleSchedule (a “Non-Budgeted Capital Expenditure”), except that the Company or any Company Subsidiary may make any Non-Budgeted Capital Expenditure that, when added to all other Non-Budgeted Capital Expenditures made by the Company and the Company Subsidiaries since the date of this Agreement would not, in the aggregate, exceed the aggregate CapEx Budget by more than $200,000;
(xiv) except as expressly required by applicable Legal Requirements or the Company’s Organizational Documents, convene (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, special meeting of the Company’s stockholders other than routine amendments to qualified retirement plans the Company Stockholder Meeting or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer meeting of the Company;
(xviii) subject ’s stockholders to Section 6.2consider a proposal that would reasonably be expected to impair, take any action or omit to take any action that is reasonably likely to prevent, interfere with prevent or delay the consummation of the Merger transactions contemplated hereby;
(xv) enter into any agreement, understanding or result arrangement with respect to the voting of any capital stock or other equity interests of the Company (including any voting trust), other than with respect to awards under the Company Equity Plans otherwise permitted under this Agreement or in connection with the granting of revocable proxies in connection with any meeting of the Company’s stockholders;
(xvi) adopt a plan of (A) complete or partial liquidation of the Company or any Company Subsidiary or (B) dissolution, merger, consolidation, division, restructuring, recapitalization or other reorganization, other than, in the case of clause (B), transactions between or among direct or indirect wholly owned Company Subsidiaries;
(xvii) settle or compromise any litigation, claim, suit, action or proceeding, except for settlements or compromises other than (A) the payment, discharge or satisfaction, in the ordinary course of business in a manner consistent with past practice, of liabilities reflected or reserved against in the Most Recent Company Balance Sheet, or (B) those that do not (x) impose any injunctive relief on the Company or any Company Subsidiary (other than confidentiality obligations), (y) involve the payment of money greater than $250,000 in excess of existing insurance coverage, and (z) do not include an admission of liability or fault on the part of the Company or any Company Subsidiary;
(xviii) materially reduce the amount of insurance coverage or fail to renew or maintain any material existing insurance policies;
(xix) (A) amend any Company Permits in a manner that adversely impacts the Company’s ability to conduct its business in any material respect or (B) terminate or allow to lapse any material Company Permits;
(xx) (A) fail to pay any issuance, renewal, maintenance and other payments that become due with respect to any material Company Registered IP or otherwise abandon, cancel, or permit to lapse any material Company Registered IP, other than in its reasonable business judgment or in the ordinary course of business in a manner consistent with past practice, or (B) authorize the disclosure to any third party of any material Trade Secret included in the Company IP in a way that results in loss of trade secret protection, other than in the ordinary course of business in a manner consistent with past practice;
(xxi) take or cause to be taken any action, or knowingly fail to take or cause to be taken any action, which action or failure to act would reasonably be expected to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the conditions to the Merger set forth in Article VII not being satisfiedCode; or
(xixxxii) agreeauthorize, authorize approve or commit enter into any agreement or make any commitment to do take any of the foregoingactions described in clauses “(i)” through “(xxi)” of this sentence.
(b) Prior to making any formal written communications Parent agrees that, during the period from the date of this Agreement through the earlier of the Closing or group oral presentations the termination of this Agreement, except (i) to the directorsextent the Company shall otherwise give its prior consent in writing (such consent not to be withheld, officers conditioned or employees delayed), (ii) as set forth in Section 4.1(b) of the Company Parent Disclosure Schedule, (iii) as may be required by applicable Legal Requirements (including COVID-19 Measures) or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated (iv) as expressly required by this Agreement, Parent shall, and shall cause the Parent Subsidiaries to, use commercially reasonable efforts to conduct its business in the ordinary course of business. Parent agrees that, during the period from the date of this Agreement through the earlier of the Closing or the termination of this Agreement, except (1) to the extent the Company shall provide Parent with a copy otherwise give its prior consent in writing, (2) as set forth in Section 4.1(b) of the intended communicationParent Disclosure Schedule, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not 3) as may be unreasonably withheld required by applicable Legal Requirements (including COVID-19 Measures) or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c4) Subject to Section 6.5as expressly permitted or required by this Agreement, Parent shall not take or (and shall not permit any Parent Subsidiary to), in each case by merger, consolidation, division, operation of its Subsidiaries to take any action that is reasonably likely to preventlaw, interfere with or delay the consummation otherwise:
(i) amend Parent’s or either of the Merger Acquisition Subs’ Organizational Documents or result amend the Organizational Documents of any Parent Subsidiary in any manner that would be adverse in any material respect to the holders of Company Common Stock (after giving effect to the Mergers);
(ii) split, combine, subdivide, change, exchange, amend the terms of or reclassify any shares of Parent’s capital stock or other equity interests of the conditions Company, except for any such transaction involving only wholly owned Parent Subsidiaries;
(iii) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock or property) with respect to any shares of Parent’s capital stock or the capital stock of any Parent Subsidiary, except for dividends or distributions only to the Merger set forth extent paid by any wholly owned Parent Subsidiary to Parent or another wholly owned Parent Subsidiary;
(iv) acquire (by merger, consolidation, operation of law, acquisition of stock, other equity interests or assets, formation of a joint venture or otherwise) (A) any other Person, (B) any equity interest in Article VII not being satisfied.any other Person (other than investments in equity securities that constitute short term investments that are accounted for as cash equivalents), (C) any business or division of another Person, or (D) any assets material to the Company and the Company Subsidiaries, taken as a whole, except in each case, (1) acquisitions by Parent from any wholly owned Parent Subsidiary or among any wholly owned Parent Subsidiaries; (2) the purchase of equipment, supplies and inventory in the ordinary course of business; (3) inbound licenses or other grants or assignments of Intellectual P
Appears in 1 contract
Sources: Merger Agreement (Bioventus Inc.)
Interim Operations. (a) The Company covenants and agrees Parent, each covenant and agree as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time and except (A) unless Parent or the Company, as applicable, shall otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to approve in writing (such consent approval not to be unreasonably withheld, delayed conditioned or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Scheduledelayed)), the its business of it and its Subsidiaries Subsidiaries’ businesses shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present officers, employees and agents, except as (i) otherwise expressly contemplated or required by this Agreement, (ii) required by applicable Law or (iii) set forth on Section 6.1(a) of the Company Disclosure Letter, as it relates to the Company and its Subsidiaries, or on Section 6.1(a) of the Parent Disclosure Letter, as it relates to Parent and its Subsidiaries. Without limiting the generality of, of and in furtherance of, of the foregoing, from the date of this Agreement until the Effective Time, except as (A) as otherwise expressly contemplated or required by this Agreement, (B) as required by applicable LawsLaw, (C) required by any Benefit Plan or collective bargaining agreement, (D) as Parent may consent to approved in writing by the Company or Parent (as applicable) (such consent approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed, in the case of Parent’s approval, with respect to Section 6.1(a)(iv), (vi), (x), (xi), (xii), (xvi), (xvii), (xiv), (xx) or (Dxxi), and in the case of the Company’s approval, with respect to Section 6.1(a)(iv), (vi), (vii), (x), (xi), (xii), (xix), (xx) as or (xxi)) or (E) set forth in on Section 6.1(a) of the Company Disclosure ScheduleLetter, as it relates to the Company and its Subsidiaries, or on Section 6.1(a) of the Parent Disclosure Letter, as it relates to Parent and its Subsidiaries, each Party, on its own account, will not and will not permit cause its Subsidiaries not to:
(i) adopt or propose any change in amend its certificate or articles of incorporation or by-laws bylaws or comparable governing documents other applicable governing instrumentsthan amendments that solely effect ministerial changes to such documents and that would not adversely affect the consummation of the Merger or the other transactions contemplated by this Agreement;
(ii) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or other equity interests (other than dividends paid by a wholly owned Subsidiary of such Party to such Party or another wholly owned Subsidiary of such Party);
(iii) except for any transactions among or solely involving a Party’s wholly owned Subsidiaries or among wholly owned Subsidiaries of a Party’s Subsidiaries, merge or consolidate the Company itself or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its material assets, operations or businesses;
(iiiiv) acquire assets outside of the ordinary course of business or businesses, whether by merger, consolidation, purchase or otherwise, from any other Person with a fair market value or purchase price price, in the case of the Company, in excess of $2,000,000 individually or $10,000,000 in the aggregate or, in the case of Parent, in excess of, of $6,000,000 individually or $30,000,000 in the aggregate, $2,500,000in any transaction or series of related transactions, other than acquisitions pursuant to Contracts of goods, services and supplies in effect as the ordinary course of the date of this Agreementbusiness;
(ivv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of its capital stock (or equity interests) or of the Company or any of its Subsidiaries (other than the issuance in respect of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes equity-based awards outstanding as of the date of this Agreement) , in each case in accordance with their terms and the plan documents), or securities convertible or exchangeable into or exercisable for any shares of such capital stockstock (or equity interests), or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(vvi) create or incur any Lien material to the Company or any of its Subsidiaries encumbrance on any assets of the Company such Party or any of its Subsidiaries, other than Permitted Liens or encumbrances incurred in connection with the incurrence of Indebtedness to the extent permitted under Section 6.1(a)(x);
(vivii) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than Person, except, in the Company or case of Parent, any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends such transaction not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to 3,000,000 individually or $15,000,000 in the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stockaggregate;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock (or equity interests) or securities convertible or exchangeable into or exercisable for any shares of its capital stockstock (or equity interests), except from other than with respect to (A) holders the capital stock or other equity interests of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise a wholly owned Subsidiary of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or Parent, as applicable, (B) former employeesthe acquisition of shares of Company Common Stock or Parent Ordinary Shares by the Company or Parent, directors respectively, that are tendered by holders of equity-based awards to satisfy the obligations to pay the exercise price or consultants following termination Tax withholding obligations with respect to such awards, and (C) the acquisition by the Company or Parent of their relationship equity-based awards in connection with the Company in accordance with applicable agreements providing for the repurchase forfeiture of shares upon such terminationawards;
(ix) incur sell, transfer, lease, divest or otherwise dispose of, whether by merger, consolidation, sale or otherwise, any indebtedness for borrowed money assets, business or guarantee such indebtedness a division of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security business with a value in the case of the Company Company, in excess of $2,000,000 individually or any $10,000,000 in the aggregate or, in the case of its SubsidiariesParent, except for inter-company borrowings solely among in excess of $6,000,000 individually or $30,000,000 in the Company and its wholly-owned Subsidiaries aggregate, in each case other than sales of inventory or among the Company’s wholly-owned Subsidiaries obsolete equipment in the ordinary course of business consistent with past practice;
(x) incur, assume, guarantee or otherwise become liable for, prepay, redeem or defease any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security), except as set forth for (A) in the capital budgets set forth case of Parent, Indebtedness for borrowed money incurred in the ordinary course of business not to exceed $30,000,000 individually or $50,000,000 in the aggregate, (B) Indebtedness in replacement of existing Indebtedness for borrowed money on terms substantially consistent with or more favorable to Parent than the Indebtedness being replaced, (C) guarantees of Indebtedness of its wholly owned Subsidiaries otherwise incurred in compliance with this Section 6.1(a)(x) or (D) Indebtedness incurred by Parent owed to any of its wholly owned Subsidiaries or by any of Parent’s wholly owned Subsidiaries and owed to Parent or any of its wholly owned Subsidiaries, or by the Company owed to any of its wholly owned Subsidiaries or by any of the Company’s wholly owned Subsidiaries and owed to the Company Disclosure Schedule and consistent therewith, or any of its wholly owned Subsidiaries;
(xi) make or authorize any payment of, or accrual or commitment for, capital expenditures in excess of $12,000,000, in the case of the Company, or $45,000,000, in the case of Parent, except (A) any such expenditure to the extent reasonably necessary to avoid a material business interruption as a result of any act of God, war, terrorism, earthquake, fire, hurricane, storm, flood, civil disturbance, explosion, partial or entire failure of utilities or information technology systems, or any other similar cause not reasonably within the control of such Party or its Subsidiaries, or (B) expenditures that the Company or Parent reasonably determines are necessary to maintain the safety and integrity of any asset or property in response to any unanticipated and subsequently discovered events, occurrences or developments (provided that the Company or Parent, as applicable, will use its reasonable best efforts to consult with the other Party prior to making or agreeing to any such capital expenditure);
(xixii) (A) enter into any Contract or other arrangement (other than any Contract that is expressly permitted or contemplated to be entered into by this Agreement) that would have been a Material Contract had it been entered into prior to this Agreement or Agreement, (B) materially amend, modify modify, supplement, waive, terminate, assign, convey or terminate otherwise transfer, in whole or in part, any Material Contract, or (C) forgive, compromise, cancel, modify or waive any debts, rights debts or claims thereunder; for purposes held by it or waive any rights having in each case of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) a value in excess of, in the case of the definition of Material Contract shall be changed to Company, $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to 1,000,000 individually or $2,500,000; and the monetary reference 5,000,000 in the definition aggregate or, in the case of Personal Property Leases shall be changed to Parent, $2,500,0003,000,000 individually or $15,000,000 in the aggregate;
(xiixiii) enter into or modify any Contract relating to, or otherwise enter into, modify, implement or consummate, a Related Party Transaction;
(xiv) other than in the ordinary course of business, settle any action, suit, claim, hearing, arbitration, investigation or other proceedings for an amount, in the case of the Company, in excess of $1,000,000 individually or $5,000,000 in the aggregate or, in the case of Parent, in excess of $3,000,000 individually or $15,000,000 in the aggregate, or any obligation or liability of it in excess of such amount or on a basis that would result in the imposition of any writ, judgment, decree, settlement, award, injunction or similar order of any Governmental Entity that would restrict in a material respect the future activity or conduct of such Party or any of its Subsidiaries or involve the admission of any criminal liability;
(xv) make any material changes with respect to financial accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company IFRS, as applicable, or any Subsidiary does not exceed $2,000,000 (interpretation thereof, including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or any similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceedingorganization, or (III) Law, including pursuant to this Agreement;
(xiv) file SEC or amend any material Tax Return except in the ordinary course of business, settle AMF rule or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreementpolicy;
(xvi) other than in the ordinary course of business, (A) transfermake, sell, license, mortgage, pledge, encumber, divest, cancel, abandon change or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify revoke any material rights Tax election, adopt or change any material Tax accounting method, file any material amended Tax Return, take any action which would reasonably be expected to cause the Parent to be treated as a “domestic corporation” pursuant to Section 7874(b) of the Code as a result of the Merger, take any action which would reasonably be expected to cause the Company to be treated as an “expatriated entity” within the meaning of Section 7874(a)(2) of the Code as a result of the Merger, settle or compromise any material Tax claim, audit, assessment or dispute for an amount materially in excess of the amount reserved or to Owned Intellectual Property, (C) fail to diligently prosecute the Companyaccrued on such Party’s and its Subsidiaries’ patent applicationsmost recent consolidated balance sheet included in such Party’s Reports, or (D) fail surrender any right to exercise claim a right refund of removal or extension under any a material Owned Intellectual Propertyamount of Taxes;
(xvii) except to make changes that are required by applicable Law other than in accordance with the terms and regular expiration thereof, terminate or to satisfy contractual obligations existing as permit any material Company Permit (in the case of the date hereof pursuant Company) or Parent Permit (in the case of Parent) to Contracts lapse or fail to apply on a timely basis (subject to any cure periods) for any renewal of any renewable material Company Permit (in the case of the Company) or Parent Permit (in the case of Parent);
(xviii) other than on account of changes in the insurance industry generally in the United States or France, make or agree to any material changes to be made to any insurance policies so as to materially affect the insurance coverage of the Party or its Subsidiaries or assets following the Effective Time;
(xix) enter into, terminate, adopt or amend any employment, change in control or severance agreement or any other Benefit Plans which are listed on Section 6.1(a)(xviiPlan or collective bargaining agreement, except for (A) any amendment to any Benefit Plan (excluding employment, change in control, severance or similar agreement with any individual officer, director or employee) that does not increase the cost of such plan or the benefits provided thereunder to such Party or its Subsidiaries, or (B) actions permitted to be taken by clause (xx) below without the consent of the applicable Party;
(xx) in the case of the Company Disclosure Scheduleand its Subsidiaries, (A) terminate, enter into, amend increase or renew change the compensation or benefits payable to any Employees (or communicate any intention to take such action) any Benefit Planother than executive officers), other than routine amendments to qualified retirement plans salary or health and welfare plans wage increases for Employees (other than severance plansexecutive officers) that in the ordinary course of business and consistent with past practice which, in the aggregate, do not increase benefits or result in materially increased administrative costsexceed the previous year’s aggregate compensation for all Employees (other than executive officers) by more than 3%, (B) increase in or change the compensation or benefits payable to any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, Employees who are executive officers, employees or consultants of the Company or its Subsidiaries, (C) pay or grant, or commit to pay or grant any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performancecompensation, (D) grant or accelerate the vesting of or lapsing of restrictions with respect to any equity-based awards or other compensation or other long-term incentive compensation amend or modify the terms of any such outstanding awards, under any Company Benefit Plan, except as provided in this Agreement, (E) grant any new award, amend transaction or retention bonuses or any discretionary bonus (including bonus plans that exist as of the terms of outstanding awards or change the compensation opportunity under any Benefit Plandate hereof), (F) pay any severance annual bonuses or performance bonuses, other than for completed periods based on actual performance through the end of the applicable performance period, or if the Company is contractually obligated to in excess connection with a termination of what is legally required under the terms of any Benefit Plan or applicable Lawemployment, (G) take increase or change the severance terms applicable to any action to fund or secure the payment of any amounts under any Benefit PlanEmployee, (H) change terminate the employment or services of any assumptions used to calculate funding or contribution obligations under any Benefit PlanEmployee that is more senior than a Senior Vice President, other than as required by GAAPfor cause, or (I) hire any executive officer or any employee officer, employee, independent contractor or consultant with maximum who has target annual cash compensation opportunities in excess of greater than $200,000, provided, that such new hire’s compensation and benefits are made ;
(xxi) in the ordinary course consistent with past practice case of the Company and are consistent with the other requirements set forth in this Agreementits Subsidiaries, implement any store closures or mass layoff of employees; (Jxxii) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment new line of any officer business outside of the Companyexisting businesses of a Party and its Subsidiaries;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time and except (A) as unless Parent shall otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to approve in writing (such consent approval not to be unreasonably withheld, delayed or conditioned), and except as (1) or (D) as set forth in on Section 6.1(a) of the Company Disclosure ScheduleLetter, (2) provided in the Settlement Agreement or (3) otherwise expressly permitted by this Agreement or as required by applicable Laws), the business of it and its Subsidiaries shall be conducted in all material respects in the ordinary and usual course of business and, to the extent consistent therewithwith the foregoing, it and its Subsidiaries shall use their respective commercially reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its their business organizations substantially intact and maintain existing or satisfactory relations and goodwill with Governmental Entities, Entities and customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributorsservice providers, creditorscreditors and lessors having significant business dealings with them, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agentskey employees; provided, however, that no action taken by the Company or its Subsidiaries with respect to matters specifically addressed by clauses (i) through (xxi) of this Section 6.1(a) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required permitted by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to approve in writing (such consent approval not to be unreasonably withheld, delayed or conditioned), (C) or as required by applicable Law, (D) as set forth in Section 6.1(a) of the Company Disclosure ScheduleLetter, or (E) as expressly provided in the Settlement Agreement in the form executed on the date of this Agreement (and any amendment thereto entered into with the written consent of Parent), the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments, other than ministerial or administrative changes not adverse to the interests of Parent;
(ii) (1) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate the Company or otherwise enter into any agreements of its Subsidiaries, except for any such transactions among wholly-owned Subsidiaries of the Company, or arrangements imposing material changes (2) commence or restrictions on its assetsfile any petition seeking (x) liquidation, operations reorganization or businessesother relief under any U.S. Federal, U.S. state or other bankruptcy, insolvency, receivership or similar Law or (y) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official;
(iii) acquire make any acquisition (whether by merger, consolidation, acquisition of stock or assets outside or otherwise) of any interest in any Person or any business, line of business or division thereof (which for the avoidance of doubt shall not include acquisitions of assets that are covered by clause (iv) below);
(iv) make any acquisition of assets, properties, operations or projects, other than (A) acquisitions of supplies in the ordinary course of business from any other Person consistent with a value past practice used by the Company and its Subsidiaries in their operations or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than (B) acquisitions pursuant to Contracts in effect as of the date of this AgreementAgreement (copies of which have been made available to Parent);
(iv1) issue, sell, pledge, dispose of, grant, transfertransfer or encumber or otherwise dispose of or redeem, encumberrepurchase or otherwise acquire any shares of capital stock or other equity interests of the Company or any of its Subsidiaries or profits interests, stock appreciation rights, phantom stock or securities convertible into or exchangeable for, or authorize the issuancesubscriptions, saleoptions, pledgewarrants, dispositioncalls, grantagreements, transferarrangements, leaseundertakings, license, guarantee commitments or encumbrance ofother rights of any kind to acquire, any shares of capital stock of the Company or any of its Subsidiaries (other than (A) the issuance of shares or interests by a wholly wholly-owned Subsidiary of the Company to the Company or another wholly wholly-owned Subsidiary of the Company, or (B) the issuance of Shares pursuant to shares or interests in respect of Company Options, Company Restricted Shares or the Convertible Senior Notes RSUs outstanding as of the date of this AgreementAgreement in accordance with their terms and the Stock Plan as in effect on the date of this Agreement or as otherwise permitted under clause (xviii) or securities convertible or exchangeable into or exercisable for any shares of such capital stock(xix) below), or (2) take any options, warrants or other rights of action that would result in any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiariesadjustment under Section 4.4;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees advances or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of among the Company and other than in the Company or any direct or indirect wholly wholly-owned Subsidiary of the Company or among the Company’s wholly-owned Subsidiaries);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or other equity securities (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company (or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) and the other equity holders of such Subsidiary, in each case, on a pro rata basis in accordance with such Subsidiary’s certificate of incorporation or by-laws or other applicable governing instruments and in the ordinary course consistent with past practice) or enter into any agreement with respect to the voting of its capital stockstock or other equity securities;
(viii) except for transactions among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries, reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, acquire any of its capital stock (or other equity securities) or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from stock (Aor other equity securities) holders (other than the withholding of shares to satisfy withholding Tax obligations in respect of Company Options in full or partial payment Equity Awards outstanding as of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise date of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company this Agreement in accordance with applicable agreements providing for their terms and, as applicable, the repurchase Stock Plan as in effect on the date of shares upon such terminationthis Agreement);
(ix) incur incur, assume or otherwise become liable for any indebtedness for borrowed money or guarantee such indebtedness of another PersonPerson (other than a wholly-owned Subsidiary of the Company), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewithfor expenditures related to operational emergencies, equipment failures or outages, make or authorize any capital expenditureexpenditures in excess of $200,000 in the aggregate during any calendar quarter;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to financial accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect theretoGAAP;
(Axii) settle any litigation claim or other proceedings pending or threatened proceeding by or before a Governmental Entity except where if such settlement (A) with respect to the settlement is limited solely payment of monetary damages, involves the payment of monetary damages that exceed $1 million individually or $3 million in the aggregate during any calendar year, net of any amount covered by insurance or third-party indemnification, or (B) with respect to (I) any non-monetary terms or conditions therein, imposes or requires actions that would or would be reasonably likely to have a material effect on the release continuing operations of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 of its Subsidiaries (or $15,000,000 in the aggregate for all such settlements) Parent or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect any of its business, provided, that Subsidiaries after the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this AgreementClosing);
(xivxiii) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, as required by Law (A) make, change or revoke any material Tax election except election, (B) settle or compromise any audit or proceeding relating to the extent consistent with past practice or as required by lawa material amount of Taxes, (C) file any amended Tax Return reflecting a material amount of Taxes, (D) make any change in any material Tax accounting method or (E) enter into any closing agreement relating to a material amount of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its SubsidiariesTaxes;
(xvxiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material amount of assets, licenses, operations, rights, product lines, lines or businesses or interests therein of the Company or its Subsidiaries, including capital stock (or other equity interests) of any of its such Subsidiaries, except sales of Company Products in the ordinary course of business and other than (A) sales of obsolete assets, other than assets that are not material and are no longer used in the operation of the business or (B) pursuant to Contracts in effect prior to as of the date of this AgreementAgreement (copies of which have been made available to Parent);
(xvixv) other than in the ordinary course of businessbecome a party to, (A) transferestablish, selladopt, licenseamend, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights commence participation in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization organization;
(xvi) (A) other than normal vendor renewals, extensions or replacements or otherwise in the ordinary course of business consistent with past practice, modify or amend in any material respect or terminate or cancel or waive, release or assign any material rights or claims with respect to, any Material Contract or (KB) terminate without cause enter into any Contract that, if entered into prior to the employment date of this Agreement, would qualify as a Material Contract under any of clauses (B) through (M) of Section 5.1(j)(i);
(xvii) enter into any new line of business other than any line of business that is reasonably ancillary to and a reasonably foreseeable extension of any officer line of business as of the Companydate of this Agreement;
(xviii) subject except as may be required by applicable Law or pursuant to Section 6.2, take the terms of any action or omit to take any action that is reasonably likely to prevent, interfere with or delay Company Plan in effect on the consummation date of the Merger Agreement, (A) establish, adopt, terminate or result materially amend any material Company Plan; (B) grant to any employee or service provider any material increase in base salary, wages, bonuses, incentive compensation or severance, retention or other employee benefits; (C) grant any equity-based awards (whether under the Stock Plan or otherwise); (D) accelerate the time of payment for, or vesting of, any compensation or benefits; or (E) materially change any actuarial or other assumption used to calculate funding obligations or liabilities under any Company Plan;
(xix) (A) hire any employee or other service provider; provided, however, that the conditions Company and its Subsidiaries shall be permitted to hire employees or engage other service providers to fill existing positions that are or become vacant or positions that are newly created in the ordinary course of business consistent with past practice to the Merger set forth extent that the annual compensation opportunity provided to any such employee or other service provider does not exceed $250,000 and, in Article VII the case of service providers other than employees, the duration of engagement does not being satisfiedexceed six months, and the compensation and benefits provided to any such employee or other service provider are consistent with terms previously provided by the Company or its Affiliates in the ordinary course of business; or (B) terminate any employee or other service provider whose annual compensation opportunity exceeds $250,000 other than for cause; or
(xixxx) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to From the directorsdate of this Agreement until the Effective Time, officers or employees of except as Parent may approve in writing, the Company will not (i) amend, modify or terminate the Settlement Agreement or seek, move for or support a motion seeking any of its Subsidiaries pertaining amendment, modification or termination, other than an amendment or modification that is immaterial and not adverse to compensation or benefit matters that are affected by Parent, the Company, this Agreement and the transactions contemplated by herein, (ii) amend, modify, supplement or terminate the Bankruptcy Court Orders or the forms thereof or otherwise seek, move for or support a motion seeking any such amendment, modification, supplement or termination, other than any amendment, modification or supplement to any of the Bankruptcy Court Orders or the forms thereof that is immaterial and not adverse to Parent, the Company, this Agreement and the transactions contemplated herein or (iii) agree to preserve any Contract pursuant to the Settlement Agreement.
(c) Notwithstanding anything to the contrary contained in this Agreement, the Company shall provide Parent with may authorize, declare and distribute to holders of Class A Shares, Company Restricted Shares and Company RSUs a copy dividend of one contingent value right per Class A Share, Company Restricted Share and Company RSU representing such holder’s entitlement to receive its pro rata share of all amounts paid by SunEdison to the Company in respect of any unsecured claims that remain outstanding following the Closing, as contemplated by the Settlement Agreement, net of the out-of-pocket costs to the Company actually incurred pursuing such claims, recovering such amounts and issuing such contingent value rights.
(d) Nothing contained in this Agreement is intended communicationto give Parent, Parent shall have a reasonable period directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, each of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communicationexercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
(ce) Subject To the extent the condition to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger Closing set forth in Article VII Section 7.2(c) (Litigation Settlement) would not being be satisfied, the Company and Parent shall negotiate and consider in good faith an adjustment to, or a deferral of a portion of, the Per Share Merger Consideration so that the net effect of such adjustment will cause the satisfaction of such condition.
(f) The Company shall keep Parent reasonably informed as to the status of, and give Parent the opportunity to participate in, settlement negotiations relating to the matters set forth in Section 6.1(f) of the Company Disclosure Letter.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier to occur of the termination of this Agreement pursuant to Article VIII and prior to the Effective Time and except (A) as unless Parent shall otherwise expressly required by this Agreementapprove in writing, which approval in the case of clauses (c)(ii), (B) as required by applicable Lawsc)(iv), (Cc)(vi), (e), (f) as Parent may consent to in writing and (such consent k) below shall not to be unreasonably withheld, delayed or conditioned) conditioned and except as otherwise permitted or (D) as set forth required by this Agreement or described in Section 6.1(a) 6.1 of the Company Disclosure Schedule, Letter):
(a) the business of it and its Subsidiaries shall be conducted in the ordinary course and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instrumentspast practice;
(iib) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
it shall not (iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(ivi) issue, sell, pledge, dispose ofof or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend or propose to amend the Company Charter or the Company Bylaws; (iii) split, grantcombine or reclassify its outstanding shares of capital stock or any class thereof; (iv) declare, transferset aside or pay any dividend payable in cash, encumberstock or property in respect of any capital stock other than (A) dividends from its direct or indirect wholly-owned Subsidiaries to the Company, or authorize (B) dividends payable on the issuanceSeries C Preferred Shares pursuant to and in accordance with the existing terms thereof; or (v) repurchase, saleredeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispositiondispose of or encumber any shares of, grantor securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, its capital stock of any class (other than Common Shares issuable pursuant to Company Options outstanding on the date hereof under the Stock Plans as set forth in Section 5.1(b) of the Company Disclosure Letter); (ii) transfer, lease, license, guarantee guarantee, sell, mortgage, pledge, dispose of, or encumbrance encumber or suffer to exist any Encumbrance (except for Permitted Encumbrances) in respect of, any shares assets in excess of capital stock $250,000 in the aggregate other than (A) sales of inventories (and/or licenses in connection therewith) in the ordinary course of business consistent with past practice and (B) dispositions of obsolete or worthless assets; (iii) incur any indebtedness for borrowed money other than borrowings (including issuance of letters of credit) and reborrowings under its or any of its Subsidiaries’ credit facilities, as such credit facilities are in existence as of the date hereof without regard to any subsequent amendment or modification, that would at any given time cause the net funded amount of indebtedness outstanding under such credit facilities to be in excess of $4,000,000 in the aggregate (the “Maximum Amount”); provided, however, that the Company may incur indebtedness under such credit facilities in excess of the Maximum Amount to the extent that the senior management of the Company reasonably determines that it is in the best interests of the Company to borrow such additional amounts in order to fund operations of the business of the Company and its Subsidiaries in the ordinary course; and provided, further that prior to taking any actions permitted by the foregoing proviso the Company shall give Parent three Business Days’ prior written notice that it intends to take such actions; (iv) make or commit for any capital expenditures in the aggregate in excess of the Company’s budget for capital expenditures, in each case, for the applicable fiscal year; (v) loan, advance funds or make any investment in or capital contribution to any other Person other than to any Subsidiary; or (vi) acquire (by merger, consolidation, or acquisition of stock or assets) any Person;
(d) except as required by Law, neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, amend or otherwise modify any Company Compensation and Benefit Plans in a manner that would materially increase benefits thereunder or increase the salary, wage, bonus or other compensation of any employees except salary increases as a result of employee promotions occurring in the ordinary course of business consistent with past practices;
(e) neither it nor any of its Subsidiaries shall (i) settle or compromise any material claims or litigation in excess of $250,000 in the aggregate other than (A) settlements and compromises in the ordinary course of business and (B) settlements and compromises of liabilities not in excess of $500,000 reflected or reserved against on the financial statements included in the Company Reports; or (ii) waive, release or assign any material rights or claims in excess of $250,000 in the aggregate other than in the ordinary course of business; provided, however, that the Company shall not settle any Governmental claims or proceedings if such settlement would result in suspension, debarment or injunctive relief that is material to the businesses of the Company and its Subsidiaries taken as a whole or that would otherwise materially affect Parent and its Affiliates;
(f) neither it nor any of its Subsidiaries shall make any material Tax election, change any annual Tax accounting period, adopt or change any material method of Tax accounting, extend or waive any applicable statute of limitations with respect to Taxes, enter into any closing agreement in respect of any material Tax claim, audit or assessment, surrender any right to claim a material Tax refund, offset or other reduction in a material Tax liability or settle or compromise any material Tax liability;
(g) use commercially reasonable efforts to (i) preserve intact its business organization and goodwill, (ii) keep available the services of its present officers and key employees and (iii) preserve the goodwill and business relationships with customers, suppliers and others having business relationships with Company;
(h) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its business in such amounts and against such risks and losses as are consistent with past practice;
(i) not enter into any plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Company or any of its Subsidiaries (other than the issuance of shares transactions contemplated by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities);
(vj) create or incur any Lien material to the Company not alter, through merger, liquidation, reorganization, restructuring or any other fashion, the corporate structure or ownership of its Subsidiaries on any assets of the Company or any of its Company’s Subsidiaries;
(vik) other than pursuant to except as required by GAAP or as recommended in writing by the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this AgreementCompany’s independent auditors, make any loans, advances, guarantees or capital contributions to or investments (i) not revalue in any Person (other than investments in cash and cash equivalents and other investments that would constitute shortmaterial respect any of its assets, including writing down the value of inventory or writing-term investments on the balance sheet of the Company and off notes or accounts receivables other than in the Company ordinary course of business consistent with past practice, or (ii) change any direct method of accounting or indirect wholly owned Subsidiary of the Company)accounting principles or practice;
(viil) declarenot (i) grant any material severance, set asideretention or termination pay to, make or pay amend in any dividend material respect any existing severance, retention or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectlytermination arrangement with, any current or former director, officer or employee of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(xii) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to under Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedulehereof, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner material respect or accelerate in any material respect the compensationpayment or vesting of, any benefits payable under any existing severance, retention or termination pay policies or employment agreements, (iii) enter into or amend in any material respect any employment, consulting, deferred compensation or other similar agreement with any director, officer, consultant or employee of Company or any of its Subsidiaries or (iv) establish, adopt or amend (except as required by applicable law) any collective bargaining agreement, bonus, profit-sharing, thrift, pension, welfareretirement, fringe post-retirement medical or life insurance, retention, deferred compensation, compensation, stock option, restricted stock or other benefitsbenefit plan or arrangement covering any present or former director, severance officer or termination pay employee, or any beneficiaries thereof, of Company or any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xixm) agree, neither it nor any of its Subsidiaries will authorize or commit enter into an agreement to do any of the foregoing.
(b) Prior , or commit to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedforegoing actions.
Appears in 1 contract
Interim Operations. (a) The Except as otherwise (w) required by this Agreement, (x) required by applicable Law, (y) approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned) or (z) set forth on Section 6.1(a) of the Company covenants and agrees as to itself and its Subsidiaries thatDisclosure Schedule, after the date of this Agreement and prior to the Effective Time Time, the Company will, and except will cause its Subsidiaries to, use its and their reasonable best efforts to conduct their businesses in the ordinary course and, to the extent consistent therewith, the Company shall, and shall cause its Subsidiaries to, use its and their commercially reasonable efforts to preserve their business organizations intact (Aincluding the service of key employees) and maintain existing relations with key customers, suppliers and other Persons with whom the Company and its Subsidiaries have significant business relationships; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 6.1(b) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision of Section 6.1(b).
(b) Except as otherwise expressly (w) required by this Agreement, (Bx) as required by applicable LawsLaw, (Cy) as Parent may consent to approved in writing by Parent (such consent approval not to be unreasonably withheld, delayed or conditioned) or (Dz) as set forth in on Section 6.1(a6.1(b) of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will not not, and will not permit cause its Subsidiaries not to:
(i) (x) adopt or propose any change in its the certificate of incorporation or by-laws bylaws of the Company, or (y) adopt any change in the comparable organizational document of any Subsidiary of the Company that, in the case of this clause (y), would adversely affect the consummation of the Merger or the other applicable governing instrumentstransactions contemplated by this Agreement;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate the Company or otherwise enter into any agreements of its Subsidiaries, in each case other than any such transactions among any wholly-owned Subsidiaries of the Company which would not reasonably be expected to result in a restriction or arrangements imposing material changes or restrictions on its assets, operations or businessesreduction in any participation exemption available under non-U.S. Law with respect to any such Subsidiaries;
(iii) (A) acquire or license tangible or intangible assets outside of the ordinary course of business from or (B) make any capital contributions to or investments in any Person, in the case of clauses (A) and (B), other Person with a value than any such transactions (I) among the Company and its wholly-owned Subsidiaries or purchase price among the Company’s wholly-owned Subsidiaries or (II) for amounts that do not exceed $200,000,000 in the aggregate in excess of, individually or any fiscal year of the Company (in the aggregatecase of clause (A), $2,500,000, other than acquisitions pursuant to Contracts in effect as determined based upon the greater of the date fair market value of this Agreementthe assets so acquired by the Company and its Subsidiaries or the fair market value of the consideration paid by the Company and its Subsidiaries);
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, encumber any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company OptionsSubsidiaries, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
, in each case, other than (vA) create or incur any Lien material to such transaction among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries or (B) any issuance, sale, grant or transfer of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than Shares pursuant to the terms settlement of Contracts in effect Company Options, Company SARs, Company RSUs, Company PSUs or Company Awards outstanding as of the date of this Agreement and provided to Parent prior to or granted after the date of this Agreement not in violation of this Agreement, ;
(v) make any loans, advancesadvances or guarantees outside the ordinary course of business, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of any such transactions (I) among the Company and other than its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries, (II) permitted under Section 6.1(b)(viii) or (III) not in excess of $25,000,000 in the Company or aggregate in any direct or indirect wholly owned Subsidiary fiscal year of the Company);
(viivi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends or other distributions paid by any direct or indirect wholly wholly-owned Subsidiary of the Company to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into Company and except for any agreement quarterly dividends to stockholders of the Company by the Company in an amount not to exceed $0.54 per Share, in each case declared and paid at such times and in such amounts as is consistent with respect historical practice over the most recent fiscal year ended prior to the voting date of its capital stockthis Agreement and (B) dividend equivalents paid in respect of Company RSUs, Company PSUs or Company Awards outstanding as of the date of this Agreement or granted thereafter in accordance with the terms of this Agreement, in each case, in accordance with their terms);
(viiivii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, stock (except from for (A) holders any such transaction by a wholly-owned Subsidiary of the Company Options and (B) acquisitions of Shares in full satisfaction of withholding obligations or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise price in respect of Company Options, Company SARs, Company RSUs, Company PSUs or Company Awards outstanding as of the Company Options date of this Agreement pursuant to its terms or Company SARs or the lapse granted thereafter not in violation of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationthis Agreement);
(ixviii) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its SubsidiariesIndebtedness, except for inter-company borrowings solely (A) intercompany Indebtedness among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries, (B) Indebtedness not to exceed $1,500,000,000 in aggregate principal amount incurred to replace, renew, extend, refinance or refund any existing Indebtedness of the Company, which Indebtedness is (I) prepayable without premium or penalty (other than customary LIBOR breakage amounts) or (II) on terms that (x) taken as a whole, are substantially consistent with or not more restrictive than those contained in the Indebtedness being replaced, renewed, extended, refinanced or refunded and (y) permit parent guarantees and parent company reporting to be substituted for Company reporting, (C) Indebtedness under commercial paper arrangements, revolving credit facilities and other working capital or liquidity facilities not to exceed $3,500,000,000 in aggregate principal amount at any time outstanding pursuant to this subclause (C), (D) guarantees of Indebtedness of the Company or its wholly-owned Subsidiaries outstanding on the date hereof or otherwise incurred in compliance with this Section 6.1(b), (E) Indebtedness of the Subsidiaries of the Company organized under the laws of a country other than the United States in an aggregate principal amount (for all such Subsidiaries, taken together) not to exceed $500,000,000 at any time outstanding pursuant to this subclause (E), (F) Indebtedness pursuant to receivables financing or factoring arrangements (but in any event for which the factoring balance does not exceed $2,400,000,000 at any time outstanding (it being understood that this clause (viii)(F) and clause (xv)(D), taken together, permit a factoring balance that does not exceed $2,400,000,000)), (G) Indebtedness pursuant to capitalized leases (1) entered into in the ordinary course consistent of business or (2) entered into in connection with past practicethe Arizona Greenhouse project, (H) Indebtedness in respect of swaps, options, derivatives and other hedging Contracts entered into in the ordinary course of business, (I) Indebtedness under letters of credit, bank guarantee arrangements and any related reimbursement obligations entered into in the ordinary course of business or (J) Indebtedness not to exceed $250,000,000 in aggregate principal amount that may be incurred other than in accordance with subclauses (A) through (I) inclusive;
(xix) except as set forth (A) make or authorize any payment of, or accrual or commitment for, capital expenditures that, in the aggregate, exceed by more than 5%, or (B) fail to make payments of capital budgets expenditures that, in the aggregate, are no less than 90%, in the case of each of clauses (A) and (B), of the aggregate amounts set forth in Section 6.1(a)(x6.1(b)(ix) of the Company Disclosure Schedule and consistent therewith(the “Capex Budget”) for the respective periods set forth therein, make except with respect to acquisitions or authorize any capital expenditurelicenses of tangible or intangible assets permitted by clause (II) of Section 6.1(b)(iii);
(xix) other than in the ordinary course of business or in connection with any matter to the extent such matter is expressly permitted by any other clause of this Section 6.1(b), (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) terminate or waive, or materially amend, modify or terminate supplement, any rights or interests pursuant to or in any Material Contract, other than expirations of any such Contract in accordance with the terms of such Contract;
(xi) enter into any Contract that (x) materially restricts the ability of the Company or cancelany of its Subsidiaries (or, modify following the consummation of the Merger, would materially restrict the ability of the Surviving Corporation or waive its Affiliates) to compete in any debtsbusiness or geographic area, rights or claims thereunder; for purposes (y) grants “most favored nation” status that, following the consummation of this Section 6.1the Merger, would be material to the Company or the crop science business of Parent and would apply to Parent, the monetary reference in clause (A) Company or any of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000their respective Subsidiaries;
(xii) make any material changes with respect to financial accounting policies or procedures, except as required by changes in Law, proposed Law or applicable by U.S. GAAP or statutory or regulatory accounting rules or interpretations with respect thereto or by any Governmental Entity or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(xiii) settle any action, suit, claim, hearing, arbitration, investigation or other proceedings (other than any audit or other proceeding in respect of Taxes), in each case made or pending against the Company or any of its Subsidiaries (and not including any settlement with respect to matters in which any of them is a plaintiff) for an amount in excess of $150,000,000 in the aggregate in any fiscal year of the Company or on a basis that would result in the imposition of any writ, judgment, decree, settlement, award, injunction or similar order of any Governmental Entity that, in the aggregate, would materially restrict the future activity or conduct of Parent, the Company or any of their respective Subsidiaries, other than with respect to monetary settlements only, settlements or compromises of any action, suit, claim, hearing, arbitration, investigation or other proceedings to the extent reflected or reserved against in the balance sheet (or the notes thereto) of the Company included in the Company’s Quarterly Report on Form 10-Q for the quarter ended May 31, 2016 for an amount not in excess of the amount so reflected or reserved;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except (other than in the ordinary course of business), (B) settle or compromise any material Tax liabilityliability for an amount materially in excess of the amount reserved or accrued on the Company’s most recent consolidated balance sheet included in the Company Reports, (C) make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law(other than an entity classification election under Treasury Regulation Section 301.7701-3 in respect of any Subsidiary that is not material), (D) change any material method of Tax accountingaccounting or (E) terminate, except as required by law, consent to the termination of or take agree to any material modification of any ruling or agreement listed in Section 5.1(n)(iii) of the Company Disclosure Schedule (or that would be necessary to be listed therein in order to prevent a breach of Section 5.1(n)(iii)) if such action which would materially adversely affect is reasonably expected to result in a material increase in the Tax position liability of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire cancel or otherwise dispose of any assetsassets (other than Intellectual Property Rights, licensesGermplasm, operations, rights, product lines, businesses or interests therein Biological Materials) of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales for transfers, sales, leases, divestments, cancellations or other dispositions (A) of Company Products in the ordinary course of business products and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than services in the ordinary course of business, (B) of obsolete inventory and equipment in the ordinary course of business, (C) of tangible assets having a net present value not in excess of $35,000,000 individually or $60,000,000 in the aggregate in any fiscal year of the Company (it being understood that the net present value of such assets shall count against the thresholds set forth in Section 6.1(b)(xvi)(IV)), (D) of receivables, invoices and related rights and assets pursuant to receivables financing or factoring arrangements (but in any event for which the factoring balance does not exceed $2,400,000,000 at any time outstanding (it being understood that this clause (xv)(D) and clause (viii)(F), taken together, permit a factoring balance that does not exceed $2,400,000,000)) and (E) among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries;
(xvi) (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire divest or otherwise dispose of any Intellectual Property Rights, Germplasm or Biological Materials or (B) except in the ordinary course of business, grant, extend, amend amend, fail to diligently prosecute or cancel, abandon or allow to lapse (in each case, except as required in the diligent prosecution of Owned Registered Intellectual Property), waive or modify modify, as applicable, any material rights in or to material Owned Intellectual Property, Germplasm or Biological Materials, except, in the case of each of clauses (CA) fail to diligently prosecute and (B), for (I) non-exclusive licenses of Intellectual Property Rights, Germplasm or Biological Materials in the ordinary course of business, (II) exclusive licenses of Intellectual Property Rights, Germplasm or Biological Materials in the ordinary course of business, provided such licenses are not exclusive in all fields of use, and provided, further, that such licenses retain the Company’s rights to offer or develop products or services that the Company is offering or developing or planning to offer or develop, as the case may be, at any time from the date hereof and through the Effective Time, (III) transfers, sales, licenses, mortgages, pledges, encumbrances, divestments and other dispositions among the Company and its Subsidiaries’ patent applicationswholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries and (IV) transfers, sales, licenses, divestments or other dispositions of Intellectual Property Rights, Germplasm or Biological Materials having a net present value not in excess of $35,000,000 individually or $60,000,000 in the aggregate in any fiscal year of the Company (D) fail to exercise a right it being understood that the net present value of removal such Intellectual Property Rights, Germplasm or extension under any material Owned Intellectual PropertyBiological Materials shall count against the thresholds set forth in Section 6.1(b)(xv)(C));
(xvii) except to make changes that are as required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure SchedulePlans, (A) terminate, adopt, establish, enter into, materially amend or renew (or communicate any intention to take such action) any material Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants who are natural persons of the Company or its Subsidiaries, other than routine annual salary or base pay increases (and corresponding increases in bonus or incentive payments to the extent determined by reference to salary or base pay) for non-executive officer employees, in the ordinary course of business consistent with past practice, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned Plan, other than payments based on actual performanceperformance for completed performance periods, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation restrictions, or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.vesting require
Appears in 1 contract
Sources: Merger Agreement (Monsanto Co /New/)
Interim Operations. (a) The Company covenants shall, from and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing, with such approval not to be unreasonably withheld, conditioned or delayed), and except (A) as otherwise expressly required by this Agreement, (B) Agreement or as required by applicable LawsLaw, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the conduct its business of it and its Subsidiaries shall be conducted in the ordinary and usual course Ordinary Course of Business and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and to, preserve in all material respects its assets and to preserve intact its business organizations organization intact and maintain existing satisfactory relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, of and in furtherance of, of the foregoingforegoing sentence, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable LawsLaw, (C) required by the express terms of any Company Material Contract made available to Parent, as Parent may consent to approved in writing by Parent (with such consent approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed) or (D) as set forth in the corresponding subsection of Section 6.1(a8.1(a) of the Company Disclosure ScheduleLetter, the Company will not and will not permit its Subsidiaries toshall not:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instrumentsOrganizational Documents;
(ii) form, incorporate or organize any Subsidiaries;
(iii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, Person or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iiiiv) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000Person, other than acquisitions pursuant to Contracts of goods in effect as the Ordinary Course of Business or assets valuing less than $100,000 individually or $250,000 in the date of this Agreementaggregate;
(ivv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee guarantee, Encumber, or encumbrance otherwise enter into any Contract or understanding with respect to the voting of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company OptionsCompany, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any such shares of such capital stock, or any options, warrants or other rights of any kind to acquire any such shares of such capital stock or such convertible or exchangeable securities;
securities (v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to (A) the terms Support Agreement and (B) the issuance of Contracts shares of capital stock in effect respect of Company Equity Awards outstanding as of the date of this Agreement and provided to Parent prior to or issued after the date of this Agreement in accordance with Section 8.1(a)(xxiv), in each case in accordance with their terms and, as applicable, the Incentive Plans as in effect on the date of this Agreement;
(vi) enter into any Contracts or other arrangements between the Company, on the one hand, and any director or executive officer of the Company or any Person beneficially owning five percent or more of the outstanding Shares or shares of common stock of any of their respective Affiliates, on the other hand, except for compensatory arrangements consistent with Section 8.1(a)(xxiv) or entered into in the Ordinary Course of Business with Company Employees consistent with Section 8.1(a)(xxiv) and transactions with Parent or its Affiliates;
(vii) create or incur any Encumbrance that is not incurred in the Ordinary Course of Business on any assets of the Company;
(viii) make any loans, advances, guarantees or capital contributions in excess of $50,000 to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company)Person;
(viiix) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement including with respect to the voting Company, for the avoidance of its capital stockdoubt, Shares);
(viiix) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ixxi) incur any indebtedness for borrowed money or guarantee such indebtedness Indebtedness (including the issuance of another Person, or issue or sell any debt securities or securities, warrants or other rights to acquire any debt security security) in excess of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice$50,000;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (Axii) enter into any Contract that would have been a Company Material Contract had it been entered into prior to this Agreement Agreement, other than Contracts entered into in the Ordinary Course of Business with payment obligations not to exceed $100,000;
(xiii) other than with respect to Company Material Contracts related to Indebtedness, which shall be governed by Section 8.1(a)(xi), terminate or (B) amend, modify modify, supplement or terminate waive in any material respect, or assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Company Material Contract, except for (x) expirations of any such Contract in the Ordinary Course of Business and in accordance with the terms of such Contract with no further action by the Company or other party to such Contract, except for any ministerial actions, (y) non-exclusive licenses under Intellectual Property Rights owned or purported to be owned by the Company, in each case, granted in the Ordinary Course of Business or (z) terminations, amendments, modifications, assignments, conveyances, transfers or expirations where, concurrent therewith, the Company enters into a replacement Contract providing substantially similar property, products or services on substantially similar terms;
(xiv) cancel, modify or waive any debts, rights debts or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment held by the Company in excess of $100,000 or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend waive any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiariesrights;
(xv) transferexcept as expressly provided for by Section 8.11, sellamend, leasemodify, licenseterminate, mortgagecancel or let lapse an Insurance Policy, pledgeunless simultaneous with such termination, surrendercancellation or lapse, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of replacement self-insurance programs are established by the Company or its Subsidiariesreplacement policies underwritten by insurance and reinsurance companies of nationally recognized standing are in full force and effect, including capital stock of any of its Subsidiariesin each case, except sales of Company Products in providing coverage equal to or greater than the ordinary course of business and sales of obsolete assetscoverage under the terminated, other than pursuant to Contracts canceled or lapsed Insurance Policies for substantially similar premiums, as applicable, as in effect prior to as of the date of this Agreement;
(xvi) other than with respect to Transaction Litigation, which shall be governed by Section 8.15, and settlement of trade accounts payable in the ordinary course Ordinary Course of Business, settle or compromise any Proceeding for an amount in excess of $100,000 individually or $250,000 in the aggregate;
(xvii) make any changes with respect to the legal structure of the Company or to their accounting policies or procedures, except as required by changes in applicable Law or GAAP;
(xviii) enter into any line of business in any geographic area other than the existing lines of business of the Company and lines of products and services reasonably ancillary to any existing line of business, in any geographic area for which a License (Aif one is required) authorizing the conduct of such business, product or service in such geographic area is held by it, or, except as currently conducted, engage in the conduct of any business in any jurisdiction that would require the receipt or transfer of any License issued by any Governmental Entity;
(xix) make any material changes to the existing lines of business of the Company or adopt or make any material modifications to the Company’s strategic plan;
(xx) make, change or revoke any material Tax election, change an annual Tax accounting period, adopt or change any Tax accounting method, file any amended material Tax Return, enter into any closing agreement with respect to Taxes, settle any material Tax claim, audit, assessment or dispute, surrender any right to claim a material refund or take any action which would be reasonably expected to result in an increase in the Tax liability of the Company, or, in respect of any taxable period (or portion thereof) ending after the Closing Date, the Tax liability of Parent or its Affiliates;
(xxi) transfer, sell, license, mortgage, pledge, encumberlease, divest, cancel, allow to lapse or expire, or otherwise dispose of or transfer, or permit or suffer to exist the creation of any Encumbrance upon, any material assets (tangible or intangible, including any Intellectual Property Rights), Licenses, product lines or businesses of the Company, except in connection with services provided in the Ordinary Course of Business or sales of obsolete assets;
(xxii) cancel, abandon or otherwise allow to lapse or expire or otherwise dispose of any Company Intellectual Property Rights, except in the Ordinary Course of Business with respect to Intellectual Property Rights that are not material to any business of the Company;
(Bxxiii) grant, extend, amend or abandon fail to comply with the Privacy and Security Policies, or alter the operation or security of any IT Assets owned, used or held for use in the operation of the Company’s business, in each case, in a manner that would be less protective of any IT Assets, Personal Information or any other confidential or proprietary information that is in the Company’s possession or control, including any information stored on or processed by such IT Assets;
(xxiv) except as required pursuant to the terms of any Company Benefit Plan in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing effect as of the date hereof pursuant to Contracts or Benefit Plans which are listed on of this Agreement and set forth in Section 6.1(a)(xvii8.1(a)(xxiv) of the Company Disclosure ScheduleLetter, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensationcompensation or fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any Company Employee, (B) become a party to, establish, adopt, amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to the date of the current this Agreement, except in connection with annual renewals or former directors, officers, employees or consultants of the Company or its Subsidiariesas required to comply with applicable Law, (C) pay grant any bonus new awards, or incentive compensation amend or modify the terms of any outstanding awards, under any Company Benefit Plan in excess of the amount earned based on actual performancePlan, (D) except as provided on Section 5.3(a)(i) of the Company Disclosure Letter, take any action to accelerate the vesting of or lapsing of restrictions with respect to or payment, or fund or in any equity-based other way secure the payment, of compensation or other long-term incentive compensation benefits under any Company Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable Law to be funded or contribution obligations under any Benefit Planchange the manner in which contributions to such plans are made or the basis on which such contributions are determined, other than except as may be required by GAAP, (IF) forgive any loans or make any extensions of credit in the form of a personal loan to any Company Employee (other than routine travel advances issued in the Ordinary Course of Business), (G) hire any executive officer or any employee or consultant engage any independent contractor (who is a natural person) with maximum an annual salary or wage rate or consulting fees and target cash compensation opportunities bonus opportunity in excess of $200,000100,000 or (H) terminate the employment of any executive officer other than for cause;
(xxv) become a party to, providedestablish, that such new hire’s compensation and benefits are made adopt, amend, commence participation in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into or terminate any collective bargaining agreement or other agreement with a labor union, labor organization, works council or similar organization or (K) terminate without cause the employment of any officer of the Companyorganization;
(xviiixxvi) fail to maintain policies and procedures designed to ensure compliance with the FCPA and Other Anti-Bribery Laws;
(xxvii) fail to maintain policies and procedures designed to ensure compliance with the Export and Sanctions Regulations in each jurisdiction in which the Company operates or is otherwise subject to Section 6.2, jurisdiction;
(xxviii) take any action or omit fail to take any action that is reasonably likely expected to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII IX not being satisfied; or
(xixxxix) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger Nothing set forth in Article VII not being satisfiedthis Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s operations prior to the Effective Time or give the Company, directly or indirectly, the right to control or direct the Parent’s or its Subsidiaries’ operations prior to the Effective Time.
Appears in 1 contract
Sources: Merger Agreement (Cafepress Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to during the Effective Time and Period, except (Ai) as otherwise expressly required or contemplated by this AgreementAgreement or the Restructuring Term Sheet, (Bii) as required by applicable Laws, Law (Cincluding the Bankruptcy Code) or (iii) as Parent may consent consented to in writing by the DIP Agent (such which consent shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed), (x) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the business of it and its Subsidiaries Business shall be conducted in the ordinary course of business consistent with past practice and usual course and, to in accordance with applicable Law and (y) the extent consistent therewith, it Company and its Subsidiaries shall use their respective commercially reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations the Business and maintain existing relations and goodwill their relationship with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditorswholesalers, lessorsretailers, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Governmental Entities.
(b) Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until during the Effective TimePeriod, except (Ax) as otherwise expressly required or contemplated by this AgreementAgreement or the Restructuring Term Sheet, (By) as required by applicable Laws, Law (Cincluding the Bankruptcy Code) or (z) as Parent may consent consented to in writing by the DIP Agent (such which consent shall not to be unreasonably withheld, delayed conditioned or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Scheduledelayed), the Company will not shall not, and will shall not permit any of its Subsidiaries to, directly or indirectly:
(i) adopt or propose any change in its amend the certificate of incorporation or by-laws incorporation, bylaws or other applicable governing instrumentsorganizational documents of the Company or its Subsidiaries;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries or otherwise enter into any agreements or arrangements imposing providing for the sale of their respective material changes or restrictions on its assets, operations or businessesbusiness;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this AgreementPerson;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee transfer or encumbrance of, any shares of capital stock or Equity Interests of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company OptionsSubsidiary), Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stockstock or Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiesthe foregoing;
(v) incur, create or incur assume any Lien material to the Company or any of its Subsidiaries Encumbrance (other than Permitted Encumbrances) on any assets properties or assets, tangible or intangible, of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement(A) incur, assume or guarantee any Indebtedness or capitalized lease obligations or issue any debt securities or (B) make any loans, advances, guarantees or capital contributions to to, or investments in in, any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company)Person;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or Equity Interests (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the CompanySubsidiary) or enter into any agreement with respect to the voting of its capital stockstock or Equity Interests (other than this Agreement);
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or Equity Interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationforegoing;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of except in accordance with the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries Budget (as defined in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewithDIP Orders), make or authorize any capital expenditure;
(xi) (Ax) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement Agreement;
(xi) other than in the ordinary course of business, cancel or terminate (B) amendother than, for the avoidance of doubt, any expiration in accordance with its terms), or modify or terminate amend in any material respect, or waive any material rights under, any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to material accounting policies or procedures, except as required by changes in applicable Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect theretoGAAP;
(xiii) settle or compromise any (A) settle any litigation or Cause of Action (other proceedings before a Governmental Entity except where the settlement is limited solely to than settlements involving only unsecured claims with an allowed amount of less than one hundred thousand dollars (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) 100,000)), or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection Patent-related Cause of bills, (II) in such cases where Action involving any of the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this AgreementIntellectual Property;
(xiv) file or amend transfer, assign, sell, lease, grant any material Tax Return except license (other than non-exclusive licenses granted in the ordinary course of business) with respect to, settle or compromise any material Tax liabilityor, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect within the Tax position control of the Company or of any of its Subsidiaries, abandon or permit to lapse, any material Company Intellectual Property;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon terminate or allow fail to lapse or expire or otherwise dispose of renew any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreementmaterial Business Permit;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumberdispose of, divesttransfer or authorize the sale, cancelpledge, abandon disposition or allow to lapse or expire or otherwise dispose transfer of any Intellectual Property Rights, (B) grant, extend, amend assets or abandon (except as required in properties of the diligent prosecution of Owned Intellectual Property), waive Company or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except grant any material licenses, sublicenses, covenants not to make changes that are required by applicable Law assert or similar rights with respect to any assets or properties, whether tangible or intangible, of the Company or its Subsidiaries;
(xviii) fail to use commercially reasonable efforts to maintain the Insurance Policies or to satisfy contractual obligations existing renew or replace the Insurance Policies following their termination;
(xix) except as required pursuant to the terms of any Debtor Plan in effect as of the date hereof pursuant to Contracts of this Agreement, the Approved ▇▇▇▇ or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure ScheduleApproved KERP, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, consulting fees, incentive, bonus, pensionretirement, welfare, fringe or other benefits, severance or termination pay of any of the current employee or former directorsindependent contractor, officers(B) become a party to, employees establish, adopt, amend, commence participation in or consultants of the Company terminate any Debtor Plan or its Subsidiariesany arrangement that would have been a Debtor Plan had it been entered into prior to this Agreement, (C) pay grant any bonus new awards, or incentive compensation amend or modify the terms of any outstanding awards, under any Benefit Plan in excess of the amount earned based on actual performanceDebtor Plan, (D) take any action to accelerate the vesting of or lapsing of restrictions with respect to or payment, or fund or in any equity-based other way secure the payment, of compensation or other long-term incentive compensation benefits under any Benefit Debtor Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any actuarial or other assumptions used to calculate funding obligations with respect to any Debtor Plan that is required by applicable Law to be funded or contribution obligations under any Benefit Planchange the manner in which contributions to such plans are made or the basis on which such contributions are determined, other than except as may be required by GAAP, (IF) hire forgive any executive officer loans or issue any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made loans (other than routine travel advances issued in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreementof business) to any employee, (JG) enter into hire any employee or engage any independent contractor (who is a natural person) other than the engagement of independent contractors to fill vacancies or staff currently existing or contemplated projects to the extent not currently staffed or (H) terminate the employment of any officer other than for cause other than any officer who was provided with written notice of termination prior to the date of this Agreement and who is listed on Section 7.1(b)(xix) of the Company Disclosure Letter;
(xx) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Companyorganization;
(xviiixxi) subject (A) change in any material respect any material method of accounting of the Company or its Subsidiaries for Tax purposes; (B) enter into any agreement with any Taxing Authority (including a “closing agreement” under Code Section 7121) with respect to Section 6.2, any material Tax or Tax Returns of the Company or its Subsidiaries; (C) surrender a right of the Company or its Subsidiaries to a material Tax refund; (D) change an accounting period of the Company or its Subsidiaries with respect to any material Tax; (E) file an amended Tax Return; (F) change or revoke any material election with respect to Taxes; (G) make any material election with respect to Taxes that is inconsistent with past practice; (H) file any Tax Return that is inconsistent with past practice; (I) consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment (other than in the ordinary course of business); or (J) take any action (or omit fail to take any action action) that is reasonably likely would result in a loss of any material Tax losses, credits or other attributes that may be used to prevent, interfere with reduce Tax liabilities;
(xxii) revalue any assets or delay the consummation properties of the Merger Company or result in any of the conditions its Subsidiaries (including Inventory), except to the Merger set forth in Article VII not being satisfiedextent required by GAAP; or
(xixxxiii) agree, authorize or commit commit, in writing or otherwise, to do take any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communicationforegoing actions.
(c) Subject to Section 6.5, Parent The Supporting Lenders shall not knowingly take or permit any of its their Subsidiaries to take any action that is reasonably likely to prevent, interfere with prevent or delay materially impede the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedTransactions.
Appears in 1 contract
Sources: Restructuring Support Agreement (Endologix Inc /De/)
Interim Operations. (a) The Company covenants and agrees Parent, each covenant and agree as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time and except (A) unless Parent or the Company, as applicable, shall otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to approve in writing (such consent approval not to be unreasonably withheld, delayed conditioned or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Scheduledelayed)), the its business of it and its Subsidiaries Subsidiaries’ businesses shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present officers, employees and agents, except as (1) otherwise expressly contemplated or required by this Agreement, (2) required by applicable Law or (3) set forth on Section 6.1(a) of the Company Disclosure Letter, as it relates to the Company and its Subsidiaries, or on Section 6.1(a) of the Parent Disclosure Letter, as it relates to Parent and its Subsidiaries. Without limiting the generality of, of and in furtherance of, of the foregoing, from the date of this Agreement until the Effective Time, except as (A) as otherwise required or expressly required contemplated by this Agreement, (B) other than (I) with respect to the restrictions set forth in Sections 6.1(a)(i), 6.1(a)(ii), 6.1(a)(iv), 6.1(a)(vii), 6.1(a)(viii), 6.1(a)(ix), 6.1(a)(x) and 6.1(a)(xi) in each case with respect to the Company and (II) with respect to Section 6.1(a)(vii) with respect to Spectra Energy Partners, LP, as contemplated by the Company CapEx Plan, or as may be necessary to execute capital projects consistent with the Company CapEx Plan, or required by applicable Lawsthe terms of any Material Contract set forth on Section 4.2(t) of the Company Disclosure Letter or any Material Contract filed as an exhibit to the Company’s Reports as of the date hereof, in each case as it relates to the Company and its Subsidiaries, (C) other than (I) with respect to the restrictions set forth in Sections 6.1(a)(i), 6.1(a)(ii), 6.1(a)(iv), 6.1(a)(vii), 6.1(a)(viii), 6.1(a)(ix), 6.1(a)(x) and 6.1(a)(xi) in each case with respect to Parent and (II) with respect to Section 6.1(a)(vii) with respect to Enbridge Income Fund, Enbridge Energy Partners, L.P. and Midcoast Energy Partners, L.P., as contemplated by the Parent CapEx Plan, or as may consent be necessary to execute capital projects consistent with the Parent CapEx Plan, or required by the terms of any Material Contract set forth on Section 4.2(t) of the Parent Disclosure Letter or any Material Contract filed as an exhibit to Parent’s Reports as of the date hereof, in each case as it relates to Parent and its Subsidiaries, (D) required by applicable Law, (E) required by any Benefit Plan or collective bargaining agreement, (F) as approved in writing by the Company or Parent (as applicable) (such consent approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed) or (DG) as set forth in on Section 6.1(a) of the Company Disclosure ScheduleLetter, as it relates to the Company and its Subsidiaries, or on Section 6.1(a) of the Parent Disclosure Letter, as it relates to Parent and its Subsidiaries, each Party, on its own account, will not and will not permit cause its Subsidiaries not to:
(i) adopt or propose any change in amend its certificate or articles of incorporation or by-laws bylaws or comparable governing documents other applicable governing instrumentsthan amendments that solely effect ministerial changes to such documents and that would not adversely affect the consummation of the Merger or the other transactions contemplated by this Agreement;
(ii) except for any transactions among or solely involving a Party’s wholly owned Subsidiaries or among wholly owned Subsidiaries of a Party’s Subsidiaries, merge or consolidate the Company itself or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its material assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business or businesses, whether by merger, consolidation, purchase or otherwise, from any other Person with a fair market value or purchase price in excess of $150,000,000 individually or $300,000,000 in the aggregate in excess of, individually any transaction or in the aggregate, $2,500,000series of related transactions, other than (A) acquisitions pursuant to Contracts of assets in effect as the ordinary course of business or (B) transactions solely between or among (x) (1) the date Company and any of this Agreementits wholly owned Subsidiaries or (2) wholly owned Subsidiaries of a Company Subsidiary and such Company Subsidiary or (y) (1) Parent and any of its wholly owned Subsidiaries or (2) wholly owned Subsidiaries of a Parent Subsidiary and such Parent Subsidiary;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of its capital stock (or equity interests) or of the Company or any of its Subsidiaries (other than the issuance of shares (or equity interests) (A) by a any of its wholly owned Subsidiaries to it or another of its wholly owned Subsidiaries or by any wholly owned Subsidiaries of a Party’s Subsidiary of the Company to the Company such Subsidiary or another wholly owned Subsidiary of such Subsidiary or the issuance (B) in respect of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes equity-based awards outstanding as of the date of this Agreement or subsequently issued in accordance with this Agreement) , in each case in accordance with their terms and the plan documents), or securities convertible or exchangeable into or exercisable for any shares of such capital stockstock (or equity interests), or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company encumbrance on any assets of such Party or any of its Subsidiaries having a value in excess of $50,000,000 individually or $200,000,000 in the aggregate that is not incurred in the ordinary course of business on any such assets of the Company such Party or any of its Subsidiaries;
(vi) other than pursuant to except in the terms ordinary course of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreementbusiness, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash (A) to or from the Company and cash equivalents and other investments that would constitute short-term investments on the balance sheet any of its wholly owned Subsidiaries or to or from any wholly owned Subsidiaries of a Subsidiary of the Company and other than such Subsidiary or (B) to or from Parent and any of its wholly owned Subsidiaries or to or from any wholly owned Subsidiaries of a Subsidiary of Parent and such Subsidiary, as applicable) in excess of $20,000,000 individually or $80,000,000 in the Company or any direct or indirect wholly owned Subsidiary of the Company)aggregate;
(vii) (x) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for or other equity interests other than (A) dividends paid or distributions by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect a wholly owned Subsidiary or by a wholly owned Subsidiary of a Subsidiary to another wholly owned Subsidiary or to such Subsidiary, (B) dividends or distributions required under the applicable organizational documents of such entity in effect on the date of this Agreement, (C) regular quarterly cash dividends made by Parent or any of its Subsidiaries with customary record and payment dates not to exceed $0.10 per Share, declared and paid consistent with prior timingin excess of the amounts for the applicable entity set forth in Section 6.1 of the Parent Disclosure Letter, and (BD) any regular cash dividends paid to made by the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary with customary record and payment dates not in excess of the Companyamounts for the applicable entity set forth in Section 6.1 of the Company Disclosure Letter or (y) or enter into modify in any agreement with material respect to the voting of its capital stockdividend policy;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock (or equity interests) or securities convertible or exchangeable into or exercisable for any shares of its capital stockstock (or equity interests), except from other than with respect to (A) holders the capital stock or other equity interests of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise a wholly owned Subsidiary of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or Parent, as applicable, (B) former employeesthe acquisition of shares of Company Common Stock or Parent Common Stock by the Company or Parent, directors respectively, that are tendered by holders of equity-based awards to satisfy the obligations to pay the exercise price or consultants following termination Tax withholding obligations with respect to such awards, and (C) the acquisition by the Company or Parent of their relationship equity-based awards in connection with the Company in accordance with applicable agreements providing for the repurchase forfeiture of shares upon such terminationawards;
(ix) sell, “drop-down”, transfer, lease, divest or otherwise dispose of, whether by merger, consolidation, sale or otherwise, any assets, business or a division of any business with a value in excess of $150,000,000 individually or $300,000,000 in the aggregate, other than (A) transactions solely between or among (x) the Company and any of its wholly owned Subsidiaries or (y) Parent and any of its wholly owned Subsidiaries, (B) in connection with services provided in the ordinary course of business, or (C) sales of obsolete assets;
(x) incur any indebtedness for borrowed money or guarantee such indebtedness Indebtedness (including the issuance of another Person, or issue or sell any debt securities or securities, warrants or other rights to acquire any debt security security), except for (A) Indebtedness for borrowed money incurred in the ordinary course of business not to exceed $250,000,000 individually or $500,000,000 in the aggregate, (B) Indebtedness in replacement of existing Indebtedness for borrowed money on terms substantially consistent with or more favorable to Parent than the Indebtedness being replaced, (C) guarantees of Indebtedness of its wholly owned Subsidiaries otherwise incurred in compliance with this Section 6.1(a)(x) or (D) Indebtedness incurred by Parent owed to any of its wholly owned Subsidiaries or by any of Parent’s wholly owned Subsidiaries and owed to Parent or any of its wholly owned Subsidiaries, or by the Company owed to any of its wholly owned Subsidiaries or by any of the Company’s wholly owned Subsidiaries and owed to the Company or any of its wholly owned Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(xxi) except as set forth in to the extent not exceeding the amount provided by the Company capital budgets expenditure plan set forth in Section 6.1(a)(x6.1(a)(xi) of the Company Disclosure Schedule and consistent therewithLetter (the “Company CapEx Plan”), as it relates to the Company, or Parent’s capital expenditures plan set forth in Section 6.1(a)(xi) of the Parent Disclosure Letter (the “Parent CapEx Plan”), as it relates to Parent, make or authorize any payment of, or accrual or commitment for, capital expenditures, except (A) any such expenditure to the extent reasonably necessary to avoid a material business interruption as a result of any act of God, war, terrorism, earthquake, fire, hurricane, storm, flood, civil disturbance, explosion, partial or entire failure of utilities or information technology systems, or any other similar cause not reasonably within the control of such Party or its Subsidiaries, or (B) expenditures that the Company or Parent reasonably determines are necessary to maintain the safety and integrity of any asset or property in response to any unanticipated and subsequently discovered events, occurrences or developments (provided that the Company or Parent, as applicable, will use its reasonable best efforts to consult with the other Party prior to making or agreeing to any such capital expenditure);
(xixii) other than in the ordinary course of business, (A) enter into any Contract (other than any Contract that is expressly permitted or contemplated to be entered into by this Agreement) that would have been a Material Contract had it been entered into prior to this Agreement or Agreement, (B) materially amend, modify modify, supplement, waive, terminate, assign, convey or terminate otherwise transfer, in whole or in part, any Material Contract, or (C) forgive, compromise, cancel, modify or waive any debts, rights debts or claims thereunder; for purposes held by it or waive any rights having in each case of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) a value in excess of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to 100,000,000 individually or $2,500,000; and the monetary reference 300,000,000 in the definition of Personal Property Leases shall be changed to $2,500,000aggregate;
(xiixiii) other than in the ordinary course of business, settle any action, suit, claim, hearing, arbitration, investigation or other proceedings for an amount in excess of $75,000,000 individually or $150,000,000 in the aggregate or any obligation or liability of it in excess of such amount or on a basis that would result in the imposition of any writ, judgment, decree, settlement, award, injunction or similar order of any Governmental Entity that would restrict in a material respect the future activity or conduct of such Party or any of its Subsidiaries;
(xiv) make any material changes with respect to financial accounting policies or procedures, except as required by changes in Law GAAP (or applicable GAAP any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or statutory any similar organization, or regulatory accounting rules Law, including pursuant to SEC rule or interpretations with respect theretopolicy;
(Axv) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice election, adopt or as required by law, change any material method Tax accounting method, file any material amended Tax Return, settle any material Tax claim, audit, assessment or dispute for an amount materially in excess of Tax accounting, except as required by lawthe amount reserved or accrued on such Party’s most recent consolidated balance sheet included in such Party’s Reports, or take surrender any action which would materially adversely affect the Tax position right to claim a refund of the Company or a material amount of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this AgreementTaxes;
(xvi) other than in the ordinary course of businessbusiness or in accordance with the terms and regular expiration thereof, terminate or permit any material Company Permit (Ain the case of the Company) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow Parent Permit (in the case of Parent) to lapse or expire or otherwise dispose fail to apply on a timely basis (subject to any cure periods) for any renewal of any Intellectual Property Rights, renewable material Company Permit (B) grant, extend, amend or abandon (except as required in the diligent prosecution case of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, ) or Parent Permit (D) fail to exercise a right in the case of removal or extension under any material Owned Intellectual PropertyParent);
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with of business or on account of changes in the other requirements set forth insurance industry generally in this Agreementthe United States or Canada, (J) enter into make or agree to any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause material changes to be made to any insurance policies so as to materially affect the employment of any officer insurance coverage of the CompanyParty or its Subsidiaries or assets following the Effective Time;
(xviii) subject increase or change the compensation or benefits payable to Section 6.2any Employee other than in the ordinary course of business and consistent with past practice, take except that, notwithstanding the foregoing, neither Party shall (A) grant any action new long-term incentive or omit equity-based awards, or amend or modify the terms of any such outstanding awards, under any Company Benefit Plan or Parent Benefit Plan, as applicable, (B) grant any transaction or retention bonuses, (C) increase or change the compensation or benefits payable to take any action that is reasonably likely to preventexecutive officer, interfere with or delay (D) pay annual bonuses, other than for completed periods based on actual performance through the consummation end of the Merger applicable performance period, or result in (E) increase or change the severance terms applicable to any of the conditions to the Merger set forth in Article VII not being satisfiedEmployee; or
(xix) agree, authorize or commit to do any of the foregoingforegoing actions prohibited by clauses (i) through (xvi) of this Section 6.1(a).
(b) Prior to making any formal written communications or group oral presentations to From the directors, officers or employees date of this Agreement until the earlier of the Company or any Effective Time and the termination of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this AgreementAgreement in accordance with Article VIII, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its their respective Subsidiaries to take or agree to take any action that is would reasonably likely be expected to prevent, interfere with materially impair or materially delay the consummation of the Merger Merger.
(c) Notwithstanding anything to the contrary in this Agreement, a Party’s obligations under Section 6.1(a) to take an action or result not to take an action, or to cause its Subsidiaries to take an action or not to take an action, shall, with respect to any entities (and their respective subsidiaries) controlled by such Party, or in which such Party otherwise has a voting interest, but that are not wholly owned Subsidiaries of such Party or have public equity holders, only apply (i) to the extent permitted by the organizational documents and governance arrangements of such entity and its subsidiaries, (ii) to the extent a Party is authorized and empowered to bind such entity and its subsidiaries and (iii) to the extent permitted by the Party’s or its Subsidiaries’ duties (fiduciary or otherwise) to such entity and its subsidiaries or any of the conditions to the Merger set forth in Article VII not being satisfied.its equity hol
Appears in 1 contract
Interim Operations. The Parties agree as follows with respect to the period from and after the execution of this Agreement.
(a) The Company shall not knowingly take or permit any of its Subsidiaries to take any action or refrain from taking any action the result of which would be reasonably and foreseeably likely to prevent the consummation of the Merger by the Termination Date. Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time Time, unless Parent shall otherwise approve in writing, and except (A) as otherwise expressly required contemplated by this Agreement, (B) Agreement or as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its the present employees and agents of Company and its Subsidiaries’ present employees , maintain the validity of the Communications Licenses and, except as disclosed in Section 5.1 of the Company Disclosure Letter, comply in all material respects with all requirements of the Communications Licenses and agentsthe rules and regulations of the FCC and State PUCs. Without limiting the generality of, of the foregoing and in furtherance of, the foregoingthereof, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this AgreementAgreement or as permitted in Section 5.6(d), (B) as required by applicable LawsParent may approve in writing, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a5.1(a) of the Company Disclosure ScheduleLetter and (D), in the case of any of the following clauses in this Section 5.1(a), as may be expressly permitted by another of the following clauses in this Section 5.1(a), the Company will not and will not permit its Subsidiaries to:
(i1) except for the Articles Amendment, adopt or propose any change in its certificate articles of incorporation or by-laws or other applicable governing instrumentsinstruments or amend any term of the Company Shares;
(ii2) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the CompanyCompany that are not obligors or guarantors of third-party indebtedness, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesadopt a plan of liquidation;
(iii3) acquire assets outside of the ordinary course Ordinary Course of business Business from any other Person with a value or purchase price in the aggregate in excess of, individually or of $50,000 in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts to the extent in effect immediately prior to the execution of this Agreement and as otherwise set forth in Section 5.1(a)(3) of the Company Disclosure Letter, and other than capital expenditures as permitted by Section 5.1(a)(12);
(4) (x) enter into any material line of business in any geographic area other than the current lines of business of Company or any of its Subsidiaries, and in the geographic areas where they are currently conducted, as of the date hereof or (y) engage in the conduct of any business in any state that would require the receipt or transfer of a Communications License;
(5) file for any License outside of the Ordinary Course of Business;
(6) other than as set forth in Section 5.1(a)(6) of the Company Disclosure Letter and other than the issuance of shares of Common Stock upon exercise of Employee Stock Options or Warrants or conversion of shares of Preferred Stock outstanding as of the date of this Agreement;
(iv) , issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company OptionsSubsidiary), Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(7) other than (i) in connection with receivables facilities and securitizations as in effect on the date hereof and disclosed in the Company Disclosure Letter and renewals thereof in the Ordinary Course of Business, (ii) in connection with the refinancing of Company’s indebtedness under its credit facility as in effect on the date hereof and disclosed in the Company Disclosure Letter, (iii) Liens created or incurred to secure the purchase price of assets acquired as permitted by Section 5.1(a)12) and (iv) Liens described in clause (ii), (iii), (iv), (v) or (vi) of Section 3.8, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) 8) other than pursuant loans and advances to employees of Company or its Subsidiaries in the terms Ordinary Course of Contracts Business and not in effect as excess of the date of this Agreement and provided $10,000 at any time outstanding to Parent prior to the date of this Agreementany employee, make any loans, advances, guarantees advances or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii9) declare, set aside, make aside or pay any dividend or other distribution, payable distribution with respect to Company’s capital stock (whether in cash, stock, stock or property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Companycombination thereof) or enter into redeem, purchase or acquire any agreement with respect to the voting of its capital stock;
(viii10) reclassify, split, combine, subdivide or redeemrepurchase, purchase redeem or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix11) other than (i) in connection with receivables facilities and securitizations as in effect on the date hereof and disclosed in the Company Disclosure Letter and renewals thereof in the Ordinary Course of Business, (ii) in connection with the refinancing of Company’s indebtedness under its credit facility as in effect on the date hereof and disclosed in the Company Disclosure Letter, and (iii) indebtedness incurred to finance the capital expenditures permitted by Section 5.1(a)(12) and guarantees thereof, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x12) except as set forth in for the capital budgets expenditures set forth in Section 6.1(a)(x5.1(a)(12) of the Company Disclosure Schedule Letter and consistent therewithasset acquisitions otherwise permitted by Section 5.1(a)(3) (without giving effect to the exception therein for capital expenditures as permitted by this clause (12)), make or authorize any capital expenditure;
(xi) (A13) enter into any Contract contract or other agreement (x) that would have been a Material Contract as described in Section 3.18 (d), (f) or (g) had it been entered into prior to the date of this Agreement Agreement, (y) other than in the Ordinary Course of Business, that involves annual consideration in excess of $50,000 or (Bz) amendthat involves annual consideration in excess of $250,000 and is not terminable by Company and its Subsidiaries without additional payment or penalty (including by any acceleration of remaining amounts), modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000upon not more than 90 days’ notice;
(xii14) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory by applicable Laws or regulatory except as Company, based upon the advice of its independent auditors after consultation with Parent, determines in good faith is advisable to conform to best accounting rules or interpretations with respect theretopractices;
(A15) settle any litigation or other proceedings before or threatened to be brought before a Governmental Entity except where the settlement is limited solely for an amount to (I) the release of claims and (II) the monetary payment be paid by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, Subsidiaries in excess of $25,000 or that would be reasonably likely to have any adverse impact on the Company consults with Parent prior to the filing or taking operations of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv16) transferother than in the Ordinary Course of Business, (i) amend or modify in any material respect adverse to Company or its Subsidiaries, or terminate or waive any material right or benefit of Company or its Subsidiaries under, any Material Contract, or (ii) cancel, modify or waive any debts or claims held by it or waive any rights;
(17) sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire license or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses assets of Company or interests therein its Subsidiaries except (i) in the Ordinary Course of Business or obsolete assets or (ii) as set forth in Section 5.1(a)(17) of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, Disclosure Letter;
(18) except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than as (x) required pursuant to Contracts existing written, binding agreements in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon Agreement or allow to lapse or expire or as otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Laws, (y) set forth in Section 6.1(a)(xvii5.1(a)(18) of the Company Disclosure ScheduleLetter or (z) the costs and expenses of which will be a Transaction Expense or Severance Amount, (Ai) terminate, enter into, amend into any commitment to provide any severance or renew termination benefits to (or communicate amend any intention to take such actionexisting arrangement with) any Benefit Plandirector, officer or employee of Company or any of its Subsidiaries, other than routine amendments for severance or termination benefits to qualified retirement plans or health and welfare plans employees (other than severance officers) in the Ordinary Course of Business consistent with past practice and pursuant to the terms of plans) that do not increase benefits , programs or result arrangements in materially increased administrative costseffect prior to the date of this Agreement and disclosed on Section 3.18 or 3.25 of the Company Disclosure Letter, (Bii) increase in the benefits payable under any manner the compensation, bonus, pension, welfare, fringe or other benefits, existing severance or termination pay benefit policy or employment agreement (other than as required to be increased pursuant to the existing terms of any such policy or agreement or as a result of the current ordinary pay raises or former directorspromotions), officers(iii) enter into any employment, employees severance, change in control, termination, deferred compensation or consultants other similar agreement (or amend any such existing agreement) with any director, officer or employee of the Company or any of its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect Subsidiaries other than pursuant to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan plan or applicable Lawagreement in effect on the date hereof and disclosed on Section 3.18 or 3.25 of the Company Disclosure Letter, (Giv) establish, adopt, amend or terminate any employee or director compensation or other benefit, employment or severance plan, program or agreement (including Employee Benefit Plans, each, a “Compensation Plan”), except for technical amendments in the Ordinary Course of Business, provided that such amendments do not materially increase the cost of such arrangements to Company, (v) increase the compensation, bonus or other benefits of, make any new awards under any Compensation Plan to, or pay any bonus to any director, officer, employee, consultant or independent contractor of the Company or any of its Subsidiaries, except for increases, new awards or payments in the Ordinary Course of Business for employees who are not officers of Company, (vi) take any action to fund or in any other way secure the payment of any amounts compensation or benefits under any Benefit Compensation Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than except as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities pursuant to the terms thereof as in excess effect as of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in date of this Agreement, (Jvii) take any action to accelerate the vesting or payment of any compensation or benefits under any Compensation Plan, to the extent not already required in any such Compensation Plan, or (viii) enter into any collective bargaining agreement agreements; provided, however, that the prohibitions contained in the foregoing clauses (i) and (v) shall not apply in connection with newly hired or other agreement newly promoted employees, in each case to the extent consistent with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Companypast practice;
(xviii19) subject to Section 6.2, take any action or omit to take any action that is may reasonably likely be expected to prevent, interfere with or delay jeopardize the consummation validity of any of the Merger Communications Licenses or result in the revocation, surrender or any adverse modification of, forfeiture of, or fail to renew under regular terms, any of the conditions Communications Licenses, (b) fail to prosecute with due diligence any pending applications with respect to the Merger set forth in Article VII not being satisfiedCommunications Licenses, including any renewals thereof, and (c) with respect to Communications Licenses, fail to make all material filings and reports and pay all material fees necessary or reasonably appropriate for the continued operation of the Business, as and when such approvals, consents, permits, licenses, filings, or reports or other authorizations are necessary or appropriate or (d) fail to initiate appropriate steps to renew any material Licenses held by Company or any of its Subsidiaries that are scheduled to terminate prior to or within 60 days after the Effective Time or to prosecute any pending applications for any material License; or
(xix20) agree, authorize agree or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not knowingly take or permit any of its Subsidiaries to take any action that is or refrain from taking any action the result of which would be reasonably and foreseeably likely to prevent, interfere with or delay prevent the consummation of the Merger by the Termination Date. Without limiting the generality of the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as Company may approve in writing or result (C) as set forth in Section 5.1(b) of the Parent Disclosure Letter, Parent will not and will not permit its Subsidiaries to:
(1) adopt or propose any material change in Parent’s certificate of incorporation or by laws or other applicable governing instruments or amend any term of the shares of Parent Stock;
(2) merge or consolidate Parent or Merger Sub with any other Person, sell all or substantially all of Parent’s assets or adopt a plan of liquidation of Parent;
(3) enter into or acquire any new line of business that (i) is material to Parent and its Subsidiaries taken as a whole and (ii) is not strategically related to the current business or operations of Parent and its Subsidiaries;
(4) except for shares of Parent Stock issued for fair value in arm’s length transactions and other than the issuance of shares in the ordinary course of business consistent with past practices pursuant to Parent employee benefit plans, issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of Parent or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of Parent to Parent or another wholly owned Subsidiary of Parent), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(5) declare, set aside or pay any dividend or distribution (whether in cash, stock or property or any combination thereof) on any shares of Parent Stock or on any shares of capital stock of any Subsidiary, other than by wholly owned Subsidiaries;
(6) reclassify, split, combine or subdivide, or repurchase, redeem or otherwise acquire at prices above fair market value, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock; or
(7) agree or commit to do any of the conditions to the Merger set forth in Article VII not being satisfiedforegoing.
Appears in 1 contract
Interim Operations. (a) The Except (i) as described in Section 5.1(a) of the Company Disclosure Letter, (ii) as otherwise expressly required or permitted by this Agreement or any other Transaction Document, (iii) as required by applicable Law (including COVID-19 Measures) or (iv) as TSIA shall otherwise consent to in writing (which consent shall not be unreasonably withheld, conditioned or delayed), the Company covenants and agrees as to itself and its Subsidiaries that, after during the period from the date of this Agreement and prior to until the Effective Time and except (A) as otherwise expressly required by Closing or valid termination of this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, shall use commercially reasonable efforts to operate the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets with past practice and to preserve intact its their business organizations intact and maintain existing relations and goodwill with Governmental Entities, all of the Company’s customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees creditors and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. employees.
(b) Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective TimeClosing or valid termination of this Agreement, except (Aw) as described in the corresponding subsection of Section 5.1(b) of the Company Disclosure Letter, (x) as otherwise expressly required or permitted by this AgreementAgreement or any other Transaction Document, (By) as required by applicable Laws, Law (Cincluding COVID-19 Measures) or (z) as Parent may TSIA shall otherwise consent to in writing (such which consent shall not to be unreasonably withheld, delayed conditioned or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Scheduledelayed), the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instrumentsits Subsidiaries’ Organizational Documents;
(ii) merge or consolidate the Company itself or any of its Subsidiaries with any other Person, except for any such transactions among its wholly owned Subsidiaries of the CompanySubsidiaries, or restructure, reorganize reorganize, dissolve or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on substantially all of its assets, operations or businesses;
(iiiA) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess ofof $2,000,000, individually or acquire any business or Person, by merger or consolidation, purchase of substantially all assets or equity interests or by any other manner, in the aggregateeach case, $2,500,000in any transaction or series of related transactions, other than acquisitions or other transactions pursuant to Contracts to which the Company or any of its Subsidiaries are a party that are in effect as of the date of this Agreement, or (B) other than in the ordinary course of business, consistent with past practice, enter into any joint venture or similar long-term business combination with another Person;
(iv) other than pursuant to Contracts to which the Company or any of its Subsidiaries are a party that are in effect as of the date of this Agreement, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its material assets, properties, licenses, operations, rights, product lines, businesses or interests therein, except for (A) sales or other dispositions in the ordinary course of business consistent with past practice and (B) sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $5,000,000 in the aggregate;
(v) except pursuant to awards granted under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee transfer or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) Company), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiariesstock;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from in connection with the net exercise or settlement of awards under the Company Stock Plans;
(Avii) holders declare, set aside, make or pay any dividend or distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or enter into any agreement with respect to the voting of its capital stock;
(viii) make any material loans, advances, guarantees or capital contributions to or investments in any Person (other than the Company Options in full or partial payment any direct or indirect wholly owned Subsidiary of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise Company), other than in the ordinary course of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationbusiness;
(ix) incur any indebtedness for borrowed money or guarantee any such indebtedness Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice, not to exceed $2,000,000 in the aggregate;
(x) except as make or commit to make capital expenditures other than in an amount not in excess of the amount set forth in the capital budgets set forth in on Section 6.1(a)(x5.1(b)(x) of the Company Disclosure Schedule and consistent therewithLetter, make or authorize any capital expenditurein the aggregate;
(xi) (A) enter into any Contract that would have been a Company Material Contract (for the purposes of this Section 5.1(b)(xi), not including the types of Contracts set forth in Sections 3.17(a)(i), 3.17(a)(ii), 3.17(a)(iii), 3.17(a)(iv), 3.17(a)(ix) (other than Contracts of the type described in Section 3.17(a)(ix) pursuant to which an exclusive license of Company Intellectual Property is granted, or any other Contract of the type described in Section 3.17(a)(ix) entered into outside of the ordinary course of business), 3.17(a)(xi) (other than Contracts entered into outside of the ordinary course of business) and 3.17(a)(xiv)) had it been entered into prior to the date of this Agreement or Agreement;
(Bxii) amend, modify modify, fail to renew or terminate any Company Material Contract, or cancel, modify Contract or waive or release any debtsmaterial rights, rights claims or claims thereunder; benefits under any Company Material Contracts (for the purposes of this Section 6.15.1(b)(xii), not including the monetary reference types of Contracts set forth in clause Sections 3.17(a)(i), 3.17(a)(ii), 3.17(a)(iii), 3.17(a)(iv), 3.17(a)(ix) (A) other than Contracts of the definition of Material Contract shall type described in Section 3.17(a)(ix) that are amended, modified, failed to be changed to $5,000,000; the monetary reference in clause (B) renewed or terminated outside of the definition ordinary course of Material Contract shall business), 3.17(a)(xi) (other than Contracts amended, modified, failed to be changed to $2,500,000; the monetary reference in clause (C) renewed or terminated outside of the definition ordinary course of Material Contract shall be changed to $2,500,000; the monetary reference in clause (Dbusiness) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,0003.17(a)(xiv));
(xiixiii) make any material changes with respect to its accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this AgreementGAAP;
(xiv) file settle any Proceeding, except where such settlement is covered by insurance or amend involves only the payment of monetary damages directly from the Company in an amount not more than $1,000,000 in the aggregate;
(xv) Make, revoke or change any material Tax Return except election in the ordinary course of businessa manner inconsistent with past practice, file any material amended Tax Return, adopt or change any material Tax accounting method or period, enter into any agreement with a Governmental Entity with respect to material Taxes, settle or compromise any material Tax liabilityexamination, make, change audit or revoke other action with a Governmental Entity of or relating to any material Taxes or settle or compromise any claim or assessment by a Governmental Entity in respect of material Taxes, or enter into any Tax election except sharing or similar agreement (excluding any commercial contract not primarily related to Taxes), in each case to the extent consistent with past practice or as required by lawsuch action could reasonably be expected to have any adverse impact that is not immaterial on TSIA, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its the Company’s Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of businesstake any action, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) knowingly fail to diligently prosecute take any action, where such action or failure to act could reasonably be expected to prevent the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual PropertyMerger from qualifying for the Intended Tax Treatment;
(xvii) except as required pursuant to make changes that are required by applicable Law or to satisfy contractual obligations existing the terms of any Company Benefit Plan in effect as of the date hereof pursuant to Contracts of this Agreement or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Scheduleas required by Law, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensationcompensation or consulting fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any Company Employee (including executive officers) with an annual salary or wage rate or consulting fees and target annual cash bonus opportunity in excess of $270,000 as of the current date of this Agreement, (B) except in the ordinary course of business, consistent with past practice, become a party to, establish, adopt, amend, commence participation in or former directors, officers, employees terminate any material Company Benefit Plan or consultants of the any arrangement that would have been a Company or its SubsidiariesBenefit Plan had it been entered into prior to this Agreement, (C) pay grant any bonus new awards, or incentive compensation amend or modify the terms of any outstanding awards under the Stock Plans or, except in the ordinary course of business, consistent with past practice, under any Company Benefit Plan in excess of the amount earned based on actual performancePlan, (D) except in the ordinary course of business, consistent with past practice, take any action to accelerate the vesting of or lapsing of restrictions with respect to or payment, or fund or in any equity-based other way secure the payment, of compensation or other long-term incentive compensation benefits under any Company Benefit Plan, (E) grant forgive any new award, amend loans or issue any loans (other than routine travel advances issued in the terms ordinary course of outstanding awards or change the compensation opportunity under business) to any Benefit PlanCompany Employee, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant engage any independent contractor (who is a natural person) with maximum annual salary or wage rate or consulting fees and target annual cash compensation opportunities bonus opportunity in excess of $200,000270,000 or (G) terminate the employment of any executive officer other than for cause;
(xviii) sell, providedassign, that such new hire’s compensation and benefits are made lease, license, pledge, encumber, divest, abandon or otherwise dispose of, allow to lapse or expire, or fail to protect, any material Company Intellectual Property, other than grants of non-exclusive licenses in the ordinary course consistent with past practice and are consistent of business;
(xix) amend or fail to comply with the other requirements set forth Company and its Subsidiaries’ existing privacy and security policies, or alter the operation or security of any IT Assets owned, used or held for use in this Agreementthe operation of the Company and its Subsidiaries businesses, in each case, (JA) in a manner that would be materially less protective of any such IT Assets or any Trade Secrets or Personal Information in the possession or control of the Company or any of its Subsidiaries and (B) other than in the ordinary course of business;
(xx) become a party to, establish, adopt, amend, commence participation in or enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Companyunion Contract;
(xviiixxi) subject fail to Section 6.2use commercially reasonable efforts to keep current and in full force and effect, take or to comply with the requirements of, or to apply for or renew, any action permit, approval, authorization, consent, license, registration or omit to take certificate issued by any action Governmental Entity that is reasonably likely material to prevent, interfere with or delay the consummation conduct of the Merger business of the Company and its Subsidiaries, taken as a whole;
(xxii) file any prospectus supplement or result registration statement or consummate any offering of securities that requires registration under the Securities Act or that includes any actual or contingent commitment to register such securities under the Securities Act in the future;
(xxiii) fail to maintain, cancel or materially change coverage under, in a manner materially detrimental to the Company or any of the conditions its Subsidiaries, any insurance policy maintained with respect to the Merger set forth in Article VII not being satisfiedCompany and its Subsidiaries and their assets and properties;
(xxiv) enter into any material new line of business outside of the business currently conducted by the Company and its Subsidiaries as of the date of this Agreement; or
(xixxxv) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Sources: Merger Agreement (TS Innovation Acquisitions Corp.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after From the date of this Agreement and prior to until the Effective Time and except (A) as otherwise expressly required by or the earlier termination of this Agreement, except (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (Dw) as set forth in Section 6.1(a) of the Company Disclosure ScheduleLetter, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (Ax) as otherwise expressly required contemplated or permitted by this AgreementAgreement (including Section 6.17), (By) as required by applicable Laws, (C) as Parent may consent to the extent consented to in writing by Parent (such which consent shall not to be unreasonably withheld, delayed or conditioned) or (Dz) as required by applicable Law, the Company shall, and shall cause its Subsidiaries to, use reasonable best efforts to cause the business of it and its Subsidiaries to be conducted in the ordinary course of business and it shall, and shall cause its Subsidiaries to, use their respective reasonable best efforts to preserve their business organizations intact and maintain existing relations with Governmental Entities, customers, suppliers, distributors, employees and business associates. Notwithstanding the generality of the foregoing, and subject to the exceptions set forth in Section 6.1(aclause (w), clause (x), clause (y) (it being understood that in the case of the below clauses (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (xii), (xiii), (xiv), (xv), (xvii), (xix), (xx), (xxi), (xxii), (xxiii), (xxiv), (xxv) and, with respect to actions contemplated by such clauses, the below clause (xxvi), Parent’s consent may be withheld for any reason in its sole discretion) and clause (z) of the Company Disclosure Scheduleimmediately preceding sentence, the Company will shall not and will shall not permit its Subsidiaries to:
(i) adopt amend the articles of incorporation, bylaws or propose any change in its certificate comparable governing documents of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries Subsidiaries;
(ii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any business(es) from any other Person in any transaction or series of related transactions, other than acquisitions of inventory, supplies, materials or other assets or products in the ordinary course of business;
(iii) merge or consolidate with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, Person or restructure, reorganize or completely or partially liquidate the Company or otherwise enter into any agreements or arrangements imposing material changes or restrictions on of its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this AgreementSubsidiaries;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, encumber or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee transfer or encumbrance of, any shares of capital stock or securities convertible, exchangeable or exercisable therefor (collectively, “Equity Interests”) of the Company or any of its Subsidiaries (including Restricted Shares or Share Equivalent Units);
(v) declare, set aside, establish a record date for, or pay any dividends on or make any other distributions (whether payable in cash, stock, property or a combination thereof) in respect of any of the capital stock, other than the issuance of shares by a any dividends from any wholly owned Subsidiary of the Company to the Company or to another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company), notwithstanding anything to the contrary in this Agreement or the Company Disclosure Letter;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viiivi) reclassify, split, combine, subdivide or redeemsubdivide, purchase repurchase, redeem or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stockthe Equity Interests, except from for repurchases, redemptions or acquisitions in connection with the vesting or forfeiture of Restricted Shares;
(vii) except as contemplated by the terms of this Agreement, (A) holders of Company Options incur, issue or modify in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under material respect the terms of any Indebtedness for borrowed money (including Indebtedness in respect of capital leases), or assume, prepay (except as required pursuant to the applicable Stock Plans and award agreements terms of any Indebtedness currently outstanding), defease, cancel, acquire, guarantee or endorse, or otherwise become responsible for (whether directly or indirectly, contingently or otherwise), the Indebtedness of any Person, (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its SubsidiariesSubsidiaries or (C) assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person for borrowed money (in each case, for the avoidance of doubt, excluding trade payables, or obligations issued or assumed as consideration for services or property, including inventory), except for inter-company borrowings solely (1) Indebtedness incurred under the Amended and Restated Credit Agreement, dated as of April 28, 2011, by and among the Company and certain of its wholly-owned Subsidiaries Subsidiaries, as borrowers, JPMorgan Chase Bank, N.A., as administrative agent and U.S. collateral agent, JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian administrative agent, J.▇. ▇▇▇▇▇▇ Europe Limited, as European administrative agent and European collateral agent, Citibank, N.A., as syndication agent and Bank of America, N.A., W▇▇▇▇ Fargo Capital Finance, LLC and Suntrust Bank, as documentation agents (the “Revolving Credit Facility”), (2) letters of credit issued pursuant to the Revolving Credit Facility or among otherwise issued in the Company’s wholly-owned ordinary course of business, (3) interest rate, foreign currency and other hedging arrangements on customary commercial terms in the ordinary course of business and (4) Intercompany Indebtedness incurred in the ordinary course of business;
(viii) grant or incur any Lien material to the Company and its Subsidiaries, other than (A) Permitted Encumbrances; (B) pledges or deposits by the Company or any of its Subsidiaries in the ordinary course of business under workmen’s compensation Laws, unemployment insurance Laws or similar Laws; (C) good faith deposits in connection with Contracts (other than for the payment of Indebtedness) to which the Company or one of its Subsidiaries is a party, in each case, in the ordinary course of business; (D) Liens that may be incurred or granted pursuant to or in accordance with the terms of any Indebtedness in effect as of the date hereof, securing any Indebtedness permitted pursuant to Section 6.1(a)(vii) or (E) pursuant to licenses or sublicenses of Intellectual Property granted in the ordinary course of business;
(ix) notwithstanding anything to the contrary elsewhere in this Agreement or the Company Disclosure Letter (other than Section 6.1(a)(ix) of the Company Disclosure Letter), except as required pursuant to agreements and Company Plans in effect prior to the date of this Agreement (and disclosed on the Company Disclosure Letter), or as otherwise required by applicable Law, (A) grant, pay or agree to pay any severance or termination payments or any similar benefits to any current or former director, officer or employee of the Company or any of its Subsidiaries, (B) increase the compensation or bonus (or grant, pay or agree to pay bonuses) to, or modify any bonus arrangements or bonus targets for, any current or former director, officer or employee of the Company or any of its Subsidiaries, (C) increase the welfare benefits of any current or former director, officer or employee of the Company or any of its Subsidiaries, except for across the board changes in welfare benefits for the employee population as a whole in the ordinary course of business consistent with past practice, (D) establish, adopt, terminate or materially amend any Company Plan or materially amend the terms of any Restricted Shares or Share Equivalent Units or amend any of the performance criteria relative to the terms of any Restricted Shares in any respect, or enter into any new, or amend any existing change in control arrangements or retention, retirement or similar agreements with any new, current or former director, officer or employee of the Company or any of its Subsidiaries or increase pension benefits for any such person, (E) accelerate the vesting or payment of or take action to fund, any compensation payable or benefits to become payable or provided to any current or former director, officer or employee of the Company or any of its Subsidiaries, except as otherwise provided in this Agreement, (F) enter into any new, or amend any existing, employment agreements with any new, current or former director, officer or employee of the Company or any of its Subsidiaries except in the case of persons who first become employees after the date of this Agreement and who will not be executive officers of the Company, new employment agreements in the ordinary course of business consistent with past practice and with an annual base salary and incentive compensation opportunity not to exceed $250,000, (G) grant or make any equity awards that may be settled in Shares, preferred shares, or any Equity Interest or any other securities of the Company or any of its Subsidiaries, or the value of which is linked directly or indirectly, in whole or in part, to the price or value of any Shares, preferred shares, Equity Interests or other Company securities or Subsidiary securities or (H) hire or otherwise employ any person that would become an executive officer of the Company or would otherwise be entitled to an annual base salary and incentive compensation opportunity in excess of $250,000;
(x) other than in the ordinary course of business, (A) make or change any material Tax election, (B) change the Company’s or any Subsidiary of the Company’s method of accounting for Tax purposes, (C) file any material amended Tax Return, (D) settle, concede, compromise or abandon any material Tax claim or assessment, (E) surrender any right to a refund of material Taxes or (F) consent to any extension or waiver of the limitation period applicable to any claim or assessment with respect to material Taxes;
(xi) except as set forth required by GAAP, a Governmental Entity or applicable Law, make any material changes to accounting policies or principles;
(xii) make any loans, advances or capital contributions to, or investments in, any Person (including in any joint venture, whether or not now existing), other than (A) to or in the Company or to or in any direct or indirect controlled wholly-owned Subsidiary of the Company, (B) to or in franchise partners, distributors or wholesale customers in the ordinary course of business in an aggregate amount of less than $1,000,000, (C) any loans, advances, capital contributions or investments that are contemplated under the heading “Fixture Spend 2014” in the quarterly capital expenditure budgets set forth in attached to Item 2 of Section 6.1(a)(x6.1(a)(xv) of the Company Disclosure Schedule Letter and consistent therewith(D) loans, make advances, capital contributions or authorize any capital expenditureinvestments in connection with S▇▇▇▇▇ ▇▇▇▇▇▇▇▇ store buildout contributions;
(xixiii) subject in any event to clauses (xxiii), (xxiv) and (xxv) below, (A) enter into any Contract that would have been a Company Material Contract pursuant to subsections (C), (D), (E), (F), (G), (J), (K) or (M) of Section 5.1(q)(i) had it been entered into prior to the date of this Agreement, (B) terminate, materially amend or waive any material rights under (x) any Company Material Contract or any Contract that would have been a Company Material Contract had it been entered into prior to the date of this Agreement Agreement, in each case in a manner materially adverse to the Company and its Subsidiaries, excluding any termination upon expiration of a term in accordance with the terms of such Company Material Contract or (By) amendany Contract set forth in Items 15 through 18, modify or terminate any Material Contractinclusive, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A5.1(q)(i)(G) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause Company Disclosure Letter, (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, waive any material default under, or release, settle or compromise any material Tax liability, make, change claim against the Company or revoke any material Tax election except liability or obligation owing to the extent consistent Company, under any Company Material Contract, (D) enter into any Contract which contains a change in control or similar provision that pursuant to its terms would require a payment to the other party or parties thereto in connection with past practice the Merger or as required by law, the other Transactions (including in combination with any other event or circumstance) or any subsequent change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position in control of the Company or of any of its Subsidiaries, (E) amend or modify the letter of engagements of the Company’s financial advisors in any manner that materially increases the fees or commissions payable by the Company, or increase the fees or commissions payable by the Company to the Company’s financial advisors by reason of any discretionary compensation that might otherwise be awarded by the Company, (F) incur or pay any fees or expenses to any of the Company’s or its Subsidiaries’ legal or accounting service providers other than as set forth in Section 5.1(r) of the Company Disclosure Letter or (G) amend or modify in any material respect or terminate any Material Real Property Lease, or enter into any new lease that would have been a Material Real Property Lease had it been in effect as of the date hereof, in either case, except in the ordinary course of business, or enter into any Contract for the purchase or sale of real property;
(xvxiv) except as set forth on subsection 6.1(a)(xiv) of the Company Disclosure Letter, transfer, sell, lease, license, assign, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire discontinue or otherwise dispose of any entity or assets, licenses, operations, rightsbrands, product lines, operations, rights or businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales in each case either (x) having a current value of Company Products $1 million for all such transactions in the ordinary course of business and sales of obsolete assetsaggregate or (y) involving GRI, B▇▇▇▇ ▇▇▇▇▇▇, R▇▇▇▇▇ ▇▇▇ or R▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ brands, operations and/or businesses and/or any other brands, operations and/or businesses with at least $1 million in annual revenue, other than pursuant to Contracts in effect prior to the date sales of this Agreement;
(xvi) other than inventory, supplies and product in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xviixv) except to make changes that are required for the expenditures contemplated by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on capital budgets set forth in Section 6.1(a)(xvii6.1(a)(xv) of the Company Disclosure ScheduleLetter or for expenditures required by Law or in response to casualty loss or property damage, make or authorize any capital expenditures;
(xvi) without limiting the terms and conditions of Section 6.16, waive, release, settle or compromise any pending or threatened litigation, arbitration, claim (excluding ordinary course disputes with vendors in which no litigation or arbitration commences) or action against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, arbitration, claim or action (A) terminate, enter into, amend where the amount paid in an individual settlement or renew compromise by the Company (and not including any amount paid by the Company’s insurance carriers or communicate any intention to take such actionthird parties) any Benefit Plan, other than routine amendments to qualified retirement plans or health does not exceed the amount set forth in Section 6.1(a)(xvi) of the Company Disclosure Letter and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in that would not impose any manner material restrictions on the compensation, bonus, pension, welfare, fringe business or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants operations of the Company or its Subsidiaries, ; provided that the foregoing clause (CA) pay will not restrict the Company’s ability to settle any bonus or incentive compensation under any Benefit Plan ordinary course claim involving a settlement amount not in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (JSection 6.1(a)(xvi) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the CompanyCompany Disclosure Letter (so long as clause (B) is satisfied);
(xviiixvii) subject to Section 6.2adopt, take enter into a plan of, or consummate, any action complete or omit to take any action that is reasonably likely to preventpartial liquidation, interfere with dissolution, merger, consolidation, restructuring, recapitalization or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees other reorganization of the Company or any of its Subsidiaries pertaining Subsidiaries;
(xviii) fail to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, maintain in full force and effect material insurance policies covering the Company shall provide Parent and its Subsidiaries and their respective properties, assets and businesses in a form and amount consistent with a copy past practice, unless the Company determines in its reasonable commercial judgment that the form or amount of such insurance should be modified;
(xix) (A) close any stores, other than as set forth in the store closure plan attached as Annex 1 to Section 6.1(a) of the intended communication, Parent shall have a reasonable period of time to review and comment on Company Disclosure Letter (the communication (which comments shall not be unreasonably withheld or delayed“Store Closure Plan”), and Parent and (B) with respect to the Company shall cooperate timing of any store closure listed in providing the Store Closure Plan, take any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take action or permit any of its Subsidiaries fail to take any action that is reasonably likely to prevent, interfere with or delay results in a material deviation from the consummation timing of the Merger or result in any of the conditions to the Merger such store closure as set forth in Article VII not being satisfied.the Store Closure Plan, (C) with respect to any store closure listed in the Store Closure Plan, commit to incur (or incur) any lease breakage costs or similar amounts materially in excess of the amount set forth on the Store Closure Plan with respect to such store closure or (D) consolidate or shutdown any distribution or supply chain facility;
(xx) effect or permit any plant closing or layoff of employees that would require notice under the Worker Adjustment and Retraining Notification Act of 1988, as amended, or any similar foreign, state or local law, regulation or ordinance;
(xxi) take,
Appears in 1 contract
Sources: Merger Agreement (Jones Group Inc)
Interim Operations. (a) The Company covenants and agrees Parent, each covenant and agree as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time and except (A) unless Parent or the Company, as applicable, shall otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to approve in writing (such consent approval not to be unreasonably withheld, delayed conditioned or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Scheduledelayed)), the its business of it and its Subsidiaries Subsidiaries’ businesses shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present officers, employees and agents, except as (i) otherwise expressly contemplated or required by this Agreement, (ii) required by applicable Law or (iii) set forth on Section 6.1(a) of the Company Disclosure Letter, as it relates to the Company and its Subsidiaries, or on Section 6.1(a) of the Parent Disclosure Letter, as it relates to Parent and its Subsidiaries. Without limiting the generality of, of and in furtherance of, of the foregoing, from the date of this Agreement until the Effective Time, except as (A) as otherwise expressly contemplated or required by this Agreement, (B) as required by applicable LawsLaw, (C) required by any Benefit Plan or collective bargaining agreement, (D) as Parent may consent to approved in writing by the Company or Parent (as applicable) (such consent approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed, in the case of Parent’s approval, with respect to Section 6.1(a)(iv), (vi), (x), (xi), (xii), (xvi), (xvii), (xiv), (xx) or (Dxxi), and in the case of the Company’s approval, with respect to Section 6.1(a)(iv), (vi), (vii), (x), (xi), (xii), (xix), (xx) as or (xxi)) or (E) set forth in on Section 6.1(a) of the Company Disclosure ScheduleLetter, as it relates to the Company and its Subsidiaries, or on Section 6.1(a) of the Parent Disclosure Letter, as it relates to Parent and its Subsidiaries, each Party, on its own account, will not and will not permit cause its Subsidiaries not to:
(i) adopt or propose any change in amend its certificate or articles of incorporation or by-laws bylaws or comparable governing documents other applicable governing instrumentsthan amendments that solely effect ministerial changes to such documents and that would not adversely affect the consummation of the Merger or the other transactions contemplated by this Agreement;
(ii) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or other equity interests (other than dividends paid by a wholly owned Subsidiary of such Party to such Party or another wholly owned Subsidiary of such Party);
(iii) except for any transactions among or solely involving a Party’s wholly owned Subsidiaries or among wholly owned Subsidiaries of a Party’s Subsidiaries, merge or consolidate the Company itself or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its material assets, operations or businesses;
(iiiiv) acquire assets outside of the ordinary course of business or businesses, whether by merger, consolidation, purchase or otherwise, from any other Person with a fair market value or purchase price price, in the case of the Company, in excess of $2,000,000 individually or $10,000,000 in the aggregate or, in the case of Parent, in excess of, of $6,000,000 individually or $30,000,000 in the aggregate, $2,500,000in any transaction or series of related transactions, other than acquisitions pursuant to Contracts of goods, services and supplies in effect as the ordinary course of the date of this Agreementbusiness;
(ivv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of its capital stock (or equity interests) or of the Company or any of its Subsidiaries (other than the issuance in respect of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes equity-based awards outstanding as of the date of this Agreement) , in each case in accordance with their terms and the plan documents), or securities convertible or exchangeable into or exercisable for any shares of such capital stockstock (or equity interests), or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(vvi) create or incur any Lien material to the Company or any of its Subsidiaries encumbrance on any assets of the Company such Party or any of its Subsidiaries, other than Permitted Liens or encumbrances incurred in connection with the incurrence of Indebtedness to the extent permitted under Section 6.1(a)(x);
(vivii) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than Person, except, in the Company or case of Parent, any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends such transaction not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to 3,000,000 individually or $15,000,000 in the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stockaggregate;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock (or equity interests) or securities convertible or exchangeable into or exercisable for any shares of its capital stockstock (or equity interests), except from other than with respect to (A) holders the capital stock or other equity interests of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise a wholly owned Subsidiary of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or Parent, as applicable, (B) former employeesthe acquisition of shares of Company Common Stock or Parent Ordinary Shares by the Company or Parent, directors respectively, that are tendered by holders of equity-based awards to satisfy the obligations to pay the exercise price or consultants following termination Tax withholding obligations with respect to such awards, and (C) the acquisition by the Company or Parent of their relationship equity-based awards in connection with the Company in accordance with applicable agreements providing for the repurchase forfeiture of shares upon such terminationawards;
(ix) incur sell, transfer, lease, divest or otherwise dispose of, whether by merger, consolidation, sale or otherwise, any indebtedness for borrowed money assets, business or guarantee such indebtedness a division of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security business with a value in the case of the Company Company, in excess of $2,000,000 individually or any $10,000,000 in the aggregate or, in the case of its SubsidiariesParent, except for inter-company borrowings solely among in excess of $6,000,000 individually or $30,000,000 in the Company and its wholly-owned Subsidiaries aggregate, in each case other than sales of inventory or among the Company’s wholly-owned Subsidiaries obsolete equipment in the ordinary course of business consistent with past practice;
(x) incur, assume, guarantee or otherwise become liable for, prepay, redeem or defease any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security), except as set forth for (A) in the capital budgets set forth case of Parent, Indebtedness for borrowed money incurred in the ordinary course of business not to exceed $30,000,000 individually or $50,000,000 in the aggregate, (B) Indebtedness in replacement of existing Indebtedness for borrowed money on terms substantially consistent with or more favorable to Parent than the Indebtedness being replaced, (C) guarantees of Indebtedness of its wholly owned Subsidiaries otherwise incurred in compliance with this Section 6.1(a)(x) or (D) Indebtedness incurred by Parent owed to any of its wholly owned Subsidiaries or by any of Parent’s wholly owned Subsidiaries and owed to Parent or any of its wholly owned Subsidiaries, or by the Company owed to any of its wholly owned Subsidiaries or by any of the Company’s wholly owned Subsidiaries and owed to the Company Disclosure Schedule and consistent therewith, or any of its wholly owned Subsidiaries;
(xi) make or authorize any payment of, or accrual or commitment for, capital expenditures in excess of $12,000,000, in the case of the Company, or $45,000,000, in the case of Parent, except (A) any such expenditure to the extent reasonably necessary to avoid a material business interruption as a result of any act of God, war, terrorism, earthquake, fire, hurricane, storm, flood, civil disturbance, explosion, partial or entire failure of utilities or information technology systems, or any other similar cause not reasonably within the control of such Party or its Subsidiaries, or (B) expenditures that the Company or Parent reasonably determines are necessary to maintain the safety and integrity of any asset or property in response to any unanticipated and subsequently discovered events, occurrences or developments (provided that the Company or Parent, as applicable, will use its reasonable best efforts to consult with the other Party prior to making or agreeing to any such capital expenditure);
(xixii) (A) enter into any Contract or other arrangement (other than any Contract that is expressly permitted or contemplated to be entered into by this Agreement) that would have been a Material Contract had it been entered into prior to this Agreement or Agreement, (B) materially amend, modify modify, supplement, waive, terminate, assign, convey or terminate otherwise transfer, in whole or in part, any Material Contract, or (C) forgive, compromise, cancel, modify or waive any debts, rights debts or claims thereunder; for purposes held by it or waive any rights having in each case of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) a value in excess of, in the case of the definition of Material Contract shall be changed to Company, $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to 1,000,000 individually or $2,500,000; and the monetary reference 5,000,000 in the definition aggregate or, in the case of Personal Property Leases shall be changed to Parent, $2,500,0003,000,000 individually or $15,000,000 in the aggregate;
(xiixiii) enter into or modify any Contract relating to, or otherwise enter into, modify, implement or consummate, a Related Party Transaction;
(xiv) other than in the ordinary course of business, settle any action, suit, claim, hearing, arbitration, investigation or other proceedings for an amount, in the case of the Company, in excess of $1,000,000 individually or $5,000,000 in the aggregate or, in the case of Parent, in excess of $3,000,000 individually or $15,000,000 in the aggregate, or any obligation or liability of it in excess of such amount or on a basis that would result in the imposition of any writ, judgment, decree, settlement, award, injunction or similar order of any Governmental Entity that would restrict in a material respect the future activity or conduct of such Party or any of its Subsidiaries or involve the admission of any criminal liability;
(xv) make any material changes with respect to financial accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company IFRS, as applicable, or any Subsidiary does not exceed $2,000,000 (interpretation thereof, including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or any similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceedingorganization, or (III) Law, including pursuant to this Agreement;
(xiv) file SEC or amend any material Tax Return except in the ordinary course of business, settle AMF rule or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreementpolicy;
(xvi) other than in the ordinary course of business, (A) transfermake, sell, license, mortgage, pledge, encumber, divest, cancel, abandon change or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify revoke any material rights Tax election, adopt or change any material Tax accounting method, file any material amended Tax Return, take any action which would reasonably be expected to cause the Parent to be treated as a “domestic corporation” pursuant to Section 7874(b) of the Code as a result of the Merger, take any action which would reasonably be expected to cause the Company to be treated as an “expatriated entity” within the meaning of Section 7874(a)(2) of the Code as a result of the Merger, settle or compromise any material Tax claim, audit, assessment or dispute for an amount materially in excess of the amount reserved or to Owned Intellectual Property, (C) fail to diligently prosecute the Companyaccrued on such Party’s and its Subsidiaries’ patent applicationsmost recent consolidated balance sheet included in such Party’s Reports, or (D) fail surrender any right to exercise claim a right refund of removal or extension under any a material Owned Intellectual Propertyamount of Taxes;
(xvii) except to make changes that are required by applicable Law other than in accordance with the terms and regular expiration thereof, terminate or to satisfy contractual obligations existing as permit any material Company Permit (in the case of the date hereof pursuant Company) or Parent Permit (in the case of Parent) to Contracts lapse or fail to apply on a timely basis (subject to any cure periods) for any renewal of any renewable material Company Permit (in the case of the Company) or Parent Permit (in the case of Parent);
(xviii) other than on account of changes in the insurance industry generally in the United States or France, make or agree to any material changes to be made to any insurance policies so as to materially affect the insurance coverage of the Party or its Subsidiaries or assets following the Effective Time;
(xix) enter into, terminate, adopt or amend any employment, change in control or severance agreement or any other Benefit Plans which are listed on Section 6.1(a)(xviiPlan or collective bargaining agreement, except for (A) any amendment to any Benefit Plan (excluding employment, change in control, severance or similar agreement with any individual officer, director or employee) that does not increase the cost of such plan or the benefits provided thereunder to such Party or its Subsidiaries, or (B) actions permitted to be taken by clause (xx) below without the consent of the applicable Party;
(xx) in the case of the Company Disclosure Scheduleand its Subsidiaries, (A) terminate, enter into, amend increase or renew change the compensation or benefits payable to any Employees (or communicate any intention to take such action) any Benefit Planother than executive officers), other than routine amendments to qualified retirement plans salary or health and welfare plans wage increases for Employees (other than severance plansexecutive officers) that in the ordinary course of business and consistent with past practice which, in the aggregate, do not increase benefits or result in materially increased administrative costsexceed the previous year’s aggregate compensation for all Employees (other than executive officers) by more than 3%, (B) increase in or change the compensation or benefits payable to any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, Employees who are executive officers, employees or consultants of the Company or its Subsidiaries, (C) pay or grant, or commit to pay or grant any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performancecompensation, (D) grant or accelerate the vesting of or lapsing of restrictions with respect to any equity-based awards or other compensation or other long-term incentive compensation amend or modify the terms of any such outstanding awards, under any Company Benefit Plan, except as provided in this Agreement, (E) grant any new award, amend transaction or retention bonuses or any discretionary bonus (including bonus plans that exist as of the terms of outstanding awards or change the compensation opportunity under any Benefit Plandate hereof), (F) pay any severance annual bonuses or performance bonuses, other than for completed periods based on actual performance through the end of the applicable performance period, or if the Company is contractually obligated to in excess connection with a termination of what is legally required under the terms of any Benefit Plan or applicable Lawemployment, (G) take increase or change the severance terms applicable to any action to fund or secure the payment of any amounts under any Benefit PlanEmployee, (H) change terminate the employment or services of any assumptions used to calculate funding or contribution obligations under any Benefit PlanEmployee that is more senior than a Senior Vice President, other than as required by GAAPfor cause, or (I) hire any executive officer or any employee officer, employee, independent contractor or consultant with maximum who has target annual cash compensation opportunities in excess of greater than $200,000, provided, that such new hire’s compensation and benefits are made ;
(xxi) in the ordinary course consistent with past practice case of the Company and are consistent with the other requirements set forth in this Agreementits Subsidiaries, implement any store closures or mass layoff of employees;
(Jxxii) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment new line of any officer business outside of the Companyexisting businesses of a Party and its Subsidiaries;
(xviiixxiii) subject in the case of Parent, permit Merger Sub to Section 6.2incur any obligation or liability, take engage in any action business or omit to take activity of any action that is reasonably likely to preventtype or kind whatsoever or enter into any agreement or arrangement with any Person, interfere except for obligations incurred in connection with its incorporation, the due diligence investigation of the Company and its Subsidiaries or delay the negotiation and consummation of this Agreement and the Merger transactions contemplated hereby and thereby; or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xixxxiv) agree, authorize or commit to do any of the foregoing.foregoing actions prohibited by clauses (i) through (xxiii) of this
(b) Prior to making any formal written communications or group oral presentations to From the directors, officers or employees date of this Agreement until the earlier of the Company or any Effective Time and the termination of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this AgreementAgreement in accordance with Article VIII, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its their respective Subsidiaries to take or agree to take any action that is would reasonably likely be expected to prevent, interfere with materially impair or materially delay the consummation of the Merger Merger.
(c) Nothing contained in this Agreement shall give Parent or result the Company, directly or indirectly, the right to control or direct the other Party’s operations prior to the Effective Time. Prior to the Effective Time, each Party will exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations. Nothing in this Agreement, including any of the conditions to the Merger actions, rights or restrictions set forth in Article VII not being satisfiedthis Agreement, will be interpreted in such a way as to require compliance by any Party if such compliance would result in the violation of any rule, regulation or policy of any federal, state, provincial, local or foreign court or Governmental Entity with jurisdiction over enforcement of any Antitrust Laws (any such Governmental Entity, a “Governmental Antitrust Entity”) or applicable Law.
Appears in 1 contract
Sources: Merger Agreement
Interim Operations. (a) The Except (i) as described in Section 5.1(a) of the Company Disclosure Letter, (ii) as otherwise expressly required or permitted by this Agreement or any other Transaction Document, including for the avoidance of doubt, the steps reasonably required to consummate the Company Reorganization, (iii) as required by or reasonably responsive to applicable Law (including COVID-19 Measures) or any Governmental Entity, or (iv) as SVF shall otherwise consent to in writing (which consent shall not be unreasonably withheld, conditioned or delayed), the Company covenants and agrees as to itself and its Subsidiaries that, after during the period from the date of this Agreement and prior to until the Effective Time and except (A) as otherwise expressly required by Closing or valid termination of this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, shall use its reasonable best efforts to operate the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets with past practice and to preserve intact its their business organizations intact and maintain existing relations and goodwill with Governmental Entities, all of the Company’s key customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributorscreditors and employees; provided, creditorshowever, lessors, employees and other business associates and keep available that no action taken or failed to be taken by the services Company or any of its and its Subsidiaries’ present employees and agents. Subsidiaries with respect to the matters specifically addressed by clauses (i) through (xx) of Section 5.1(b) shall be deemed a breach of this Section 5.1(a) unless such action would constitute a breach of such clauses (i) through (xx).
(b) Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective TimeClosing or valid termination of this Agreement, except (Aw) as described in the corresponding subsection of Section 5.1(b) of the Company Disclosure Letter, (x) as otherwise expressly required or permitted by this AgreementAgreement or any other Transaction Document, including, for the avoidance of doubt, the Company Reorganization, (By) as required by or reasonably responsive to applicable Laws, Law (Cincluding COVID-19 Measures) or any Governmental Entity or (z) as Parent may SVF shall otherwise consent to in writing (such which consent shall not to be unreasonably withheld, delayed conditioned or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Scheduledelayed), the Company will shall not and will shall not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instrumentsits Subsidiaries’ Organizational Documents;
(ii) merge or consolidate the Company itself or any of its Subsidiaries with any other Person, except for any such transactions solely between or among wholly owned Subsidiaries the Company and/or any of the Companyits Wholly Owned Subsidiaries, or restructure, reorganize reorganize, dissolve or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on substantially all of its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess ofof $2,000,000 or acquire any business or Person, individually by merger or consolidation, purchase of substantially all assets or equity interests or by any other manner, in the aggregateeach case, $2,500,000in any transaction or a series of related transactions, or enter into any joint venture or similar long-term business combination with another Person, other than acquisitions or other transactions pursuant to Contracts to which the Company or any of its Subsidiaries are a party that are in effect as of the date of this AgreementAgreement or entered into thereafter consistent with the terms hereof;
(iv) other than pursuant to Contracts to which the Company or any of its Subsidiaries are a party that are in effect as of the date of this Agreement or entered into thereafter consistent with the terms hereof, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its material assets, properties, licenses, operations, rights, product lines, businesses or interests therein, except for (A) transfers, sales, licenses or other dispositions in the ordinary course of business consistent with past practice and (B) sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $5,000,000 in the aggregate;
(v) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee transfer or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Wholly Owned Subsidiary of the Company to the Company or another wholly owned Wholly Owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) Company), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiariesstock;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(vii) declare, except from set aside, make or pay any dividend or distribution (Aother than any Tax Distribution, as defined by the Company LLC Agreement), payable in cash, stock, property or otherwise, with respect to any of its capital stock, or enter into any agreement with respect to the voting of its capital stock;
(viii) holders of make any material loans, advances, guarantees or capital contributions to or investments in any Person (other than the Company Options in full or partial payment any Wholly Owned Subsidiary of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise Company), other than in the ordinary course of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationbusiness;
(ix) incur any indebtedness for borrowed money or guarantee any such indebtedness Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice, not to exceed $2,000,000 in the aggregate;
(x) except as set forth make or commit to make capital expenditures other than in an amount not in excess of the capital budgets amount set forth in Section 6.1(a)(x5.1(b)(x) of the Company Disclosure Schedule and consistent therewithLetter, make except for any such expenditures (A) to the extent reasonably necessary to avoid a material business interruption as a result of any act of God, war, terrorism, earthquake, fire, hurricane, storm, flood, civil disturbance, explosion, partial or authorize entire failure of utilities or information technology systems, or any capital expenditureother similar cause not reasonably within the control of the Company or its Subsidiaries or (B) not in excess of $5,000,000 in the aggregate during any consecutive twelve-month period;
(xi) (A) other than with respect to Contracts with a supplier or customer of the Company or otherwise in the ordinary course of business, enter into any Contract that would have been a Company Material Contract had it been entered into prior to the date of this Agreement Agreement; provided that the Company will reasonably consult with SVF before entering into any such Contract with any supplier or (B) amend, modify customer of the Company if the contemplated counterparty to such Contract is not a current supplier or terminate any Material Contractcustomer, or cancelan Affiliate of a current supplier or customer, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000Company;
(xii) amend, modify, fail to renew or terminate any Company Material Contract or waive or release any material rights, claims or benefits under any Company Material Contracts, other than expirations or non-renewals of any such Contract in the ordinary course of business;
(xiii) make any material changes with respect to its accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this AgreementGAAP;
(xiv) file other than with respect to any Proceeding in connection with, arising out of or amend otherwise related to a dispute among the Parties in connection with this Agreement or any material Tax Return of the Transaction Documents, settle any Proceeding, except where such settlement is covered by insurance or involves only the payment of monetary damages directly from the Company in an amount not more than $1,000,000 in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiariesaggregate;
(xv) transfermake any material Tax election in a manner inconsistent with past practice or revoke or change any material Tax election; file any material amended Tax Return; adopt or change any material Tax accounting method or period; enter into any agreement with a Taxing authority with respect to material Taxes; settle or compromise any examination, sellaudit or other action with a Taxing authority of or relating to any material Taxes; extend, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon waive or allow consent to lapse any extension or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein waiver of the Company limitation period applicable to any claim or its Subsidiaries, including capital stock assessment in respect of material Taxes; surrender any right to claim a refund in respect of its Subsidiaries, except sales material Taxes; or enter into any “closing agreement” as described in Section 7121 of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this AgreementCode (or any similar Law) with any Taxing authority;
(xvi) other than except as required pursuant to the terms of any Company Benefit Plan as in effect on the ordinary course date of businessthis Agreement or as required by Law, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensationcompensation or consulting fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any Company Employee (including executive officers) with an annual salary or wage rate or consulting fees and target annual cash bonus opportunity in excess of $300,000 as of the current date of this Agreement, (B) except in the ordinary course of business, consistent with past practice, become a party to, establish, adopt, amend, commence participation in or former directors, officers, employees terminate any material Company Benefit Plan or consultants of the any arrangement that would have been a Company or its SubsidiariesBenefit Plan had it been entered into prior to this Agreement, (C) pay grant any bonus new awards, or incentive compensation amend or modify the terms of any outstanding awards or, except in the ordinary course of business, consistent with past practice, under any Company Benefit Plan in excess of the amount earned based on actual performancePlan, (D) take any action to accelerate the vesting of or lapsing of restrictions with respect to or payment, or fund or in any equity-based other way secure the payment, of compensation or other long-term incentive compensation benefits under any Company Benefit Plan, (E) grant forgive any new award, amend loans or issue any loans (other than routine travel advances issued in the terms ordinary course of outstanding awards or change the compensation opportunity under business) to any Benefit PlanCompany Employee, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant engage any independent contractor (who is a natural person) with maximum annual salary or wage rate or consulting fees and target annual cash compensation opportunities bonus opportunity in excess of $200,000300,000 or (G) terminate the employment of any executive officer other than for cause;
(xvii) sell, providedassign, that such new hire’s compensation and benefits are made lease, license, pledge, encumber, divest, abandon or otherwise dispose of, allow to lapse or expire, or fail to protect, any material Company Intellectual Property, other than grants of non-exclusive licenses in the ordinary course consistent with past practice and are consistent with the other requirements set forth of business;
(xviii) become a party to, establish, adopt, amend, commence participation in this Agreement, (J) or enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Companyunion Contract;
(xviiixix) subject to Section 6.2, take enter into any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation material new line of business outside of the Merger or result in any business currently conducted by the Company and its Subsidiaries as of the conditions to the Merger set forth in Article VII not being satisfieddate of this Agreement; or
(xixxx) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after From the date of this Agreement and prior to until the Effective Time and or the earlier termination of this Agreement, except (Aw) as otherwise set forth in Section 5.1(a) of the Company Disclosure Letter, (x) as expressly required contemplated by this Agreement, (By) as required by applicable Laws, (C) as Parent may consent to the extent consented to in writing by Parent (such consent which consent, in the cases of the matters set forth in subclauses (ii), (ix), (xi), (xiii), (xvi), (xix) and (xx) (solely in respect of agreements, authorizations or commitments in respect of the immediately foregoing subclauses) below shall not to be unreasonably withheld, delayed or conditioned, and, in all other cases, shall be in Parent’s sole discretion) or (Dz) as set forth in Section 6.1(a) of required by applicable Law, the Company Disclosure Scheduleshall, the business and shall cause each of it and its Subsidiaries shall be conducted in the ordinary and usual course andto, to the extent consistent therewith, it and conduct its Subsidiaries shall use their respective reasonable best efforts to protect and preserve operations in all material respects in the ordinary course of business and it shall, and shall cause each of its assets and Subsidiaries to, use its respective commercially reasonable efforts to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partnerssuppliers, manufacturers, suppliers, distributors, creditors, lessors, employees distributors and other business associates and keep available the services of its and its Subsidiaries’ present employees and agentspartners. Without limiting Notwithstanding the generality of, and in furtherance of, of the foregoing, from but subject to the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as exceptions set forth in Section 6.1(aclauses (w), (x), (y) and (z) of the Company Disclosure Scheduleimmediately preceding sentence, the Company will shall not and will shall not permit any of its Subsidiaries to:
(i) adopt or propose any change in amend its certificate of incorporation incorporation, bylaws or by-laws or other applicable comparable governing instrumentsdocuments;
(ii) merge acquire (by merger, consolidation, acquisition of stock or consolidate the Company assets or otherwise) any corporation, partnership or other business organization or any of its Subsidiaries with any other Personproperty, except for any such transactions among wholly owned Subsidiaries of the Company, rights or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess offor consideration that exceeds, individually or in the aggregate, $2,500,0001.0 million from any other Person in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement that have been made available to Parent prior to the date of this Agreement;
(iii) except for (A) advances of expenses and trade credit, in each case in the ordinary course of business, (B) in connection with any Transaction Litigation or (C) in a manner consistent with the Company’s indemnification obligations set forth in its certificate of incorporation or bylaws, make any loans, advances or capital contributions to, or investments in, any other Person (other than any wholly owned Subsidiary of the Company);
(iv) make, authorize or incur any capital expenditure in excess of the amounts set forth in Section 5.1(a)(iv) of the Company Disclosure Letter;
(v) merge or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries (other than with respect to any merger or consolidation among the Company and any wholly owned Subsidiary of the Company or among wholly owned Subsidiaries of the Company);
(vi) issue, sell, pledge, dispose of, grant, transfer, encumber, encumber or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee transfer or encumbrance of, any shares of capital stock Equity Interests of the Company or any of its Subsidiaries Subsidiaries, except issuances or dispositions of (A) Shares in respect of Stock Options, Stock Appreciation Rights and RSUs outstanding on the date of this Agreement under the Company Plans or (B) Shares or options or rights to acquire Shares in connection with grants or awards of stock based compensation made in accordance with Section 5.1(a)(xii) hereof;
(vii) declare, set aside, establish a record date for, or pay any dividends on or make any other distributions (whether payable in cash, stock, property or a combination thereof) in respect of any of the capital stock, other than the issuance of shares by a any dividends from any wholly owned Subsidiary of the Company to the Company or to another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeemsubdivide, purchase repurchase, redeem or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stockthe Equity Interests, except from (A) holders of Company Options for repurchases, redemptions or acquisitions in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship connection with the exercise, vesting, settlement or forfeiture of Stock Options, Stock Appreciation Rights and RSUs under Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationPlans;
(ix) except in connection with the repayment of the Credit Facility at or prior to the Closing or any voluntary repayment of borrowings under the Credit Facility, (A) incur or issue any indebtedness Indebtedness for borrowed money money, or assume, voluntarily prepay, defease, cancel, acquire, guarantee such indebtedness or endorse, or otherwise become responsible for (whether directly or indirectly, contingently or otherwise), the Indebtedness of another any Person, or (B) issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its SubsidiariesSubsidiaries or (C) assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person for borrowed money (in each case, for the avoidance of doubt, excluding trade payables, capitalized lease obligations, or obligations issued or assumed as consideration for services or property, including inventory), except for inter-company borrowings solely among (1) Indebtedness incurred under the Company Credit Agreement, dated as of May 5, 2015, by and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in , certain of its Subsidiaries, as borrowers, Bank of America, N.A., as agent for the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; lenders and the monetary reference in other lenders, guarantors and agents party thereto (the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills“Credit Facility”), (II2) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment letters of a valuable aspect of its business, provided, that the Company consults with Parent prior credit issued pursuant to the filing Credit Facility or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except otherwise issued in the ordinary course of business, settle (3) interest rate, foreign currency and other hedging arrangements on customary commercial terms entered into in the ordinary course of business and (4) Intercompany Indebtedness incurred in the ordinary course of business;
(x) grant or compromise incur any material Tax liabilityLien, makeother than (A) Permitted Encumbrances; (B) pledges or deposits by the Company or any of its Subsidiaries in the ordinary course of business under workmen’s compensation Laws, change unemployment insurance Laws or revoke similar Laws; (C) good faith deposits in connection with Contracts (other than for the payment of Indebtedness) to which the Company or one of its Subsidiaries is a party, in each case, in the ordinary course of business; (D) Liens that may be incurred or granted pursuant to or in accordance with the terms of any material Tax election except Indebtedness in effect as of the date hereof, securing any Indebtedness permitted pursuant to Section 5.1(a)(ix), or (E) pursuant to licenses or sublicenses of Intellectual Property granted in the ordinary course of business;
(xi) engage in any transaction, or series of similar transactions, agreements, arrangements or understandings, that is of a type that would be required to be disclosed in the Company SEC Documents pursuant to Item 404 of Regulation S-K, other than (A) as permitted pursuant to Sections 5.1(a)(xii) or 5.9, or (B) in the ordinary course of business and on terms, taken as a whole, no less favorable to the extent Company than terms that could have been obtained from an unaffiliated third party;
(xii) except as required pursuant to the existing terms of any Company Plan, Employment Agreement or another agreement in effect prior to the date of this Agreement, or as required by applicable Law, (A) grant, pay or agree to pay any severance or termination payments or any benefits to any current or former director or officer of the Company or any of its Subsidiaries, except in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice and consistent with the Company’s existing severance plans and policies, (B) increase the compensation or bonus (or grant, pay or agree to pay bonuses) or other benefits to any current or former director, officer or employee of the Company or any of its Subsidiaries, except in the case of employees who are not executive officers of the Company, immaterial increases in compensation in the ordinary course of business consistent with past practice, (C) increase pensions or welfare benefits of any current or former director, officer or employee of the Company or any of its Subsidiaries, (D) establish, adopt, terminate or materially amend any Company Plan or Employment Agreement, or enter into any new, or amend any existing, change in control arrangements or retention, retirement or similar agreements with any new, current or former director, officer or employee of the Company or any of its Subsidiaries, (E) waive or materially amend any performance or vesting criteria or accelerate the vesting or payment of, or take action to fund, any compensation payable or benefits payable or provided to any current or former director, officer or employee of the Company or any of its Subsidiaries, except as required expressly provided in this Agreement, (F) enter into any new, or amend any existing, employment agreements with any new, current or former director, officer or employee of the Company or any of its Subsidiaries except in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice and with an annual base salary and incentive compensation opportunity not to exceed $200,000, (G) terminate any executive officer other than for cause or for performance reasons (in each case, as reasonably determined by lawthe Company) (in which case the Company shall promptly notify Parent) or hire or promote any executive officer, or (H) grant or make any equity awards that may be settled in Shares, preferred shares, or any Equity Interest or any other securities of the Company or any of its Subsidiaries, or the value of which is linked directly or indirectly, in whole or in part, to the price or value of any Shares, preferred shares, Equity Interests or other Company securities or Subsidiary securities;
(xiii) other than in the ordinary course of business (A) make or change any material Tax election, (B) change the Company’s or any of its Subsidiaries’ method of accounting for Tax accountingpurposes, (C) file any amended Tax Return that would result in a material change in Tax liability, taxable income or loss, (D) settle, concede, compromise or abandon any material Tax claim or assessment, (E) surrender any right to a refund of material Taxes or (F) consent to any extension or waiver of the limitation period applicable to any claim or assessment with respect to material Taxes;
(xiv) except as required by lawGAAP, a Governmental Entity or take applicable Law, make any action which would materially adversely affect the Tax position of the Company material changes to accounting policies or of any of its Subsidiariesprinciples;
(xv) transfer, sell, lease, license, assign, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire divest or otherwise dispose of any entity or assets, licenses, operations, rights, product lines, rights or businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its SubsidiariesSubsidiaries having a value in excess of $1.0 million in the aggregate, except sales of Company Products other than (A) machinery, equipment, inventory, supplies, materials and other assets (including, without limitation, Intellectual Property) in the ordinary course of business and sales of obsolete assetsbusiness, other than (B) pursuant to Contracts in effect prior to the date of this AgreementAgreement that have been made available to Parent prior to the date of this Agreement or (C) pursuant to the Contracts listed in Section 5.1(a)(xv) of the Company Disclosure Letter;
(xvi) other than in the ordinary course of businessenter into, (A) materially amend or modify, transfer, sellassign, license, mortgageencumber or terminate, pledgeor waive any material term under, encumber, divest, cancel, abandon any Company Material Contract or allow Material Real Property Lease or any Contract that would constitute a Company Material Contract or Material Real Property Lease if entered into prior to lapse the date hereof (other than the expiration or expire or otherwise dispose renewal of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required of the foregoing Contracts in the diligent prosecution of Owned Intellectual Propertyaccordance with its terms), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans in accordance with Section 5.17, waive, release, settle or health and welfare plans compromise any pending or threatened litigation, arbitration, claim (other than severance plansexcluding ordinary course disputes with vendors in which no litigation or arbitration commences) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of action against the Company or any of its SubsidiariesSubsidiaries other than settlements or compromises of any litigation, (C) pay any bonus arbitration, claim or incentive compensation under any Benefit Plan in excess of action where the amount earned based on actual performance, paid in an individual settlement or compromise by the Company (D) accelerate the vesting of or lapsing of restrictions with respect to and not including any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required amount paid by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company’s insurance carriers or third parties) does not exceed $500,000;
(xviii) subject to Section 6.2enter into or amend any agreement or arrangement with any broker or finder in connection with the Merger Transactions;
(xix) adopt a budget of the Company for the fiscal year ending December 31, take any action or omit to take any action 2016 that is reasonably likely different from the draft 2016 budget that the Company has made available to preventParent, interfere with or delay the consummation of the Merger or result in make any of the conditions to the Merger set forth in Article VII not being satisfiedamendment thereto; or
(xixxx) agree, authorize or commit to do any of the foregoing.
foregoing actions or enter into any letter of intent (bbinding or non-binding) Prior or similar agreement or arrangement with respect to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedforegoing.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries thatExcept (x) for the operations covered by the AFEs described in Exhibit 4.1(h), after the date of this Agreement and prior to operations set forth in the Effective Time and except (A) as otherwise expressly required by this Side Letter Agreement, or such operations required pursuant to any Applicable Contract, applicable Law or Lease, (By) as required by applicable Lawsin the event of an emergency to protect life, property or the environment, and (Cz) as Parent may consent expressly contemplated by this Agreement or as expressly consented to in writing by Buyer (such which consent shall not to be unreasonably withhelddelayed, delayed withheld or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule), the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoingSeller shall, from and after the date of this Agreement Execution Date until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries toClosing:
(i) adopt as to Properties operated by CPX or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate Affiliates, continue the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries operation of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except Properties in the ordinary course of business, settle or, as to Properties where CPX or compromise any material Tax liabilityan Affiliate of CPX is not the operator, makecontinue its actions as a non-operator in the ordinary course of business;
(ii) subject to interruptions resulting from force majeure, change mechanical breakdown and planned maintenance, in each case, operate the Properties in compliance with all applicable Laws and the terms of all Leases and Applicable Contracts;
(iii) maintain, or revoke any material Tax election except cause to be maintained, the books of account and Records relating to the Properties in the usual, regular and ordinary manner and in accordance with the usual accounting practices of Seller; and
(iv) to the extent consistent with past practice Seller has Knowledge thereof, use commercially reasonable efforts to timely inform Buyer of all matters it considers in good faith to be material developments affecting any of the Properties.
(b) Except (x) for the operations covered by the AFEs described in Exhibit 4.1(h), the operations set forth in the Side Letter Agreement, or such operations required pursuant to any Applicable Contract, applicable Law or Lease, (y) as required in the event of an emergency to protect life, property or the environment, and (z) as expressly contemplated by this Agreement or as required expressly consented to in writing by lawBuyer (which consent shall not be unreasonably delayed, change any material method of Tax accountingwithheld or conditioned), except as required by lawSeller shall not, or take any action which would materially adversely affect from and after the Tax position of the Company or of any of its Subsidiaries;Execution Date until Closing:
(xvi) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire sell or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein portion of the Company Properties except for sales or its Subsidiaries, including capital stock other dispositions of any of its Subsidiaries, except sales of Company Products (1) Hydrocarbons in the ordinary course of business after production, or (2) equipment and sales other personal property or fixtures in the ordinary course of obsolete assetsbusiness where the same has become obsolete, other than pursuant to Contracts in effect prior to is otherwise no longer necessary for the date operation of this Agreementthe Properties, or is replaced by an item or items of at least equal suitability;
(xviii) affirmatively terminate any Material Contract or materially amend or change the terms of any Material Contract;
(iii) enter into an agreement that, if in existence on the Execution Date would be a Material Contract;
(iv) affirmatively release, terminate or materially amend any Lease, Easement, permit or license;
(v) incur any indebtedness or take or fail to take any action that would cause a lien or encumbrance to arise or exist on the Properties or otherwise allow a lien (other than Permitted Encumbrances) to attach to or encumber the Properties or any portion thereof;
(vi) grant or create any Preferential Right, transfer restriction or similar right, obligation, or requirement with respect to the Properties; and
(vii) except for the commitments set forth in Exhibit 4.1(h), all of which are deemed to be approved, approve or propose any operations on the Properties anticipated to cost the owner of the Properties more than $50,000 per operation or activity net to Seller’s or any of its Affiliate’s interest.
(c) Buyer acknowledges that Seller is currently, and from the date hereof will continue to, conduct certain operations required in order to perpetuate the Leases and extend its rights under the Farmout Agreement and, notwithstanding anything in this Section 6.3, but subject to Section 6.3(d) to the contrary, all activities and actions of Seller taken in connection therewith are deemed authorized by Buyer, without further consultation, and regardless of whether such activities and actions are in the ordinary course of business, .
(Ad) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose With the exception of any Intellectual Property Rights, (Bthe operations and activities set forth on Exhibit 4.1(h) grant, extend, amend or abandon (except as required and the operations and activities set forth in the diligent prosecution Side Letter Agreement, which shall be deemed authorized by Buyer without further consultation, should Seller receive (or desire to make) any proposals to drill additional ▇▇▇▇▇ on the Oil and Gas Properties, or to conduct other operations which require consent of Owned Intellectual Propertynon-operators under an applicable operating agreement, Seller will notify Buyer of, and consult with Buyer concerning, such proposals, provided that in the event Seller and Buyer cannot come to an agreement on any such proposal, any decisions with respect to such proposal shall be made by Seller in its sole discretion. From and after the Effective Date, any proposed activities other than those set forth on Exhibit 4.1(h) or in the Side Letter Agreement shall be subject to Buyer’s prior written consent. The Parties hereby recognize that the current ownership and operation of the Properties may include Seller electing not to participate (i.e., non-consent status) in ▇▇▇▇▇ drilled pursuant to an operating agreement, joint exploration agreement or spacing order relating to the Properties and that Seller may continue to make consistent elections for such Properties, provided, however, Seller will provide Buyer with notice of such election. For the avoidance of doubt, subject to the Side Letter Agreement and notwithstanding anything in this Agreement to the contrary, in no event shall Seller be required to drill or complete any ▇▇▇▇▇ prior to Closing. The Buyer shall be permitted to undertake the activities on the Oil and Gas Properties in accordance with and subject to the terms of the Side Letter Agreement.
(e) Without expanding any obligations which Seller may have to Buyer, it is expressly agreed that Seller shall never have any liability to Buyer with respect to its operation of a Property greater than that which it might have as the operator to a non-operator under the applicable operating agreement (or, in the absence of such an agreement, under the AAPL 610 (1989 Revision) form Operating Agreement), waive IT BEING RECOGNIZED THAT, UNDER SUCH AGREEMENTS AND SUCH FORM, SELLER IS NOT RESPONSIBLE FOR ITS OWN NEGLIGENCE, AND HAS NO RESPONSIBILITY OTHER THAN FOR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
(f) Promptly following the execution of this Agreement, Buyer shall use its commercially reasonable efforts to secure the fracing and completion services of ▇▇▇▇ Energy Services with respect to the following four uncompleted ▇▇▇▇▇ located in ▇▇▇▇▇▇ County, Texas: Durham ▇▇▇▇▇ Fuente #212HU (API # 389-35440) to be scheduled on or modify about June 1, 2017; Durham ▇▇▇▇▇ Fuente #214HU (API # 389-35464) to be scheduled on or about June 25, 2017; Durham ▇▇▇▇▇ Fuente #207HL (API # 389-35563) to be scheduled on or about July 10, 2017; and Durham ▇▇▇▇▇ Fuente #209HL (API # 389-35431) to be scheduled on or about August 14, 2017. The scheduled dates set forth above are estimates only and are subject to the availability of ▇▇▇▇ Energy Services. In the event (i) the Closing has not occurred prior to five Business Days before any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applicationsscheduled service, or (Dii) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof this Agreement is terminated pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule8.3, (A) terminate, enter into, amend or renew (or communicate any intention Buyer shall use its commercially reasonable efforts to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health assign and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or transfer its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions rights with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plansuch scheduled services to Seller. Further, (E) grant any new awardin the event of such transfer, amend Buyer agrees to pay to Seller the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms amount of any Benefit Plan or applicable Lawcosts associated with such scheduled services above Seller’s current negotiated rate with C&J Energy Services, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, provided that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in event of a transfer pursuant to clause (i) above, no such payment shall be required unless this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject Agreement is terminated prior to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize or commit to do any of the foregoingClosing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees the Shareholder agree (except as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time and except (A) as otherwise expressly required contemplated by this Agreement, (B) as required by applicable Lawsincluding any Exhibits and Schedules hereto, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it that Purchaser shall otherwise consent in writing) that as to the Company:
(1) The Company shall carry on the Business in the Ordinary Course of Business and its Subsidiaries shall use their respective all commercially reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its present business organizations and maintain existing relations and goodwill with Governmental Entitiesorganization, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its present officers and its Subsidiaries’ present employees and agents. Without limiting the generality ofpreserve its relationships with customers, suppliers and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instrumentsothers having business dealings with it;
(ii2) merge or consolidate the The Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
shall not and shall not propose to: (iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(viia) declare, set aside, make aside or pay any dividend dividend, on, or make other distributiondistributions in respect of, payable in cash, stock, property or otherwise, with respect to any of its capital stock (stock, except for (A) dividends paid by any direct or indirect wholly owned Subsidiary those S corporation distributions necessary to cover applicable pass-through taxes on the Company's net income in 2002 prior to the Company Closing, or to purchase or redeem any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting shares of its capital stock;
; (viiib) reclassify, split, combine, subdivide combine or redeem, purchase or otherwise acquire, directly or indirectly, reclassify any of its capital stock or issue, authorize or propose the issuance of any other securities convertible in respect of, in lieu of or exchangeable into in substitution for shares of its capital stock; (c) redeem, repurchase or exercisable for otherwise acquire any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements ; or (Bd) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationotherwise change its capitalization;
(ix3) Except as contemplated by this Agreement, the Company shall not sell, issue, pledge, authorize or propose the sale or issuance of, pledge or purchase or propose the purchase of, any shares of its capital stock of any class or securities convertible into, or rights, warrants or options to acquire, any such shares or other convertible securities;
(4) The Company shall not amend its certificate of incorporation or its bylaws;
(5) The Company shall not sell, lease, pledge, encumber or otherwise dispose of or agree to sell, lease, pledge, encumber or otherwise dispose of, any of its assets that are material or any other assets except in the Ordinary Course of Business and in no event amounting in the aggregate to more than $25,000;
(6) The Company shall not incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or guarantee any debt securities of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries others other than in the ordinary course of business consistent with prior practice and in no event amounting in the aggregate to more than $25,000;
(7) The Company shall not make any capital expenditures in excess of $25,000 individually or $100,000 in the aggregate without the Purchaser's prior written consent;
(8) The Company shall maintain the levels of inventory, materials and supplies used in the business of the Company consistent with past practice;
(x9) except as set forth The Company shall not accelerate the collection of its accounts receivable or delay the payment of its accounts payable or other liabilities, in each case arising out of the capital budgets set forth in Section 6.1(a)(x) operation of the business of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditurein a manner which would be inconsistent with past practice;
(xi10) The Company shall not adopt or amend in any material respect any collective bargaining agreement or Employee Benefit Plan;
(A11) The Company shall not grant to any employees any increase in compensation or in severance or termination pay, or enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate employment agreement with any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000employee;
(xii12) The Company shall not acquire (by merger, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or subdivision thereof, or make any investment by either purchase of stock or securities, contributions to capital, property transfer or, except in the Ordinary Course of Business, purchase of any property or assets, of any other individual or entity;
(13) The Company shall not make any material changes with respect to accounting policies Tax election or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv14) transferThe Company shall not waive, sellrelease, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon grant or allow to lapse transfer any rights of material value or expire modify or otherwise dispose of change in any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of material respect any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) Material Contract other than in the ordinary course Ordinary Course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual PropertyBusiness;
(xvii15) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the The Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do shall not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund action, or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit fail to take any action action, that is not in the Ordinary Course of Business or that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to representations and warranties of the Merger Company and the Shareholders set forth in Article VII not being satisfied; orthis Agreement becoming untrue in any material respect;
(xix16) agree, authorize or commit The Company shall maintain in full force and effect all insurance coverages for its properties and assets substantially comparable to do any coverages existing on the date hereof;
(17) Within (i) forty five (45) days of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to close of each month after the directors, officers or employees execution of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent make available to the Purchaser a preliminary balance sheet and income statement for the Company disclosing the financial position and results of operations of the Company for the preceding month and year-to-date; and
(18) The Company shall not enter into, or modify, any contract with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communicationRelated Party.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time and except Except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (Di) as set forth in Section 6.1(a) of the Company Disclosure ScheduleLetter, (ii) as expressly contemplated or permitted by this Agreement, (iii) as may be required to comply with applicable Law or any Order or (iv) with the business prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned, it and being agreed by Parent that its Subsidiaries consent shall be conducted deemed to have been given if Parent does not object in writing to a written request for such consent within five Business Days after such request for consent is delivered by the ordinary and usual course andCompany), to during the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, period from the date of this Agreement until the earlier of the Effective TimeTime and the date of termination of this Agreement in accordance with Section 9.1, except the Company shall, and shall cause each of its Subsidiaries to, conduct its respective business in all material respects in the ordinary course consistent with past practice and that it shall use its commercially reasonable efforts to maintain its current relationship with its suppliers, manufacturers, distributors, customers, business associates, executives and other key employees and Governmental Entities.
(Ab) Except (i) as otherwise set forth in Section 6.1(b) of the Company Disclosure Letter, (ii) as expressly required contemplated or permitted by this Agreement, (Biii) as may be required by to comply with applicable LawsLaw or any Order, or (Civ) as with the prior written consent of Parent may (which consent to in writing (such consent shall not to be unreasonably withheld, delayed or conditioned) or (D) as set forth , it being agreed by Parent that its consent shall be deemed to have been given if Parent does not object in Section 6.1(a) writing to a written request for such consent within five Business Days after such request for consent is delivered by the Company), during the period from the date of this Agreement until the earlier of the Company Disclosure ScheduleEffective Time and the date of termination of this Agreement in accordance with Section 9.1, the Company will not shall not, and will shall not permit any of its Subsidiaries to:
(i) adopt (A) adjust, split, combine, or propose any change in reclassify its certificate capital stock or the capital stock of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with Subsidiaries; (B) declare, authorize or pay any dividend or make any other Person, distribution in respect of the shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock (except for any such transactions among wholly owned Subsidiaries of the Company, dividend or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares distribution by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date Company); (C) directly or indirectly redeem, purchase or otherwise acquire any shares of this Agreement) its capital stock or any securities or obligations convertible into or exchangeable into or exercisable for any shares of its capital stock (except for the acquisition of Company Common Stock (1) tendered by employees or former employees in connection with a cashless exercise of Company Options or in order to pay taxes with respect to equity-based awards, or for the Company to satisfy withholding obligations in respect of such taxes, in connection with Company Options or other equity-based awards) or (2) in connection with the forfeiture of equity-based awards granted pursuant to the Company Equity Plans); or (D) except for transactions solely between the Company and its Subsidiaries, or between Subsidiaries of the Company, issue, deliver, sell, pledge, dispose of, grant, award or encumber any shares of capital stock, ownership interests or voting securities, or any options, warrants warrants, convertible securities or other rights of any kind to acquire or receive any shares of such capital stock, any other ownership interests or any voting securities (including restricted stock units, stock appreciation rights, phantom stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to similar instruments), of the Company or any of its Subsidiaries on (except for issuances (1) of shares of Company Common Stock upon the exercise or settlement of Company Options, options under the Company ESPP or other equity-based awards, in each case, that are outstanding as of the date hereof; (2) pursuant to the Rights Plan, (3) required to be made by virtue of the consummation of the Merger; or (4) required to be made pursuant to this Agreement);
(ii) sell, transfer, mortgage, encumber, dispose of or otherwise subject to any Lien (other than a Permitted Lien) any of its material assets or material properties (other than to a wholly owned Subsidiary), by merger, consolidation, asset sale or other business combination (including formation of a joint venture) or cancel, release or assign any material Indebtedness or claim, or restructure, reorganize or completely or partially liquidate, in each case, except (A) in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation of the foregoing shall be deemed to include the sale or other disposition of supply, inventory or trading stock in the ordinary course of business), (B) dispositions of obsolete or worthless assets, (C) sales of receivables and other assets in the ordinary course of business consistent with past practice, (D) sales of immaterial assets for a purchase price of $10,000,000 or less in any single case or $25,000,000 in the aggregate; and (E) leases and subleases of real property owned by the Company or any Company Subsidiary and leases of its Subsidiariesreal property under which the Company or any Company Subsidiary is a tenant or a subtenant and voluntary terminations or surrenders of such leases;
(viiii) make any acquisition, by purchase or other acquisition of stock or other equity interests, by merger, consolidation, asset purchase or other business combination, or by contributions to capital, or make any material purchases of any property or assets (including material Intellectual Property) in or from any other Person other than pursuant a wholly owned Subsidiary of the Company, or make any loan to any Person, except (A) as expressly required by the terms of Contracts any Contract in effect as of the date of this Agreement and provided to Parent prior to force on the date of this Agreement, make any loans(B) as otherwise permitted by this Section 6.1(b); (C) for portfolio acquisitions or Intellectual Property licensing in the ordinary course of business consistent with past practice; (D) for foreclosures or acquisitions of control in a fiduciary, advancesagent or similar capacity or in satisfaction of debts previously contracted in good faith or pursuant to written contracts or agreements entered into prior to the date hereof; and (E) other acquisitions in the ordinary course of business consistent with past practice and, guarantees or capital contributions to or investments in any Person case, involving consideration in an aggregate amount not in excess of $25,000,000;
(other than investments in cash and cash equivalents and other investments iv) enter into, renew, extend, amend, waive any material rights under or terminate any Contract that is or would constitute short-term investments on the balance sheet of the Company and a Material Contract, in each case other than in the ordinary course of business;
(v) other than as required by any Contract in effect on the date hereof (including, without limitation, this Agreement and the Company Benefit Plans) or applicable Law, (A) increase, or commit to increase, the salary, wages, benefits, bonuses or other compensation or severance payable to any of its current or former directors, officers or other employees, other than salary or wage increases made in the ordinary course of business, consistent with past practice, to employees who receive annual compensation of less than $250,000, (B) amend, establish, enter into or terminate any Company Benefit Plan (or arrangement that would be a Company Benefit Plan if in existence on the date hereof) or collective bargaining or similar agreement other than amendments to the Company health and welfare plans that are not material, (C) accelerate the vesting of any stock options or other stock-based compensation or (D) hire any director or employee with annual base compensation of $200,000 or more;
(vi) amend the Company Charter or Company By-Laws or amend in any material respect the certificate of organization, by-laws or any direct or indirect wholly owned Subsidiary other organizational documents of the Company)any Company Subsidiary;
(vii) declareincur any Indebtedness for borrowed money, set asideissue any debt securities or assume, make guarantee or pay any dividend endorse or other distributionotherwise become responsible for the obligations of another Person, payable except, in casheach case, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by intercompany guarantees or intercompany “keep well” or other agreements to maintain any direct or indirect wholly owned Subsidiary to financial statement condition of the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per ShareCompany Subsidiary, declared and paid consistent with prior timing, and (B) letters of credit issued in the ordinary course of business, (C) Indebtedness incurred through the revolving credit facility under the Credit Agreement (including in respect of letters of credit), (D) Indebtedness having an aggregate principal amount outstanding that is not in excess of $5,000,000 and (E) in the ordinary course of business consistent with past practice, provided that, in the case of clauses (D) and (E), such Indebtedness shall be prepayable without any cash dividends paid to the Company premium, penalty or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stocksimilar cost;
(viii) reclassifyexcept in the ordinary course of business, splitmake or change any material Tax election, combine, subdivide settle or redeem, purchase or otherwise acquire, directly or indirectly, compromise any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security material Tax liability of the Company or any of its Subsidiaries, file any material amendment to an income or other material Tax Return, or waive any statute of limitations in respect of Taxes except for inter-company borrowings solely among as required by Law;
(ix) make any material changes in its accounting methods or method of Tax accounting, practices or policies, except as may be required under GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Company and its wholly-owned Subsidiaries Financial Accounting Standards Board or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practiceany similar organization;
(x) except as set forth enter into, renew or amend in any material respect any transaction, Contract, arrangement or understanding between the capital budgets set forth in Section 6.1(a)(x) Company or any Subsidiaries, on the one hand, and any Affiliate of the Company Disclosure Schedule and consistent therewith(other than any of the Company’s Subsidiaries), make or authorize any capital expenditureon the other hand, of the type that would be required to be disclosed under Item 404 of Regulation S-K promulgated under the Exchange Act;
(xi) make or authorize capital expenditures except (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference as budgeted in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment Company’s current plan approved by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect Board that was made available to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuitdate hereof, action, claim or similar proceeding, or (IIIB) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (KC) terminate without cause the employment of any officer of the Company;
(xviii) subject otherwise in an amount not to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedexceed $3 million; or
(xixxii) agreeagree to, authorize or commit to do make any commitment to, take any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated actions prohibited by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayedSection 6.1(b), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Sources: Merger Agreement (Par Pharmaceutical Companies, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after During the period from the date of this Agreement and prior ------------------ to the Effective Time and Time, except (A) as otherwise expressly required specifically contemplated by this Agreement, Agreement (Bincluding Section 3.02) or otherwise as required by applicable Laws, (C) as Parent may consent consented to or approved in writing (such consent not by the Purchaser, the Seller shall cause the Company and the Subsidiaries to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) adhere to each of the Company Disclosure Schedule, following:
(a) the business of it and its Subsidiaries Business shall be conducted in only in, and the Company and each of the Subsidiaries shall not take any action except in, the ordinary and usual course andof the Business consistent with past practice;
(b) neither the Company nor any of the Subsidiaries shall make or propose any change or amendment to its respective certificate of incorporation, other charter document, by-laws or operating agreement, as applicable;
(c) neither the Company nor any of the Subsidiaries shall issue or sell, or authorize the issuance or sale of, any shares of its capital stock or any of its other securities or issue any securities convertible into or exchangeable for, or options, warrants to purchase, scrip, rights to subscribe for, calls or commitments of any character whatsoever relating to, or enter into any contract, understanding or arrangement with respect to the extent consistent therewithissuance of, it any shares of its capital stock or any of its other securities, or enter into any arrangement or contract with respect to the purchase or voting of shares of its capital stock or adjust, split, combine or reclassify any of its securities, or make any other changes in its capital structure;
(d) except as permitted in Section 3.02, the Company and its the Subsidiaries shall not undertake any of the actions specified in Section 2.02(i);
(e) the Company shall, and shall cause the Subsidiaries to, use their respective all reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its the business organizations organization of the Company and maintain existing relations and goodwill with Governmental Entitieseach of the Subsidiaries, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and to keep available the services of its and its Subsidiaries’ their present employees officers and agents. Without limiting the generality ofkey Employees, and in furtherance of, to preserve the foregoing, from goodwill of those having business relationships with it and the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instrumentsSubsidiaries;
(iif) merge or consolidate neither the Company or nor any of its the Subsidiaries shall take any action with respect to the grant of any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, severance or restructure, reorganize or completely or partially liquidate or termination pay (otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock written Plans of the Company or any of its the Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of in effect on the date of this Agreementhereof) or securities convertible with respect to any increase of benefits payable under its written Plans providing for severance or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiestermination pay in effect on the date hereof;
(vg) create neither the Company nor any of the Subsidiaries shall (except as required by law and except for salary increases or incur any Lien other employee benefit arrangements in the ordinary course of the Business consistent with past practice that do not result in a material increase in benefits or compensation expense to the Company or any Subsidiary or pursuant to collective bargaining agreements as presently in effect) adopt or amend any Plan or other arrangement for the benefit or welfare of any Employee or increase in any manner the compensation or fringe benefits of any Employee or pay or grant any benefit not required by any existing Plan or arrangement; provided, however, that the Company and the Subsidiaries shall have ----------------- the right to change the terms of any such Plan or arrangement pertaining to transaction incentive bonuses, to the extent that such change does not result in any cost increase to the Purchaser, the Company or the Subsidiaries;
(h) except with respect to transactions between and among the Company and any of the Subsidiaries or the endorsement of negotiable instruments in the ordinary course of the Business, neither the Company nor any of the Subsidiaries shall guarantee any Indebtedness (other than any guaranty of Subsidiary Indebtedness in the ordinary course of the Business) or the obligations of any Person;
(i) except in the ordinary course of the Business consistent with past practice or in the case of obsolete or redundant assets, or those requiring replacement, and except as disclosed on Schedule 2.02(i), the Company shall not, ---------------- and shall not permit any Subsidiary to, sell, lease or otherwise dispose of any of its Subsidiaries on assets or any of the Company's or any Subsidiary's interest in any of its assets, or enter into any agreements to do any of the foregoing (including any agreement to sell, lease, occupy or use by easement or otherwise any part of the Real Property);
(j) the Company shall not, and shall not permit any Subsidiary to, acquire (for cash, shares of stock or other consideration) (including by merger, consolidation or acquisition of stock or assets) any Person or any division or assets thereof;
(k) the Company shall not, and shall not permit any Subsidiary to, authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution of the Company or any of its the Subsidiaries;
(vil) other than pursuant to the terms of Contracts in effect as of the date of this Agreement Company shall not, and provided to Parent prior to the date of this Agreementshall not permit any Subsidiary to, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, elections or settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its SubsidiariesLiability for Taxes;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvim) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course Business consistent with past practice and other than the discharge of any Liabilities of the Company by the Seller as contemplated by Exhibit D, the Company shall not, and shall not --------- permit any Subsidiary to, waive any material rights or make any payment, direct or indirect, of any material Liability of the Company or any of the Subsidiaries before the same comes due in accordance with its terms;
(n) the Company shall not, and shall not permit any Subsidiary to, fail to maintain its existing insurance coverage in effect or, in the event any such coverage shall be terminated or lapse, to the extent available at reasonable cost, procure substantially similar substitute insurance policies which in all material respects are consistent with in at least such amounts and against such risks as are currently covered by such policies;
(o) the other requirements set forth in this AgreementCompany shall not, (J) and shall not permit any Subsidiary to, enter into any collective bargaining agreement or any successor collective bargaining agreement;
(p) the Company shall not, and shall not permit any Subsidiary to, enter into any long term purchase or sales agreement or other agreement with a labor union, works council or similar organization or arrangement (K) terminate without cause other than the employment renewal of any officer sales agreements in effect as of the date hereof);
(q) the Company shall not, and shall not permit any Subsidiary to, enter into any Derivative Contracts having a term which extends beyond the Closing Date;
(r) the Company shall not make or commit to any capital expenditures in excess of the Company;'s capital budget for calendar year 2000 nor in excess of the Company's capital budget for calendar year 2001 when approved by its Board of Directors; and
(xviiis) subject to Section 6.2the Company shall not, take and shall not permit any action Subsidiary to, enter into any contract, agreement, commitment or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize or commit arrangement to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees Except as to itself and its Subsidiaries thatexpressly contemplated hereby, after without the date of this Agreement and prior to the Effective Time and except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may written consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Scheduleother parties, the IDC and DWS (and DWS Delaware, as applicable) shall conduct its business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practicepractice and use all reasonable efforts to: (i) preserve intact its present business organization; (ii) keep available the services of its officers; (iii) maintain in effect all material foreign, federal, state and local licenses, permits, approvals and authorizations that are required for it to carry on its business as currently conducted or proposed to be conducted; and (iv) preserve existing relationships with its material partners, lenders, suppliers and others having material business relationships with it so that its business or prospects shall not be adversely affected in any material respect as of the Effective Time. Further, and without limiting the generality of the foregoing, and excluding those matters necessary to accomplish the Redomestication Transaction as provided in Section 6.2, from the date hereof until the Effective Time, without the prior written consent of the other Parties, IDC and DWS shall not:
(a) amend its certificate of incorporation, articles or bylaws or other applicable governing instrument;
(xb) except as set forth in the capital budgets set forth in Section 6.1(a)(x) amend any term of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditureof its outstanding securities;
(xic) split, combine, subdivide or reclassify any shares of its capital stock or other equity interests or declare, set aside or pay any dividend or other distribution (Awhether in cash, stock or property or any combination thereof) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contractin respect of its capital stock, or cancel▇▇▇▇▇▇, modify ▇▇▇▇▇▇▇▇▇▇ or waive otherwise acquire or offer to redeem, repurchase, or otherwise acquire any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000its securities;
(xiid) make any adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect theretoreorganization;
(Ae) settle issue, deliver or sell, or authorize the issuance, delivery or sale of, any litigation shares of its capital stock of any class or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company equity interests or any Subsidiary does not exceed $2,000,000 (securities convertible into or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceedingexercisable for, or (III) pursuant any rights, warrants or options to this Agreementacquire, any such capital stock or other equity interests;
(xivf) file or amend any material Tax Return except in the ordinary course of business, settle or compromise make any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accountingcapital expenditures, except as required by law, or take any action which would materially adversely affect for capital expenditures not exceeding $50,000 in the Tax position of the Company or of any of its Subsidiariesaggregate;
(xvg) transferacquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability corporation, partnership, other business organization or division thereof, assets of any Person, other than in the ordinary course of business;
(h) except in the ordinary course of business, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire encumber or otherwise dispose of transfer any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, ;
(i) except sales of Company Products in the ordinary course of business and sales business, incur or assume any Indebtedness;
(j) except in the ordinary course of obsolete assetsbusiness, create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than pursuant liens for Taxes that are not yet due, statutory liens, or to Contracts in effect prior to the date of secure Indebtedness or other obligations permitted by this Agreement;
(xvik) make any loan, advance or capital contributions to or investment in any Person, or acquire any Investment Interest;
(l) enter into any contract or agreement, other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse relinquish or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under respect any material Owned Intellectual Propertycontract (as defined in Item 601(b)(1) of Regulation S-K of the SEC) to which it is a party, other than transactions and commitments contemplated by this Agreement;
(xviim) enter into any agreement or arrangement that materially limits or otherwise materially restricts it or any of its Affiliates or any successor thereto or that could, after the Effective Time, limit or restrict any of IDC, the Surviving Corporation or any of its Affiliates, from engaging in any business;
(n) enter into any employment, deferred compensation or other similar agreement with any of its director or officer or with any other Person; or establish or adopt any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, compensation, stock option, restricted stock or other benefit plan or arrangement covering any of its director, officer or any other Person; increase the compensation, bonus or other benefits payable to any director, or officer; or amend the terms of any outstanding option or right to purchase shares of its Common Stock or its other capital stock (except for the cancellation of all outstanding DWS options and warrants prior to the Effective Time in accordance with Section 4.5(c));
(o) except to make for changes that are required by applicable Law or to satisfy contractual obligations existing pending as of the date hereof pursuant which have been disclosed by DWS to Contracts IDC, change: (1) its methods of accounting or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase accounting practices in any manner material respect, except as required by concurrent changes in GAAP or by law; or (2) its fiscal year, except with prior notification to the compensationother parties;
(p) settle any material litigation, bonusinvestigation, pensionarbitration, welfare, fringe proceeding or other benefits, severance claim;
(q) make any material tax election or termination pay enter into any settlement or compromise of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, material tax liability;
(C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (Gr) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Planaction, other than as required expressly permitted by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into that would make any collective bargaining agreement of its representation or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result warranty hereunder inaccurate in any of material respect at the conditions to the Merger set forth in Article VII not being satisfiedEffective Time; or
(xixs) agree, authorize agree or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after Between the date hereof and the Final Closing Date, the Sellers shall operate and carry on the Business (except to the extent a portion thereof has previously been transferred to Buyer or Eastern as of the Closing Date or prior Inventory Closing Date) only in the ordinary course and substantially as presently operated. Consistent with the foregoing, the Sellers shall (i) keep and maintain the Purchased Assets in good operating condition and repair, normal wear-and-tear excepted; (ii) use their commercially reasonable efforts to preserve the goodwill of the suppliers, contractors, licensors, employees, customers, distributors and others having business relations with the Business; (iii) maintain the Inventory at levels adequate and not excessive in the present circumstances of the Business and at levels reasonably based on past practices and historical sales of the Business; and (iv) maintain the Sellers’ current operating practices with respect to Patient Charges. In furtherance of the foregoing, the Sellers shall maintain normal operating hours, staffing levels, inventory levels and merchandise mix. For the avoidance of doubt, changes imposed or required by third parties of a kind and nature typical for a company that has announced an intent to wind down its business or dissolve shall not be deemed to violate the terms of this Agreement and prior to (but may be included in any determination of the Effective Time and except existence of a Material Adverse Effect).
(Ab) Except as otherwise expressly required contemplated by this AgreementAgreement or except with the express written approval of Buyer, the Sellers shall not: (Bi) as required by applicable Laws, take any action that is intended or may reasonably be expected to result in (Cx) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as any of the representations and warranties set forth in Section 6.1(athis Agreement being or becoming untrue in any material respect, (y) any of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, conditions to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as Closing set forth in Section 6.1(athis Agreement not being satisfied or (z) of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights violation of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date provision of this Agreement, make any loansexcept, advancesin each case, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall may be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
Requirements of Law; (Aii) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent business consistent with past practice practice, enter into any lease, agreement, Contract or as required by lawcommitment of any nature, change oral or written, nor make any material method of Tax accountingcapital investment or expenditures, except as required by law, primarily related to the ownership or take any action which would materially adversely affect the Tax position operation of the Company Operate Location Pharmacies, Worksite Pharmacies or of any of its Subsidiaries;
Transfer Locations; (xviii) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales consistent with past practice, enter into any Contract with respect to, or make any increase in (or commitment to increase) the compensation payable to any of obsolete assetsits employees or agents primarily related to the Operate Location Pharmacies, Worksite Pharmacies or Transfer Locations; (provided, that the foregoing shall not prohibit the granting of “stay-bonuses” or similar commitments) or (iv) sell, lease, transfer or otherwise dispose of (including any transfers from any of the Sellers to any of their respective Affiliates), or impose or suffer to be imposed any Encumbrance on, any of the Purchased Assets, other than pursuant to Contracts in effect prior to the date inventory and minor amounts of this Agreement;
(xvi) other than personal property sold or otherwise disposed of for fair value in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course Business consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize or commit to do any of the foregoingpractice.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after During the period from the date of this Agreement and prior to continuing until the Effective Time and Closing:
(a) The Shareholder agrees (except (A) as otherwise expressly required contemplated by this Agreement, including any Exhibits and Schedules hereto, or to the extent that Buyer shall otherwise consent in writing) that as to the Company:
(B1) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the The Company Disclosure Schedule, the shall carry on its business of it and its Subsidiaries shall be conducted in the usual, regular and ordinary and usual course in substantially the same manner as heretofore conducted and, to the extent consistent therewithwith such business, it and its Subsidiaries shall use their respective all reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its present business organizations and maintain existing relations and goodwill with Governmental Entitiesorganization, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its present officers and its Subsidiaries’ present employees and agents. Without limiting the generality ofpreserve its relationships with customers, suppliers and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instrumentsothers having business dealings with it;
(ii2) merge The Company shall not and shall not propose to: (a) declare, set aside or consolidate the Company pay any dividend, on, or make other distributions in respect of, any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants purchase or other rights of any kind to acquire redeem any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary other than a cash dividend to be distributed to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid Shareholder in an amount equal to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary Shareholder's liability for federal and state taxes on the earnings from operations of the CompanyCompany during 1998 through the Closing Date (exclusive -26- 34 of any income or gain on sale associated with the transactions covered by this Agreement) or enter into any agreement with respect to the voting of its capital stock;
as more fully described at Section 5.4 hereafter; (viiib) reclassify, split, combine, subdivide combine or redeem, purchase or otherwise acquire, directly or indirectly, reclassify any of its capital stock or issue, authorize or propose the issuance of any other securities convertible in respect of, in lieu of or exchangeable into in substitution for shares of its capital stock; (c) redeem, repurchase or exercisable for otherwise acquire any shares of its capital stock; or (d) otherwise change its capitalization.
(3) Except as contemplated by this Agreement, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options shall not sell, issue, pledge, authorize or Company SARs propose the sale or issuance of, pledge or purchase or propose the lapse purchase of, any shares of restriction on Company Restricted Shares its capital stock of any class or securities convertible into, or rights, warrants or options to the extent required acquire, any such shares or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;other convertible securities.
(ix4) The Company shall not amend its certificate of incorporation or its Bylaws.
(5) The Company shall not sell, lease, pledge, encumber or otherwise dispose of or agree to sell, lease, pledge, encumber or otherwise dispose of, any of its assets that are material or any other assets except in the ordinary course of business consistent with prior practice and in no event amounting in the aggregate to more than $25,000.
(6) The Company shall not incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or guarantee any debt securities of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries others other than in the ordinary course of business consistent with past practice;prior practice and in no event amounting in the aggregate to more than $25,000.
(x7) except as set forth The Company shall not adopt or amend in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make any material respect any collective bargaining agreement or authorize any capital expenditure;Employee Benefit Plan.
(xi) (A) 8) The Company shall not grant to any executive officer any increase in compensation or in severance or termination pay, or enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement employment agreement with any executive officer.
(9) The Company shall not acquire (by merger, consolidation or (Bacquisition of stock or assets or otherwise) amendany corporation, modify partnership or terminate any Material Contractother business organization or subdivision thereof, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect investment by either purchase of stock or securities, contributions to accounting policies or procedurescapital, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commenceproperty transfer or, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, purchase of any property or assets, of any other individual or entity.
(10) The Company shall not make any material tax election or settle or compromise any material Tax federal, state, local or foreign tax liability.
(11) The Company shall not waive, makerelease, grant or transfer any rights of material value or modify or change or revoke in any material Tax election except to the extent consistent with past practice or as required by law, change respect any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products Material Contract other than in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, practice.
(J12) The Company shall not enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize or commit arrangement to do any of the foregoing. The Company shall not take any action, or fail to take any action, that is reasonably likely to result in any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions Buyer agrees (except as expressly contemplated by this Agreement, including any Exhibits and Schedules hereto, or to the Company extent that the Shareholder shall provide Parent otherwise consent in writing or to the extent required to permit Buyer to meet its obligations under this Section 5) that:
(1) Buyer shall carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and, to the extent consistent with a copy of the intended communicationsuch business, Parent shall have a use all reasonable period of time efforts to review and comment on the communication preserve intact its present business organization (which comments provided that such obligation shall not be unreasonably withheld relate to the officers and employees of Buyer or delayed)any of its subsidiaries) and preserve its relationships with customers, suppliers and Parent and the Company shall cooperate in providing any such mutually agreeable communicationothers having business dealings with it.
(2) As part of its overall business strategy, Buyer is presently in negotiations with other companies that may be suitable acquisition targets. Buyer may, therefore, make one or more acquisitions prior to the Closing, and in connection therewith, may be caused to issue additional securities, of whatever nature and number, in connection with such acquisitions. In addition, Buyer may also be caused to issue additional securities, of whatever nature and number, in connection with certain private placement transactions which may be undertaken between the date hereof and the Closing.
(3) Buyer shall not (and shall not propose to) (a) declare or pay any dividend, on, or make other distributions in respect of, any of its capital stock, (b) split, combine or reclassify any of its capital stock or issue, authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, (c) Subject repurchase or otherwise acquire any shares of its capital stock or (d) otherwise change its capitalization.
(4) Buyer shall not sell, lease, pledge, encumber or otherwise dispose of, or agree to Section 6.5sell, Parent lease, pledge, encumber or otherwise dispose of, any of its assets that are material, or any other assets except in the ordinary course of business consistent with prior practice.
(5) Buyer shall not adopt or amend in any material respect any collective bargaining agreement or Employee Benefit Plan (as defined herein).
(6) Buyer shall not enter into any agreement or arrangement to do any of the foregoing. Buyer shall not take any action, or permit any of its Subsidiaries fail to take any action action, that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger their representations and warranties set forth in Article VII not being satisfiedthis Agreement becoming untrue in any material respect.
Appears in 1 contract
Interim Operations. (a) The Company Each of the Partnership and Parent covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless Parent or the Partnership, as applicable, shall otherwise approve in writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except (A) as otherwise expressly required contemplated by this Agreement, (B) as provided in any Contract in effect as of the date of this Agreement, or as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure ScheduleLaw, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course Ordinary Course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agentsassociates. Without limiting the generality of, of and in furtherance of, of the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required expressly: (a) contemplated by this Agreement; (b) contemplated by any Contract entered into prior to, concurrently with or after the date of this Agreement by Parent with respect to the Other Parent Transactions (Bas such Contract may be amended, supplemented or otherwise modified from time to time); (c) as required by applicable LawsLaw or the terms of any Partnership Material Contract or Parent Material Contract, as applicable; (Cd) as Parent may consent to approved in writing (such consent which approval shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed) by the other Party; or (De) as set forth in the corresponding subsection of Section 6.1(a) 8.1 of the Company Partnership Disclosure ScheduleLetter, as it relates to the Company will Partnership and its Subsidiaries, or in Section 8.1 of the Parent Disclosure Letter, as it relates to Parent and its Subsidiaries, each Party, on its own account, shall not and will shall not permit its Subsidiaries to:
(i) adopt or propose make any material change in to the nature of its certificate of incorporation or by-laws or other applicable governing instrumentsbusiness and operations;
(ii) make any change to its Organizational Documents as in effect on the date of this Agreement in any manner that would reasonably be expected to prohibit, prevent or materially impede, hinder or delay the ability of such Party to satisfy any of the conditions to, or the consummation of, the Merger or the other Transactions;
(iii) (A) merge or consolidate the Company itself or any of its Subsidiaries with any other PersonPerson (expressly excluding, for the avoidance of doubt, any of the Other Parent Transactions), or (B) adopt a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization, in each case, except for any (1) such transactions among solely between or among, or solely involving, such Party and one or more of its wholly owned Subsidiaries, or a Subsidiary of such Party and one or more wholly owned Subsidiaries of the Companysuch Subsidiary, (2) as would not reasonably be expected to result in a Partnership Material Adverse Effect or Parent Material Adverse Effect, as applicable, or restructure(3) as would not reasonably be expected to prohibit, reorganize prevent or completely materially impede, hinder or partially liquidate or otherwise enter into delay the ability of such Party to satisfy any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value conditions to, or purchase price in the aggregate in excess consummation of, individually the Merger or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this AgreementTransactions;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, encumber or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance encumbrance, or enter into any Contract (including, with respect to the voting of), any of its partnership interests, limited liability company interests, shares of capital stock of the Company or any of its Subsidiaries equity interests, as applicable (other than the issuance of partnership interests, limited liability company interests, shares of capital stock or equity interests, as applicable, (A) by a wholly owned Subsidiary of the Company such Party to the Company such Party or another one or more of such Party’s wholly owned Subsidiaries, or by a wholly owned Subsidiary of such Party’s Subsidiary to such Subsidiary or the issuance one or more other wholly owned Subsidiaries of Shares pursuant to Company Optionssuch Subsidiary, Company Restricted Shares or the Convertible Senior Notes (B) in respect of equity-based awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the plan documents as in effect on the date of this Agreement) ), or securities convertible or exchangeable into or exercisable for any such partnership interests, limited liability company interests, shares of such capital stockstock or equity interests, as applicable, or any options, warrants or other rights of any kind to acquire any partnership interests, limited liability company interests, shares of such capital stock or equity interests, as applicable, or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its partnership interests, limited liability company interests, shares of capital stock or equity interests, as applicable, or securities convertible or exchangeable into or exercisable for any partnership interests, limited liability company interests, shares of its capital stockstock or equity interests, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationas applicable;
(ixvi) incur any indebtedness for borrowed money or guarantee such indebtedness of another Personwaive, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiariesrelease, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of businessassign, settle or compromise any material Tax liabilityclaim, action or proceeding, including any state or federal regulatory proceeding seeking damages or injunction or other equitable relief, which waiver, release, assignment, settlement or compromise would reasonably be expected to result in a Partnership Material Adverse Effect or Parent Material Adverse Effect, as applicable;
(vii) other than in the Ordinary Course, make, change or revoke any material Tax election except (other than a Tax election with respect to the extent consistent with past practice Spectra Energy Partners GP, LLC), adopt or as required by law, change any material method Tax accounting method, file any material amended Tax Return, settle any material Tax claim, audit, assessment or dispute for an amount materially in excess of Tax accountingthe amount reserved or accrued on such Party’s most recent consolidated balance sheet included in the Parent Reports or Partnership Reports, as applicable, or surrender any right to claim a refund of a material amount of Taxes;
(viii) make any material changes with respect to accounting policies, except as required by lawchanges in GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or take any action which would materially adversely affect the Tax position of the Company Law, including pursuant to SEC rule or of any of its Subsidiariespolicy;
(xvix) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon make or allow to lapse declare any dividends or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior distributions to the date holders of this Agreement;
(xvi) Common Units or Parent Common Stock, in each case, other than in the ordinary course of businessOrdinary Course, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied8.10; or
(xixx) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations Notwithstanding anything to the directorscontrary in this Agreement, officers a Party’s obligations under Section 8.1(a) to take an action or employees not to take an action, or to cause its Subsidiaries to take an action or not to take an action, shall, with respect to any Persons (and their respective Subsidiaries) controlled by such Party, or in which such Party otherwise has a voting interest, but that are not wholly owned Subsidiaries of such Party or have public equity holders, only apply (i) to the Company extent permitted by the organizational documents and governance arrangements of such entity and its subsidiaries, (ii) to the extent a Party is authorized and empowered to bind such entity and its subsidiaries and (iii) to the extent permitted by the Party’s or its Subsidiaries’ duties (fiduciary or otherwise) to such entity and its subsidiaries or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communicationequity holders.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Sources: Merger Agreement (Enbridge Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the earlier of the Merger 1 Effective Time and except (A) as otherwise expressly required by the termination of this AgreementAgreement in accordance with its terms, (Bw) as required by applicable Laws, (C) as unless Parent may shall otherwise consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned), (x) except as otherwise expressly permitted by this Agreement, (y) except as required by applicable Laws, or (Dz) except as set forth in Section 6.1(a5.1(a) of the Company Disclosure ScheduleLetter, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course Ordinary Course of Business, and, to the extent consistent therewith, it shall, and it shall cause its Subsidiaries shall to, use its and their respective commercially reasonable best efforts to protect preserve their business organizations, preserve their assets and properties in good repair and condition and preserve in all material respects its assets their relationships with those persons having significant business dealings with them to the end that their good will and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available ongoing businesses shall be unimpaired at the services of its and its Subsidiaries’ present employees and agentsClosing. Without limiting the generality of, of and in furtherance of, of the foregoing, from the date of this Agreement until the earlier of the Merger 1 Effective TimeTime and the termination of this Agreement in accordance with its terms, except (AX) as otherwise expressly required permitted by this Agreement, (B) as required by applicable Laws, (CY) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) ), or (DZ) as set forth in Section 6.1(a5.1(a) of the Company Disclosure ScheduleLetter, the Company it will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate the Company’s articles of incorporation or by-laws bylaws or other applicable governing instrumentsthe organizational documents of any of the Company’s Subsidiaries;
(ii) merge or consolidate the Company itself or any of its Subsidiaries with any other Person, except for any such transactions among wholly its wholly-owned Subsidiaries of the Companyand except in connection with any transaction in accordance with Section 5.1(a)(xiii), or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesliquidate;
(iii) acquire assets outside other than (A) in connection with the exercise or settlement of Company Equity Awards, (B) as permitted by Section 5.1(a)(xi), or (C) as disclosed in Section 5.1(a)(xi) of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess ofCompany Disclosure Letter, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its capital stock or of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly its wholly-owned Subsidiary of the Company to the Company it or another wholly of its wholly-owned Subsidiary or the issuance of Shares pursuant to Company OptionsSubsidiaries), Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, other than (i) grants of Company Equity Awards to new hires in the Ordinary Course of Business or (ii) grants of Company Equity Awards up to $100,000, in the aggregate, to non-executive officer employees;
(viv) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees advances or capital contributions to or investments in any Person (other than investments in cash between itself and cash equivalents and other investments that would constitute short-term investments on the balance sheet any of the Company and other than in the Company or any its direct or indirect wholly owned Subsidiary Subsidiaries), other than advances to employees in the Ordinary Course of the Company)Business;
(viiv) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly wholly-owned Subsidiary to the Company it or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the CompanySubsidiary) or enter into any agreement with respect to the voting of its capital stock;
(viiivi) other than in connection with tax withholdings related to a Company Equity Award, reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its the Company’s capital stock or securities convertible or exchangeable into or exercisable for any shares of its the Company’s capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ixvii) incur any indebtedness for borrowed money or guarantee such any indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any of its debt security securities or of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and (A) guarantees incurred in compliance with this Section 5.1(a) by it of indebtedness of its wholly-owned Subsidiaries Subsidiaries, or among the Company’s wholly-owned Subsidiaries in the ordinary course (B) interest rate swaps on customary commercial terms consistent with past practice;
(xviii) except as set forth may be required as a result of a change in applicable Law or GAAP or as required by the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewithCompany’s auditors or accountants, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(Aix) settle any litigation or other proceedings before except as may be required as a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except change in the ordinary course of business, settle or compromise any material Tax liabilityapplicable Law, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by lawelection, change any material method of Tax accounting, except as required by law, accounting or take any action which would materially adversely affect the annual Tax position of the Company or of any of its Subsidiariesaccounting period;
(xvx) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse (except with respect to patents expiring in accordance with their terms) or expire or otherwise dispose of any of its material assets, licenses, operations, rights, product lines, lines or businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products (A) in connection with services and products provided in the ordinary course Ordinary Course of business Business and sales of obsolete assets, other than (B) Liens securing indebtedness in accordance with Section 5.1(a)(vii), (C) pursuant to Contracts in effect prior to the date of this Agreement, and (D) assets with a fair market value of less than $500,000 in the aggregate;
(xvixi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed set forth on Section 6.1(a)(xvii5.1(a)(xi) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costsLetter, (B) as required by any Company Benefit Plan in effect on the date of this Agreement, or (C) as required by applicable Law, (1) materially increase any compensation or benefit provided or to be provided to any current or former employee or other service provider of the Company or any of its Subsidiaries, other than increases in the Ordinary Course of Businesses and increases in compensation to certain employees, who are non-executive officers, which are reasonably necessary to bring such compensation to market level compensation, (2) enter into or adopt any new Company Benefit Plan or amend in any manner material respect or terminate any Company Benefit Plan, (3) accelerate the compensationfunding or vesting of any compensation or benefit, bonusor (4) make any material contribution to any Company Benefit Plan other than contributions made in the Ordinary Course of Business;
(xii) enter into, pensionmaterially amend or terminate any Company Material Contract (or any Contract that would be a Company Material Contract if it were in effect as of the date of this Agreement), welfareexcept that the Company and its Subsidiaries may (x) enter into Contracts of the types described in clauses (B), fringe (F)(II) or (F)(V) of Section 4.1(t)(i)) and (y) amend Company Material Contracts, so long as such Contracts and amendments will not, in the aggregate, increase the liabilities of the Company and its Subsidiaries by greater than $500,000;
(xiii) acquire (whether by merger, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other benefits, severance business organization or termination pay division thereof or substantially all of the assets of any of the current foregoing, other than (A) purchases of inventory and other assets in the Ordinary Course of Business or former directorspursuant to existing Contracts, officersand (B) assets with a fair market value of no greater than $500,000 in the aggregate;
(xiv) make any payment or accrual of, employees or consultants commit to, capital expenditures for any period that are greater than 105% of the capital expenditures reflected in the Company’s capital expenditure budget provided to Parent prior to the date hereof;
(xv) compromise, settle or agree to settle any Action (including any Action relating to this Agreement or the transactions contemplated hereby), or consent to the same, other than compromises, settlements or agreements with no obligation of the Company or and its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or Subsidiaries other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the than payment of any amounts under any Benefit Plan, cash (HA) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization Ordinary Course of Business or (KB) terminate without cause not to exceed $300,000 in the employment of any officer of the Company;
aggregate for all such compromises, settlements and agreements under this clause (xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedB); or
(xixxvi) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations Parent agrees that, after the date of this Agreement and prior to the directors, officers or employees earlier of the Merger 1 Effective Time and the termination of this Agreement in accordance with its terms, (w) unless the Company shall otherwise consent in writing (such consent not to be unreasonably withheld, delayed or conditioned), (x) except as otherwise expressly permitted by this Agreement, (y) except as required by applicable Laws, or (z) except as set forth in Section 5.1(b) of the Parent Disclosure Letter, the business of it and its Subsidiaries shall be conducted in the Ordinary Course of Business, and, to the extent consistent therewith, it shall, and it shall cause its Subsidiaries to, use its and their respective commercially reasonable efforts to preserve their business organizations, preserve their assets and properties in good repair and condition and preserve their relationships with those persons having significant business dealings with them to the end that their good will and ongoing businesses shall be unimpaired at the Closing. Without limiting the generality of and in furtherance of the foregoing, from the date of this Agreement until the earlier of the Merger 1 Effective Time and the termination of this Agreement in accordance with its terms, except (X) as otherwise expressly permitted by this Agreement, (Y) as the Company may consent in writing (such consent not to be unreasonably withheld, delayed or conditioned), or (Z) as set forth in Section 5.1(b) of the Parent Disclosure Letter, it will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in Parent’s certificate of incorporation or bylaws or the organizational documents of any of Parent’s Subsidiaries;
(ii) merge or consolidate itself or any of its Subsidiaries pertaining with any other Person, except for any such transactions among its wholly-owned Subsidiaries and except in connection with any transaction in accordance with Section 5.1(b)(xiii), or restructure, reorganize or completely or partially liquidate;
(iii) other than (A) in connection with the exercise or settlement of Parent Equity Awards, (B) issuances pursuant to compensation redemptions of Common Units (as defined in Parent Certificate of Incorporation) pursuant to the GH LLC Agreement in the Ordinary Course of Business, (C) as permitted by Section 5.1(b)(xi), or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy (D) as disclosed in Section 5.1(b)(xi) of the intended communicationParent Disclosure Letter, Parent shall have a reasonable period issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of time to review and comment on the communication (which comments shall not be unreasonably withheld its capital stock or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit of any of its Subsidiaries (other than the issuance of shares by its wholly-owned Subsidiary to take it or another of its wholly-owned Subsidiaries), or securities convertible or exchangeable into or exercisable for any action that is reasonably likely shares of such capital stock, or any options, warrants or other rights of any kind to preventacquire any shares of such capital stock or such convertible or exchangeable securities, interfere other than (i) grants of Parent Equity Awards to new hires in the Ordinary Course of Business or (ii) grants of Parent Equity Awards up to $100,000, in the aggregate, to non-executive officer employees;
(iv) make any loans, advances or capital contributions to or investments in any Person (other than between itself and any of its direct or indirect Subsidiaries), other than advances to employees in the Ordinary Course of Business;
(v) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by any direct or delay indirect wholly-owned Subsidiary to it or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the consummation voting of its capital stock;
(vi) other than in connection with tax withholdings related to a Parent Equity Award, reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of Parent’s capital stock or securities convertible or exchangeable into or exercisable for any shares of Parent’s capital stock;
(vii) incur any indebtedness or guarantee any indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any of its debt securities or of any of its Subsidiaries, except for (A) guarantees incurred in compliance with this Section 5.1(b) by it of indebtedness of its wholly-owned Subsidiaries, or (B) interest rate swaps on customary commercial terms consistent with past practice;
(viii) except as may be required as a result of a change in applicable Law or GAAP or as required by Parent’s auditors or accountants, make any changes with respect to accounting policies or procedures;
(ix) except as may be required as a result of a change in applicable Law, make, change or revoke any material Tax election, material method of Tax accounting or any annual Tax accounting period;
(x) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse (except with respect to patents expiring in accordance with their terms) or expire or otherwise dispose of any of its material assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries, except (A) in connection with services and products provided in the Ordinary Course of Business and sales of obsolete assets, (B) Liens securing indebtedness in accordance with Section 5.1(b)(vii), (C) pursuant to Contracts in effect prior to the date of this Agreement, and (D) assets with a fair market value of less than $500,000 in the aggregate;
(xi) other than (A) as set forth on Section 5.1(b)(xi) of the Merger Parent Disclosure Letter, (B) as required by any Parent Benefit Plan in effect on the date of this Agreement, or result (C) as required by applicable Law, (1) materially increase any compensation or benefit provided or to be provided to any current or former employee or other service provider of Parent or any of its Subsidiaries, other than increases in the Ordinary Course of Businesses and increases in compensation to certain employees, who are non-executive officers, which are reasonably necessary to bring such compensation to market level compensation, (2) enter into or adopt any new Parent Benefit Plan or amend in any material respect or terminate any Parent Benefit Plan, (3) accelerate the funding or vesting of any compensation or benefit, or (4) make any material contribution to any Parent Benefit Plan other than contributions made in the Ordinary Course of Business;
(xii) enter into, materially amend or terminate any Parent Material Contract (or any Contract that would be a Parent Material Contract if it were in effect as of the date of this Agreement), except that Parent and its Subsidiaries may (x) enter into Contracts of the types described in clauses (B), (F)(II) or (F)(V) of Section 4.2(t)(i)) and (y) amend Parent Material Contracts, so long as such Contracts and amendments will not, in the aggregate, increase the liabilities of Parent and its Subsidiaries by greater than $500,000;
(xiii) acquire (whether by merger, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or substantially all of the assets of any of the conditions foregoing, other than (A) purchases of inventory and other assets in the Ordinary Course of Business or pursuant to existing Contracts, and (B) assets with a fair market value of no greater than $500,000 in the aggregate;
(xiv) make any payment or accrual of, or commit to, capital expenditures for any period that are greater than 105% of the capital expenditures reflected in Parent’s capital expenditure budget provided to the Merger set forth Company prior to the date hereof;
(xv) compromise, settle or agree to settle any Action (including any Action relating to this Agreement or the transactions contemplated hereby), or consent to the same, other than compromises, settlements or agreements with no obligation of Parent and its Subsidiaries other than payment of cash (A) in Article VII not being satisfied.the Ordinary Cou
Appears in 1 contract
Interim Operations. (a) The Except (i) as described in Section 5.1(a) of the Company Disclosure Letter, (ii) as otherwise expressly required or permitted by this Agreement or any other Transaction Document, (iii) as required by applicable Law or COVID-19 Measures or (iv) as Parent shall otherwise consent to in writing (which consent shall not be unreasonably withheld, conditioned, delayed, or denied), the Company covenants and agrees as to itself and its Subsidiaries that, after during the period from the date of this Agreement and prior to until the Effective Time and except (A) as otherwise expressly required by this AgreementClosing, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, shall use commercially reasonable efforts to operate the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets of business and to preserve intact its their business organizations intact and maintain existing relations with the Company Top Suppliers, Company Top Customers and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Company’s executive officers.
(b) Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective TimeClosing, except (Aw) as described in the corresponding subsection of Section 5.1(b) of the Company Disclosure Letter, (x) as otherwise expressly required or permitted by this AgreementAgreement or any Transaction Document, (By) as required by applicable Laws, Law or COVID-19 Measures or (Cz) as Parent may shall otherwise consent to in writing (such which consent shall not to be unreasonably withheld, delayed conditioned or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Scheduledelayed), the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instrumentsits Subsidiaries’ Organizational Documents;
(ii) (A) merge or consolidate the Company itself or any of its Subsidiaries with any other Person, except for any such transactions among its wholly owned Subsidiaries Subsidiaries, or (B) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company, Company or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesSubsidiaries;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess ofof $1,000,000, individually or acquire any business or entity (whether by merger or consolidation, by purchase of substantially all assets or equity interests or by any other manner), in the aggregateeach case, $2,500,000in any transaction or series of related transactions, other than acquisitions or other transactions pursuant to Contracts to which the Company or any of its Subsidiaries are a party that are in effect as of the date of this Agreement;
(iv) sell, lease, license or otherwise dispose of any of its material assets or properties (other than Intellectual Property of the Company), except (A) for sales, leases, licenses or other dispositions in the ordinary course of business and (B) for sales, leases, licenses or other dispositions of assets and properties with a fair market value not in excess of $1,000,000 in the aggregate or (C) pursuant to Contracts to which the Company or any of its Subsidiaries are a party that are in effect as of the date of this Agreement;
(v) except pursuant to awards granted under the Stock Plan, issue, sell, pledge, dispose of, grant, transfer, encumber, grant or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee sale or encumbrance of, grant of any shares of capital stock or other securities of the Company or any of its Subsidiaries (other than the issuance of shares issuances by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stockCompany), or any options, warrants warrants, convertible securities, subscription rights or other similar rights of any kind entitling its holder to receive or acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets other securities of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms reclassify, split, combine, subdivide, redeem or repurchase, any of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet stock of the Company and other than or options, warrants or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except in connection with the Company net exercise or any direct or indirect wholly owned Subsidiary settlement of awards under the Company)Stock Plan;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassifymake any material loans, splitadvances, combine, subdivide guarantees or redeem, purchase capital contributions to or otherwise acquire, directly investments in any Person (other than the Company or indirectly, any of its capital stock direct or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment indirect wholly owned Subsidiary of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise Company), other than in the ordinary course of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationbusiness;
(ix) incur any indebtedness Indebtedness for borrowed money or guarantee any such indebtedness Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries Indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice, not to exceed $500,000 in the aggregate;
(x) except as set forth make or commit to make capital expenditures other than in an amount not in excess of $500,000, in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewithaggregate, make or authorize other than any capital expenditureexpenditure (or series of related capital expenditures) consistent in all material respects with the Company’s annual capital expenditure budget for periods following the date hereof made available to Parent;
(xi) (A) enter into any Contract that would have been a Company Material Contract had it been entered into prior to the date of this Agreement Agreement, other than in the ordinary course of business;
(xii) amend or (B) amend, modify in any material respect or terminate any Company Material Contract, or cancelwaive or release any material rights, modify claims or waive benefits under any debtsCompany Material Contract, rights or claims thereunder; for purposes of this Section 6.1in each case, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference other than in the definition ordinary course of Personal Property Leases shall be changed to $2,500,000business;
(xiixiii) make any material changes with respect to its accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this AgreementGAAP;
(xiv) file or amend settle any material Tax Return Proceeding, except in the ordinary course of businessbusiness or where such settlement is covered by insurance or involves only the payment of monetary damages in an amount not more than $500,000 in the aggregate;
(xv) file any material amended Tax Return, make, revoke or change any material Tax election in a manner inconsistent with past practice, adopt or change any material Tax accounting method or period, enter into any agreement with a Governmental Entity with respect to material Taxes, settle or compromise any material Tax liabilityexamination, make, change audit or revoke other action with a Governmental Entity of or relating to any material Taxes or settle or compromise any claim or assessment by a Governmental Entity in respect of material Taxes, or enter into any Tax election except sharing or similar agreement (excluding any commercial contract not primarily related to Taxes), in each case, to the extent consistent with past practice or as required by law, change such action could reasonably be expected to have any adverse and material method of Tax accounting, except as required by law, or take any action which would materially adversely affect impact on Parent following the Tax position of the Company or of any of its SubsidiariesClosing;
(xvxvi) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than or pursuant to Contracts the terms of any Company Benefit Plan in effect prior to as of the date of this Agreement or as required by Law, (A) materially increase the annual salary or consulting fees or target annual cash bonus opportunity, of any Company Employee with an annual salary or consulting fees and target annual cash bonus opportunity in excess of $250,000 as of the date of this Agreement;
, (xviB) become a party to, establish, adopt, materially amend, or terminate any material Company Benefit Plan or any arrangement that would have been a material Company Benefit Plan had it been entered into prior to this Agreement, (C) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, (D) forgive any loans or issue any loans (other than routine travel advances issued in the ordinary course of business) to any Company Employee, (AE) transfer, hire any employee or engage any independent contractor (who is a natural person) with annual salary or consulting fees and target annual cash bonus opportunity in excess of $250,000 or (F) terminate the employment of any executive officer other than for cause;
(xvii) sell, assign, lease, exclusively license, mortgage, pledge, encumber, divest, cancelabandon, abandon or allow to lapse or expire or otherwise dispose of any material Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments grants of non-exclusive licenses in the ordinary course of business to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any customers for use of the current products or former directors, officers, employees or consultants services of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made otherwise in the ordinary course consistent with past practice and are consistent with the other requirements set forth of business;
(xviii) become a party to, establish, adopt, amend, commence participation in this Agreement, (J) or enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Companyunion Contract;
(xviiixix) subject fail to Section 6.2use commercially reasonable efforts to keep current and in full force and effect, take or to comply with the requirements of, or to apply for or renew, any action permit, approval, authorization, consent, license, registration or omit to take certificate issued by any action Governmental Entity that is reasonably likely material to prevent, interfere with or delay the consummation conduct of the Merger business of the Company and its Subsidiaries, taken as a whole;
(xx) file any prospectus supplement or result registration statement or consummate any offering of securities that requires registration under the Securities Act or that includes any actual or contingent commitment to register such securities under the Securities Act in the future;
(xxi) fail to maintain, cancel or materially change coverage under, in a manner materially detrimental to the Company or any of the conditions its Subsidiaries, any insurance policy maintained with respect to the Merger set forth in Article VII not being satisfiedCompany and its Subsidiaries and their assets and properties;
(xxii) enter into any material new line of business outside of the business currently conducted by the Company and its Subsidiaries as of the date of this Agreement; or
(xixxxiii) agree, agree or authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Interim Operations. (ai) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing, and except (A) as otherwise expressly required contemplated by this Agreement, (B) and except as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its the present employees and agents of the Company and its Subsidiaries’ present employees and agents. Without limiting the generality of, of the foregoing and in furtherance of, the foregoingthereof, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to approve in writing (such consent approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed) or (DC) as set forth in Section 6.1(a) 6.1 of the Company Disclosure ScheduleLetter, the Company will not and will not permit its Subsidiaries to:
(ia) adopt or propose any change in its certificate articles of incorporation organization or by-laws or other applicable governing instruments;
(iib) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly wholly-owned Subsidiaries of the CompanyCompany or pursuant to Contracts in effect as of the date of this Agreement, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iiic) acquire assets outside or any securities of any business from any other Person, whether or not in the ordinary course of business from business, in any other Person with a value transaction or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000series of related transactions, other than (i) acquisitions in accordance with capital budgets previously provided, (ii) acquisitions pursuant to Contracts in effect as of the date of this Agreement, (iii) acquisitions with a value or purchase price in the aggregate of less than $50,000 or (iv) acquisitions of inventory and other daily purchases in the ordinary course of business;
(ivd) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly wholly-owned Subsidiary of the Company to the Company or another wholly wholly-owned Subsidiary or the issuance of Shares pursuant to Company OptionsSubsidiary), Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, other than required issuances of shares of Company Common Stock upon the exercise of Company Stock Options outstanding as of the date of this Agreement;
(ve) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its SubsidiariesSubsidiaries having a value in excess of $100,000 in the aggregate;
(vif) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees advances or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly wholly-owned Subsidiary of the Company)) in excess of $100,000 in the aggregate;
(viig) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly wholly-owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the CompanySubsidiary) or enter into any agreement with respect to the voting of its capital stock;
(viiih) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ixi) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $100,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company and its of indebtedness of wholly-owned Subsidiaries of the Company or among the Company’s wholly-owned Subsidiaries in the ordinary course (iv) interest rate swaps on customary commercial terms consistent with past practicepractice and not to exceed $250,000 of notional debt in the aggregate;
(xj) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewithpreviously provided, make or authorize any capital expenditureexpenditure in excess of $100,000 in the aggregate during any twelve (12) month period;
(xi) (Ak) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement Agreement;
(l) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP;
(Bm) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $100,000 (net of insurance coverage) or any disputed obligation or liability of the Company in excess of such amount;
(n) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights debts or claims thereunder; for purposes held by it or waive any rights having in each case a value in excess of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000100,000;
(xiio) make or change any material changes Tax election, change an annual accounting period, file any amended Tax Return, enter into any closing agreement, waive or extend any statute of limitation with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of businessTaxes, settle or compromise any material Tax liability, makeclaim or assessment, change or revoke surrender any material Tax election except right to the extent consistent with past practice or as required by law, change any material method claim a refund of Tax accounting, except as required by law, Taxes or take any other similar action which would materially adversely affect relating to the Tax position of the Company or filing of any Tax Return or the payment of its Subsidiariesany Tax;
(xvp) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, lines or businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for product sales of Company Products in the ordinary course of business and business, sales of obsolete assetsassets or sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $100,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xviq) other than except as set forth in Section 5.1(h)(i) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of businessbusiness consistent with past practice, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (Bii) increase in any manner the compensation, bonus, bonus or pension, welfare, fringe severance or other benefitsbenefits of, severance pay any bonus to, or termination pay of make any of the current new equity awards to any director, officer or former directors, officers, employees or consultants employee of the Company or any of its Subsidiaries, (Ciii) pay any bonus establish, adopt, amend or incentive compensation under terminate any Benefit Plan in excess or Pension Plan or amend the terms of the amount earned any outstanding equity-based on actual performanceawards, (Div) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation benefits under any Benefit Plan, (E) grant to the extent not already provided in any new award, amend the terms of outstanding awards or change the compensation opportunity under any such Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (Hv) change any actuarial or other assumptions used to calculate funding or contribution obligations under with respect to any Benefit PlanPlan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, other than except as may be required by GAAP; or (vi) forgive any loans to directors, (I) hire any executive officer officers or employees of the Company or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;its Subsidiaries.
(xviiir) subject to Section 6.2, knowingly take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII VIII not being satisfied; or
(xixs) agree, authorize or commit to do any of the foregoing.;
(bii) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII VIII not being satisfied.
Appears in 1 contract
Interim Operations. From and after the date hereof, the Seller shall cause the Company to conduct the Business in the ordinary course consistent with past practice and use its commercially reasonable efforts to preserve intact the assets, properties and relationships with employees and third parties having material business dealings with the Company. Without limiting the generality of the foregoing, except (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time and except (A) as otherwise expressly required by this Agreement, (Bb) as required for actions approved by applicable Laws, the Purchaser (C) as Parent may consent to in writing (such consent which approval shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed), (c) as required to comply with applicable Law or (Dd) as set forth in on Section 6.1(a) 5.1 of the Company Disclosure Schedule, from and after the business of it and its Subsidiaries date hereof, the Seller shall be conducted in the ordinary and usual course and, not (solely with respect to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality ofCompany), and in furtherance of, shall cause the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent Company not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) take any of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries tofollowing actions:
(i) adopt or propose any change in its certificate certification of incorporation or by-laws incorporation, bylaws or other applicable similar organizational or governing instrumentsdocuments;
(ii) merge adopt a plan or consolidate the Company agreement of complete or any of its Subsidiaries with any partial liquidation, dissolution, restructuring, merger, consolidation, restructuring, recapitalization or other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesreorganization;
(iii) acquire assets outside (A) issue, sell, transfer, pledge, dispose of or encumber the Equity Interests or any other equity or similar interests of the ordinary course Company or (B) grant any option, warrant or other right to purchase or obtain, or otherwise dispose of business from or encumber, the Equity Interests or any other Person equity or similar interests of the Company;
(iv) enter into or consummate any transaction or series of transactions involving the acquisition of the business, stock, assets or other properties of any other Person, whether by merger, consolidation, purchase or otherwise, for consideration in excess of $250,000, individually, or $250,000, in the aggregate;
(v) sell, lease, license, transfer, exchange or swap, mortgage or otherwise encumber, or subject to any Encumbrance (other than Permitted Encumbrance) or otherwise dispose of any portion of its properties or assets with a value or purchase price in the aggregate in excess of, individually or in the aggregate, of $2,500,000, 250,000 other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xvB) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts existing agreements in effect prior to the date hereof, (C) as may be required by applicable Law or any Governmental Authority in order to permit or facilitate the consummation of the transactions contemplated by this Agreement, or (D) dispositions of obsolete or worthless assets;
(vi) incur, assume, guarantee, prepay or otherwise become liable for any Indebtedness, other than (A) in the ordinary course of business, and (B) Indebtedness incurred pursuant to agreements in effect prior to the execution of this Agreement;
(xvivii) enter into, renew, amend or modify in any material respect, or terminate any Material Contract, other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of increase in any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in material respect the diligent prosecution of Owned Intellectual Property), waive benefits under any Company Plan or modify any Company Plan where such modification has a material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed cost impact on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviiiviii) subject (A) incur or commit to any capital expenditures other than as set forth on the cap expenditure budget set forth on Section 6.25.1(viii) of the Disclosure Schedule, (B) omit to incur any capital expenditure set forth on the cap expenditure budget set forth on 5.1(viii) of the Disclosure Schedule or (C) enter into any new line of business;
(A) make, change or revoke any material Tax election, (B) file any amended Tax Return, or (C) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes;
(x) settle or compromise any pending or threatened action, suit, investigation, arbitration or administrative or other proceeding for an amount in excess of a specific accrual and reserve established in the Financial Statements in respect of such matter, except for any settlement or compromise that arises in the ordinary course to the extent such settlement or compromise does not involve the incurrence or expenditure by the Company of cash payments (or payment commitments) of more than $100,000 in the aggregate;
(xi) take any action or omit to take any action that is could reasonably likely be expected to prevent, interfere with cause any Permit to be suspended or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedrevoked; or
(xixxii) agreechange its financial accounting policies or procedures or any of its methods of reporting income, authorize deductions or other items for financial accounting purposes, except as required by GAAP or applicable Law; or
(xiii) authorize, or agree or commit to do do, whether in writing or otherwise, any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Sources: Equity Purchase Agreement (Primus Telecommunications Group Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to until the Effective Time Time, its business and except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course andcourse, to consistent with past practice in all material respects. To the extent consistent therewithwith the foregoing sentence, it the Company and its Subsidiaries shall use their respective commercially reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its the present employees and agents of the Company and its Subsidiaries’ present employees . Nothing in the foregoing sentences shall prohibit or restrict the Company and agents. Without limiting the generality of, and in furtherance of, the foregoing, its Subsidiaries from the date of this Agreement to the Effective Time from taking any of the following actions: (i) actions approved by Purchaser in writing, which approval shall not be unreasonably withheld, delayed or conditioned; (ii) any action expressly required or permitted by this Agreement; and (iii) any action required by Law. Without limiting the generality of the foregoing and in furtherance thereof, from the date hereof until the Effective Time, except (A) as otherwise expressly required or permitted by this Agreement, (B) as required by applicable Laws, (C) as Parent Purchaser may consent to approve in writing (such consent approval not to be unreasonably withheld, delayed or conditioned) or ), (DC) as set forth in Section 6.1(a) 6.1 of the Company Disclosure ScheduleLetter or (D) as required by any applicable Laws (including any requirement of the SEC), the Company will not and will not permit its Subsidiaries to:
(ia) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments;
(b) acquire or agree to acquire (i) by merging or consolidating with, or by purchasing a substantial portion of the stock, or other ownership interests in, or substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association, joint venture, limited liability company or other entity or division thereof or (ii) merge any assets that would be material, individually or consolidate in the aggregate, to the Company or any of and its Subsidiaries with any other PersonSubsidiaries, taken as a whole, except for any such transactions among wholly owned Subsidiaries purchases of supplies, equipment, services and inventory in the Companyordinary course of business consistent with past practice;
(c) restructure, or restructurerecapitalize, reorganize or completely or partially liquidate the Company or otherwise enter into adopt a plan of complete or partial liquidation with respect to the Company or adopt resolutions providing for or authorizing any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesof the foregoing;
(iiid) acquire assets outside other than (i) Shares issuable pursuant to Company Options outstanding and disclosed as outstanding in Section 5.1(b) of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions Company Disclosure Letter and (ii) Shares issuable pursuant to Contracts in effect as the exercise of the date of this Agreement;
(iv) Warrants, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company OptionsSubsidiary), Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(ve) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees advances (except for advances to employees or consultants in respect of travel and business expenses) or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(viif) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the CompanySubsidiary) or enter into any agreement with respect to the voting of its capital stock;
(viiig) other than transactions involving direct or indirect wholly owned Subsidiaries, reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares stock other than pursuant to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationWarrant Agreements;
(ixh) redeem, repurchase, prepay, cancel, incur or otherwise acquire, or modify, in any material respect in a manner adverse to the Company, its Subsidiaries, Purchaser or Merger Sub, any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among with respect to (i) any such redemption, repurchase, prepayment, cancellation, incurrence or acquisition of indebtedness incurred or repaid under the Amended and Restated Credit Agreement with Bank of America, N.A. and the other banks party thereto, dated as of September 29, 2005 or (ii) any such redemption, repurchase, prepayment, cancellation, incurrence or acquisition not to exceed $2,500,000 in the aggregate or (iii) guarantees incurred in compliance with this Section 6.1 by the Company and or any of its wholly-direct or indirect wholly owned Subsidiaries of indebtedness of any direct or among indirect wholly owned Subsidiary of the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(xi) except as set forth in each of the quarterly capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule previously made available to Purchaser and consistent therewith, make or authorize any capital expenditureexpenditures in excess of $500,000 in the aggregate;
(xij) other than in the ordinary course of business consistent with past practice, (A) enter into into, renew, terminate, fail to renew or amend in any material respect any Contract that is or would have been be a Material Contract had it been entered into prior to this Agreement or Contract, (B) enter into, amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights under any contract or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) agreement or transaction with an executive officer or director of the definition Company (or, other than on arm’s-length terms in the ordinary course of Material Contract shall be changed to business, any Person in which such executive officer or director, or any immediate family member of such executive officer or director, has over a 5% interest) involving amounts in excess of $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause 75,000, or (C) enter into any line of business other than lines of business currently conducted by the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; Company and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000its Subsidiaries;
(xiik) make any material changes with respect to accounting policies or procedures, except as required by Law or changes in Law applicable generally accepted accounting principles (of which, to the knowledge of the Company, there are none) or applicable GAAP write up, write down or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle write off the book value of any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release assets of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commenceits Subsidiaries, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of businessbusiness and consistent with past practice;
(l) pay, discharge, waive, compromise settle or compromise otherwise satisfy any Action, whether now pending or hereafter brought, (A) at a cost materially in excess of the amount accrued or reserved in the Company Reports or (B) pursuant to terms that impose material Tax liabilityadverse restrictions on the business of the Company and its Subsidiaries as currently conducted or (C) on a basis that reveals a finding or an admission of a material violation of Law by the Company or its Subsidiaries;
(m) other than in the ordinary course of business consistent with past practice, (A) make, change or revoke any material Tax election except election, (B) enter into any settlement or compromise of any material Tax liability, (C) file any amended Tax Return with respect to the extent consistent with past practice or as required by lawany material Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material method of Tax, (F) fail to claim a material Tax accounting, except as required by lawrefund for which it is entitled, or take any action which would materially adversely affect the (G) make material changes to their Tax position of the Company accounting methods or of any of its Subsidiariesprinciples;
(xvn) transfer, sell, lease, license, sublicense, mortgage, pledge, surrender, encumber, divest, cancel, abandon abandon, restrict or allow to lapse or expire or otherwise dispose of any material assets, licenses, operations, rights, product lines, lines or businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business business, and sales except for obsolete assets and except for sales, leases, licenses or other dispositions of obsolete assetsassets with a fair market value not in excess of $1,000,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreementhereof;
(xvio) except as required pursuant to existing written, binding agreements in effect prior to the date hereof or any Benefit Plan which is set forth in Section 6.1(o) of the Company Disclosure Letter, (i) (A) hire, promote or terminate any director, employee or consultant earning more than $125,000 in aggregate annual compensation (other than than, in the case of this clause (A), (x) employee terminations for cause, (y) in connection with new hires to replace departed key employees or consultants in the ordinary course of business consistent with past practice and on substantially similar terms and conditions and (z) in connection with promotions in the ordinary course of business consistent with past practice); or (B) implement or effect any reduction in force, lay off or similar program or effort concerning the termination of employees (other than, in the case of this clause (B), (x) employee terminations for cause and (y) employee terminations pursuant to and consistent with past practice); (ii) grant or provide any new severance or new termination payments or new material benefits to any former or existing director, officer, employee or consultant of the Company or any of its Subsidiaries, (iii) increase the compensation, fees, bonus or pension, profit sharing, welfare, severance or other benefits of or pay any bonus to any employee or director or make any new equity awards to any director, officer, consultant or employee of the Company or any of its Subsidiaries (other than, in all such cases, employees earning $75,000 or less in aggregate annual compensation), (iv) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (v) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (vi) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vii) forgive any loans to directors, officers or, outside the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon employees of the Company or allow to lapse or expire or otherwise dispose any of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xviip) except on substantially similar terms and conditions to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed terms and conditions set forth on Section 6.1(a)(xvii6.1(p) of the Company Disclosure ScheduleLetter, (A) terminateestablish, adopt, enter into, into or amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a any labor union, works council union or similar organization or (K) terminate without cause the employment of any officer of the Companyorganization;
(xviiiq) subject (A) transfer to Section 6.2one or more third parties, mortgage or encumber, or except in the ordinary course of business, license or sublicense, any material Intellectual Property or (B) fail to pay any fee, take any action or omit make any filing reasonably necessary to take any action that is reasonably likely to prevent, interfere with or delay the consummation maintain its ownership of the Merger material owned Intellectual Property;
(r) fail to maintain in full force and effect, or result in fail to replace or renew, material insurance policies existing as of the date hereof that are maintained by the Company or any of the conditions to the Merger set forth in Article VII not being satisfiedits Subsidiaries; or
(xixs) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Sources: Merger Agreement (Sourcecorp Inc)
Interim Operations. Except (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time and except (Ai) as otherwise set forth in Section 5.1 of the Company Disclosure Schedule, (ii) as required or expressly required permitted by this Agreement, including under the second sentence of this Section 5.1, (Biii) as required by applicable Laws, Law or (Civ) as with the prior written consent of Parent may consent to in writing (such consent not to be unreasonably withheld, delayed conditioned or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoingdelayed), from the date of this Agreement until the earlier of the Effective TimeTime and the termination of this Agreement in accordance with Article VII (the “Interim Period”), the Company will, and will cause each of its Subsidiaries to, conduct the business of the Company and its Subsidiaries in the Ordinary Course of Business. In addition, and without limiting the generality of the foregoing, except (Ai) as otherwise set forth in Section 5.1 of the Company Disclosure Schedule, (ii) as required or expressly required permitted by this Agreement, (Biii) as required by applicable Laws, Law or (Civ) as with the prior written consent of Parent may consent to in writing (such consent not to be unreasonably withheld, delayed conditioned or conditioned) or (D) as set forth in Section 6.1(a) of delayed), during the Company Disclosure ScheduleInterim Period, the Company will not not, and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with to, do any of the following:
(a) (i) declare, set aside or pay any dividends on, or make any other Persondistributions (whether in cash, except for stock or property or any such transactions among wholly owned Subsidiaries combination thereof) in respect of any Shares or capital stock or other equity interests, other than (1) dividends and other distributions by a direct or indirect Subsidiary to its parent in the Ordinary Course of Business, (2) dividends or other distributions by an entity in which the Company directly or indirectly owns at least a majority interest, in the Ordinary Course of Business, and (3) if applicable and upon consultation with Parent, to the extent reasonably necessary to maintain the Company’s qualification as a REIT and to avoid the imposition of entity-level income and excise taxes; (ii) split, combine, subdivide or reclassify shares of capital stock or other equity interests of the CompanyCompany or its Subsidiaries; or (iii) repurchase, or restructure, reorganize or completely or partially liquidate redeem or otherwise enter into acquire, directly or indirectly, any agreements Shares or arrangements imposing material changes capital stock or restrictions on other equity interests of the Company or its assetsSubsidiaries, operations or businessesother than the withholding of Shares to satisfy withholding Tax obligations with respect to Shares granted pursuant to Company Equity Awards and forfeitures of Company Equity Awards;
(iiib) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess ofexcept as required by Section 5.19, individually or in the aggregateissue, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issuedeliver, sell, pledge, dispose of, grant, transfer, encumber, pledge or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee otherwise encumber or encumbrance of, subject to any Lien (other than Liens imposed by applicable securities Laws) any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or any securities convertible into, exercisable or exchangeable into or exercisable for any shares of such capital stock, or any optionsrights, warrants or other rights of any kind options to acquire any shares of such capital stock or such convertible or exchangeable securities, in each case;
(vc) create except as required by Section 5.19, amend, supplement or incur any Lien material to modify, the Company or any of its Subsidiaries on any assets Organizational Documents of the Company or any of its Subsidiaries;
(vid) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend adopt a material change in its accounting methods, principles or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stockpractices, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except insofar as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall may be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in GAAP, applicable Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect theretothereto or by any Governmental Authority (including the Financial Accounting Standards Board or any similar organization);
(Ae) settle except in relation to Liens to secure Indebtedness for borrowed money permitted to be incurred under Section 5.1(f), sell, lease (as lessor), license, mortgage, sell and leaseback or otherwise subject to any litigation Lien (other than Permitted Liens), or other proceedings before a Governmental Entity otherwise dispose of any properties or assets (including Company Owned Property) or any interests therein, in each case, with an aggregate value or purchase price in excess of $100,000 individually or $250,000 in the aggregate, in any transaction or series of related transactions, except where that the settlement is limited solely Company and its Subsidiaries may continue to lease Company Owned Properties in the Ordinary Course of Business;
(If) incur, create, assume, refinance, replace or prepay any Indebtedness for borrowed money or guarantee such Indebtedness of another Person, or issue, sell or amend the release terms of claims and (II) the monetary payment by any debt securities or rights to acquire any debt securities of the Company or any Subsidiary does not exceed $2,000,000 its Subsidiaries, other than (or $15,000,000 i) the incurrence of Indebtedness for borrowed money in the aggregate Ordinary Course of Business under, and in accordance with, the Existing Loan Agreements, as in effect as of the date hereof, (ii) intercompany Indebtedness or guarantees between or among the Company and any of its Subsidiaries that will be satisfied or discharged as of the Closing or (iii) in connection with the financing of accounts payable in the Ordinary Course of Business;
(g) other than as permitted under another subsection of this Section 5.1, (i) materially modify, amend or waive any material right or Action under or renew any Material Contract or (ii) enter into any new Contract that would constitute a Material Contract if existing on the date hereof;
(h) (i) enter into any Contract with any current or prospective director, employee, consultant or independent contractor, (ii) accelerate the vesting or payment of, or increase the amount of, the compensation or benefits with respect to any current or former employee, consultant or independent contractor of the Company or its Subsidiaries, other than (A) the payment of annual bonuses for all such settlements) completed periods in the Ordinary Course of Business or (B) commenceas required by any Company Benefit Plan in effect as of the date of this Agreement, joinor as otherwise required by any applicable Law, make an appeal (iii) adopt, materially amend or terminate any Company Benefit Plan (or any plan, program, policy, arrangement, Contract or understanding that would be a Company Benefit Plan if it were in existence on the date of this Agreement), except as required by applicable Law, (iv) grant any awards under any Company Benefit Plan, or (v) hire or engage, or terminate (other than for cause) the employment or engagement of any officer, employee, consultant or independent contractor;
(i) except as required by applicable Law or, following consultation with Parent, to qualify or preserve the status of any of the Company’s Subsidiaries as a disregarded entity or partnership for United States federal income tax purposes or as a taxable REIT subsidiary within the meaning of Section 856(l) of the Code, as the case may be, (i) make, change or revoke any material election with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of billsTaxes, (IIii) make a material change in any Tax accounting method (or file a request to make any such cases where change), (iii) file any material amended Tax Return (and, in the case of filing any such Tax Return as required by applicable Law prior to the Closing, the Company shall provide drafts of each such Tax Return and supporting documents to Parent for its review and comment at least five (5) Business Days prior to the date on which the Company will file such Tax Return and shall consider in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its businessany reasonable comments timely submitted by Parent), provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (IIIiv) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make(v) surrender any right to claim a material Tax refund, change offset or revoke credit, (vi) waive or extend the statute of limitations with respect to any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assetsTax, other than pursuant to Contracts in effect prior extensions of time to the date of this Agreement;
(xvi) other than file Tax Returns obtained in the ordinary course Ordinary Course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applicationsBusiness, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (Jvii) enter into any collective bargaining Tax protection agreement or other any closing agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Companyrespect to Taxes;
(xviiij) subject to Section 6.2settle or compromise (i) any Action, take any action in each case made or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in pending against any of the conditions to Company Properties, the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize Company or commit to do any of the foregoing.
Subsidiaries, excluding any such matter relating to Taxes (bwhich is covered by Section 5.1(i) Prior to making above), or (ii) any formal written communications Action involving any present, former or purported holder or group oral presentations to of holders of the directorsShares, officers or employees of in each case, in their capacity as such, where the amount paid by the Company or any of its Subsidiaries pertaining to compensation in settlement exceeds $100,000 individually or benefit matters that are affected is not settled solely by the transactions contemplated by this Agreement, payment of money damages and does not provide a full release of the Company shall provide Parent and its Subsidiaries;
(k) enter into any new line of business;
(l) adopt a plan of merger, complete or partial liquidation or resolutions providing for or authorizing such merger, liquidation or a dissolution, consolidation, recapitalization or bankruptcy reorganization;
(m) remove any material personal property owned or leased by the Company or any of its Subsidiaries from its Company Property except as may be required for necessary repair or replacement or as permitted by Section 5.1(f) above;
(n) initiate any Tax protest with respect to any Company Property;
(o) settle, agree to, or otherwise acquiesce to any condemnation or taking of all or any portion of a copy of Company Owned Property;
(p) make any capital expenditures in an amount exceeding $20,000 at a single Company Property or $150,000 in the intended communication, Parent shall have a reasonable aggregate in any period of time to review and comment on thirty (30) consecutive days between the communication (which comments shall not be unreasonably withheld or delayed), and Parent date of this Agreement and the Effective Time, or enter into any agreement to obligate the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to make such capital expenditures; or
(q) agree to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedforegoing actions.
Appears in 1 contract
Sources: Merger Agreement (KBS Strategic Opportunity REIT, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after from the date of this Agreement and prior to until the earlier of the Effective Time and except the termination of this Agreement in accordance with Article VI (Aexcept: (i) if Parent shall otherwise approve in writing, such approval not to be unreasonably withheld, conditioned or delayed, (ii) as otherwise expressly required by this Agreement, (Biii) as expressly set forth in Section 4.1(a) of the Company Disclosure Letter, (iv) as required by applicable LawsLaws or any Governmental Entity or (v) with respect to any COVID-19 Measures to the extent reasonably necessary for the operation of the Company), the business of the Company and its Subsidiaries shall be conducted, in all material respects, in the ordinary course of business (including, for the avoidance of doubt, consistent with recent past practice in light of COVID-19) and applicable Law. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement in accordance with Article VI, except (A) as otherwise contemplated or required by this Agreement, (CB) as Parent may consent to approve in writing (such consent approval not to be unreasonably withheld, delayed or conditioned), (C) as required by applicable Laws or any Governmental Entity or (D) as set forth in Section 6.1(a4.1(a) of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure ScheduleLetter, the Company will not not, and will not permit its Subsidiaries Subsidiaries, to:
(i) adopt or propose any change in amendments to its certificate of incorporation charter or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate the Company or otherwise enter into any agreements or arrangements imposing material changes or restrictions on of its assetsSubsidiaries, operations or businessesexcept for any such transactions solely among Subsidiaries of the Company;
(iii) acquire assets or capital stock outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually of $5,000,000 in any transaction or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as series of the date of this Agreementrelated transactions;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee transfer or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than (A) to the extent permitted under Section 4.1(xiv) below, (B) the issuance of Shares upon the settlement of Restricted Shares and Performance Shares outstanding on the date of this Agreement in accordance with their terms on the date of this Agreement, or (C) the issuance of shares of capital stock by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) Company), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible convertible, exchangeable or exchangeable exercisable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees advances or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company)) in excess of $2,000,000 in the aggregate;
(viivi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary of the Company to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock);
(viiivii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stockstock (other than, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required by the Stock Plan or permitted under any award outstanding on the terms date hereof, the acquisition of the applicable Stock Plans and award agreements any Shares tendered by current or (B) former employees, employees or directors or consultants following termination of their relationship in order to pay Taxes in connection with the Company in accordance with applicable agreements providing for the repurchase settlement of shares upon such terminationRestricted Shares or Performance Shares);
(ixviii) incur any indebtedness for borrowed money or guarantee such indebtedness of another PersonPerson (other than a Subsidiary of the Company), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among indebtedness for borrowed money incurred in the Company ordinary and its wholly-owned Subsidiaries usual course of business pursuant to the Existing Credit Facility and that can be repaid without penalty on or among prior to the Closing Date or issuances of letters of credit under the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practicerevolving credit facility;
(xix) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditureexpenditure in excess of $2,500,000 in the aggregate, other than expenditures relating to internally developed software in the ordinary course of business;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xiix) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect theretoa Governmental Entity;
(Axi) settle any litigation or other proceedings Actions before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment for an amount payable by the Company or any Subsidiary does not exceed of its Subsidiaries in excess of $2,000,000 (2,500,000 or $15,000,000 in the aggregate for all such settlements) any commitment, obligation or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection liability of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment excess of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreementamount;
(xivxii) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by lawelection, change any Tax accounting period, adopt or change any material method Tax accounting method, amend any material Tax Return, enter into any closing agreement in respect of Tax accountingTaxes, except as required by lawsettle or compromise any material liability or claim for Taxes, or take surrender any action which would materially adversely affect the Tax position material claim for a refund of the Company or of any of its SubsidiariesTaxes;
(xvxiii) except for transactions among the Company and its Subsidiaries or among the Company’s Subsidiaries, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, assets or businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of in each case which are material to the Company Products and its Subsidiaries taken as a whole, other than equipment, inventory, supplies and other assets in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xiv) except as required pursuant to the terms of any existing Benefit Plan or Contract in effect prior to the date of this Agreement and made available to Parent, or as otherwise required by applicable Laws, (A) grant or provide any severance or termination payments or benefits to any director, officer or other employee of the Company or any of its Subsidiaries, except in the ordinary course of business or consistent with past practice or pursuant to existing Contracts, (B) increase or decrease the compensation or make any new equity awards to any director, officer or other employee of the Company or any of its Subsidiaries, except in the ordinary course of business or consistent with past practice, or (C) establish, adopt, enter into, terminate or materially amend or modify any Benefit Plan (or any arrangement that would be a Benefit Plan if in effect on the date hereof), other than changes that are made in connection with the annual renewal of group welfare benefit contracts in the ordinary course of business or consistent with past practice that do not materially increase the costs to the Company or any of its Subsidiaries of any such Benefit Plan; or
(xv) (i) negotiate, modify, extend, or enter into any Labor Agreement or (ii) recognize or certify any labor union, labor organization, works council, employee representative or group of employees as the bargaining representative for any employees of the Company or its Subsidiaries;
(xvi) implement or announce any employee layoffs, plant closings, reductions in force, furloughs, temporary layoffs, salary or wage reductions, work schedule changes or other actions that would be reasonably likely to implicate the WARN Act;
(xvii) hire, engage, terminate (without cause), furlough, or temporarily layoff any employee or independent contractor with annual base compensation in excess of $250,000;
(xviii) waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation of any current or former employee or independent contractor;
(xix) enter into or adopt any “poison pill” or similar stockholder rights plan, in each case, applicable to the Merger and the other transactions contemplated by this Agreement;
(xx) amend or modify in any material respect, waive any material rights under, terminate (other than in the ordinary course of business or any termination in the accordance with the terms of an existing Material Contract that occurs automatically), release, settle or compromise any material claim, liability or obligation under any Material Contract or enter into (other than in the ordinary course of business, ) any contract which if entered into prior to the date of this Agreement would have been a Material Contract;
(Axxi) transferenter into any new line of business outside the existing business of the Company and its Subsidiaries as of the date of this Agreement;
(xxii) abandon, sell, assign, license, mortgagepermit to lapse, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Company Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equitynon-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made exclusive licenses granted in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedbusiness; or
(xixxxiii) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time and except (A) as unless Parent shall otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to approve in writing (such consent approval not to be unreasonably withheld, delayed or conditioned) )), and except as otherwise expressly contemplated by this Agreement or (D) as set forth in Section 6.1(a) of required by applicable Laws, the Company Disclosure Schedule, and its Subsidiaries shall cause the business of it and its Subsidiaries shall to be conducted in the ordinary and usual course consistent with past practice and, to the extent consistent therewith, it and its Significant Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agentsassociates. Without limiting the generality ofof the foregoing, and in furtherance of, the foregoingthereof, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required contemplated or specifically permitted by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to approve in writing (such consent approval not to be unreasonably withheld, delayed or conditioned), (C) as is reasonably responsive to a requirement of applicable Law or any Governmental Entity or (D) as set forth in Section 6.1(a) 6.1 of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws bylaws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire make any acquisition of assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually of $30 million in any transaction or in the aggregate, $2,500,000series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than (A) the issuance of Shares upon the settlement of performance units, restricted stock awards and other awards under the Stock Plans (and dividend equivalents thereon, if applicable) or (B) the issuance of shares by a wholly wholly-owned Subsidiary of the Company to the Company or another wholly wholly-owned Subsidiary or the issuance of Shares pursuant to Company OptionsSubsidiary), Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees advances or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly wholly-owned Subsidiary of the Company)) in excess of $30 million in the aggregate;
(viivi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) regular quarterly dividends paid to holders of Shares in the ordinary course consistent with past practice (including with respect to the record dates for such dividends) in an amount not to exceed $0.03 per Share, and (B) dividends paid by any direct or indirect wholly wholly-owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the CompanySubsidiary) or enter into any agreement with respect to the voting of its capital stock;
(viiivii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stockstock (other than the acquisition of any Shares tendered by current or former employees or directors in order to pay Taxes in connection with the settlement of performance units, except from restricted stock awards and other awards under the Stock Plans and other than in connection with a customary cashless exercise of Company Options);
(viii) (A) holders incur, issue, modify, renew, syndicate or refinance any Indebtedness (other than any letters of Company Options credit issued in full or partial payment the ordinary course of business, the exercise thereof and/or refinancing of any applicable Taxes payable by such holder upon exercise existing Indebtedness of the Company Options in the ordinary course of business (provided that such refinancing Indebtedness so incurred must be voluntarily prepayable without premium, penalties or other costs in excess of $2 million in the aggregate) and any Contracts relating to interest rate protection, swap agreements and collar agreements entered into in the ordinary course of business; provided, that the Company SARs shall consult in good faith with Parent prior to entering into, amending or otherwise modifying, or agreeing in principle to, any Contract relating to or reflecting any hedging arrangement that is material for the lapse Company and its Subsidiaries taken as a whole) having an outstanding principal amount in excess of restriction on Company Restricted Shares to (1) $5 million per individual incurrence or (2) $50 million in the extent required aggregate, provided that, in each case, any Indebtedness so incurred must be voluntarily prepayable without premium, penalties or permitted under the terms of the applicable Stock Plans and award agreements other costs or (B) former employeesenter into any swap transaction other than in the ordinary course of business consistent with past practice; provided, directors or consultants following termination of their relationship with that the Company shall consult in accordance good faith with applicable agreements providing Parent prior to entering into, amending or otherwise modifying, or agreeing in principle to, any Contract relating to or reflecting any hedging arrangement that is material for the repurchase of shares upon such terminationCompany and its Subsidiaries taken as a whole;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x6.1(a)(ix) of the Company Disclosure Schedule and in the ordinary course of business consistent therewithwith past practice or for expenditures related to operational emergencies, make or authorize any capital expenditureexpenditure in excess of $50 million in the aggregate;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xiix) make any material changes with respect to financial or Tax accounting policies or procedures, except as required by applicable Law or by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect theretoGAAP;
(Axi) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal other than with respect to a lawsuitany Tax audits, action, claim litigation or similar proceeding other than (Iproceedings) for the routine collection an amount in excess of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result $10 million individually or $30 million in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreementaggregate;
(xivxii) file other than in the ordinary course of business consistent with past practice or amend except to the extent required by Law, make any material Tax Return election;
(xiii) except in the ordinary course of business, settle enter into any settlement, compromise or compromise closing agreement with respect to any material Tax liabilityliability or Tax refund, make, change or revoke file any amended Tax Return with respect to any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by lawTax, or take any action which would materially adversely affect waive or extend the Tax position statute of the Company or limitations in respect of any of its Subsidiariesmaterial Taxes;
(xvxiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material amount of assets, licenses, operations, rights, product lines, lines or businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales other than pursuant to Contracts in force on the date of this Agreement, transactions solely among the Company Products and/or its wholly-owned Subsidiaries that would not result in a material increase in the Tax liability of the Company and its Subsidiaries or in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvixv) other than except as required pursuant to agreements in effect prior to the date of this Agreement or as otherwise required by applicable Law, (A) grant or provide any severance or termination payments or benefits to any director or employee of the Company or any of its Subsidiaries except with respect those employees who are not executive officers of the Company or any Subsidiary of the Company in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rightsbusiness consistent with past practice, (B) grant, extend, amend increase the compensation to any director or abandon (except as required employee of the Company or any of its Subsidiaries in excess of the 2010 amounts budgeted with respect thereto on the date hereof and otherwise in the diligent prosecution ordinary course of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Propertybusiness consistent with past practice, (C) fail establish, adopt, terminate or materially amend any Benefit Plan (other than routine changes to diligently prosecute welfare plans) or any plan, program, arrangement, policy or agreement that would be a Benefit Plan if it were in existence on the Company’s and its Subsidiaries’ patent applications, date hereof or (D) fail grant any equity or equity-based awards, except that (1) the Company may grant time-based restricted stock units in respect of no more than 1,227,270 Shares to exercise a right employees of removal or extension the Company and its Subsidiaries, other than those employees who are eligible to receive grants under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the Company’s Long-Term Incentive Program on the date hereof pursuant (such employees, the “LTIP Eligible Employees”), in the ordinary course of business and consistent with past practices with respect to Contracts or Benefit Plans which are the allocation of awards and otherwise subject to the terms of Section 6.1(e) below, (2) the Company may grant performance-based restricted stock unit awards in respect of no more than 590,909 shares under the Company’s Long Term Incentive Program with respect to the 2010-2011 performance cycle to LTIP Eligible Employees in the ordinary course of business and consistent with past practices with respect to the allocation of awards and otherwise subject to the terms of Section 6.1(f) below and (3) the Company may grant PERS awards for 2010 to the individuals listed on Section 6.1(a)(xvii6.1(a)(xv)(D)(3) of the Company Disclosure Schedule, (A) terminatein respect of no more than 104,545 shares, enter intoin the ordinary course of business and consistent with past practices with respect to the allocation of awards; provided, amend however, that the Company or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any a Subsidiary of the current Company may make offers of employment to newly hired non-executive employees in the ordinary course of business consistent with past practice that are not inconsistent with the terms of this subsection (xv);
(xvi) adopt a plan or former directors, officers, employees agreement of complete or consultants partial liquidation or dissolution of the Company or any of its Significant Subsidiaries, ;
(C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (Exvii) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, Lien other than as required by GAAP, Permitted Liens and except in connection with Indebtedness permitted under Section 6.1(a)(viii);
(Ixviii) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (JA) enter into any collective bargaining agreement Collective Bargaining Agreement or other similar agreement with a any labor union, works council or similar other collective bargaining organization or (KB) terminate without cause engage in information and consultation with any works council or similar organization in relation to reductions in force or workforce restructuring, which materially increases the employment of any officer financial obligations of the CompanyCompany or any of its Subsidiaries;
(xviiixix) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay in the consummation case of Subsidiaries of the Merger Company which are organized in jurisdictions other than a state of the United States, make any investment in debt or result in equity securities issued by the Company or any of its Subsidiaries organized under the conditions laws of a state of the United States;
(xx) permit any of its Subsidiaries or Affiliates or any of its or their respective directors, officers, managers, employees, independent contractors, representatives or agents to promise, authorize or make any payment to, or otherwise contribute any item of value to, directly or indirectly, any non-U.S. official, in each case, in violation of the Merger set forth in Article VII not being satisfiedFCPA; or
(xixxxi) agree, authorize or commit to do any of the foregoing.
(b) Prior Parent shall not knowingly take or permit any of its Affiliates to making take any formal written communications action that could reasonably be expected to prevent or group oral presentations to delay in any material respect the directors, officers or employees consummation of the Merger.
(c) If the Company identifies any activities of the Company or any of its Subsidiaries, including those activities of their respective directors, officers, managers, employees, independent contractors, representatives or agents, that the Company reasonably believes (following due inquiry) to be in violation of the FCPA, the Company shall and shall cause each of its Subsidiaries pertaining and Affiliates to compensation cease such activities. The Company shall and shall cause its Subsidiaries and Affiliates to take all actions required by law to remediate any actions taken by the Company, its Subsidiaries or benefit matters Affiliates, or any of their respective directors, officers, managers, employees, independent contractors, representatives or agents in violation of the FCPA.
(d) The Company shall (i) give Parent prompt notice of any inquiry, in any form, written or oral, from the PBGC or The Pensions Regulator with respect to any Benefit Plan that are affected is subject to Title IV of ERISA or any Non-U.S. Benefit Plan located in the United Kingdom, as applicable, (ii) permit Parent to participate in all negotiations and proceedings with, or initiated by, such entities, (iii) control such negotiations and any settlements, provided, however, that, without Parent’s consent, which shall not unreasonably be withheld, the Company may not commit itself under this Section 6.1(d) to any material obligations, whether effective prior to or after the Closing; and further provided, that the Company shall cooperate with Parent and shall take all actions reasonably requested to facilitate communication and negotiations, if reasonably determined by Parent to be appropriate, with the trustees of the Foreign Pension Plan in the United Kingdom between the date hereof and the Effective Time.
(e) The Company agrees that any awards granted pursuant to Section 6.1(a)(xv)(D)(1) above shall vest in equal installments on each of the first four anniversaries and shall provide, and shall require the grantee of such award as a condition to the receipt of such award to agree, that, notwithstanding any provision of this Agreement, any other agreement or plan to the contrary, upon a “change in control” (which shall include the consummation of the transactions contemplated by this Agreement), subject to the grantee remaining employed on such date, the Company award shall vest pro-rata based on number of months that have elapsed from January 1, 2010 through and including the month in which the change in control occurs relative to 48 months and shall further provide Parent with a copy that any portion of the intended communicationaward that is unvested at the time such change in control occurs shall terminate with no consideration due to the grantee. The portion of the grant document relating to the terms and conditions set forth in this Section 6.1(e) and matters associated therewith shall be subject to the review of and consent by Parent, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld withheld.
(f) The Company agrees that any awards granted pursuant to Section 6.1(a)(xv)(D)(2) above shall vest in equal installments on each of the first two anniversaries and shall provide, and shall require that the grantee of such award as a condition to the receipt of such award to agree, that, notwithstanding any provision of this Agreement, any other agreement or delayedplan to the contrary, upon a “change in control” (which shall include the consummation of the transactions contemplated by this Agreement), subject to the grantee remaining employed on such date, the award shall vest pro-rata based on number of months that have elapsed from January 1, 2010 through and including the month in which the change in control occurs based on target performance and shall further provide that any portion of the award that is unvested at the time such change in control occurs relative to 24 months shall terminate with no consideration due to the grantee. The Company shall further require that the grantee of such award agree as a condition to the receipt of such award that in no event shall Section 4(d) of the Company’s Long Term Incentive Program apply to such award. The portion of the grant document relating to the terms and conditions set forth in this Section 6.1(f) and matters associated therewith shall be subject to the review of and consent by Parent, which shall not be unreasonably withheld.
(g) Nothing contained in this Agreement is intended to give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time, and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations. Prior to the Effective Time, each of Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5exercise, Parent shall not take or permit any consistent with the terms and conditions of this Agreement, complete control and supervision over its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.and its Su
Appears in 1 contract
Sources: Merger Agreement (Ims Health Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier of the termination of this Agreement and prior pursuant to its terms or the Effective Time and (unless Buyer shall otherwise approve, such approval not to be unreasonably withheld if the request relates to any matters other than those described in clauses (i), (iii), (iv), (x), (xi), or (xv) below), except (A) as otherwise expressly required contemplated by this Agreement, (B) Agreement and except as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) the business of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course consistent with past practices and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its their business organizations intact and maintain existing relations and goodwill with Governmental Entities, material customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, key employees and other business associates and keep available the services of its and its Subsidiaries’ present employees key employees, to maintain all of its material operating assets in their current condition (normal wear and agentstear excepted) and to maintain and preserve its business organization and its material rights and franchises. Without limiting the generality of, of the foregoing and in furtherance of, the foregoingthereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A1) as otherwise expressly required by this Agreement, (B2) upon at least twenty-four hours prior written notice delivered to Buyer (if feasible), as may be required by applicable LawsLaws (including the rules of NASDAQ), (C3) as Parent Buyer may consent to in writing (approve, such consent approval not to be unreasonably withheldwithheld if the request relates to any matters other than those matters described in clauses (i), delayed or conditioned) (iii), (iv), (x), (xi), or (Dxv) below, or (4) as set forth in Section 6.1(a) 6.1 of the Company Disclosure ScheduleLetter, the Company will not and will not permit its Subsidiaries to:
(i) adopt a plan of complete or propose partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of such entity;
(ii) enter into any change in new line of business outside its certificate existing business segments (other than as permitted by clause (vi));
(iii) (A) amend its articles of incorporation or incorporation, by-laws or other applicable governing instruments; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property in respect of any capital stock; (D) enter into, amend or modify any shareholder rights agreement, rights plan, “poison pill” or other similar agreement or instrument; or (E) repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock (except pursuant to the forfeiture of Company Options, Company Restricted Shares or Common Stock Units or the acquisition by the Company of Company Shares in settlement of the exercise price of a Company Option or Tax withholding obligations of holders of Company Options, Company Restricted Shares or Common Stock Units);
(iiiv) merge or consolidate the Company itself or any of its Subsidiaries with with, acquire all or substantially all of the assets of, or acquire all or a substantial portion of any equity or voting interests of any other Person, except for any such transactions among wholly its wholly-owned Subsidiaries of the CompanySubsidiaries, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesbusinesses (other than as permitted by clause (vi));
(iiiv) form any Subsidiary of the Company or any of its Subsidiaries;
(vi) acquire any business, whether by merger, consolidation, purchase of property or assets outside or otherwise (valuing any non-cash consideration at its fair market value as of the ordinary course date of business from the agreement for such acquisition); provided that neither the Company nor any of its Subsidiaries shall make any acquisition that would, or would reasonably be expected to prevent, delay or impair the Company’s ability to consummate the transactions contemplated by this Agreement; (vii) incur, prepay, repurchase, assume or materially modify any indebtedness for borrowed money or guarantee any indebtedness of another Person, or issue or sell any debt securities or warrants or other Person rights to acquire any of its debt securities or of any of its Subsidiaries, except for (A) indebtedness for borrowed money (x) interest rate swaps on customary commercial terms consistent with a value past practice and in compliance with its risk management policies in effect on the date of this Agreement or purchase price relating to acquisitions by the Company, collectively in the aggregate in excess of, individually or an amount not to exceed $10,000,000 in the aggregate, $2,500,000or (y) in replacement of existing indebtedness for borrowed money, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(viii) make or commit to any capital expenditures materially in excess of the aggregate amount reflected in the Company’s capital expenditure budget for the period in which such capital expenditures are made;
(ix) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its material assets, Intellectual Property, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries, other than acquisitions pursuant to Contracts in effect as of the date of this AgreementAgreement or sales or licenses in the ordinary course of business;
(ivx) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize or agree to the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock stock, or any other equity or voting interest of the Company or of any of its Subsidiaries (other than the issuance of shares by a wholly wholly-owned Subsidiary of the Company to the Company it or another wholly of its wholly-owned Subsidiary or the issuance of Shares pursuant to Company OptionsSubsidiaries), Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock stock, or such convertible or exchangeable securities, other than in connection with the exercise of the Top-Up Option or any Company Options issued as of the date hereof;
(vxi) create make any change with respect to accounting policies or incur any Lien material to the Company procedures, except as required by changes in GAAP or any of its Subsidiaries on any assets of the Company or any of its Subsidiariesby Law;
(vixii) other than pursuant to the terms of Contracts in effect except as of required by Law, (A) make, revoke or change any material Tax election or take any material position on any material Tax Return filed on or after the date of this Agreement and provided to Parent or adopt any material method therefor that is inconsistent with elections made, positions taken or methods used in preparing or filing similar Tax Returns in prior to the date of this Agreement, periods or (B) settle or resolve any material Tax controversy;
(xiii) make any material loans, advances, guarantees advances or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(viixiv) declareenter into any non-competition Contract or other Contract that limits in any material respect either the type of business in which the Company or its Subsidiaries (or, set asideafter the Effective Time, make Buyer or its Affiliates) may engage or the manner or locations in which any of them may so engage in any business;
(xv) except as required pursuant to Contracts in effect as of the date of this Agreement, or as otherwise required by this Agreement or applicable Law: (A) grant or provide any severance or termination payments or benefits to any of its directors, officers or employees; (B) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any dividend bonus to, or make any new equity awards, except as provided in Section 6.1(a)(x) above, to any of its directors, officers or employees (other than increases in compensation in connections with new-hires and promotions, compensation adjustments in the ordinary course of business consistent with the normal annual review cycle of the Company and payment of bonuses in the ordinary course of business and consistent with past practices); provided however, the Company may establish a cash retention program comprised of up to $375,000 in aggregate payments to employees of the Company who remain employed by the Company for at least 12 months following the Closing Date, provided that such amount will increase by $250,000 to a total of $625,000 in aggregate payments if the Offer Closing has not occurred within 90 days from the date hereof, and thereafter Buyer will reasonably consider an additional increase to such amount as reasonably requested by the Company; (C) establish, adopt, amend or terminate any Company Compensation and Benefit Plan or amend the terms of any outstanding equity-based awards; (D) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Compensation and Benefit Plans, to the extent not already provided in any such Company Compensation and Benefit Plan; (E) change any actuarial or other distribution, payable in cash, stock, property or otherwise, assumptions used to calculate funding obligations with respect to any Company Compensation and Benefit Plan or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (F) forgive any loans to any of its capital stock (except for (A) dividends paid by or of any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the CompanySubsidiaries’ directors, officers or employees;
(xvi) adopt or enter into any agreement with respect collective bargaining agreement, works council agreement, or other labor union Contract applicable to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security employees of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is would reasonably likely be expected to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions of the Offer set forth on Exhibit A or to the Merger set forth in Article VII not being satisfiedsatisfied or intended to prevent, delay or materially impair the ability of the Company to consummate or otherwise impede, interfere or be inconsistent with the Offer, the Merger or any transactions contemplated thereby;
(xviii) settle any litigation in any forum or any dispute, or any administrative or other proceedings before or threatened to be brought before a Governmental Entity, including but not limited to any claims of shareholders and any shareholder litigation relating to this Agreement or any transaction contemplated by this Agreement or otherwise, other than settlements solely for monetary compensation and/or the provision of services and/or products by the Company with an aggregate value of less than $500,000;
(xix) disclose any confidential or proprietary information of the Company or any of its Subsidiaries other than pursuant to a confidentiality agreement restricting the right of the recipient thereof to use and disclose such confidential or proprietary information;
(xx) fail to keep in force any material insurance policy or replacement or revised provisions providing insurance coverage with respect to the assets, operations and activities of the Company and its Subsidiaries as are currently in effect;
(xxi) except in the ordinary course of business consistent with past practice, (A) enter into any Contract that would constitute a Material Contract, or modify, amend (in the case of modifications or amendments, in a manner that is, taken as a whole, adverse in to the Company and its Subsidiaries) or terminate any Material Contract, or (B) waive, release or assign any material rights or claims under any Material Contract;
(xxii) convene any annual or special meeting (or any adjournment thereof) of the shareholders of the Company other than the Shareholders Meeting (if such a meeting is required by this Agreement and applicable Law); or
(xixxxiii) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees Within ten days of the Company or any end of its Subsidiaries pertaining to compensation or benefit matters that are affected by each month after the transactions contemplated by date of this Agreement, the Company shall covenants and agrees to provide Parent Buyer with a copy written notice of (i) any indebtedness for borrowed money incurred, prepaid, repurchased, assumed, materially modified or guaranteed in compliance with Section 6.1(a)(vii) during the prior month, (ii) any action taken under Section 6.1(a)(xii) during the prior month because required by Law, (iii) any material loans, advances or capital contributions to or investments in the Company or any Subsidiary permitted by Section 6.1(a)(xiii) during the prior month, (iv) any action taken during the prior month permitted under Section 6.1(a)(xv) because it was required by Contracts in effect as of the intended communicationdate of the Agreement or Law, Parent shall have a reasonable period of time to review and comment on (v) any increases in compensation during the communication (which comments shall not be unreasonably withheld or delayedprior month permitted under Section 6.1(a)(xv)(B), (vi) the name and Parent title of any employee receiving a retention payment during the prior month permitted under Section 6.1(a)(xv)(B) and the Company shall cooperate in providing amount of such payment, (vii) any such mutually agreeable communication.
settlement of litigation during the prior month permitted under Section 6.1(a)(xviii), (cviii) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that taken during the prior month which is reasonably likely to prevent, interfere with or delay permitted under Section 6.1(a)(xxi) because it was in the consummation ordinary course of business and (ix) all new employees hired and promotions during the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedprior month.
Appears in 1 contract
Sources: Merger Agreement (NCR Corp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after 3.03.01 Sellers covenant that from the date of this Agreement hereof until the Closing Date (and, if applicable, with respect to each Subject Property not conveyed at Closing until the applicable Subsequent Closing or the Environmental Subsequent Closing), except (i) as expressly provided herein or (ii) as otherwise consented to in writing by Purchaser, Sellers will not, and prior to the Effective Time and except will cause WDP not to:
(A) as otherwise expressly required by this Agreementoperate or in any manner deal with, incur obligations with respect to, or undertake any transactions relating to, the Subject Properties other than transactions (1) in the normal, usual and customary manner, (B2) as required by applicable Lawsof a nature and in an amount consistent with prior practice, (C3) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary regular course of business from any other Person with a value or purchase price in of owning and operating the aggregate in excess ofSubject Properties, individually or in and (4) subject to the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date terms and conditions of this Agreement;
(ivB) issue, sell, pledge, dispose of, grant, transfer, encumber, abandon or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, relinquish any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiesSubject Properties;
(vC) create waive, compromise or incur settle any Lien material to the Company right or any of its Subsidiaries on any assets of the Company or any of its Subsidiariesclaim;
(viD) other than pursuant introduce any new methods of management, operation or accounting with respect to any or all of the Subject Properties;
(E) except to the terms extent necessary to avoid forfeiture of Contracts any Lease and except for emergency operations or as provided in effect as of the date of this Agreement and provided Section 3.03.01, not enter into agreements to Parent prior drill new ▇▇▇▇▇ or to the date of this Agreementrework, make plug back, deepen, plug or abandon any loanswell, advancesnor commence any drilling, guarantees reworking or capital contributions to completing or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments operations on the balance sheet of the Company and Leases or other than Subject Properties which require expenditures exceeding Fifty Thousand Dollars ($50,000) (net to Sellers’ interest) for each operation or Two Hundred Fifty Thousand Dollars ($250,000) in the Company or any direct or indirect wholly owned Subsidiary of the Companyaggregate (net to Sellers’ interests);
(viiF) declare, set aside, make or pay voluntarily relinquish any dividend position as operator of any Subject Property to anyone other than Purchaser;
(G) grant any preferential or other distribution, payable in cash, stock, property right to purchase or otherwise, with respect agree to require the consent of any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary Person not otherwise required to consent to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared transfer and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary assignment of the CompanySubject Properties to Purchaser;
(H) or enter into any agreement new sales contract or supply contract that cannot be cancelled upon thirty (30) days prior notice or that is for sales of hydrocarbons at less than a market price; or
(I) amend or modify any Contract.
3.03.02 Sellers will (1) use commercially reasonable efforts to maintain and keep the Leases in full force and effect, and fulfill all contractual or other covenants, obligations and conditions imposed upon Sellers with respect to the voting of its capital stock;
(viii) reclassifySubject Properties, splitincluding, combinebut not limited to, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or royalties, delay rentals, shut-in gas royalties and any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares and all other required payments; (2) to the extent required known to Sellers, provide Purchaser with written notice of (a) any claims, demands, suits or permitted under actions made against Sellers which materially affect the terms of the applicable Stock Plans and award agreements Subject Properties; or (Bb) former employees, directors or consultants following termination of their relationship with the Company any proposal from a third party to engage in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes transaction (e.g., a farmout) with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
the Subject Properties; (A3) settle any litigation or other proceedings before a Governmental Entity except where maintain current insurance covering the settlement is limited solely to (I) the release of claims Subject Properties until Closing and (II4) the monetary payment provide prompt written notice to Purchaser of any notice received by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment Sellers of a valuable aspect default, claim, obligation or suit which affects any of its businessthe Subject Properties. In addition to the foregoing, provided, that during the Company consults with Parent period of time prior to the filing or taking of any action Closing, Sellers shall use commercially reasonable efforts to take such actions as may be requested by Purchaser in writing (which writing shall include specific instructions and parameters with respect to such lawsuitactions) in order to seek to obtain Permits required for drilling additional ▇▇▇▇▇, actionto declare alternate unit ▇▇▇▇▇, claim or similar proceedingto secure surface access rights and rights-of-way and to build roads, or (III) pursuant locations and pipelines. Purchaser hereby agrees directly to this Agreement;
(xiv) file or amend any material Tax Return except pay all third party service providers and out-of-pocket expenses incurred by Sellers in the ordinary course of businesscomplying with such written requests and to defend, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business indemnify and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take hold harmless Sellers against all Claims arising from such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans actions (other than severance plans) that do not increase benefits Claims due to Sellers' gross negligence or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize or commit to do any of the foregoingintentional misconduct).
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Questar Market Resources Inc)
Interim Operations. (a) The Company covenants Between the Signing Date and agrees as to itself and its Subsidiaries that, after the date Closing Date or the earlier termination of this Agreement and prior to the Effective Time and in accordance with Article X, except (Ax) for the Restructuring or the Pre-Closing Distribution each in accordance herewith, (y) as set forth on Schedule 7.1 or (z) as otherwise expressly required by this Agreement, unless Buyer has previously expressly consented in writing or to the extent required by applicable Law, each Seller and Parent Company will, and will cause each other member of the Company Group to, (i) conduct its operations in the Ordinary Course of Business and in accordance with applicable Law, and (ii) use commercially reasonable efforts to (A) preserve and maintain the current business, assets, properties, organization and goodwill of the Company Group, (B) as required by applicable Lawsmaintain books, accounts and records of the Company Group in accordance with past practice and (C) as Parent may consent to preserve and maintain the present relationships with customers, suppliers, Governmental Authorities, lenders and others having business dealings with the Company Group.
(b) Without limiting the foregoing, between the Signing Date and the Closing Date or the earlier termination of this Agreement in writing accordance with Article X, except (such consent not to be unreasonably withheldx) in connection with the Restructuring and the Pre-Closing Distribution, delayed or conditioned) or (Dy) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration on Schedule 7.1 or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (Az) as otherwise expressly required by this Agreement, (B) as unless Buyer has previously expressly consented in writing or to the extent required by applicable LawsLaw, (C) as Sellers and the Parent may consent to in writing (such consent not to be unreasonably withheldCompanies shall not, delayed or conditioned) or (D) as set forth in Section 6.1(a) and shall cause each other member of the Company Disclosure ScheduleGroup not to, do any of the Company will not and will not permit its Subsidiaries tofollowing:
(i) adopt (A) make any amendment, modification, change to the Organizational Documents of any member of the Company Group (or propose waive compliance with any change in its certificate of incorporation material provision thereof) or by-laws or other applicable governing instruments(B) form any new Subsidiary;
(ii) (A) authorize, issue, pledge, suffer any security interests on, assign, transfer, or sell any Equity Interests of the Company Group or other rights to purchase or otherwise acquire for any such Equity Interests of the Company Group or (B) split, combine, redeem, recapitalize, reclassify or subdivide any Equity Interests of any member of the Company Group or make any commitments to do any of the foregoing with respect to any Equity Interests;
(iii) subject to any Liens (other than Permitted Liens), sell, assign, transfer, license (other than granting non-exclusive licenses to customers in the Ordinary Course of Business), sublicense, abandon, allow to lapse or expire, or otherwise dispose of, or fail to enforce, maintain, or protect any material Company Group IP or amended or modified in any material respect any existing Contract or rights with respect to any material Company Group IP;
(iv) (A) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for (B) acquire any such transactions among wholly owned Subsidiaries Equity Interests, business, line of business, other business organization or division thereof, or all or substantially all of the Companyassets, of another Person, in a single transaction or a series of related transactions; (C) make any investment or capital contribution in or loan to any other Person or business; (D) enter into any joint venture, partnership or similar venture with any Person; (E) restructure, reorganize or completely adopt a plan or partially liquidate agreement of liquidation, dissolution, merger, consolidation or other reorganization or (F) dispose of, lease, transfer, surrender, abandon, waive, lapse or release any asset, right, claim, debt or property, tangible or intangible, of the Company Group which is material to the business as a whole;
(v) (A) amend or modify in any material and adverse respect (including of payment terms), cancel, terminate or initiate the termination (other than termination due to expirations of such Contracts in accordance with their terms) of, or waive or assign any material right, claim or benefit under, any Material Contract, or (B) enter into a Contract which, had it been entered into prior to the Signing Date, would have been a Material Contract or Real Property Lease, in each case, other than in the Ordinary Course of Business;
(vi) (A) amend or modify in any material and adverse respect (including of payment terms), cancel, terminate or initiate the termination of, or waive or assign any material right, claim or benefit under, any Specified Contract or Real Property Lease. or (B) enter into a Contract which, had it been entered into prior to the Signing Date, would have been a Specified Contract or Real Property Lease;
(vii) (A) accelerate the collection of accounts receivable, (B) delay the payment of accounts payable or accrued expenses, or (C) delay the purchase of supplies or delay material capital expenditures, repairs or maintenance, in each case of the foregoing clauses (A)-(C), outside of the Ordinary Course of Business;
(viii) grant or announce any new award of, increase the amount of, or accelerate of the timing of funding, payment or vesting of, any cash, equity or equity-based incentive, severance, change in control, retention, transaction or other bonus, salary, or other compensation or benefit of any current or former employee, officer, director, or other individual service provider of any member of the Company Group other than (x) with respect to discretionary bonuses in the Ordinary Course of Business or (y) as required by Law, any existing agreement in effect as of the Signing Date and set forth on Schedule 4.10(a), or the existing terms of any Employee Plan in effect as of the Signing Date and set forth on Schedule 4.10(a);
(ix) enter into, establish, adopt, terminate, amend or modify any Employee Plan or any other benefit or compensation plan, policy, program, contract, agreement or arrangement that would be an Employee Plan if in effect as of the Signing Date, other than with respect to discretionary bonuses in the Ordinary Course of Business or as required by Law;
(x) (A) hire, promote or engage, or otherwise enter into any agreements employment or arrangements imposing material changes consulting agreement or restrictions on its assets, operations arrangement with any individual whose annualized compensation opportunities exceeds or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not reasonably be expected to exceed $0.10 per Share200,000, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) terminate, other than for cause, the employment or service of any current or former employeesemployee, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Personofficer, or issue or sell any debt securities or warrants director or other rights service provider whose annualized compensation opportunities exceeds or would reasonably be expected to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditureexceed $200,000;
(xi) (A) modify, extend, negotiate, terminate or enter into any Contract that would have been a Material Contract had it been entered into prior to this Labor Agreement or (B) amendrecognize or certify any labor union, modify labor organization, works council or terminate group of employees as the bargaining representative for any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) employees of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000Company Group;
(xii) make implement or announce any material changes with respect to accounting policies employee layoffs, furloughs, reductions in force, plant closings, reductions in compensation or proceduresother similar actions, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect theretoeach case, that would trigger notice obligations under the WARN Act;
(Axiii) settle waive or release any litigation noncompetition, non-solicitation, nondisclosure or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release restrictive covenant obligation of claims and (II) the monetary payment by any current or former employee or independent contractor of the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this AgreementGroup;
(xiv) file (A) make (outside the Ordinary Course of Business), change or amend rescind any U.S. federal income Tax entity classification election with respect to any member of the Company Group or any other material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, makeelection relating to Taxes; (B) adopt, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by lawGAAP; (C) settle or compromise any U.S. federal, state or take local or non-U.S. Tax Liability, claim, dispute or assessment with respect to any action which would materially adversely affect the material amount of Taxes; (D) amend any income or other material Tax position Return; (E) enter into any closing agreement or similar agreement with any Taxing Authority; (F) waive or consent to an extension of the Company a statute of limitations period applicable to any Tax claim, assessment or deficiency; (G) fail to pay any material Tax when due and payable or otherwise incur any material penalties or interest in respect of any of its SubsidiariesTax; or (H) surrender any right to claim a material Tax refund or surrender any other material Tax asset;
(xv) transfermake any material change to the accounting methods, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon principles or allow to lapse or expire or otherwise dispose practices of any assets, licenses, operations, rights, product lines, businesses or interests therein member of the Company or its Subsidiaries, including capital stock of any of its SubsidiariesGroup, except sales of Company Products as may be required by GAAP or changes in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this AgreementLaw;
(xvi) other than in the ordinary course of business, (A) transferissue, sellcreate, licenseincur, mortgageassume, pledgeguarantee, encumberendorse, divest, cancel, abandon or allow to lapse or expire refinance or otherwise dispose of become liable or responsible with respect to (whether directly, contingently or otherwise) any Intellectual Property Rightsindebtedness for borrowed money or other Company Group Debt, other than (Bi) grant, extend, amend to the extent paid in full or abandon (except as required in otherwise discharged prior to the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applicationsClosing, or (Dii) fail to exercise a right reflected in the Estimated Closing Statement and determination of removal or extension under any material Owned Intellectual PropertyEstimated Closing Date Cash Payment therein;
(xvii) except make any investments in or loans to make changes that are required by applicable Law or to satisfy contractual obligations existing as enter into or modify any Contract with any Related Persons outside of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) Ordinary Course of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the CompanyBusiness;
(xviii) subject to Section 6.2any Lien or otherwise encumber or permit, take allow or suffer to be encumbered, (A) any action of the material properties or omit material assets owned, used or occupied by the Company Group, other than a Permitted Lien, or (B) the Equity Interests of any member of the Company Group, other than Securities Liens;
(xix) settle or compromise any pending or threatened Action against any member of the Company Group (or for which any member of the Company Group would be financially responsible), whether or not commenced prior to take the Signing Date, other than settlements of any action pending or threatened Action in the Ordinary Course of Business for payment of amounts less than $50,000 individually; provided, that is reasonably likely no settlement of any pending or threatened Action may involve any injunctive or equitable relief, or impose material restrictions on any member of the Company Group, or admit wrongdoing, or be with respect to preventa criminal matter;
(xx) make or authorize capital expenditures for property, interfere with plant and equipment, except those otherwise in an aggregate amount for all such capital expenditures not to exceed $100,000 in the aggregate;
(xxi) enter into any agreement or delay arrangement that would purport to bind or impose a restrictive covenant on (other than customary confidentiality obligations), or otherwise materially limit the operations of, Buyer or any of its Affiliates following the consummation of the Merger Closing (including the Company Group);
(xxii) cause or result in intentionally allow any of the conditions Permit to the Merger set forth in Article VII not being satisfiedbe cancelled, revoked, terminated, or suspended; or
(xixxxiii) agree, authorize or commit agree to do take any of the foregoing.
actions described in clauses (bi) Prior through (xx) above. Nothing contained in this Section 7.1 or elsewhere in this Agreement shall preclude any Parent Company, in its sole discretion, from (i) using available Cash to making pay indebtedness, transaction expenses, cash dividends or distributions, or (ii) assuming, settling, cancelling, or otherwise terminating any formal written communications or group oral presentations to the directors, officers or employees all of the Company Group’s obligations, receivables, payables, loans or other intercompany accounts between any Seller and/or any member of its Subsidiaries pertaining the Company Group. In addition, nothing contained in this Agreement shall give Buyer, directly or indirectly, the right to compensation control or benefit matters that are affected by direct the transactions contemplated by business or operations of any member of the Company Group prior to the Closing. Prior to the Closing, each member of the Company Group shall exercise, consistent with the terms and conditions of this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review complete control and comment on the communication (which comments shall not be unreasonably withheld or delayed), supervision over its business and Parent and the Company shall cooperate in providing any such mutually agreeable communicationoperations.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Sources: Purchase Agreement (Gogo Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the earlier of the Effective Time and except (A) as otherwise expressly required by the date, if any, of which this AgreementAgreement is earlier terminated pursuant to Article VI, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, its business and the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to of business consistent with past practice. To the extent consistent therewithwith the foregoing sentence, it the Company and its Subsidiaries shall use their respective commercially reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its the present employees and agents of the Company and its Subsidiaries’ present employees . Nothing in the foregoing sentences shall prohibit or restrict the Company and agentsits Subsidiaries from taking any of the following actions: (i) actions approved by Parent in writing (which approval shall not be unreasonably delayed, and Parent agrees to consider in good faith any actions to be taken by the Company for which such approval is being sought from Parent by the Company), (ii) any action expressly required or expressly not prohibited by this Agreement; and (iii) any action required by Law (including any requirement of the SEC). Without limiting the generality of, of the foregoing and in furtherance of, the foregoingthereof, from the date hereof until the earlier of the Effective Time and the date, if any, on which this Agreement until the Effective Timeis earlier terminated pursuant to Article VI, except (A) as otherwise expressly required or expressly not prohibited by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to approve in writing (such consent approval not to be unreasonably withhelddelayed and Parent agrees to consider in good faith any actions to be taken by the Company for which such approval is being sought from Parent by the Company), delayed or conditioned) or (DC) as set forth in Section 6.1(a) 3.1 of the Company Disclosure ScheduleLetter or (D) as required by any applicable Laws (including any requirement of the SEC), the Company will not and will not permit its Subsidiaries to:
(ia) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments;
(b) acquire or agree to acquire (i) by merging or consolidating with, or by purchasing a substantial portion of the stock, or other ownership interests in, or substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association, joint venture, limited liability company or other entity or division thereof or (ii) merge any assets that would be material, individually or consolidate in the aggregate, to the Company and its Subsidiaries, taken as a whole, except, in each case, (x) purchases of supplies, equipment, services and inventory in the ordinary course of business consistent with past practice and (y) any Permitted Acquisition;
(c) restructure, recapitalize, reorganize or completely or partially liquidate the Company or any of its Subsidiaries or adopt a plan of complete or partial liquidation with respect to the Company or any other Person, except of its Subsidiaries or adopt resolutions providing for or authorizing any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesforegoing;
(iiid) acquire assets outside except as set forth in Section 4.1(d) of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000Company Disclosure Letter, other than acquisitions pursuant to Contracts in effect as shares of Class A Common Stock issuable under the date of this Agreement;
(iv) Company Stock Plans issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance Encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company OptionsSubsidiary), Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(ve) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees advances (except for advances to employees in respect of travel and business expenses) or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company)) other than in the ordinary course of business consistent with past practice;
(viif) (i) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends or other distribution paid (Ax) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly of the Company and (y) on the Shares declared by the Company Board of Directors in accordance with the Company’s stated dividend policy consistent with past practice, including, but not limited to, (A) those certain dividends declared by the Company Board of Directors on May 10, 2007 in respect of the Shares and payable June 1, 2007 in an aggregate amount not to exceed $0.10 per Share, declared and paid consistent with prior timing, 16,029,100 and (B) any cash those certain dividends paid payable on September 1, 2007 in respect of outstanding shares of Class A Common Stock, and (C) those certain dividends declared on or after November 1, 2007 and payable only in the event the transactions contemplated by this Agreement are not consummated on or prior to the Company November 30, 2007 or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company(ii) or enter into any agreement with respect to the voting of its capital stock;
(viiig) other than transactions involving direct or indirect wholly owned Subsidiaries of the Company, reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of stock other than pursuant to the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationPlans;
(ixh) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among indebtedness for borrowed money (i) incurred pursuant to agreements in effect prior to the date hereof, provided that the Company and its wholly-owned Subsidiaries or among shall not incur any additional indebtedness under the Company’s wholly-owned Subsidiaries Credit Agreement without the prior consent of Parent, (ii) incurred in the ordinary course of business consistent with past practicepractices not to exceed $1,000,000 in the aggregate or (iii) guarantees incurred in compliance with this Section 4.1 by the Company or any of its direct or indirect wholly owned Subsidiaries of indebtedness of any direct or indirect wholly owned Subsidiary of the Company;
(xi) fail to pay when due (after taking into account any applicable grace periods and notice requirements) all interest due and payable on the Company’s indebtedness incurred prior to the date hereof;
(j) except (i) as set forth in the capital budgets previously made available to Parent or its Affiliates (and set forth in Section 6.1(a)(x) of the Company Disclosure Schedule Letter) and consistent therewith, or (ii) in connection with one or more Permitted Acquisitions, make or authorize any capital expenditureexpenditures in excess of $2,000,000 in the aggregate;
(xik) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this except as set forth in Section 6.1, the monetary reference in clause (A4.1(k) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) Company Disclosure Letter, make any material changes with respect to accounting policies or procedures, except as required by Law or changes in Law or applicable GAAP or statutory or regulatory generally accepted accounting rules or interpretations with respect theretoprinciples;
(Al) except as set forth in Section 4.1(l) of the Company Disclosure Letter, settle or compromise any pending or threatened material suit, action, claim or litigation or other proceedings before a Governmental Entity except where other than the settlement is limited solely to (I) the release or compromise of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuitsuit, action, claim or similar proceeding litigation or other than proceedings (IA) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent business consistent with past practice and (B) reflected or as required by lawreserved against in the financial statements of the Company for the period ended December 31, 2006, but only to the extent that the amount of such settlement or compromise is not materially in excess of such reflected or reserved amount;
(m) other than in the ordinary course of business consistent with past practice, make or change any material method of Tax accounting, except as required by lawelection, or take settle or finally resolve any action which would materially adversely affect the Tax position contest with respect to a material amount of the Company or of any of its SubsidiariesTax;
(xvn) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material assets, licenses, operations, rights, product lines, lines or businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business business, except for obsolete assets and sales except for sales, leases, licenses or other dispositions of obsolete assetsassets with a fair market value not in excess of $2,500,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreementhereof;
(xvio) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon business consistent with past practice or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property)by applicable Law, materially amend, modify, supplement, waive or modify terminate (other than termination in accordance with their terms) or enter into any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual PropertyMaterial Contract;
(xviip) except (w) as required pursuant to make changes that are existing written, binding agreements in effect prior to the date hereof, (x) as required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or any Employee Benefit Plans which are Plan in each case listed on Section 6.1(a)(xvii3.1(h) of the Company Disclosure ScheduleLetter, (y) as set forth in Section 4.1(p) of the Company Disclosure Letter, or (z) as otherwise required by applicable Law, (i) grant or provide any new severance or new termination payments or new material benefits to any existing director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of or pay any bonus to any officer, employee or director of the Company, other than such increases which in the aggregate would not result in payments in excess of $1,800,000 in any given fiscal year of the Company including (A) terminate, enter into, amend increases made to hourly employees of the Company or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result of its Subsidiaries in materially increased administrative coststhe ordinary course of business consistent with past practice, (B) increase increases in any manner payments of sales commissions by the compensation, bonus, pension, welfare, fringe Company or other benefits, severance or termination pay of any of its Subsidiaries resulting from adjustments to the current Company’s sales commission plans as in effect on the date hereof; provided that, for the avoidance of doubt, payments of sales commissions by the Company or former directorsany of its Subsidiaries made in the ordinary course of business consistent with past practice and in accordance with the Company’s sales commission plans as in effect on the date hereof shall be permitted under this Agreemrnt, officers(C) making any new equity awards to any director, employees officer or consultants employee of the Company or any of its SubsidiariesSubsidiaries or (D) increases in quarterly bonuses to regional vice presidents made in the ordinary course of business consistent with past practice; provided that any quarterly bonus payments to regional vice presidents made in the ordinary course of business consistent with past practice not exceeding $100,000 in the aggregate shall be permitted under this Agreement, (Ciii) grant or pay any bonus transaction-related bonuses or incentive compensation under make any other similar payments, whether or not in cash, in connection with the transactions contemplated hereby, (iv) establish, adopt, amend or terminate any Benefit Plan in excess or amend the terms of the amount earned any outstanding equity-based on actual performanceawards, (Dv) subject to the terms of this Agreement, take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation benefits under any Benefit Plan, (E) grant to the extent not already provided in any new award, amend the terms of outstanding awards or change the compensation opportunity under any such Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (Hvi) change any actuarial or other assumptions used to calculate funding or contribution obligations under with respect to any Benefit PlanPlan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, other than except as may be required by GAAP; or (vii) forgive any loans to directors, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000officers or, provided, that such new hire’s compensation and benefits are made in outside the ordinary course of business consistent with past practice and are consistent with the other requirements set forth in this Agreementpractice, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer employees of the Company;
(xviii) subject to Section 6.2, take any action Company or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedits Subsidiaries; or
(xixq) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior Prior to the Effective Time and Time, except (A) as otherwise set forth in Section 5.2 of the Company Disclosure Schedule or as expressly required by provided for in this Agreement, (B) as required by applicable Laws, (C) as unless Parent may consent to has consented in writing thereto (such consent not to be unreasonably withheldwithheld or delayed), delayed or conditionedthe Company:
(i) or (D) as set forth in Section 6.1(a) shall, and shall cause each of the Company Disclosure ScheduleSubsidiaries to, the business of it and conduct its Subsidiaries shall be conducted operations in the ordinary and usual course and, to consistent with the extent consistent therewith, it and its Subsidiaries manner as heretofore conducted;
(ii) shall use their respective commercially reasonable best efforts efforts, and shall cause each of the Company Subsidiaries to protect and preserve in all material respects its assets and use commercially reasonable efforts, to preserve intact its their business organizations and maintain existing relations and goodwill with Governmental Entitiesgoodwill, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its their respective officers and its Subsidiaries’ present employees and agents. Without limiting the generality ofmaintain satisfactory relationships with those persons having business relationships with them;
(iii) shall not, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) shall cause each of the Company Disclosure ScheduleSubsidiaries not to, the Company will not and will not permit its Subsidiaries to:
(i) adopt amend their respective Certificates of Incorporation or propose any change in its certificate of incorporation Bylaws or by-laws or other applicable comparable governing instruments;
(iiiv) merge shall give prompt notice to Parent of any representation or consolidate warranty made by it contained in this Agreement becoming untrue or inaccurate in any material respect such that the Company condition set forth in Section 6.3(a)(ii) would not be satisfied; provided, however, that no such notification shall affect the representations, warranties, covenants or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries agreements of the Company, parties or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesthe conditions to the obligations of the parties under this Agreement;
(iiiv) shall not, and shall not permit any of the Company Subsidiaries to, (A) acquire or agree to acquire by merging or consolidating with, or by acquiring any capital stock of or purchasing a substantial portion of the assets outside of of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof, or (B) acquire or agree to acquire assets other than in the ordinary course of business from or (C) release or relinquish or agree to release or relinquish any other Person with a value material contract rights;
(vi) shall not, and shall not permit any of the Company Subsidiaries to, effect any stock split or purchase price in the aggregate in excess ofotherwise change its capitalization or issue any shares of its capital stock or securities convertible into or exchangeable or exercisable for shares of its capital stock, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect except upon exercise of options outstanding as of the date hereof to purchase shares of this AgreementCompany Common Stock under the Company Stock Option Plans;
(ivvii) issueshall not, sell, pledge, dispose ofand shall not permit any of the Company Subsidiaries to, grant, transferconfer or award any options, encumberwarrants, conversion rights or authorize other rights, not existing on the issuancedate hereof, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, to acquire any shares of its capital stock or other securities of the Company or any of its the Company Subsidiaries or amend or otherwise modify any outstanding options or warrants;
(other than the issuance of shares by a wholly owned Subsidiary viii) shall not, and shall not permit any of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declareto, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company stock, or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur shall not, and shall not permit any indebtedness for borrowed money of the Company Subsidiaries to, take or guarantee such indebtedness fail to take any actions which would be reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of another PersonSection 368(a) of the Code with respect to which gain recognition is not required under Section 367(a) of the Code;
(x) shall not, and shall not permit any of the Company Subsidiaries to, amend in any material respect, except as required by applicable law or in response to changes in applicable law, the terms of any Company Employee Plans, including, without limitation, any employment, severance or similar agreements or arrangements in existence on the date hereof, or issue adopt any new employee benefit plans, programs or sell arrangements or any debt securities employment, severance or warrants similar agreements or other rights arrangements, or grant any award thereunder (except in the case of awards not involving the acquisition of securities, in the ordinary course of business consistent with past practice), or grant any salary increases to acquire any debt security employee of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of businessbusiness consistent with past practice except that (A) the Company may hire, and enter into compensation arrangements with, employees in the ordinary course of business consistent with past practice and (B) this subsection (x) shall not preclude the Company from making payments required under Company Employee Plans in effect on the date hereof;
(xi) shall not, and shall not permit any of the Company Subsidiaries to, except in the ordinary course of business consistent with past practice, (x) incur, create, assume or otherwise become liable for borrowed money or assume, guarantee, endorse or otherwise become responsible or liable for the obligations of any other individual, corporation or other entity or (y) make any loans or advances to any other person;
(xii) shall not, and shall not permit any of the Company Subsidiaries to, (x) make, revoke or change any material election with respect to Taxes unless required by applicable law or (y) settle or compromise any material Tax liability;
(xiii) shall not, make, change or revoke and shall not permit any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or Subsidiaries to, authorize capital expenditures which are, in the aggregate, in excess of any of its Subsidiaries$1 million for the Company and the Company Subsidiaries taken as a whole;
(xvxiv) transfershall not, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of and shall not permit any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its SubsidiariesSubsidiaries to, except sales for the payment of Company Products reasonable professional fees relating to the Merger or otherwise and reasonable fees to financial advisors (which financial advisory fees have heretofore been disclosed or are otherwise acceptable, to Parent), pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) in an amount in excess of $1 million in the aggregate, other than the payments, discharges or satisfactions, in the ordinary course of business and sales consistent with past practice, of obsolete assets, other than pursuant to Contracts liabilities reflected or reserved against in effect the Company's most recent audited balance sheet as of a date prior to the date hereof or subsequently incurred in the ordinary course of this Agreementbusiness and consistent with past practice or collect, or accelerate the collection of, any amounts owed (including accounts receivable) other than collection in the ordinary course;
(xv) shall not, and shall not permit any of the Company Subsidiaries to, except in the ordinary course of business or as otherwise expressly contemplated hereby, grant or acquire any material licenses to use any Intellectual Property Rights or unpatented inventions set forth in the Company Disclosure Schedule; provided that the Company shall not grant any material -------- licenses to use any material Intellectual Property Rights or unpatented inventions so set forth without the prior written consent of Parent, which consent shall not be unreasonably withheld;
(xvi) other than shall not, and shall not permit of the Company Subsidiaries to, allow any insurance policy naming it as a beneficiary or a loss payee to be cancelled, terminated or materially altered, except in the ordinary course of business, business and consistent with past practice and following written notice to Parent (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow provided that an insurer refusing to lapse or expire or otherwise dispose renew a policy shall not be deemed a breach of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Propertythis covenant), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) shall not, and shall not permit any of the Company Disclosure ScheduleSubsidiaries to, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement hedging, option, derivative or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Companytransaction;
(xviii) subject shall notify Parent a reasonable time in advance of, and shall permit a representative of Parent to Section 6.2review or participate in, take any action communications, meetings, or omit to take correspondence between the Company or any action that is reasonably likely to preventCompany Subsidiary and the FDA, interfere with the European Agency for the Evaluation of Medical Products or delay the consummation of the Merger or result similar regulatory agency and in any of the conditions Company's internal planning meetings that cover substantive issues relating to the Merger set forth Evacet(TM), except, in Article VII not being satisfiedeach case, as may be inconsistent with applicable law or regulation; orand
(xix) agreeshall not, authorize or commit to do and shall not permit any of the foregoingCompany Subsidiaries to, agree, in writing or otherwise, to take any of the foregoing actions.
(b) Prior to making any formal written communications or group oral presentations to the directorsEffective Time, officers or employees except as set forth in Section 5.2 of the Company Parent Disclosure Schedule or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by as expressly provided in this Agreement, unless the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time has consented in writing thereto (such consent not to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), Parent:
(i) shall, and shall cause each of the Parent Subsidiaries to, conduct its operations in the ordinary course consistent with the manner as heretofore conducted;
(ii) shall use commercially reasonable efforts, and shall cause each of Parent Subsidiaries to use commercially reasonable efforts, to preserve intact their business organizations and goodwill, keep available the services of their respective officers and employees and maintain satisfactory relationships with those persons having business relationships with them;
(iii) shall not, and shall cause each of Parent Subsidiaries not to, amend their respective Certificates of Incorporation or Bylaws or comparable governing instruments;
(iv) shall give prompt notice to the Company of any representation or warranty made by it contained in this Agreement becoming untrue or inaccurate in any material respect such that the condition set forth in Section 6.2(a)(ii) would not be satisfied; provided, however, that no such notification shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5affect the representations, Parent shall not take warranties, covenants or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation agreements of the Merger parties or result in any of the conditions to the obligations of the parties under this Agreement;
(v) shall not, and shall not permit any of Parent Subsidiaries to, take or fail to take any actions which would be reasonably likely to prevent the Merger set forth from qualifying as a reorganization within the meaning of Section 368(a) of the Code with respect to which gain recognition is not required under Section 367(a) of the Code; and
(vi) shall not, and shall not permit any of Parent Subsidiaries to, agree, in Article VII not being satisfiedwriting or otherwise, to take any of the foregoing actions.
Appears in 1 contract
Sources: Merger Agreement (Liposome Co Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after between the date of this Agreement and prior the Effective Time, except (i) as expressly contemplated by this Agreement, (ii) as set forth in Section 7.1(a) of the Company Disclosure Letter, (iii) as required by applicable Law, or (iv) to the Effective Time extent Parent otherwise consents in writing (which consent shall not be unreasonably withheld, conditioned or delayed), the businesses of the Company and the Subsidiaries shall be conducted in all material respects in the ordinary course of business consistent with past practice. Without limiting the generality of the foregoing, except (A) as otherwise expressly required contemplated by this Agreement, (B) as required by applicable Lawsset forth in Section 7.1(a) of the Company Disclosure Letter, (C) as required by applicable Law or (D) to the extent Parent may consent to otherwise consents in writing (such which consent shall not to be unreasonably withheld, delayed conditioned or conditioned) or (D) as set forth in Section 6.1(a) of delayed), the Company Disclosure Scheduleagrees that neither the Company nor any Subsidiary shall, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from between the date of this Agreement until and the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) do any of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries tofollowing:
(i) adopt amend or propose any change in its certificate restate the articles of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries bylaws of the Company, or restructure, reorganize such similar organizational or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside governing documents of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any each of its Subsidiaries;
(viii) grant, issue, deliver, sell, transfer, dispose of, pledge or encumber any shares of the Company’s or any of its Subsidiaries’ capital stock or equity interests, any other voting securities or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire, any such shares of capital stock or equity interests, voting securities or convertible securities, other than pursuant to the terms issuance of Contracts in effect Shares issuable upon the exercise of Company Options or upon the vesting of RSUs outstanding under the Stock Plans as of the date of this Agreement or issued as required by the employment agreements and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company)Stock Plans;
(viiiii) declare, authorize, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (or equity interests, except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stockSubsidiary;
(viiiiv) reclassify, combine, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible equity interests of the Company or exchangeable into or exercisable for any shares of its capital stock, except from Subsidiaries;
(v) (A) holders acquire (including by merger, consolidation, or acquisition of Company Options stock or assets or any other business combination) any corporation, partnership, other business or business organization, any division or business unit thereof or any material assets, (B) incur, create, assume or otherwise become liable for any amount of Indebtedness or other liability or issue any debt securities or any right to acquire debt securities or assume, guarantee, endorse or otherwise become responsible or liable for any liability of any other Person other than (1) in full the ordinary course of business consistent with past practice or partial payment (2) draws on any existing credit facility or line of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise credit of the Company Options or Company SARs any of its Subsidiaries solely for working capital purposes, (C) enter into any new line of business, (D) make any loans, advances or capital contributions to, or investments in, Persons other than wholly owned Subsidiaries and other than in the lapse ordinary course of restriction on Company Restricted Shares business consistent with past practice, or (E) sell, lease, license, encumber or otherwise dispose of or transfer (by merger, consolidation, sale of stock or assets or otherwise) any amount of its assets other than in the ordinary course of business consistent with past practice;
(vi) make or commit to make any capital expenditure (not including capital expenditures for rental instruments) other than in respect of those capital expenditure projects that are (A) contemplated by the extent required or permitted under the terms of the applicable Stock Plans and award agreements Company’s fiscal year 2012 forecast or (B) former employeesnot in excess of $5,000,000 in the aggregate;
(vii) adopt or enter into a plan of complete or partial liquidation, directors dissolution, restructuring, recapitalization or consultants following termination other reorganization of their relationship with the Company or any Subsidiary (other than the Merger);
(viii) (A) increase the salary, wages, benefits, bonuses or other compensation payable or to become payable to its current or former directors, officers or Employees, except for increases required under employment agreements existing on the date hereof, (B) enter into or amend or otherwise alter any employment, change of control, retention or severance agreement with, or establish, adopt, enter into or amend any Benefit Plan (other than ordinary course changes to any ERISA plan other than severance plans), (C) except as required under any employment agreement existing on the date hereof or as may be required to implement the actions contemplated by this Agreement, including Section 4.3 and Section 7.8, accelerate the vesting or payment of any compensation or benefit under any Benefit Plan, or (D) take any action to fund the payment of compensation or benefits under any Benefit Plan, except, in accordance the case of clauses (C) and (D), in the ordinary course of business consistent with past practice, or as may be required by the terms of any Benefit Plan in effect on the date hereof or to comply with applicable agreements providing for Law, including Section 409A of the repurchase of shares upon such terminationCode;
(ix) incur unless otherwise required by Law, enter into any indebtedness collective bargaining agreement or other contract with a labor union, works council or other labor organization;
(x) make any material change to its methods of accounting, principles or practices (or change an annual accounting period) in effect as of the date of this Agreement, except as required by changes in GAAP or Law or by the SEC or as recommended by the Company’s independent registered public accounting firm;
(xi) (A) make, change or rescind (or file a request to make, change or rescind) any material Tax election, (B) settle or compromise any material Tax liability, audit claim or assessment, (C) surrender any right to claim for borrowed money a Tax refund, (D) change in any material respect (or guarantee file a request to make any such indebtedness change) any accounting method in respect of another PersonTaxes, (E) file any amendment to an income or other material Tax Return, (F) enter into any closing agreement, settle or compromise any material claim or material assessment in respect of Taxes, or issue (G) consent to any extension or sell waiver of the statute of limitations applicable to any debt securities claim or warrants assessment in respect of Taxes, except, in each case, as required by Law;
(xii) write up, write down or write off the book value of any of its material assets, other than (A) in the ordinary course of business and consistent with past practice or (B) as may be required by GAAP;
(xiii) (A) waive, settle, satisfy or compromise any claim against the Company (which shall include any pending or threatened action), except to the extent subject to reserves existing on the date of this Agreement, or (B) waive, settle, satisfy or compromise any material claim by the Company, except in the ordinary course of business consistent with past practice;
(xiv) other than in the ordinary course of business consistent with past practice and on terms not materially adverse to the Company and the Subsidiaries taken as a whole, enter into, amend, modify, cancel, waive any rights under or consent to acquire the termination of any debt security Material Contract or any Contract that would be a Material Contract if in effect on the date of this Agreement;
(xv) enter into, renew or amend in any material respect any transaction, Contract, arrangement or understanding between the Company or any Subsidiaries, on the one hand, and any Affiliate of the Company (other than any of the Company’s Subsidiaries), on the other hand, of the type that would be required to be disclosed under Item 404 of Regulation S-K promulgated under the Exchange Act, except for any agreement, renewal or amendment made in the ordinary course of business consistent with past practice or contemplated by the Company’s fiscal year 2012 budget;
(xvi) (A) assign, transfer, license or sublicense, mortgage or encumber any material Intellectual Property owned by the Company or any of its Subsidiaries, except for internon-company borrowings solely among the Company and its whollyexclusive licenses or non-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) exclusive sublicenses of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal such Intellectual Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assetsconsistent with past practice, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute pay any fee, take any action, protect any trade secret, or make any filing reasonably necessary to maintain its ownership of the Company’s and material Intellectual Property owned by the Company or any of its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;; or
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result agree in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize or commit writing to do any of the foregoing.
(b) Prior Without the prior written consent of the Company, Parent and Merger Sub shall not, and shall cause the Guarantor and their respective Affiliates to making not, (i) enter into discussions or negotiations regarding any formal written communications Contracts or group arrangements or understandings (whether oral presentations or written) or commitments to enter into Contracts, arrangements or understandings (whether oral or written) or (ii) amend or otherwise supplement any Contracts, arrangements or understandings (whether oral or written) in existence on the directorsdate of this Agreement, officers in the case of clauses (i) and (ii) that are between Parent, Merger Sub, the Guarantor or employees any of their Affiliates, on the one hand, and any officer or director of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this AgreementSubsidiaries, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communicationother hand.
(c) Subject to Section 6.5, Parent shall not take If the Company identifies any activities of the Company or permit any of its Subsidiaries, including those activities of their respective directors, officers, managers, employees, independent contractors, representatives or agents, that the Company reasonably believes to be in violation of the FCPA, the Company shall use reasonable best efforts to cause each of its Subsidiaries and Affiliates to cease such activities and take any additional remedial action reasonably requested by Parent or that is the Company reasonably likely to prevent, interfere with or delay deems appropriate under the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedcircumstances.
Appears in 1 contract
Sources: Merger Agreement (Immucor Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the earlier of the termination of this Agreement in accordance with Article VIII and the Effective Time and except (A) as unless Parent shall otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to approve in writing (such consent approval not to be unreasonably withheld, delayed or conditioned)), and except as otherwise expressly required or permitted by this Agreement or as required by applicable Law, the business of it and its Subsidiaries shall be conducted in all material respects in the ordinary course of business and, to the extent consistent with the foregoing and the restrictions in the next sentence, the Company and its Subsidiaries shall use their respective commercially reasonable efforts to preserve their business organizations substantially intact, maintain satisfactory relationships with Governmental Entities, customers, suppliers, employees and other business relationships having significant business dealings with them and keep available the services of their key employees and agents; provided that any action specifically permitted by the exceptions to the restrictions set forth in clauses (i) - (xviii) of this Section 6.1(a) shall be deemed in compliance with this sentence. Without limiting the foregoing, from the date of this Agreement until the earlier of the termination of this Agreement in accordance with Article VIII and the Effective Time, except (w) as otherwise expressly required or permitted by this Agreement, (x) as Parent may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned), (y) as is required by applicable Law or (Dz) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure ScheduleLetter, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws bylaws or other applicable governing instrumentsdocuments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire make any acquisition of any business or any assets outside in excess of $5,000,000 individually or $15,000,000 in the aggregate, other than acquisitions of assets acquired from the Company's or its Subsidiaries' vendors or suppliers in the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this AgreementCompany and its Subsidiaries;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, encumber or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock or other equity securities of the Company or any of its Subsidiaries or securities convertible or exchangeable into or exercisable for, or give any Person a right to subscribe for or acquire (including options, warrants or other rights of any kind), any shares of capital stock or other equity securities (other than (A) in respect of Company Options, RSUs and PSUs outstanding as of the date of this Agreement as required by their terms as in effect on the date of this Agreement or (B) the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiesCompany);
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person in excess of $5,000,000 individually or $15,000,000 in the aggregate (in each case, other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than to or in the Company Company, or any direct or indirect wholly owned Subsidiary of the Company);
(viivi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary of the Company to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, of the Company and (B) the payment of any cash dividends paid dividend declared prior to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of date hereof and related dividend equivalents on those RSUs that were being credited with dividend equivalents prior to the Company) date hereof; provided that in no event shall such dividend exceed $0.5225 per Share), or enter into any agreement with respect to the voting of its capital stock;
(viiivii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, acquire any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from stock (A) holders other than the retention or acquisition of Company Options any Shares tendered by current or former employees or directors in full or partial payment of order to pay the exercise thereof and/or price of any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship Taxes in connection with the exercise or vesting of Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationOptions, RSUs or PSUs);
(ixviii) incur any indebtedness for borrowed money or guarantee such indebtedness of another PersonPerson (other than a wholly owned Subsidiary of the Company), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries other than (A) indebtedness incurred in the ordinary course consistent of business under the Existing Credit Agreements in an aggregate principal amount that does not exceed, as of any time, the aggregate principal amount outstanding under the Existing Credit Agreements as of June 30, 2018 by more than $50,000,000 and that may be repaid at any time without premium or penalty and (B) indebtedness incurred under the Existing Credit Agreements in an aggregate amount up to $91,000,000 as required to fund a rabbi trust in connection with past practice;
(x) except as the transactions contemplated by this agreement under the Benefit Plan set forth in the capital budgets set forth in item 4(d) on Section 6.1(a)(x5.1(d)(ii) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditureLetter;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xiiix) make any material changes with respect to financial accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect theretoGAAP;
(Ax) settle except as with respect to Transaction Litigation, which shall be governed by Section 6.14, and appraisal litigation which shall be governed by Section 4.2(f), settle, waive or release any litigation or other proceedings before a Governmental Entity except where if such settlement, waiver or release (A) with respect to the settlement is limited solely to (I) payment of monetary damages, involves the release payment of claims and (II) the monetary payment by the Company or any Subsidiary does not damages that exceed $2,000,000 (5,000,000 individually or $15,000,000 in the aggregate for all such settlements) aggregate, net of any amount covered by insurance or indemnification or (B) commence, join, make an appeal with respect to any non-monetary terms and conditions therein, imposes or requires actions that would have a lawsuit, action, claim or similar proceeding other than (I) for material effect on the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position continuing operations of the Company or of any of its Subsidiaries;
(xvxi) except as would not reasonably be expected to materially and adversely affect Parent or any of its Affiliates (including the Company and its Subsidiaries) after the Effective Time, (A) make, revoke or change any Tax election; (B) settle, consent to or compromise any Tax Proceeding or any Tax claim or assessment or surrender a right to a Tax refund, respectively, in excess of $5,000,000 individually or $15,000,000 in the aggregate; (C) consent to any extension or waiver of any limitation period with respect to any Tax claim or assessment; (D) file an amended Tax Return; (E) enter into a closing agreement with any Tax Authority regarding an amount of Taxes or Tax matter; (F) change any method of Tax accounting; or (G) take any action that would reasonably be expected to preclude the Company or any of its Subsidiaries from making a valid election under Section 965(h) or Section 965(n) of the Code;
(xii) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein material assets of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales other than (A) Permitted Liens, (B) transactions solely among the Company and/or its wholly owned Subsidiaries that would not result in a material increase in the Tax liability of the Company Products and its Subsidiaries, (C) non-exclusive licenses to customers and resellers in the ordinary course of business with respect to any Intellectual Property or (D) transactions involving the sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $5,000,000 individually or $15,000,000 in the aggregate or (E) abandonment of Intellectual Property in the ordinary course of business;
(xiii) other than as required pursuant to the terms in effect on the date of the Agreement of any Benefit Plan or as required by applicable Law: (A) enter into or amend any agreement providing compensation or benefits to any Service Provider, except for amendments that do not materially increase compensation or benefits, (B) enter into, adopt, amend, modify or terminate any compensation or benefit plans (other than routine amendments or renewals to benefit plans that do not materially increase benefits or result in materially increased costs), (C) accelerate the vesting or payment of any cash or equity award held by any former or current Service Provider, (D) hire or engage the services of any individual who is expected to hold a position of vice president or above and sales have an annual base salary equal to or above $300,000, or (E) increase the compensation provided to any current or former Service Provider, except for any such increases that result from actions otherwise permitted under this clause (xiii), (F) pay any material bonus or incentive compensation; or (G) to fund the plans or arrangements set forth on Section 6.1(a)(xiii) of obsolete the Parent Disclosure Letter;
(xiv) enter into any Contract which would limit (i) the incurrence of indebtedness or (ii) the declaration and payment of the dividends in respect of the capital stock of the Company or its Subsidiaries;
(xv) except as required by applicable Law or GAAP, (A) revalue in any material respect any of its properties, assets, including writing off notes or accounts receivables, other than pursuant to Contracts in effect prior to the date ordinary course of this Agreementbusiness or (B) make any material change in any of its accounting principles or practices;
(xvi) (A) incur or commit to incur any capital expenditures other than capital expenditures not to exceed $41,000,000 in the aggregate during any six (6) month period from June 30, 2018 to the Closing Date (provided, that such amount shall be committed or incurred in the ordinary course of business on a pro-rated basis for the portion of any six (6) month period elapsed between the date hereof and the Closing Date); (B) enter into, modify, amend or terminate any Material Contract (which, for purposes of this Section 6.1(a)(xvi), shall be deemed not to include any Benefit Plans), other than Contracts entered into in the ordinary course of business with customers, suppliers or independent contractors or regarding real property (but not a Contract that would constitute a Material Contract under Section 5.1(j)(i)(B) or any Contract that cannot be cancelled without material liability or penalty to the Company or its Subsidiaries upon notice of ninety (90) days or less); (C) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice; (D) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404; (E) effectuate a "plant closing," "mass layoff" (each as defined in the Worker Adjustment and Retraining Notification Act of 1988 or any similar Law) or other collective employee layoff, collective redundancy, or similar event; (F) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than in the ordinary course of business, ; or (AG) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon waive or allow to lapse or expire or otherwise dispose of release any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required material claim other than in the diligent prosecution ordinary course of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Propertybusiness;
(xvii) except to make changes that are required by applicable Law propose or to satisfy contractual obligations existing as adopt a plan of the date hereof pursuant to Contracts complete or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedulepartial liquidation, (A) terminatedissolution, enter intomerger, amend or renew (or communicate any intention to take such action) any Benefit Planconsolidation, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costsrestructuring, (B) increase in any manner the compensation, bonus, pension, welfare, fringe recapitalization or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants reorganization of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedSignificant Subsidiary; or
(xixxviii) agree, authorize or commit to do any of the foregoing.
(b) Nothing contained in this Agreement is intended to give Parent, directly or indirectly, the right to control or direct the Company's or its Subsidiaries' operations prior to the Effective Time, and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent's or its Subsidiaries' operations. Prior to making any formal written communications or group oral presentations to the directorsEffective Time, officers or employees each of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communicationexercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries' respective operations.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after From the date of this Agreement and prior to until the Effective Time and Closing, except as (Aw) approved in writing by Purchaser, (x) provided in subsections (b) through (e) of this Section 6.1 or as otherwise expressly required by this Agreement, (By) as required by applicable LawsLaw or (z) set forth in Section 6.1 of the Company Disclosure Schedule, (CA) as Parent may the Company shall, and shall cause each of its Subsidiaries to, conduct their business only in the Ordinary Course of Business (and shall timely pay all Entity Level Taxes) and (B) the Company shall not, and shall not permit any of its Subsidiaries to, take any of the following actions, in each case without the prior written consent to in writing of Purchaser (such consent not to be unreasonably withheld, delayed conditioned or conditioneddelayed):
(i) amend any provision of its Organizational Documents;
(ii) [reserved];
(iii) merge, consolidate or effect any similar transaction with any Person other than a wholly owned member of the Company Group (Deach such Person that is not a wholly owned member of the Company Group being called a “Non-Group Member”), or enter into any joint venture or similar transaction with any Non-Group Member;
(iv) acquire, in one or more transactions, from any Non-Group Member (A) except as set forth in Section 6.1(a6.1(b)(i) of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course andany assets, to the extent consistent therewithincluding computers, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees furnitures and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except equipment (Aother than (1) as otherwise expressly required by this Agreement, equity interests or businesses with respect to which clause (B) as required by applicable Lawsbelow shall apply, (C2) as Parent may consent CMBS and/or CDO bonds and/or whole loans (or participations therein) with respect to in writing which Section 6.1(b)(i) shall apply and (such consent not to be unreasonably withheld, delayed or conditioned3) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of loans originated by the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii’s conduit business with respect to which Section 6.1(b)(ii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate shall apply) for consideration in excess of, of $50,000 individually or $750,000 in the aggregate, or (B) any equity interests or business for aggregate consideration in excess of $2,500,00010,000,000;
(v) sell, lease, license or otherwise dispose of, to any Non-Group Member, any of its assets, including any CDO-Related Security or any CMBS or any voting, approval or other rights under any CDO-Related Security or any CMBS, other than acquisitions pursuant in the Ordinary Course of Business, or sell, lease, license or otherwise dispose of, to Contracts any Non-Group Member in effect the Ordinary Course of Business any of its assets, including any CDO-Related Security or any CMBS or any voting, approval or other rights under any CDO-Related Security or any CMBS, for consideration in excess of $10,000,000 individually or $25,000,000 in the aggregate except as otherwise permitted by Section 6.1(b)(i) or Section 6.1(b)(ii);
(vi) enter into any line of business or offer any services of a nature substantially different from those in which a member of the Company Group is engaged or which a member of the Company Group provides as of the date of this Agreement;
(ivvii) issue, sell, pledgegrant, transfer or otherwise dispose of, grant, transfer, or pledge or otherwise encumber, or authorize the issuanceany limited liability company interests, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of, or other equity interest in the Company or any of its Subsidiaries (collectively, “Company Group Equity Interests”), or any securities convertible into, or exercisable or exchangeable for, any Company Group Equity Interests or any options, calls, warrants or other rights to acquire any Company Group Equity Interests or any such convertible, exercisable or exchangeable securities in each case to any Non-Group Member;
(viii) split, combine or reclassify, or directly or indirectly repurchase, redeem or otherwise acquire, any Company Group Equity Interests not held by a member of the Company Group;
(ix) incur, assume or guarantee any Indebtedness to any Non-Group Member in excess of $10,000,000 in the aggregate, or cancel any Indebtedness owed by any Non-Group Member in excess of $10,000,000, in the aggregate, in each case other than in the Ordinary Course of Business with respect to indebtedness of the type referenced in clauses (c) through (f) of the definition of “Indebtedness”;
(x) loan or advance any amount to any Person;
(xi) cancel or waive all or any part of any Indebtedness owed to the Company or any of its Subsidiaries by any Seller or any of such Seller’s respective Affiliates (other than the Company and its Subsidiaries);
(xii) settle, compromise, discharge, waive, release or assign any material claim, right or Legal Proceeding, except where only monetary damages are owed by the Company or any of its Subsidiaries and there is no post-Closing obligation or cost to the Company or any of its Subsidiaries (other than the issuance covenants customary in settlement agreements that are of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiesimmaterial nature and scope);
(vxiii) create pay, assume, indemnify or incur any Lien material to Indebtedness for the Company benefit of the Sellers or any of its Subsidiaries on any assets of the Sellers’ Affiliates (other than the Company or any of and its Subsidiaries;
(vi) ), other than any payments required to be made pursuant to the terms of Contracts in effect as of existing Indebtedness or Indebtedness incurred after the date of this Agreement pursuant to and provided to Parent prior to in accordance with the date terms of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xiixiv) make any material changes with respect to its accounting policies policies, practices or proceduresprocedures except as required by GAAP;
(xv) terminate, or waive any material right or benefit under, any Material Contract or (ii) other than in the Ordinary Course of Business, enter into, amend, renew or extend, or grant any consent under, any Material Contract;
(xvi) make or change any material election in respect of Taxes, adopt or change any material accounting method in respect of Taxes or otherwise, enter into any closing agreement, settle any claim or assessment in respect of a material amount of Taxes, request any ruling (other than the ruling requested on September 26, 2012) or similar guidance with respect to Taxes or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual PropertyGAAP;
(xvii) except to make changes that are other than as may be required by applicable Law or to satisfy contractual obligations existing as the terms of any Benefit Plan in existence on the date hereof pursuant to Contracts of this Agreement or Benefit Plans which are listed as set forth on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, or amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments or any plan, program, arrangement, practice or agreement that would be a Benefit Plan if it were in existence on the date hereof, except to qualified retirement plans or health and welfare plans (other than severance plans) the extent that do such amendment would not materially increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay compensation of any of the current Business Employees, officers or former directors, officers, employees or consultants directors of the Company or any of its Subsidiaries, except for increases in base salaries in the Ordinary Course of Business or (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan; provided, however, that the foregoing clauses (FA)-(C) pay any severance in excess of what is legally required under shall not restrict the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer Company or any employee of its Subsidiaries from entering into or consultant making available to newly hired or promoted employees, in each case in the Ordinary Course of Business, plans, agreements, benefits and compensation arrangements that have a value that is consistent with maximum annual cash compensation opportunities in excess the past practice of $200,000, provided, that such new hire’s making compensation and benefits are made available to newly hired or promoted employees in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Companypositions;
(xviii) terminate the employment of (other than by the Company or its Subsidiaries for cause and in consultation with Purchaser) or hire any Person whose annual base compensation exceeded or is reasonably expected to exceed $250,000;
(xix) adopt, enter into, terminate, amend, extend or renew any collective bargaining agreement, works council agreement or other labor union or employee representative Contract;
(xx) agree to any restriction on the Company’s or any Subsidiary’s exercise of any of its rights under any CDO-Related Security, or agree to any modification, waiver or amendment of any agreement or instrument governing or relating to any CDO-Related Security, including any collateral management or similar Contract;
(xxi) agree to any restriction on the Company’s or any Subsidiary’s exercise of any of its rights under any CMBS, or agree to any modification, waiver or amendment of any Contract governing or relating to any CMBS, including any servicing or similar Contract;
(xxii) enter into any modification, waiver or consent of any Contract that would limit any right of the Company or any Subsidiary of the Company in any capacity to appoint (or approve or be consulted with respect to the appointment of) the primary servicer, master servicer or special servicer for any loan;
(xxiii) effect or cause the resignation of the Company or any Subsidiary of the Company from its capacity as primary servicer, master servicer or special servicer in connection with any one or more loans or interests therein, or from its capacity as collateral manager, disposition consultant, administrator, investment manager or asset manager or in a similar capacity with respect to any one or more securities secured by or evidencing an interest in (in each case, whether directly or indirectly and whether in whole or in part) by one or more loans or interests therein;
(xxiv) terminate or allow coverage to lapse under any of the insurance policies set forth in Section 3.21 of the Company Disclosure Schedule without obtaining replacements therefor in the Ordinary Course of Business;
(xxv) enter into any Contract that would have been required to be set forth on Section 3.7(a)(v) of the Company Disclosure Schedule if such Contract had been in effect on the date hereof;
(xxvi) subject to Section 6.26.1(b), take (A) enter into any action lease of real property in the capacity as lessee or omit sub-lessee (or in a similar capacity), except any renewals of existing leases in the Ordinary Course of Business or (B) purchase any direct or indirect interest in any real property (other than any such purchases required to take any action that is reasonably likely be consummated pursuant to preventthe terms of Contracts in existence on the date of this Agreement, interfere with or delay the consummation all of which are described on Section 6.1(a)(xxvi) of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedCompany Disclosure Schedule); or
(xixxxvii) agreeauthorize, authorize agree or commit to do any of the foregoing.
; provided, however, that the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to keep Purchaser reasonably informed of any action (bother than in respect of actions not material in value and nature and taken in the Ordinary Course of Business) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of taken by the Company or any of its Subsidiaries pertaining that would require the prior written consent of Purchaser pursuant to compensation this Section 6.1 but for the fact that such action did not meet or benefit matters exceed a threshold set forth in this Section 6.1.
(b) Notwithstanding anything to the contrary in Section 6.1(a):
(i) From the date of this Agreement through the Closing, the Company and its Subsidiaries shall have the right to acquire (x) CMBS and/or CDO bonds and/or whole loans (or participations therein) in respect of the transactions set forth on Section 6.1 of the Company Disclosure Schedule and (y) in one or more transactions in the Ordinary Course of Business, from one or more Non-Group Members, up to $25,000,000 (based on consideration paid) in the aggregate of CMBS and/or CDO bonds and/or whole loans (or participations therein) so long as no individual purchase, or series of related purchases, exceeds $10,000,000 (based on consideration paid); provided that are affected (1) the restrictions in Section 6.1(a)(v) shall not apply to the sale of CMBS and/or CDO bonds and/or whole loans (or participations therein) in the Ordinary Course of Business by the transactions contemplated Company or any of its Subsidiaries to the extent the consideration received from such sales is used to fund the purchase of CMBS and/or CDO bonds and/or whole loans (or participations therein) pursuant to this clause (i) and (2) the consideration received from such sales of CMBS and/or CDO bonds and/or whole loans (or participations therein) shall be credited towards the $25,000,000 threshold (such that, for example, any such sales for $10,000,000 in total consideration provide an additional $10,000,000 in permitted acquisitions of such CMBS, CDO bonds and whole loans); provided, further, that if Purchaser consents in writing (which the parties agree may be granted by electronic mail from an authorized representative of Purchaser) to any acquisitions of CMBS and/or CDO bonds and/or whole loans (or participations therein) referenced in this Agreementclause (i), the aggregate consideration paid in respect of such acquisitions shall not be applied against the thresholds stated herein. From the date hereof to the Closing, the Company agrees to report to Purchaser on a weekly basis as to all actions taken in respect of this clause (i).
(ii) From the date of this Agreement through the Closing, the Company and its Subsidiaries shall have the right to originate loans in the Ordinary Course of Business in connection with the Company’s conduit business in amounts that do not, individually or in the aggregate, result in an equity investment by the Company or its Subsidiaries in such loans of more than $50,000,000, in the aggregate; provided that the Company and its Subsidiaries shall also have the right to incur, pursuant to the existing repurchase facilities of the Company and its Subsidiaries (to the extent permitted thereunder), for purposes of such origination indebtedness equal to 75% of the loan to value ratio (as determined in accordance with the existing repurchase facilities of the Company and its Subsidiaries); provided, further, that (1) the restrictions in Section 6.1(a)(v) shall not apply to the sale of loans originated in the Ordinary Course of Business in connection with the Company’s conduit business to the extent the consideration received from such sales is used to fund the origination of loans pursuant to this clause (ii) and (2) (x) if the Company or any of its Subsidiaries sells any such loans to a Non-Group Member the $50,000,000 threshold shall calculated without regard to such loan origination except that the amount of gain or loss realized by the Company and/or its Subsidiaries as a result of such sale shall be applied as a credit or deduct, as applicable, to such threshold and (y) if Purchaser consents in writing (which the parties agree may be granted by electronic mail from an authorized representative of Purchaser) to any loan origination referenced in this clause (ii), such originations shall not be applied against the threshold (provided that, notwithstanding this clause (y), in no event shall the Company and its Subsidiaries have loans outstanding that were originated in connection with the Company’s conduit business after the date of this Agreement that, individually or in the aggregate, result in an equity investment by the Company or its Subsidiaries in such loans of more than $75,000,000). Notwithstanding the foregoing, all references to $50,000,000 in this clause (ii) shall instead refer to $25,000,000 until the Company consummates the GSMC 2013-GC10 securitization transaction.
(iii) From the date of this Agreement through the Closing, except (1) for Permitted Activities, (2) as required by applicable Law or (3) as described in Section 6.1(c), the Company shall provide Parent with a copy of the intended communicationnot, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries or any of its Affiliates which it Controls to, in each case without the prior written consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed, and which the parties agree may be granted by electronic mail from an authorized representative of Purchaser) take or cause to be taken any action, or exercise any power or authority, or fail to take any action that is reasonably likely required of it under applicable Law, or any existing Contract, permit, license, or authorization, or take or permit to preventoccur any Specified Restricted Activity, interfere with or delay the consummation in respect of the Merger or result in any of the conditions commercial properties identified in Exhibit O-1 (collectively, the “Commercial Properties” and each individually a “Commercial Property”). Without limiting anything contained in this clause (iii), the Company shall, and shall cause its Subsidiaries and Affiliates which it Controls to, consult with Purchaser with respect the Commercial Properties (including regarding (x) the management, maintenance, development, construction, operation, and remediation thereof, (y) any substantive communications with any Governmental Authority and (z) any offers or solicitations regarding any Commercial Property), on a weekly basis (and, with respect to the Merger set forth in Article VII not being satisfied.material issues with respect to a Commercial Property,
Appears in 1 contract
Sources: Unit Purchase Agreement (Starwood Property Trust, Inc.)
Interim Operations. (a) The Company covenants shall, and agrees as to itself and shall cause its Subsidiaries thatto, after between the date hereof and the Closing or earlier termination of this Agreement and prior to the Effective Time and (except (A) in each case as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent referred to in writing Section 7.1(b) or as may be approved by Parent (such consent approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed)), (1) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted carry on their respective businesses in the ordinary course of business in all material respects consistent with past practice and usual course and, to the extent consistent therewith, it and its Subsidiaries shall (2) use their respective commercially reasonable best efforts to protect maintain and preserve intact in all material respects its assets business organization and to preserve intact its advantageous business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agentsrelationships. Without limiting the generality ofIn addition to, and in furtherance of, without limiting the foregoing, from between the date hereof and the Closing or earlier termination of this Agreement (except in each case as referred to in Section 7.1(b) or as may be approved by Parent), the Company shall not, and shall cause its Subsidiaries not to (provided only clauses (xxi) and (xxii) below shall apply to actions of the Company or its Subsidiaries taken with respect to Financial Advisors or prospective Financial Advisors):
(i) amend any provision of the Constituent Documents of the Company other than amendments which are ministerial in nature;
(ii) sell, pledge, transfer, dispose of, encumber (other than Permitted Encumbrances), create, redeem, repurchase, acquire, allot or issue, or grant an option to subscribe for, any Equity Interest in the Company or any of its Subsidiaries (except in each case the net share settlement or issuance of equity interests in respect of Company Equity Awards outstanding as of the date of this Agreement until in accordance with their terms (or, with respect to net share settlement, consistent with past practice) and, as applicable, the Effective Time, except Stock Plans as in effect on the date of this Agreement);
(iii) (A) as otherwise expressly required by this Agreementacquire or agree to acquire any Equity Interest in, or make any investments in, any Person, (B) make any loans or advances to any Person or make any capital contributions to any Person (other than as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of between the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change and advances of expenses to employees in its certificate the ordinary course of incorporation or by-laws or other applicable governing instrumentsbusiness consistent with past practice);
(iiiv) merge or consolidate the Company or any of its Subsidiaries with any Person (other Person, except for than with any such transactions among wholly owned Subsidiaries Affiliate of the CompanyCompany or any of its Subsidiaries), or restructureadopt a plan of complete or partial liquidation, reorganize dissolution, restructuring, recapitalization or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock reorganization of the Company or any of its Subsidiaries (other than the issuance of shares by or establish any Person that would constitute a wholly owned Subsidiary or Affiliate of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiesCompany;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(viiA) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (including with respect to the Company, for the avoidance of doubt, Shares), except for (Ax) dividends paid by any direct or indirect wholly owned Subsidiary of the Company to the Company or to any other direct or indirect wholly owned Subsidiary or of the Company and (y) regular quarterly or monthly dividends not to exceed $0.10 per Share, (as applicable) declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting Shares and/or Preferred Shares made in the ordinary course of its capital stock;
business consistent with past practice; or (viiiB) reclassify, split, combine, subdivide combine or redeem, purchase or otherwise acquire, directly or indirectly, reclassify any of its capital stock or other equity interests or issue or authorize the issuance of any other securities convertible in respect of, in lieu of or exchangeable into or exercisable in substitution for any shares of its capital stockstock or other equity interests (except in each case the issuance of equity interests in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans as in effect on the date of this Agreement);
(vi) except from as required pursuant to the terms of any Benefit Plan or as otherwise required by applicable Law, the Company shall not: (A) holders grant any new long-term incentive or equity-based awards, or amend, modify or waive the terms or conditions of any such outstanding awards under any Benefit Plan; (B) grant any transaction-related retention bonuses (it being understood the Company Options in full or partial payment may pay a portion of the exercise thereof and/or annual bonus in respect of the 2019 calendar year in the form of cash retention awards consistent with past practice); (C) increase the compensation payable to any applicable Taxes payable by such holder upon exercise employee, except for (i) employees who are not executive officers of the Company Options and (ii) increases implemented in the ordinary course of business consistent with past practice provided that the aggregate base salaries payable to all such employees does not exceed 103% of the previous year’s base salaries payable to all such employees; (D)
(i) terminate the employment of any executive officer (other than for cause), (ii) hire any new employee (except for new employees with an annual salary or wage rate of less than $100,000 annually and who are replacement hires receiving substantially similar terms of employment) or (iii) promote or grant merit increases to any employees, except in the ordinary course of business in connection with the Company’s annual or quarterly compensation review cycle or as the result of the termination or resignation of any employee; (E) adopt, enter into, terminate or amend any Benefit Plan or program that would be a Benefit Plan if adopted or any collective bargaining agreement or other Contract with any labor organization or other representative of the Company’s or any Company SARs Subsidiary’s employees or the lapse of restriction on Company Restricted Shares make any contribution to the extent any Benefit Plan, other than contributions required by Law or permitted under the terms of such Benefit Plans as in effect on the applicable Stock date hereof, except with respect to Benefit Plans providing for health and award agreements welfare benefits, the Company may (i) negotiate and enter into new contracts and extensions of existing contracts with Benefit Plan providers in the ordinary course of business consistent with past practice, provided that duration of such contracts or extensions do not extend beyond calendar year 2020 and (ii) take such other actions so long as the aggregate cost of any such Benefit Plan is not materially increased; (F) enter into or amend any employment, services, change in control, severance, deferred compensation, retention or similar Contract with any officer, director, or employee of the Company; (G) take any action to accelerate or otherwise change the payment timing of any compensation or benefit under any Benefit Plan; or (BH) former employeeschange any actuarial or other assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions are made or the basis on which contributions are calculated, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationexcept as may be required by GAAP;
(ixvii) incur make, change or revoke any indebtedness for borrowed money material Tax election, change any Tax accounting method or guarantee such indebtedness period, file any amended Tax Return, enter into any closing agreement with respect to Taxes, request any Tax ruling, waive or extend the statute of another Personlimitations in respect of a material amount of Taxes or settle or compromise any material Tax liability or refund;
(viii) other than the sale of obsolete equipment or assets in the ordinary course of business, sell, lease, license or otherwise dispose of (whether by way of merger, consolidation, sale of stock or assets, or issue otherwise), grant an Encumbrance on or sell permit an Encumbrance to exist on, or agree to sell, lease, license, or otherwise dispose of, or grant or permit an Encumbrance on, any debt securities properties or warrants or other rights to acquire any debt security assets of the Company or any of its Subsidiaries, in each case, other than any Permitted Encumbrances and other than with respect to any assets with a value of less than $500,000 individually or $2,000,000 in the aggregate;
(ix) acquire or agree to acquire all or a substantial portion of the assets or business of any Person or any division or line of business thereof;
(x) commence any Action or file any petition in any court relating to the bankruptcy, reorganization, insolvency, dissolution, liquidation or relief from debtors, in any case, in respect of the Company or any of its Subsidiaries;
(xi) amend, modify, waive or terminate, in each case, any existing Material Contract or enter into any Contract that would be a Material Contract if in effect on the date of this Agreement other than in each case (A) any termination or renewal for one year or less in accordance with the terms of any existing Material Contract on substantially similar terms, (B) the entry into new Material Contracts in replacement of existing Material Contracts on terms not materially worse to the Company or the relevant Subsidiary, in the aggregate, than the current terms and (C) immaterial ministerial amendments, modifications or waivers of the terms of Material Contracts in the ordinary course (it being understood that this provision shall not apply to any employment, services, change in control, severance, deferred compensation, retention or similar Contract with any officer, director, or employee of the Company, which shall be governed by clause (vi) above);
(xii) incur, redeem or prepay any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security), except for inter(A) Indebtedness for borrowed money incurred in the ordinary course of business not to exceed $2,000,000 in the aggregate, (B) Indebtedness in replacement of existing Indebtedness for borrowed money on terms substantially consistent with or more favorable to the Company than the Indebtedness being replaced, or (C) guarantees of Indebtedness of its wholly owned Subsidiaries otherwise incurred in compliance with this clause (xii);
(xiii) make any material change in business operations as defined in FINRA (NASD) Rule 1011(k);
(A) change its fiscal year or (B) make any material change in accounting methods, principles or practices used by it, except in each case as may be required (x) by GAAP or (y) by applicable Law, including Regulation S-company borrowings solely among X under the Securities Act;
(xv) other than in accordance with the Company’s capital expenditures budget for calendar year 2019 or any capital expenditures budget for calendar year 2020 (which budget shall not materially exceed the aggregate amount of capital expenditures provided in the capital expenditures budget for calendar year 2020), make any capital expenditure or expenditures, or incur any obligations or liabilities in connection therewith, which, individually, is in excess of $500,000 or, in the aggregate, are in excess of $2,000,000;
(xvi) settle or compromise any Action, other than settlements or compromises of claims that exclusively require the payment of money by the Company or its Subsidiaries of unreimbursed out-of-pocket settlement amounts that are (A) accrued or reserved for as of the date of this Agreement or (B) not in excess of $250,000 per Action or $2,000,000 in the aggregate for all Actions pursuant to this clause (B), or enter into any consent, decree, injunction or similar restraint or form of equitable relief or deferred prosecution agreement or similar agreement with any Government Authority that would impose any conduct conditions or remedies that would have a restrictive impact on the business of the Company or any of its Subsidiaries, or would reasonably be expected to impede or delay in any material respect the consummation of the transactions contemplated by this Agreement, including obtaining the Company Shareholder Approval;
(xvii) cancel, compromise, waive or release any material right or claim of the Company and its wholly-owned Subsidiaries Subsidiaries;
(xviii) cancel, terminate or among modify in any material respect, or take any action that could permit cancellation, termination or material modification of, any Insurance Policy (other than the Company’s wholly-owned Subsidiaries renewal of any Insurance Policy in place as of the date hereof in the ordinary course of business consistent with past practice);
(xix) enter into any real property lease or modify, amend, renew, extend, waive or exercise any material right or remedy under or terminate any Lease, other than (A) any renewal for one year or less, (B) immaterial ministerial amendments, modifications or waivers, in each case of the foregoing (A) and (B), of any Lease in existence on the date hereof in the ordinary course of business consistent with past practice or (C) with respect to any Lease that requires a monthly rent payment of less than $3,000;
(xx) other than ordinary course director compensation, ordinary course compensation and employee benefit entitlements, ordinary course reimbursement of travel and entertainment expenses or advances regarding the same, in each case that are payable in the ordinary course of business consistent with past practice or as otherwise permitted pursuant to Section 7.1(a)(vi), enter into any transaction or arrangement with any (A) director, officer or employee of the Company, (B) Person who is or was, since the Applicable Date, a greater than 5% shareholder of the Company or (C) any of their respective Affiliates;
(xxi) (A) acquire or agree to acquire any Equity Interests in, assets or accounts of, or make any investments in, any Financial Advisor or prospective Financial Advisor (including, for this purpose, any Person affiliated with any such Financial Advisors) in excess of $500,000 individually or $5,000,000, in the aggregate or (B) make any recruiting loans or similar advances (including advances of expenses) to any prospective Financial Advisor in excess of $500,000 individually or $2,500,000 in the aggregate; provided, however, that if the Closing does not occur on or prior to March 31, 2020, the aggregate limit set forth in sub-clause (A) shall increase to $10,000,000 and the aggregate limit set forth in sub-clause (B) shall increase to $5,000,000;
(A) make any change to the Financial Advisor “payout grids” or substantially similar compensation table (as in effect as of the date hereof) or (B) make any change to any other methodology affecting the rate of any other compensation with respect to the Financial Advisors, in each case, where such changes would be applicable to the Financial Advisor field force taken as a whole; provided that, in the case of (A) or (B), the Company or its Subsidiaries may make changes to the compensation payable to individual Financial Advisors on a case-by-case basis consistent with past practices; or
(xxiii) affirmatively authorize, agree or commit, or publicly announce an intention, to do any of the actions prohibited by this Section 7.1(a).
(b) Notwithstanding anything to the contrary in Section 7.1(a), or any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall be prevented from undertaking, be required to obtain Parent’s consent in relation to, or incur any Liability as a result of effecting any of the following:
(i) any matter required by Law, required by any Government Authority or requested by any Government Authority as part of its supervision of the Company or any of its Subsidiaries;
(ii) the implementation of any transaction or the taking of any action required by, or otherwise permitted under, this Agreement;
(iii) any matter disclosed in the Company Disclosure Letter;
(iv) the performance of an obligation under any Contract existing as at the date hereof;
(v) any action by the Company or any Subsidiary thereof for, on behalf or at the direction of any Client or customer of the Company or any Subsidiary thereof (including investments in securities for or on behalf of customers or Clients), provided that such action is taken in the ordinary course of business consistent with past practice;
(xvi) except as set forth in the capital budgets set forth in Section 6.1(a)(x) release or discharge of any Liability owed by any Subsidiary of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (of its Affiliates, or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where owed by the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect any of its business, provided, Subsidiaries or Affiliates; or
(vii) any action taken in connection with disaster recovery or related emergency response efforts with the intention of minimizing any adverse effect resulting from such efforts (provided that the Company consults with shall promptly notify Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;efforts).
(xivc) file Neither Party shall knowingly take or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of permit any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit their Affiliates to take any action that is would reasonably likely be expected to prevent, interfere with materially delay or delay materially impede the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the other transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Sources: Merger Agreement (Ladenburg Thalmann Financial Services Inc.)
Interim Operations. (a) The Except (i) as described in Section 5.1(a) of the Company Disclosure Letter, (ii) as otherwise expressly required by this Agreement or any other Transaction Document, (iii) as required by applicable Law or COVID-19 Measures or (iv) as Parent shall otherwise consent to in writing (which consent shall not be unreasonably withheld, conditioned, delayed, or denied), the Company covenants and agrees as to itself and its Subsidiaries that, after during the date period from the Execution Date until the Closing, or the earlier termination of this Agreement and prior to in accordance with its terms, the Effective Time and except Company shall (A) as otherwise expressly required by this Agreement, operate its business in the ordinary course of business substantially consistent with past practice and (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to protect maintain and preserve in all material respects its assets and to preserve intact its business organizations organization, assets, properties and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other material business associates and keep available the services of its and its Subsidiaries’ present employees and agents. relations.
(b) Without limiting the generality of, and in furtherance of, the foregoing, from the date Execution Date until the Closing or the earlier termination of this Agreement until the Effective Timein accordance with its terms, except (Av) as described in the corresponding subsection of Section 5.1(b) of the Company Disclosure Letter, (w) as otherwise expressly required by this AgreementAgreement or any Transaction Document, (Bx) as required by applicable Laws, Law or COVID-19 Measures or (Cy) as Parent may shall otherwise consent to in writing (such which consent shall not to be unreasonably withheld, conditioned, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Scheduledenied), the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instrumentsits Subsidiaries’ Organizational Documents;
(ii) (A) merge or consolidate the Company itself or any of its Subsidiaries with any other Person, except for any such transactions among its wholly owned Subsidiaries or (B) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company, Company or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesSubsidiaries;
(iii) Except as set forth on Section 5.1(b)(iii) of the Company Disclosure Letter, acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess ofof $100,000, individually or acquire any business or entity (whether by merger or consolidation, by purchase of substantially all assets or equity interests or by any other manner), in the aggregateeach case, $2,500,000in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreementor other transactions;
(iv) sell, lease, license or otherwise dispose of any of its material assets or properties (other than Intellectual Property), except (A) for sales, leases, licenses or other dispositions in the ordinary course of business and (B) for sales, leases, licenses or other dispositions of assets and properties with a fair market value not in excess of $100,000 in the aggregate;
(v) issue, sell, pledge, dispose of, grant, transfer, encumber, grant or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee sale or encumbrance of, grant of any shares of capital stock or other securities of the Company or any of its Subsidiaries (other than the issuance of shares issuances by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date Company), or any options, warrants, convertible securities, subscription rights or other similar rights entitling its holder to receive or acquire any shares of this Agreementsuch capital stock or other securities of the Company or any of its Subsidiaries other than grants to employees, directors and consultants of the Company in the ordinary course of business of Company Options collectively having an aggregate number of underlying shares of Company Common Stock not to exceed 400,000 shares of Company Common Stock;
(vi) reclassify, split, combine, subdivide, redeem or repurchase, any capital stock of the Company or options, warrants or securities convertible or exchangeable into or exercisable for any shares of such its capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassifymake any loans, splitadvances, combine, subdivide guarantees or redeem, purchase capital contributions to or otherwise acquire, directly investments in any Person (other than the Company or indirectly, any of its capital stock direct or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment indirect wholly-owned Subsidiary of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise Company), other than in the ordinary course of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationbusiness;
(ix) incur any indebtedness Indebtedness for borrowed money or guarantee any such indebtedness Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries Indebtedness for borrowed money incurred in the ordinary course consistent with past practiceof business not to exceed $100,000 in the aggregate;
(x) except as set forth make or commit to make capital expenditures other than in an amount not in excess of $100,000, in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditureaggregate;
(xi) (A) enter into any Contract that would have been a Company Material Contract had it been entered into prior to this Agreement the Execution Date, other than in the ordinary course of business;
(xii) amend or (B) amend, modify in any material respect or terminate any Company Material Contract, or cancelwaive or release any material rights, modify claims or waive benefits under any debtsCompany Material Contract, rights or claims thereunder; for purposes of this Section 6.1in each case, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference other than in the definition ordinary course of Personal Property Leases shall be changed to $2,500,000business;
(xiixiii) make any material changes with respect to its accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this AgreementGAAP;
(xiv) file or amend settle any material Tax Return Proceeding, except in the ordinary course of business, settle business or compromise any material Tax liability, make, change where such settlement is covered by insurance or revoke any material Tax election except to involves only the extent consistent with past practice or as required by law, change any material method payment of Tax accounting, except as required by law, or take any action which would materially adversely affect monetary damages in an amount not more than $250,000 in the Tax position of the Company or of any of its Subsidiariesaggregate;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales consistent with past practice, file any material amended Tax Return, make, revoke or change any material Tax election in a manner inconsistent with past practice, adopt or change any material Tax accounting method or period, enter into any agreement with a Governmental Entity with respect to material Taxes, settle or compromise any examination, audit or other action with a Governmental Entity of obsolete assetsor relating to any material Taxes or settle or compromise any claim or assessment by a Governmental Entity in respect of material Taxes, other than pursuant or enter into any Tax sharing or similar agreement (excluding any commercial contract not primarily related to Contracts Taxes), in effect prior each case, to the date of this Agreementextent such action could reasonably be expected to have a Material Adverse Effect on Parent;
(xvi) except in the ordinary course of business or pursuant to the terms of any Company Benefit Plan in effect as of the Execution Date or as required by Law, (A) increase the annual salary or consulting fees or target annual cash bonus opportunity, of any Company Employee with an annual salary or consulting fees and target annual cash bonus opportunity in excess of $100,000 as of the Execution Date, (B) become a party to, establish, adopt, amend, or terminate any material Company Benefit Plan or any arrangement that would have been a material Company Benefit Plan had it been entered into prior to this Agreement, (C) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, (D) forgive any loans or issue any loans (other than routine travel advances issued in the ordinary course of business) to any Company Employee, (AE) transfer, hire any employee or engage any independent contractor (who is a natural person) with annual salary or consulting fees and target annual cash bonus opportunity in excess of $100,000 or (F) terminate the employment of any employee of the Company who would be an “executive officer” (as defined in Rule 3b-7 of the Exchange Act) other than for cause;
(xvii) sell, assign, lease, exclusively license, mortgage, pledge, encumber, divest, cancelabandon, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Company Intellectual Property, (C) fail other than grants of non-exclusive licenses in the ordinary course of business to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as customers for use of the date hereof pursuant to Contracts products or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants services of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made otherwise in the ordinary course consistent with past practice and are consistent with the other requirements set forth of business;
(xviii) become a party to, establish, adopt, amend, commence participation in this Agreement, (J) or enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Companyunion Contract;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agreefail to use commercially reasonable efforts to keep current and in full force and effect, authorize or commit to do comply with the requirements of, or to apply for or renew, any permit, approval, authorization, consent, license, registration or certificate issued by any Governmental Entity that is material to the conduct of the foregoing.business of the Company and its Subsidiaries, taken as a whole;
(bxx) Prior file any prospectus supplement or registration statement or consummate any offering of securities that requires registration under the Securities Act or that includes any actual or contingent commitment to making any formal written communications register such securities under the Securities Act in the future;
(xxi) fail to maintain, cancel or group oral presentations materially change coverage under, in a manner materially detrimental to the directors, officers or employees of the Company or any of its Subsidiaries, any insurance policy maintained with respect to the Company and its Subsidiaries pertaining to compensation or benefit matters that are affected and their assets and properties;
(xxii) enter into any material new line of business outside of the business currently conducted by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy and its Subsidiaries as of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.Execution Date;
(cxxiii) Subject enter into any Contract that would have been a Company Related Party Transaction had it been entered into prior to Section 6.5the Execution Date; or
(xxiv) enter into any Contract, Parent shall not take or permit any of its Subsidiaries otherwise become obligated, to take any action that is reasonably likely to preventdo, interfere with or delay the consummation of the Merger or result in authorize, any of the conditions to the Merger set forth in Article VII not being satisfiedforegoing.
Appears in 1 contract
Sources: Merger Agreement (Monterey Capital Acquisition Corp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries Subsidiary that, after the date of this Agreement hereof and prior to the Effective Time Time, unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed, it shall comply with all of the covenants provided in this Section 5.1 (provided, however, with respect to the covenants in subsections (c)(v), (f), (g), (k), (l), and (m) only, Company shall comply with such covenant unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed, it being agreed that Parent's approval shall be deemed to have been given if Parent does not provide to the Company written notice of its objection within three(3) Business Days of written notice from the Company), except (A) as otherwise expressly required contemplated by this Agreement, Agreement :
(Ba) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the business of it and its Subsidiaries Subsidiary shall be conducted in the ordinary and usual course consistent with past practices and, to the extent consistent therewith, it and its Subsidiaries Subsidiary shall use their respective commercially reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations organization intact and maintain its existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality ofassociates;
(b) it shall not, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries to:
(i) adopt issue, sell or propose any change in otherwise dispose of or subject to Lien (other than Permitted Liens) its certificate of incorporation or by-laws or other applicable governing instruments;
Subsidiary's Capital Stock owned by it; (ii) merge amend its charter or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
bylaws; (iii) acquire assets outside split, combine or reclassify its outstanding shares of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
Capital Stock; (iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make aside or pay any dividend or other distribution, payable in cash, stockstock or property in respect of any Capital Stock; (v) repurchase, property redeem or otherwise, with respect to any of otherwise acquire or permit its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any shares of its capital stock Capital Stock or any securities convertible into or exchangeable into or exercisable for any shares of its capital stockCapital Stock; (vi) form, except from organize or capitalize any Subsidiary; or (Avii) holders adopt a plan of Company Options in full complete or partial payment of the exercise thereof and/or liquidation or dissolution, merger or otherwise restructure or recapitalize or consolidate with any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationPerson other than Merger Sub;
(ixc) neither it nor its Subsidiary shall (i) authorize for issuance or issue, sell or otherwise dispose of or subject to any Lien (other than Permitted Liens) any shares of its Capital Stock, or securities convertible into or exchangeable or exercisable for, options, warrants, calls, commitments or rights of any kind to acquire, any shares of its Capital Stock of any class or any Voting Debt (other than Shares issuable pursuant to Company Options outstanding on the date hereof); (ii) transfer, lease, license, guarantee, sell or otherwise dispose of or subject to any Lien (other than Permitted Liens) any other property or assets or incur or modify any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights liability; (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person; (iv) make any loans to acquire any debt security of other Person (other than to the Company Subsidiary or any of its Subsidiaries, except for intercustomary loans or advances to employees in connection with business-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries related travel in the ordinary course of business consistent with past practice;
practices); or (xv) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewithmake any commitments for, make or authorize any capital expenditureexpenditures other than in amounts less than $10,000 individually and $50,000 in the aggregate (unless and to the extent fully paid for in advance by a customer of the Company) or, by any means, make any acquisition of, or investment in, assets or stock of any other Person;
(xid) except as may be required to comply with applicable law or by existing contractual commitments, neither it nor its Subsidiary shall (Ai) enter into any Contract that would have been new agreements or commitments for any severance or termination pay to, or enter into any employment or severance agreement with, any of its directors, officers or employees or consultants except for specific arrangements required as a Material Contract had it been entered into prior condition to this Agreement closing of the Merger or (Bii) amendterminate, modify establish, adopt, enter into, make any new grants or terminate awards under, amend or otherwise modify, any Material ContractCompensation and Benefit Plan or increase or accelerate the salary, wage, bonus or cancelother compensation of any employees or directors or consultants or pay or agree to pay any pension, modify retirement allowance or waive other employee benefit not required by any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; existing Compensation and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000Benefit Plan;
(xiie) make any material changes with respect to accounting policies or proceduresneither it nor its Subsidiary shall, except as may be required as a result of a change in law or in GAAP, change any of the accounting principles or practices used by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect theretoit;
(Af) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any neither it nor its Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accountingshall, except as may be required by law, under GAAP in connection with the audit of the 2002 Financial Statements (as defined in Section 6.2(l)) or take any action which would materially adversely affect the Tax position preparation of the Company or of any of its Subsidiaries;
(xv) transferReports after the date hereof, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in each case in the ordinary course of business and sales consistent with past practice, revalue in any respect any of obsolete its assets, other than pursuant to Contracts including writing-down the value of inventory or writing-off notes or accounts receivable, or make any adjustment in effect prior to the date of this Agreement;
(xvi) any accrual or reserve other than in the ordinary course of businessbusiness consistent with past practices; provided, (A) transferhowever, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required no adjustments greater than $100,000 in the diligent prosecution of Owned Intellectual Property), waive aggregate shall be made in the Company's PECFA reserve;
(g) neither it nor its Subsidiary shall settle or compromise any claims or litigation or terminate or amend or modify any of its material Contracts or waive, release or assign any rights or claims, except (i) PECFA claims where the difference between the claim value and the settlement amount is less than $25,000 and (ii) other claims or litigation less than $10,000 if such settlement or compromise would be in excess of any reserve or accrual on the Balance Sheet with respect to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Propertysuch claim;
(xviih) except neither it nor its Subsidiary shall make any Tax election or, to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of extent within the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants control of the Company or its SubsidiariesSubsidiary, (C) pay permit any bonus insurance policy naming it as a beneficiary or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of loss-payable payee to be canceled or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Companyterminated;
(xviiii) subject to Section 6.2, neither it nor its Subsidiary shall take any action or omit to take any action that is reasonably likely would cause any of its representations and warranties herein to prevent, interfere with or delay the consummation of the Merger or result become untrue in any of the conditions to the Merger set forth in Article VII not being satisfied; ormaterial respect;
(xixj) agree, neither it nor its Subsidiary will authorize or commit enter into any agreement to do any of the foregoing.;
(bk) Prior neither it nor its Subsidiary shall enter into any agreement to making perform work reimbursable under the PECFA program unless, as a part of all agreements for such work, it expressly disclaims in writing any formal written communications obligation to guarantee or group oral presentations reimburse any amounts not paid by the State of Wisconsin under such program;
(l) neither it nor its Subsidiary shall enter into any agreement to provide services having a value of, or with projected revenues over the directors, officers or employees life of the Company project, greater than $100,000 and not on the Company's standard terms and conditions; and
(m) neither it nor its Subsidiary shall enter into any agreement or arrangement pursuant to which it grants any customer or any of its Subsidiaries pertaining other person a license or other rights in any Intellectual Property, invention, development or improvement to compensation or benefit matters that are affected by the transactions contemplated by pre-existing Intellectual Property. Nothing in this Agreement, subsection shall prevent the Company shall provide Parent with from vesting in a copy customer the rights to project data and reports generated in the course of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communicationperforming services for that customer.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Sources: Merger Agreement (Envirogen Inc)
Interim Operations. (a) The Except (i) as described in Section 5.1(a) of the Company Disclosure Letter, (ii) as otherwise expressly required or permitted by this Agreement or any other Transaction Document, (iii) as required by applicable Law or (iv) as Parent shall otherwise consent to in writing (which consent shall not be unreasonably withheld, conditioned, delayed, or denied), the Company covenants and agrees as to itself and its Subsidiaries that, after during the period from the date of this Agreement and prior to until the Effective Time and except (A) as otherwise expressly required by this AgreementClosing, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, shall use commercially reasonable efforts to operate the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets with past practice and to preserve intact its their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Company’s executive officers.
(b) Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective TimeClosing, except (Aw) as described in the corresponding subsection of Section 5.1(b) of the Company Disclosure Letter, (x) as otherwise expressly required or permitted by this AgreementAgreement or any Transaction Document, (By) as required by applicable Laws, Law or (Cz) as Parent may shall otherwise consent to in writing (such which consent shall not to be unreasonably withheld, conditioned, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Scheduledenied), the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instrumentsits Subsidiaries’ Organizational Documents;
(ii) (A) merge or consolidate the Company itself or any of its Subsidiaries with any other Person, except for any such transactions among its wholly owned Subsidiaries or (B) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company, Company or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesSubsidiaries;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess ofof $250,000, individually or acquire any business or entity (whether by merger or consolidation, by purchase of substantially all assets or equity interests or by any other manner), in the aggregateeach case, $2,500,000in any transaction or series of related transactions, other than acquisitions or other transactions pursuant to Contracts to which the Company or any of its Subsidiaries are a party that are in effect as of the date of this Agreement;
(iv) sell, lease, license or otherwise dispose of any of its material assets or properties, except (A) for sales, leases, licenses or other dispositions in the ordinary course of business and (B) for sales, leases, licenses or other dispositions of assets and properties with a fair market value not in excess of $250,000 in the aggregate or (C) pursuant to Contracts to which the Company or any of its Subsidiaries are a party that are in effect as of the date of this Agreement;
(v) except pursuant to awards granted under the Stock Plan (which, for clarity, may be granted after the date of this Agreement in the ordinary course of business consistent with past practice (including grants to new hires)), issue, sell, pledge, dispose of, grant, transfer, encumber, grant or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee sale or encumbrance of, grant of any shares of capital stock or other securities of the Company or any of its Subsidiaries (other than the issuance of shares issuances by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stockCompany), or any options, warrants warrants, convertible securities, subscription rights or other similar rights of any kind entitling its holder to receive or acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets other securities of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms reclassify, split, combine, subdivide, redeem or repurchase, any of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet stock of the Company and other than or options, warrants or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except in connection with the Company repurchase, net exercise or any direct settlement of awards under the Stock Plan or indirect wholly owned Subsidiary the withholding of shares to satisfy Tax obligations with respect to awards under the Company)Stock Plan;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassifymake any loans, splitadvances, combine, subdivide guarantees or redeem, purchase capital contributions to or otherwise acquire, directly investments in any Person (other than the Company or indirectly, any of its capital stock direct or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment indirect wholly-owned Subsidiary of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise Company), other than in the ordinary course of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationbusiness;
(ix) incur any indebtedness Indebtedness for borrowed money or guarantee any such indebtedness Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries Indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice;
(x) except as set forth make or commit to make capital expenditures other than in an amount not in excess of $1,000,000, in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditureaggregate;
(xi) (A) enter into any Contract that would have been a Company Material Contract had it been entered into prior to the date of this Agreement Agreement, other than in the ordinary course of business;
(xii) amend or (B) amend, modify in any material respect or terminate any Company Material Contract, or cancelwaive or release any material rights, modify claims or waive benefits under any debtsCompany Material Contract, rights or claims thereunder; for purposes of this Section 6.1in each case, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference other than in the definition ordinary course of Personal Property Leases shall be changed to $2,500,000business;
(xiixiii) make any material changes with respect to its accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this AgreementGAAP;
(xiv) file or amend settle any material Tax Return Proceeding, except in the ordinary course of business, settle business or compromise any material Tax liability, make, change where such settlement is covered by insurance or revoke any material Tax election except to involves only the extent consistent with past practice or as required by law, change any material method payment of Tax accounting, except as required by law, or take any action which would materially adversely affect monetary damages in an amount not more than $250,000 in the Tax position of the Company or of any of its Subsidiariesaggregate;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business consistent with past practice: (A) file any material amended Tax Return, (B) make, revoke or change any material Tax election, (C) adopt or change any material Tax accounting method or period, (D) enter into any agreement with a Governmental Entity with respect to material Taxes, (E) settle or compromise any examination, audit or other action with a Governmental Entity of or relating to any material Taxes or settle or compromise any claim or assessment by a Governmental Entity in respect of material Taxes, or (F) enter into any Tax sharing or similar agreement (excluding any commercial contract not primarily related to Taxes), in each case, to the extent such action could reasonably be expected to have any adverse and sales material impact on Parent;
(xvi) except in the ordinary course of obsolete assets, other than business or pursuant to Contracts the terms of any Company Benefit Plan in effect prior to as of the date of this Agreement or as required by Law, (A) materially increase the annual salary or consulting fees or target annual cash bonus opportunity of any Company Employee with an annual salary or consulting fees in excess of $250,000 as of the date of this Agreement, (B) enter into, establish, adopt, amend, or terminate any material Company Benefit Plan, (C) take any action to accelerate the vesting or lapsing of restrictions or payment or funding of compensation or benefits under any Company Benefit Plan, (D) hire any employee or engage any independent contractor (who is a natural person) with an annual salary or consulting fees in excess of $250,000 or (E) terminate the employment of any executive officer other than for cause or due to death or disability;
(xvixvii) sell, assign, exclusively license, abandon, or allow to lapse any material Company Intellectual Property, other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Propertybusiness consistent with past practice;
(xviixviii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAPapplicable Law, (I) hire any executive officer become a party to, establish, adopt, amend, commence participation in or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Companylabor union Contract;
(xviiixix) subject fail to Section 6.2use commercially reasonable efforts to keep current and in full force and effect, take or to comply with the requirements of, or to apply for or renew, any action Permit, approval, authorization, consent, license, registration or omit to take certificate issued by any action Governmental Entity that is reasonably likely material to prevent, interfere with or delay the consummation conduct of the Merger business of the Company and its Subsidiaries, taken as a whole;
(xx) file any prospectus supplement or result registration statement or consummate any offering of securities that requires registration under the Securities Act or that includes any actual or contingent commitment to register such securities under the Securities Act in the future;
(xxi) fail to maintain, cancel or materially change coverage under, in a manner materially detrimental to the Company or any of the conditions its Subsidiaries, any insurance policy maintained with respect to the Merger set forth in Article VII not being satisfiedCompany and its Subsidiaries and their assets and properties;
(xxii) enter into any material new line of business outside of the business currently conducted by the Company and its Subsidiaries as of the date of this Agreement; or
(xixxxiii) agree, agree or authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Interim Operations. Except (av) The as required by applicable Law, (w) as Parent may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), (x) as expressly disclosed in Section 6.1(a) of the Company Disclosure Letter or (y) as expressly provided for in this Agreement, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date execution of this Agreement and prior to the earlier of (1) the Effective Time and except or (2) the valid termination of this Agreement in accordance with ARTICLE VIII (A) as otherwise expressly required the Company shall use its commercially reasonable efforts to conduct its business and the business of its Subsidiaries in the ordinary course of business consistent with past practice in all material respects; provided, however that no action that is (i) specifically permitted by any of subclauses (a) through (v) of Section 6.1(B) shall be deemed a breach of this Agreement, clause (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditionedA) or (Dii) as set forth expressly disclosed in Section 6.1(a) 6.1 of the Company Disclosure Schedule, the business Letter with respect to any subclause of it and its Subsidiaries Section 6.1(B) shall be conducted in the ordinary deemed a breach of any other subclause of Section 6.1(B) and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without (B) without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will shall not and will not permit any of its Subsidiaries to:
(a) (i) adopt or propose any change in amend its certificate of incorporation or by-laws bylaws (or comparable governing documents), other applicable than amendments to the governing instruments;
documents of any wholly owned Subsidiary of the Company that would not (A) prevent, delay or impair the Merger or the other transactions contemplated by this Agreement or (B) otherwise be material to the Company and its Subsidiaries taken as a whole, (ii) merge split, combine, subdivide, recapitalize or consolidate the Company or any reclassify its outstanding shares of its Subsidiaries with any other Person, capital stock (except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares transaction by a wholly owned Subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction and that would not prevent, delay or impair the Merger or the other transactions contemplated by this Agreement or otherwise be material to the Company and its Subsidiaries taken as a whole), (iii) declare, set aside, accrue, authorize or another pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for any dividends or distributions paid by a direct or indirect wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date Company to another direct or indirect wholly owned Subsidiary of this Agreementthe Company or to the Company or) or (iv) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of such its capital stockstock (other than (1) pursuant to the exercise of Company Options or the forfeiture of, or any optionswithholding of Taxes with respect to, warrants Company Options, Company Restricted Stock, or Company RSUs or (2) purchases, repurchases, redemptions or other rights acquisitions of securities of any kind to acquire wholly owned Subsidiary of the Company by the Company or any shares other wholly owned Subsidiary of such capital stock or such convertible or exchangeable securitiesthe Company);
(vb) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than mergers among, or the restructuring, reorganization or liquidation of any wholly owned Subsidiaries of the Company in the ordinary course of business that would not prevent, delay or impair the Merger or the other transactions contemplated by this Agreement) or create any non-wholly owned Subsidiary of the Company;
(c) except as required by applicable Law, or incur as required by Contract (i) materially increase the cash compensation payable to any Lien director, officer, employee, consultant or individual independent contractor of the Company or any of its Subsidiaries, in each case, other than in the ordinary course of business consistent with past practice (provided that any increase in cash compensation made outside of the ordinary course of business shall only be made following consultation with Parent), (ii) materially increase the material fringe or other material benefits, or pay any bonus other than in the ordinary course, payable to any director, officer, employee, consultant or individual independent contractor of the Company or any of its Subsidiaries on with annual base cash compensation in excess of $300,000 per year (provided that any assets increase in fringe or other benefits outside of the ordinary course of business shall only be made following consultation with Parent), (iii) grant any increase in change in control, retention, severance or termination pay with respect to any director, officer, employee, consultant or individual independent contractor of the Company or any of its Subsidiaries, (iv) establish, adopt, enter into, terminate or materially amend, or take any action to accelerate the vesting, payment or funding of any compensation, or benefits under, any material Company Plan, (v) enter into any employment, consulting, or termination agreement with any director, officer, employee, consultant or individual independent contractor of the Company or any of its Subsidiaries whose annual base cash compensation exceeds $300,000 or (vi) enter into any change in control, retention or similar agreement with any director, officer, employee, consultant or individual independent contractor of the Company or any of its Subsidiaries;
(vid) other than incur any Indebtedness, guarantee, endorse, assume or otherwise become liable or responsible for any Indebtedness of another Person or issue any rights to acquire any Indebtedness, except (i) in the ordinary course of business, borrowings under the Company’s revolving credit facility as in effect as of the date hereof, including pursuant to the Company’s Existing Credit Agreement or as contemplated in the Company Notes not in excess of $150,000,000, (ii) in replacement of existing Indebtedness which has matured or is scheduled to mature, in each case after the date of this Agreement, on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced, (iii) inter-company Indebtedness among the Company and its wholly owned Subsidiaries in the ordinary course of Contracts business consistent with past practice, (iv) (A) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (B) overdraft facilities or cash management programs, in effect each case issued, made or entered into in the ordinary course of business consistent with past practice, or (v) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice and not for speculative purposes;
(e) make or commit to any capital expenditures other than in the ordinary course of business consistent with past practice and which do not exceed in the aggregate, for the period between the date of this Agreement and the Closing Date, 110% of the capital expenditures provided for in the budget for fiscal year 2025 previously provided to Parent prior Parent;
(f) other than sales of inventory in the ordinary course of business consistent with past practice, transfer, lease, license, sell, assign, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Subsidiaries but not including any Intellectual Property), with a fair market value in excess of $5,000,000 individually or $15,000,000 in the aggregate (other than transactions among the Company and its wholly owned Subsidiaries);
(g) issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or other equity or voting interests or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any shares of its capital stock or other equity or voting interests, including Shares (including, for the avoidance of doubt, any restricted stock units or performance restricted stock units as contemplated under the Company Stock Plan), except (i) for any Shares issued pursuant to Company Options and Company RSUs outstanding on the date of this Agreement in accordance with the existing terms of such awards (as modified by this Agreement) and the Company Stock Plan that are outstanding on the date hereof; provided, however, that, if the Company has the right to settle any Company Plan or employee benefit agreement, trust, plan, fund or other agreement (including with respect to any Company Option or Company RSU) in cash, the Company shall not settle such Company Benefit Plan or employee benefit agreement, trust, plan, fund or other agreement in Company equity securities instead of cash and (ii) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company;
(h) other than in the ordinary course of business, spend or commit to spend in excess of $5,000,000 individually or $15,000,000 in the aggregate to acquire any assets or other property, whether by merger, consolidation, purchase of property or assets or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition);
(i) acquire or agree to acquire (whether by merger, consolidation, purchase of property or assets or otherwise) any third Person or business or any material equity interest in such Person, or enter into any material joint venture, legal partnership or similar arrangement with any third Person;
(j) acquire, or agree to acquire, fee ownership (or its jurisdictional equivalent) of any real property;
(k) make any material change with respect to its financial accounting policies or procedures, except as required by changes in GAAP (or any interpretation thereof) or by applicable Law;
(l) abandon any material existing line of business or enter into any new line of business other than any line of business that is reasonably ancillary to and a reasonably foreseeable extension of any line of business as of the date of this Agreement;
(m) other than in the ordinary course of business consistent with past practice, make any loans, advances, guarantees advances or capital contributions to to, or investments in in, any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in loans, advances or capital contributions to the Company or any direct or indirect wholly owned Subsidiary of the Company);
(viin) declare, set aside, make (i) amend or pay modify in any dividend or other distribution, payable material respect (and in cash, stock, property or otherwise, with respect a manner adverse to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries Subsidiaries) or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
terminate (x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) excluding terminations upon expiration of the Company Disclosure Schedule and consistent therewithterm thereof in accordance with the terms thereof) any Material Contract or waive, make release or authorize assign any capital expenditure;
material rights, claims or benefits under any Material Contract or (xi) (Aii) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement or (B) amend, modify or terminate any Material Contractunless it is on terms substantially consistent with, or cancelon terms more favorable to the Company or its Subsidiaries (and to Parent and its Subsidiaries following the Closing) than, modify either a Contract it is replacing or waive a form of such Material Contract made available to Parent prior to the date hereof; provided that the foregoing shall not prohibit or restrict the ability of the Company or its Subsidiaries to take any debts, rights or claims thereunder; for purposes of action described in this Section 6.1, the monetary reference in clause (A6.1(n) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition ordinary course of Personal Property Leases business consistent with past practice with respect to Contracts or Material Contracts; provided, further that for the avoidance of doubt, this Section 6.1(n) shall be changed to $2,500,000not prohibit or restrict any Company Plans;
(xiio) settle any action, suit, case, litigation, claim, hearing, arbitration, investigation or other Proceedings before or threatened to be brought before a Governmental Entity, other than settlements if the amount of any such settlement is not in excess of $2,500,000 individually or $5,000,000 in the aggregate, in each case in excess of amounts available under the Company’s applicable insurance policy; provided that such settlements do not involve any non-de minimis injunctive or equitable relief or impose non-de minimis restrictions on the business activities of the Company and its Subsidiaries or Parent and its Subsidiaries;
(p) other than with respect to transactions between or among the Company and its wholly owned Subsidiaries, (i) make or change any material Tax election or make any material changes change to any annual Tax accounting period; (ii) settle or compromise any material Tax claim or assessment; (iii) consent to any extension or waiver of any limitation period with respect to accounting policies any material Tax claim or proceduresassessment; (iv) initiate or enter into any closing, except as required by changes voluntary disclosure or similar agreement relating to Taxes; (v) surrender any right to claim a material refund of Taxes or a material offset or other material reduction in Law liability for Taxes; or applicable GAAP (vi) request any ruling or statutory or regulatory accounting rules or interpretations similar guidance with respect theretoto material Taxes;
(Aq) settle (i) sell, assign, transfer, lease, license, encumber, abandon or permit to lapse any litigation material Intellectual Property owned or other proceedings before a Governmental Entity except where the settlement is limited solely purported to (I) the release of claims and (II) the monetary payment be owned by the Company or any Subsidiary does not exceed of its Subsidiaries the book value of which is in excess of $2,000,000 (or $15,000,000 5,000,000 in the aggregate (except for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except licenses granted in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law), or take any action which would materially adversely affect the Tax position (ii) disclose material trade secrets of the Company or of any of its Subsidiaries;
Subsidiaries to a third party (xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow business to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Propertya third party bound by confidentiality obligations), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xviir) except to make changes that are required by applicable Law enter into any Affiliate Transaction;
(s) effectuate a “plant closing” or to satisfy contractual obligations existing “mass layoff” (each as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made defined in the ordinary course consistent with past practice United States Worker Adjustment and are consistent with the other requirements set forth Retraining Notification Act) affecting in this Agreementwhole or in part any site of employment, facility, operating unit or employee;
(Jt) enter into any collective bargaining agreement or other agreement Contract with a labor union, works council union or similar other labor organization or (K) terminate without cause the employment of with respect to any officer employee of the CompanyCompany or any of its Subsidiaries or recognize any union or other labor organization as the bargaining representative for any employee of the Company or any of its Subsidiaries or establish any trade union or other employee representative body;
(xviiiu) subject to Section 6.2, take adopt or implement any action stockholder rights plan or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedsimilar arrangement; or
(xixv) agree, authorize resolve or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the earlier of the termination of this Agreement in accordance with Article VIII and the Effective Time and except (A) as unless Parent shall otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to approve in writing (such consent approval not to be unreasonably withheld, delayed or conditioned)), and except as otherwise expressly required or permitted by this Agreement or as required by applicable Law, the business of it and its Subsidiaries shall be conducted in all material respects in the ordinary course of business and, to the extent consistent with the foregoing and the restrictions in the next sentence, the Company and its Subsidiaries shall use their respective commercially reasonable efforts to preserve their business organizations substantially intact, maintain satisfactory relationships with Governmental Entities, customers, suppliers, employees and other business relationships having significant business dealings with them) and keep available the services of their key employees and agents; provided that any action specifically permitted by the exceptions to the restrictions set forth in clauses (i)—(xviii) of this Section 6.1(a) shall be deemed in compliance with this sentence. Without limiting the foregoing, from the date of this Agreement until the earlier of the termination of this Agreement in accordance with Article VIII and the Effective Time, except (w) as otherwise expressly required or permitted by this Agreement, (x) as Parent may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned), (y) as is required by applicable Law or (Dz) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure ScheduleLetter, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws bylaws or other applicable governing instrumentsdocuments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire make any acquisition of any business or any assets outside in excess of $5,000,000 individually or $15,000,000 in the aggregate, other than acquisitions of assets acquired from the Company’s vendors or suppliers in the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date Company and its Subsidiaries; Table of this Agreement;
Contents (iv) issue, sell, pledge, dispose of, grant, transfer, encumber, encumber or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock or other equity securities of the Company or any of its Subsidiaries or securities convertible or exchangeable into or exercisable for, or give any Person a right to subscribe for or acquire (including options, warrants or other rights of any kind), any shares of capital stock or other equity securities (other than (A) in respect of Company Options, RSUs and PSUs outstanding as of the date of this Agreement as required by their terms as in effect on the date of this Agreement or (B) the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time and except (A) as unless Parent shall otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to approve in writing (such consent approval not to be unreasonably withheld, delayed or conditioned) )), and except as otherwise expressly contemplated by this Agreement or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedulerequired by applicable Laws, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course andconducted, to the extent contemplated thereby, in a manner consistent therewithwith the business plan set forth in Part I to Section 6.1(a) of the Company Disclosure Letter (the “Business Plan”) and, it otherwise in the ordinary course of business (taking into account the effects of the Business Plan). To the extent consistent with the foregoing, the Company and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agentsassociates. Without limiting the generality ofof the preceding provisions of this Section 6.1(a), and in furtherance of, the foregoingthereof, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required specifically contemplated or specifically permitted by provisions of this AgreementAgreement other than this Section 6.1(a), (B) as required by applicable Laws, (C) as Parent may consent to approve in writing (such consent approval, not to be unreasonably withheld, delayed or conditioned), (C) as is required by applicable Law or (D) as set forth in Section 6.1(a) of the Company Disclosure ScheduleLetter, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation formation or by-laws bylaws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the ordinary course Company or any of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreementits Subsidiaries;
(iv) make any acquisition of any assets or Person for a purchase price in excess of $10 million unless such acquisition would be permissible under clause (xi) below;
(v) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than (A) the issuance of Shares upon the settlement of performance units, restricted stock awards and other awards under the Stock Plans (and dividend equivalents thereon, if applicable), (B) the issuance of Shares upon conversion of Convertible Senior Notes, or (C) the issuance of shares by a wholly wholly-owned Subsidiary of the Company to the Company or another wholly wholly-owned Subsidiary or the issuance of Shares pursuant to Company OptionsSubsidiary), Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees advances or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company)) in excess of $20 million in the aggregate;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) regular quarterly dividends paid to holders of Shares in an amount not to exceed $0.4325 per Share per quarter, with record dates of or no earlier than, March 2, 2007; June 1, 2007; September 1, 2007; December 1, 2007; March 1, 2008 and June 1, 2008, respectively, and provided that no quarterly dividend will be declared with respect to the quarter in which the Effective Time occurs unless the Effective Time is after the record date for such quarter, (B) dividends paid in the ordinary course of business consistent with past practice by any direct or indirect wholly wholly-owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary and (C) dividends to holders of shares of preferred stock of TXU US Holdings Company in accordance with the Companyterms of such preferred stock) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stockstock (other than the acceptance of Convertible Senior Notes surrendered by their holders for conversion and the acquisition of any Shares tendered by current or former employees or directors in order to pay Taxes in connection with the settlement of performance units, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted restricted stock awards and other awards under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationPlans);
(ix) repurchase, redeem, defease, cancel, prepay, forgive, issue, sell, incur or otherwise acquire any indebtedness for borrowed money or any debt securities or rights to acquire debt securities of the Company or any of its Subsidiaries, or assume, guarantee or otherwise become responsible for such indebtedness of another PersonPerson (other than a wholly owned Subsidiary of the Company), except for indebtedness for borrowed money incurred or repaid in the ordinary course of business consistent with past practice (A) under the Company’s existing revolving credit facilities or the extension or refinancing thereof, (B) under commercial paper borrowings, (C) to refinance indebtedness for borrowed money as such indebtedness matures and using commercially reasonable efforts to obtain comparable terms and conditions, (D) by drawing under outstanding letters of credit or (E) in connection with the remarketing of outstanding Pollution Control Revenue Bonds in each case of any excepted issuance, refinancing or incurrence of indebtedness, which does not include any prepayment penalties, makewhole or similar terms and which does not interfere with, compete with or impede in any material respect the Debt Financing;
(x) amend or modify in any material respect the terms of, or issue refinance, any indebtedness for borrowed money, guarantee of indebtedness for borrowed money or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for interin connection with any refinancing of such indebtedness as it matures that does not include any new prepayment penalties, make-company borrowings solely among whole or similar term and does not unreasonably interfere with, compete with or impede in any material respect the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practiceDebt Financing;
(xxi) except as set forth in the capital budgets set forth expenditures contained in Section 6.1(a)(x) of the Company Disclosure Schedule Business Plan and consistent therewithfor expenditures related to operational emergencies, equipment failures or outages, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes expenditure in excess of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference 50 million in the definition of Personal Property Leases shall be changed to $2,500,000aggregate during any 12 month period;
(xii) except as required by applicable Law, reactivate or enter into any “reliability must run” Contract with respect to any generating plant that, as of the date of this Agreement, is shutdown or “mothballed;”
(xiii) make any material changes with respect to accounting policies or procedures, except as required by Law or by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect theretoGAAP;
(Axiv) waive, release or settle any pending or threatened litigation or other proceedings before a Governmental Entity except where (A) for an amount in excess of $10 million or (B) entailing the settlement incurrence of (1) any obligation or liability of the Company in excess of such amount, including costs or revenue reductions, (2) obligations that would impose any material restrictions on the business or operations of the Company or its Subsidiaries, or (C) that is limited solely to (I) the release brought by any current, former or purported holder of claims and (II) the monetary payment by any capital stock or debt securities of the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior relating to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to transactions contemplated by this Agreement;
(xivxv) file or amend any material Tax Return except other than in the ordinary course of businessbusiness consistent with past practice or except to the extent required by Law, make or change any material Tax election, settle or compromise any material Tax liability, make, change liability of the Company or revoke any material Tax election except to the extent consistent with past practice or as required by lawof its Subsidiaries in excess of $10 million, change any material method of Tax accounting, except as required by law, enter into any closing agreement with respect to any material Tax or surrender any right to claim a material Tax refund;
(xvi) take any action which would materially adversely affect outside the Tax position ordinary course of business that could result in the inclusion in taxable income of any intercompany gain of the Company or of any of its Subsidiaries;
(xvxvii) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, lines or businesses or interests therein of the Company or its Subsidiaries, Subsidiaries (including capital stock of any of its Subsidiaries) with a fair market value in excess of $400 million in the aggregate, except other than sales of Company Products inventory, electricity or other commodities, Derivative Products, real property or obsolete goods or equipment or cancellation of, abandonment of, or allowing to lapse or expire, Intellectual Property in the ordinary course of business and sales of obsolete assets, other than consistent with past practice or pursuant to Contracts in effect prior to the date of this Agreementhereof that have been made available to Parent or Merger Sub;
(xvixviii) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which in effect prior to the date of this Agreement, or as otherwise required by applicable Law, (A) grant or provide any severance or termination payments or benefits to any director or employee of the Company or any of its Subsidiaries or to any Designated Officer, except, in the case of employees who are listed on not Designated Officers, in the ordinary course of business and consistent with past practice, (B) increase the compensation or make any new equity awards to any director or employee of the Company or any of its Subsidiaries or to any Designated Officer, except, in the case of employees who are not Designated Officers of the Company, in the ordinary course of business and consistent with past practice or (C) establish, adopt, terminate or materially amend any Benefit Plan (other than routine changes to welfare plans);
(xix) (A) modify in any material respect the TXU Trading Policies or any similar policy, other than modifications that are more restrictive to the Company and its Subsidiaries or (B) enter into any Derivative Product or any similar transaction, other than as permitted by Section 6.1(a)(xvii6.1(a)(xix) of the Company Disclosure ScheduleLetter;
(xx) enter into, terminate (other than at the end of a term), renew or materially extend or amend any Company Material Contract or Contract that, if in effect on the date hereof, would be a Company Material Contract; or waive any material default under, or release, settle or compromise any material claim against the Company or liability or obligation owing to the Company under any Company Material Contract;
(xxi) fail to maintain in full force and effect material insurance policies covering the Company and its Subsidiaries and their respective properties, assets and businesses in a form and amount consistent with past practice unless the Company determines in its reasonable commercial judgment that the form or amount of such insurance should be modified;
(A) terminateexcept for any filings or proceedings related to automatic transmission capital trackers or automated meter reading investments, enter into, amend voluntarily file or renew (or communicate initiate any intention to take such action) proceeding before any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costsGovernmental Entity regarding rates charged by any Subsidiary of the Company, (B) increase in enter into any manner settlement or make any commitment or concession with any Person (including any Governmental Entity) regarding the compensationregulated rates, bonus, pension, welfare, fringe regulated rate base or other benefits, severance or termination pay return on equity of any Subsidiary of the current Company or former directors(C) take those actions referenced on Section 6.1(a)(xxii) of the Company Disclosure Letter;
(xxiii) sell, officerstransfer, employees swap, encumber or consultants otherwise make unavailable to the Company and its Subsidiaries any air emissions allowances, credits or offsets presently available to, possessed or controlled by the Company or its Subsidiaries, or purchase any air emissions allowances, credits or offsets, provided that the foregoing shall not restrict the Company or any of its Subsidiaries from using any such allowances, credits or offsets consistent with past practice, to offset emissions at any of their facilities;
(xxiv) enter into any new commodity transactions which are referred to as Category I transactions in (xix) of Section 6.1(a) of the Company Disclosure Letter (“Category I Transactions”), that require the initial or ongoing posting of letters of credit and/or cash as collateral support, except for any of such Category I Transactions referred to in paragraph 2 of the description thereof that will have a scheduled duration of 36 months or less (“Exempt Category I Transactions”);
(xxv) revoke, withdraw, terminate or abandon any currently outstanding or pending Environmental Permits or applications therefor relating to (A) the construction of generation facilities; or (B) the operation of the business of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, except such actions that such new hire’s compensation and benefits are made taken in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedbusiness; or
(xixxxvi) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications After the date hereof and on or group oral presentations prior to the directorsClosing Date, officers or employees of to the extent that the Company or any of its Subsidiaries pertaining enters into any transactions defined as Category I Transactions (other than Exempt Category I Transactions, such non-exempt transactions being referred to compensation as, “Post-Signing Commodity Hedging Arrangements”) and is required to provide Liens, security interests or benefit matters that are affected by the transactions contemplated by this Agreementother collateral to support their respective obligations under such Post-Signing Commodity Hedging Arrangements, the Company shall cause the documentation relating to such Post-Signing Commodity Hedging Arrangements to provide Parent with a copy of the intended communicationfor, Parent shall have a reasonable period of time to review and comment on the communication Closing Date, automatic termination, amendment and/or other release of such Liens, security interests and other collateral and the replacement of such collateral support obligations with Liens on the Collateral (which comments shall not as defined in Exhibit B to the Debt Financing Commitment) that would be unreasonably withheld or delayedpari passu with the Liens granted to secure the Borrower Obligations, the Guarantees and other Hedging Arrangements (each as described and as defined in Exhibit B to the Debt Financing Commitment). In addition, and Parent and the Company shall cooperate in providing cause the Post-Signing Commodity Hedging Arrangements not to include any such mutually agreeable communicationlimitations on the Company or its Subsidiaries to incur indebtedness or grant Liens on its assets.
(c) Subject to Section 6.5Except for actions required under the terms of this Agreement, Parent neither party hereto shall not intentionally take or permit any of its Subsidiaries Affiliates to take any action that is reasonably likely to prevent, interfere with prevent or delay in any material respect the consummation of the Merger Merger.
(d) Nothing contained in this Agreement is intended to give Parent, directly or result indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time, and nothing contained in any this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations. Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
(e) The Company covenants and agrees that it will use its reasonable best efforts to enter into the commercial transactions referenced in Section 6.1(e) of the Company Disclosure Letter on the terms and conditions to the Merger set forth in Article VII not being satisfieddescribed therein.
Appears in 1 contract
Sources: Merger Agreement (Txu Corp /Tx/)
Interim Operations. (a) The Company covenants shall, and agrees as to itself and shall cause each of its Subsidiaries thatto, from and after the date of this Agreement and prior to until the earlier of the Effective Time and the termination of this Agreement in accordance with Article IX (the “Interim Period”), except (A1) as Parent shall otherwise approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), (2) as otherwise expressly contemplated or required by this Agreement, (B3) as required by applicable LawsLaw, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D4) as set forth in Section 6.1(a7.1(a) of the Company Disclosure ScheduleLetter or (5) for commercially reasonable actions as reasonably required to comply with or implement COVID-19 Measures, conduct its business in the business Ordinary Course of it Business and use and cause each of its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect conduct its business in accordance with applicable Law and preserve in all material respects maintain its and its Subsidiaries’ business and assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees employees, agents and other business associates and keep available the services of its and its Subsidiaries’ present employees and agentsassociates. Without limiting the generality of, of and in furtherance ofof the foregoing sentence, during the foregoing, from the date of this Agreement until the Effective TimeInterim Period, except (AI) as otherwise expressly contemplated or required by this Agreement, (BII) as required by applicable LawsLaw, (CIII) as Parent may consent to approved in writing by Parent (such consent approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed, except that Parent may withhold, condition or delay approval of actions contemplated by Section 7.1(a)(iii) or Section 7.1(a)(iv) in Parent’s sole discretion), (DIV) as set forth in Section 6.1(a7.1(a) of the Company Disclosure ScheduleLetter or (V) for commercially reasonable actions in deviation of the prohibitions set forth in clauses (xii) (Material Contracts) (other than with respect to the Contracts described in the proviso thereto) or (xvii) (Compensation) below to the extent reasonably required to comply with or implement COVID-19 Measures, the Company will shall not and will not permit shall cause its Subsidiaries not to:
(i) adopt or publicly propose any change in its certificate of incorporation the Company’s Organizational Documents (other than to correct scrivener’s errors or by-laws immaterial or other applicable governing instrumentsministerial amendments);
(ii) (A) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the CompanyWholly Owned Subsidiaries, or (B) solely with respect to the Company and its Wholly Owned Subsidiaries, restructure, reorganize reorganize, recapitalize or completely or partially liquidate or dissolve (provided, that the Company may effect or cause to be effected the actions referred to in this clause (ii) to the extent they involve only the Company’s Wholly Owned Subsidiaries and are reasonably required to be undertaken to effectuate transactions otherwise enter into any agreements permitted under clauses (iii) or arrangements imposing material changes or restrictions on its assets, operations or businesses(iv) below);
(iii) acquire acquire, directly or indirectly, by merger, consolidation, acquisition of stock or assets outside of the ordinary course of business or otherwise, any business, Person or assets from any other Person with a fair market value or purchase price in the aggregate excess of $30,000,000 in excess of, individually any individual transaction or series of related transactions or $75,000,000 in the aggregate, $2,500,000in each case, other than acquisitions pursuant including any amounts or value reasonably expected to Contracts be paid in effect as connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation (it being understood and agreed that this Section 7.1(a)(iii) shall not alter or limit the date applicability of this AgreementSection 7.6(f) to the Company in any respect);
(iv) transfer, sell, lease to a third Person, divest, abandon, allow to expire, license to a third Person, outsource to a third Person or otherwise dispose of, or grant any Encumbrance (other than any Permitted Encumbrance) upon, any properties or assets (tangible or intangible, including any Intellectual Property Rights), product lines or businesses of the Company or any of its Subsidiaries, including capital stock of any of its Subsidiaries, except (A) other than with respect to Intellectual Property Rights and outsourcing, in connection with services provided in the Ordinary Course of Business, (B) expiration, abandonment or sales of obsolete or unused assets in the Ordinary Course of Business, (C) sales, leases, licenses, outsourcing or other dispositions of assets with a fair market value not in excess of $10,000,000 individually or $25,000,000 in the aggregate, (D) with respect to licenses of Intellectual Property Rights, non-exclusive grants of licenses in the Ordinary Course of Business and (E) the grant of Encumbrances to secure Indebtedness permitted by Section 7.1(a)(ix);
(v) issue, sell, pledge, dispose of, grant, transfer, encumberlease to a third Person, license to a third Person, guarantee, encumber or authorize enter into any Contract or other agreement, understanding or arrangement (whether oral or written) with respect to the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance voting of, any shares of capital stock of the Company (including, for the avoidance of doubt, Shares) or of any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company OptionsSubsidiaries, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any such shares of such capital stock, or any options, warrants or other rights of any kind to acquire any such shares of such capital stock or such convertible or exchangeable securities;
securities (vother than (A) create proxies or incur voting agreements solicited by or on behalf of the Company in order to obtain the Requisite Company Vote and any Lien material other votes or consents contemplated by Section 7.4(f) or in connection with any annual meeting of the Company’s stockholders) or (B) issuances (1) by a Wholly Owned Subsidiary of the Company to the Company or any of its Subsidiaries on any assets another Wholly Owned Subsidiary of the Company, (2) solely with respect to shares of capital stock of the Company’s Non-Wholly Owned Subsidiaries, in connection with joint ventures, minority investments, venture capital investments or similar transactions permitted by Section 7.1(a)(iii) or Section 7.1(a)(vi), (3) in respect of Company Equity Awards and issuances under the Stock Plans in the Ordinary Course of Business or any of (4) pursuant to the ESPP in accordance with its Subsidiariesterms and subject to Section 4.2(g));
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of (A) to or from the Company and any of its Wholly Owned Subsidiaries or (B) for indemnification or advancements to any directors, officers or other than in fiduciaries of the Company or any direct of its Subsidiaries pursuant to any of their respective Organizational Documents or indirect wholly owned Subsidiary any Contracts with such Persons, in either case in effect as of the Company)date of this Agreement) outside the Ordinary Course of Business in excess of $10,000,000 individually or $40,000,000 in the aggregate;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (including with respect to the Company, for the avoidance of doubt, Shares), except for (A) cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) solely with respect to the Company and its material Subsidiaries, reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stockstock (including, except from for the avoidance of doubt, Shares) (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of provided, that the Company Options may effect or Company SARs or cause to be effected the lapse of restriction on Company Restricted Shares actions referred to in this clause (viii) to the extent they involve only the Company’s Wholly Owned Subsidiaries and are reasonably required or to be undertaken to effectuate transactions otherwise permitted under the terms of the applicable Stock Plans and award agreements clauses (iii) or (Biv) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationabove);
(ix) assume, guarantee, issue or incur any indebtedness for borrowed money or guarantee such indebtedness Indebtedness (including the issuance of another Person, or issue or sell any debt securities or any warrants or other rights to acquire any debt security security) or enter into any hedging agreements, except for (subject, in each case, to Section 7.1(a)(xii)) (A)
(1) Indebtedness of the type contemplated by clauses (a) and (b) of the definition thereof in the Ordinary Course of Business up to $75,000,000 and (2) other Indebtedness in the Ordinary Course of Business up to $25,000,000, (B) drawdowns under the Credit Agreement, (C) guarantees of Indebtedness of its Wholly Owned Subsidiaries otherwise incurred in compliance with this Section 7.1(a), (D) Indebtedness between the Company and any of its Wholly Owned Subsidiaries or between one Wholly Owned Subsidiary of the Company and another Wholly Owned Subsidiary of the Company, (E) hedging agreements entered into in the Ordinary Course of Business and not for speculative purposes, (F) extensions or renewals of any outstanding Indebtedness in the Ordinary Course of Business or (G) refinancings or replacements of any outstanding Indebtedness on terms that are substantially similar to the terms of such outstanding Indebtedness or are otherwise more favorable to the Company and its Subsidiaries; provided, that any Indebtedness assumed, guaranteed, issued or incurred by the Company or any of its Subsidiaries, except Subsidiaries or for inter-company borrowings solely among which the Company and or any of its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practiceotherwise becomes liable under this Section 7.1(a)(ix) shall permit prepayment at any time without penalty of any kind;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any payment of, or accrual or commitment for, capital expenditureexpenditures, except in the Ordinary Course of Business;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement Agreement, other than Contracts entered into in the Ordinary Course of Business;
(xii) other than in the Ordinary Course of Business, (A) terminate or fail to renew any Material Contract (other than expirations of any such Contract in accordance with its terms), (B) amend, modify modify, supplement or terminate any Material Contractwaive, or cancelassign, modify convey, Encumber or waive any debtsotherwise transfer in whole or in part, rights or claims thereunder; for purposes of this Section 6.1interests pursuant to or in, the monetary reference in clause (A) of the definition of any Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies other than assignments between or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by among the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, Wholly- Owned Subsidiaries that the Company consults with Parent prior would not be adverse to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceedingParent), or (IIIC) pursuant to this Agreement;
(xiv) file or amend enter into any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which Contract that would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect have been a Material Contract had it been entered into prior to the date of this Agreement;
(xvi) other than ; provided, however, that in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of no event may the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current foregoing actions with respect to (1) the Specified Tax Agreements and any Tax “hold harmless,” sharing, allocation or former directorsindemnification agreement or arrangement (other than, officersin each case, employees (x) such agreements or consultants of arrangements solely between or among the Company or and any of its Wholly Owned Subsidiaries, (Cy) pay any bonus such agreements or incentive compensation under any Benefit Plan arrangements contained in excess commercial contracts entered into, amended or terminated in the Ordinary Course of Business the amount earned based on actual performanceprincipal subject of which is not Taxes and (z) customary Tax indemnification or Tax benefit provisions contained in merger agreements, stock purchase agreements, asset purchase agreements or other business combination agreements entered into in accordance with Section 7.1(a)), (D2) accelerate the vesting Credit Agreement, the Senior Notes Indenture (including, for the avoidance of doubt, by entering into a supplemental indenture pursuant thereto), the Senior Amortizing Notes Indenture (including, for the avoidance of doubt, by entering into a supplemental indenture pursuant thereto) and the Purchase Contract Agreement (in each case, except in connection with extensions or lapsing of restrictions with respect to any equity-based compensation renewals permitted under Section 7.1(a)(ix)(F) or other long-term incentive compensation refinancings or replacements permitted under any Benefit Plan, Section 7.1(a)(ix)(G)) (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreementthat, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions notwithstanding anything to the Merger set forth contrary herein, in Article VII not being satisfied; or
(xix) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of no event may the Company or any of its Subsidiaries pertaining amend, modify or supplement the Credit Agreement such that the borrowing capacity thereunder is increased beyond such capacity as of the date hereof), (3) any Contract described in clause (iv) or (xv) of the definition of a “Material Contract”, or (4) the Contract set forth in Section 7.1(a)(xii) of the Company Disclosure Letter; provided, further, that this Section 7.1(a)(xii) shall not be construed to compensation permit any action that would otherwise require the consent of Parent pursuant to any other provision of Section 7.1(a);
(xiii) cancel, modify or benefit matters that are affected waive any debts or claims held by or owed to the Company or any of its Subsidiaries having in each case a value in excess of $5,000,000 individually or $20,000,000 in the aggregate;
(xiv) other than with respect to Transaction Litigation, any Proceeding in connection with, arising out of or otherwise related to a demand for appraisal under Section 262 of the DGCL or any Tax claim, audit, assessment or dispute, which shall be governed by Sections 7.15, 4.3(f) and 7.1(a)(xvi), respectively, settle or compromise any Proceeding for an amount in excess of $20,000,000 individually or $40,000,000 in the aggregate during any calendar year, or which would reasonably be expected to (A) prevent, materially delay or materially impair the consummation of the transactions contemplated by this Agreement, (B) impose any material restriction on the operations of the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its material Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.or
Appears in 1 contract
Sources: Merger Agreement
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time and Time, except (A) as otherwise expressly required contemplated by this Agreement, (B) as Agreement or required by applicable Laws, Laws or with the prior written approval of Parent or Merger Sub (C) as Parent may consent to in writing (such consent which shall not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause each of its Subsidiaries to, (i) or conduct its business in the ordinary course consistent with past practice and (Dii) as set forth in Section 6.1(a) use its commercially reasonable efforts to keep available the services of the current officers, key employees and consultants of the Company Disclosure Schedule, the business and each of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations of the Company and each of its Subsidiaries intact and to maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees suppliers and other business associates and keep available Persons with whom the services Company or any of its and its Subsidiaries’ present employees and agentsSubsidiaries has material business relations. Without limiting the generality of, and in furtherance of, the foregoing, from From the date of this Agreement until the Effective Time, except (Aw) as otherwise expressly required contemplated by this Agreement, (Bx) as required by applicable Lawswith the prior written approval of Parent or Merger Sub (which, solely with respect to the matters in clauses (ix), (Cx), (xi), (xv), (xvi), (xvii) as Parent may consent and (xviii) below and, to in writing the extent relating to any of the foregoing clauses, clause (such consent xxi) below, shall not to be unreasonably withheld, delayed or conditioned), (y) as required by applicable Law or any Governmental Entity or (Dz) as set forth in Section 6.1(a5.1(a) of the Company Disclosure Schedule, the Company will not and will not permit any of its Subsidiaries to, directly or indirectly:
(i) adopt any amendment to or propose any other change in its certificate of incorporation or by-laws bylaws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire make any acquisition (whether by merger, consolidation, or acquisition of stock or assets) of any interest in any Person or any division thereof or any assets outside of thereof, except (A) any such acquisitions that are in the ordinary course of business from any other Person consistent with a value or purchase price past practice and are for consideration not in the aggregate in excess ofof $500,000 in any transaction or series of related transactions, individually or in the aggregate, $2,500,000, other than acquisitions (B) pursuant to Contracts in effect as of the date of this Agreement, true and complete copies of which have been made available to Parent or (C) as permitted by clause (ix) of this Section 5.1(a);
(iv) issue, deliver, sell, pledge, dispose of, grant, transfer, encumberencumber or otherwise dispose of, or authorize authorize, propose or agree to the issuance, delivery, sale, pledge, disposition, grant, transfer, lease, license, guarantee encumbrance or encumbrance disposition of, any shares of capital stock or other Equity Interests of the Company or any of its Subsidiaries, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock or other Equity Interests of the Company or any of its Subsidiaries (other than the issuance of shares Shares upon the settlement of Company Options existing on the date hereof on the terms in effect on the date hereof or by a wholly wholly-owned Subsidiary of the Company to the Company or another wholly wholly-owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiesCompany);
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees advances or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly wholly-owned Subsidiary of the Company)) in excess of $250,000 in the aggregate, other than amounts paid in connection with employee relocation consistent with the Company’s past practices;
(viivi) declare, set aside, establish a record date for, make or pay any dividend or other distribution, distribution (whether payable in cash, stock, property or otherwise, ) with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly wholly-owned domestic Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the CompanySubsidiary) or enter into any agreement with respect to the voting of its capital stock;
(viiivii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to acquire, directly or indirectly, any of its capital stock or other Equity Interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from stock or other Equity Interests (A) holders other than the acquisition of any Shares tendered by current or former employees or directors in order to pay Taxes in connection with the settlement of Company Options in full or partial payment outstanding as of the exercise thereof and/or any applicable Taxes payable by such holder upon date hereof under the Option Plans and other than in connection with a customary cashless exercise of the Company Options or Company SARs or outstanding as of the lapse of restriction on Company Restricted Shares to date hereof under the extent required or permitted under Option Plans, in each case, in accordance with the terms of such Company Options in effect on the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationdate hereof);
(ixviii) redeem, repurchase, prepay, defease, cancel, incur or otherwise acquire any indebtedness for borrowed money (including capital lease obligations and off-balance sheet financings), or guarantee such indebtedness enter into any Contract to do any of another Person, the foregoing or issue or sell any debt securities or warrants or other rights to acquire any debt security securities of the Company or any of its Subsidiaries or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person (other than the Company or any of its Subsidiaries) for borrowed money, except for inter-company borrowings solely among (x) capital lease obligations incurred in the ordinary course of business consistent with past practices so long as the aggregate obligations of the Company and its wholly-owned Subsidiaries under all capital leases (including all capital leases outstanding as of the date of this Agreement) do not exceed $12,000,000 or among the Company’s wholly-owned Subsidiaries (y) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practicepractices under the revolving credit facility under the Credit Agreement as in effect on the date hereof in an aggregate amount at any time outstanding not to exceed the maximum amount authorized under such facility;
(xix) except as set forth in the capital budgets set forth in Section 6.1(a)(x5.1(a)(ix) of the Company Disclosure Schedule and consistent therewithor expenditures related to operational emergencies, make or authorize any capital expenditureexpenditures that individually, or in the aggregate, exceed $500,000;
(xix) settle, release, waive or compromise any pending or threatened Action (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment requiring payments by the Company or any Subsidiary of its Subsidiaries of an amount in excess of $250,000, except as required under the terms of applicable insurance policies where the liability of the Company or any of its Subsidiaries in respect thereof does not exceed $2,000,000 (or $15,000,000 exceed, in the aggregate for all aggregate, the portion of the applicable deductible under such settlements) insurance policy required to be paid by the Company or its Subsidiaries, (B) commence, join, make an appeal with respect to a lawsuit, action, claim entailing the incurrence of any liability or similar proceeding other than (I) for the routine collection obligation of bills, (II) in such cases where the Company or its Subsidiaries in good faith determines excess of such amount, including costs or revenue reductions or obligations that failure to commence suit would result in impose any material restrictions on the material impairment business or operations of a valuable aspect the Company or any of its businessSubsidiaries or (C) that is brought by any current, provided, that former or purported holder of any capital stock or other Equity Interests or debt securities of the Company consults with Parent prior or any of its Subsidiaries relating to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to transactions contemplated by this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xvxi) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of or grant any Lien other than any Permitted Lien on any material amount of assets, licenses, operations, rights, properties, product lines, lines or businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, pursuant to Contracts as in force on the date of this Agreement or transactions solely among the Company and/or its wholly-owned Subsidiaries;
(xii) except (x) to the extent required by applicable Law or (y) to satisfy contractual obligations existing on the date hereof pursuant to written Contracts or Plans that have been disclosed and made available to Parent, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon pay or allow commit to lapse pay any severance or expire or otherwise dispose of any Intellectual Property Rightstermination pay, (B) grantenter into or amend any employment Contract or any deferred compensation, extendconsulting, amend severance, retention, retirement or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Propertyother similar Contract, (C) fail increase or commit to diligently prosecute increase any employee benefits payable to any director, officer or employee of the Company’s and Company or any of its Subsidiaries’ patent applications, including wages, salaries, compensation, pension, severance, termination pay or other benefits or payments (except in the case of employees other than officers and directors in the ordinary course of business consistent with past practice), (D) adopt or make any commitment to adopt any additional employee benefit plan, (E) make any contribution to any Plan, or (DF) fail amend or extend or make any commitments to exercise a right of removal amend or extension under extend any Plan in any material Owned Intellectual Propertyrespect;
(xiii) adopt or enter into a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(xiv) communicate with employees of the Company or any of its Subsidiaries regarding the compensation, benefits or other treatment that they will receive in connection with the Merger, unless any such communications are consistent with the terms of this Agreement or, to the extent the subject matter thereof is not addressed herein, prior directives or documentation provided to the Company by Parent (in which case, the Company shall provide Parent with prior notice of and the opportunity to review and comment upon any such communications);
(xv) pay, discharge, settle or satisfy any material claim that involves the payment by or to the Company or any of its Subsidiaries of amounts in excess of $250,000 or imposes equitable relief on the Company or any of its Subsidiaries, other than (A) performance of contractual obligations in accordance with their terms, (B) payment, discharge, settlement or satisfaction in the ordinary course of business, and (C) payment, discharge, settlement or satisfaction in accordance with their terms, of claims, liabilities or obligations that have been (x) disclosed in the most recent financial statements of the Company included in the Company Reports filed prior to the date hereof to the extent of such disclosure or (y) incurred since the date of such financial statements in the ordinary course of business;
(xvi) except as may be required by GAAP or as a result of a change in Law, make any material change in accounting principles, policies, practices, procedures or methods;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend in the ordinary course of business consistent with past practices or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase as would not result in the incurrence of a material amount of additional Tax, make or change any manner the compensationTax election, bonuschange any annual accounting period, pensionadopt or change any accounting method, welfarefile any amended Tax Return, fringe enter into any closing agreement, settle any Tax claim or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of assessment relating to the Company or any of its Subsidiaries, (C) pay surrender any bonus right to claim a refund of Taxes, or incentive compensation under consent to any Benefit Plan in excess extension or waiver of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect limitation period applicable to any equity-based compensation Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend similar action relating to the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms filing of any Benefit Plan Tax Return or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the CompanyTax;
(xviii) subject enter into, terminate (other than extensions at the end of a term in the ordinary course of business) or materially amend or modify any Material Contract or Contract that, if in effect on the date hereof, would have been a Material Contract;
(xix) fail to Section 6.2maintain in full force and effect material insurance policies covering the Company and its Subsidiaries and their respective properties, take assets and businesses in a form, if any, and amount consistent with past practice;
(xx) implement any action plant closing or omit to take any action mass layoff that is reasonably likely to prevent, interfere with or delay could implicate the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedWARN Act; or
(xixxxi) agree, authorize or commit to do any of the foregoing or enter into any letter of intent (binding or non-binding) or similar agreement or arrangement with respect to any of the foregoing.
(b) Prior Nothing contained in this Agreement is intended to making any formal written communications give Parent or group oral presentations Merger Sub, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the directorsEffective Time, officers and nothing contained in this Agreement is intended to give the Company, directly or employees indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations.
(c) The Company shall promptly (but in any event within seven (7) days after receipt of such notice by the Company or any of its Subsidiaries) inform Parent in writing of any written or, to the extent the Company has Knowledge thereof, other notice received by the Company or any of its Subsidiaries pertaining after the date hereof from any other party to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time any Material Contract required to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII Section 3.15(b) of the Company Disclosure Schedule indicating that such third party intends to terminate or not being satisfiedto renew any such Material Contract.
Appears in 1 contract
Sources: Merger Agreement (BWAY Holding CO)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier to occur of the termination of this Agreement pursuant to Article VIII and prior to the Effective Time and except (A) as unless Parent shall otherwise expressly required by this Agreementapprove in writing, which approval in the case of clauses (c)(ii), (B) as required by applicable Lawsc)(iv), (Cc)(vi), (e), (f) as Parent may consent to in writing and (such consent k) below shall not to be unreasonably withheld, delayed or conditioned) conditioned and except as otherwise permitted or (D) as set forth required by this Agreement or described in Section 6.1(a) 6.1 of the Company Disclosure Schedule, Letter):
(a) the business of it and its Subsidiaries shall be conducted in the ordinary course and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instrumentspast practice;
(iib) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
it shall not (iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(ivi) issue, sell, pledge, dispose ofof or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend or propose to amend the Company Charter or the Company Bylaws; (iii) split, grantcombine or reclassify its outstanding shares of capital stock or any class thereof; (iv) declare, transferset aside or pay any dividend payable in cash, encumberstock or property in respect of any capital stock other than (A) dividends from its direct or indirect wholly-owned Subsidiaries to the Company, or authorize (B) dividends payable on the issuanceSeries C Preferred Shares pursuant to and in accordance with the existing terms thereof; or (v) repurchase, saleredeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispositiondispose of or encumber any shares of, grantor securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, its capital stock of any class (other than Common Shares issuable pursuant to Company Options outstanding on the date hereof under the Stock Plans as set forth in Section 5.1(b) of the Company Disclosure Letter); (ii) transfer, lease, license, guarantee guarantee, sell, mortgage, pledge, dispose of, or encumbrance encumber or suffer to exist any Encumbrance (except for Permitted Encumbrances) in respect of, any shares assets in excess of capital stock $250,000 in the aggregate other than (A) sales of inventories (and/or licenses in connection therewith) in the ordinary course of business consistent with past practice and (B) dispositions of obsolete or worthless assets; (iii) incur any indebtedness for borrowed money other than borrowings (including issuance of letters of credit) and reborrowings under its or any of its Subsidiaries' credit facilities, as such credit facilities are in existence as of the date hereof without regard to any subsequent amendment or modification, that would at any given time cause the net funded amount of indebtedness outstanding under such credit facilities to be in excess of $4,000,000 in the aggregate (the "Maximum Amount"); provided, however, that the Company may incur indebtedness under such credit facilities in excess of the Maximum Amount to the extent that the senior management of the Company reasonably determines that it is in the best interests of the Company to borrow such additional amounts in order to fund operations of the business of the Company and its Subsidiaries in the ordinary course; and provided, further that prior to taking any actions permitted by the foregoing proviso the Company shall give Parent three Business Days' prior written notice that it intends to take such actions; (iv) make or commit for any capital expenditures in the aggregate in excess of the Company's budget for capital expenditures, in each case, for the applicable fiscal year; (v) loan, advance funds or make any investment in or capital contribution to any other Person other than to any Subsidiary; or (vi) acquire (by merger, consolidation, or acquisition of stock or assets) any Person;
(d) except as required by Law, neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, amend or otherwise modify any Company Compensation and Benefit Plans in a manner that would materially increase benefits thereunder or increase the salary, wage, bonus or other compensation of any employees except salary increases as a result of employee promotions occurring in the ordinary course of business consistent with past practices;
(e) neither it nor any of its Subsidiaries shall (i) settle or compromise any material claims or litigation in excess of $250,000 in the aggregate other than (A) settlements and compromises in the ordinary course of business and (B) settlements and compromises of liabilities not in excess of $500,000 reflected or reserved against on the financial statements included in the Company Reports; or (ii) waive, release or assign any material rights or claims in excess of $250,000 in the aggregate other than in the ordinary course of business; provided, however, that the Company shall not settle any Governmental claims or proceedings if such settlement would result in suspension, debarment or injunctive relief that is material to the businesses of the Company and its Subsidiaries taken as a whole or that would otherwise materially affect Parent and its Affiliates;
(f) neither it nor any of its Subsidiaries shall make any material Tax election, change any annual Tax accounting period, adopt or change any material method of Tax accounting, extend or waive any applicable statute of limitations with respect to Taxes, enter into any closing agreement in respect of any material Tax claim, audit or assessment, surrender any right to claim a material Tax refund, offset or other reduction in a material Tax liability or settle or compromise any material Tax liability;
(g) use commercially reasonable efforts to (i) preserve intact its business organization and goodwill, (ii) keep available the services of its present officers and key employees and (iii) preserve the goodwill and business relationships with customers, suppliers and others having business relationships with Company;
(h) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its business in such amounts and against such risks and losses as are consistent with past practice;
(i) not enter into any plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Company or any of its Subsidiaries (other than the issuance of shares transactions contemplated by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities);
(vj) create or incur any Lien material to the Company not alter, through merger, liquidation, reorganization, restructuring or any other fashion, the corporate structure or ownership of its Subsidiaries on any assets of the Company or any of its Company's Subsidiaries;
(vik) other than pursuant to except as required by GAAP or as recommended in writing by the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this AgreementCompany's independent auditors, make any loans, advances, guarantees or capital contributions to or investments (i) not revalue in any Person (other than investments in cash and cash equivalents and other investments that would constitute shortmaterial respect any of its assets, including writing down the value of inventory or writing-term investments on the balance sheet of the Company and off notes or accounts receivables other than in the Company ordinary course of business consistent with past practice, or (ii) change any direct method of accounting or indirect wholly owned Subsidiary of the Company)accounting principles or practice;
(viil) declarenot (i) grant any material severance, set asideretention or termination pay to, make or pay amend in any dividend material respect any existing severance, retention or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectlytermination arrangement with, any current or former director, officer or employee of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(xii) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to under Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedulehereof, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner material respect or accelerate in any material respect the compensationpayment or vesting of, any benefits payable under any existing severance, retention or termination pay policies or employment agreements, (iii) enter into or amend in any material respect any employment, consulting, deferred compensation or other similar agreement with any director, officer, consultant or employee of Company or any of its Subsidiaries or (iv) establish, adopt or amend (except as required by applicable law) any collective bargaining agreement, bonus, profit-sharing, thrift, pension, welfareretirement, fringe post-retirement medical or life insurance, retention, deferred compensation, compensation, stock option, restricted stock or other benefitsbenefit plan or arrangement covering any present or former director, severance officer or termination pay employee, or any beneficiaries thereof, of Company or any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xixm) agree, neither it nor any of its Subsidiaries will authorize or commit enter into an agreement to do any of the foregoing.
(b) Prior , or commit to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedforegoing actions.
Appears in 1 contract
Sources: Merger Agreement (Meggitt USA Inc)
Interim Operations. Except (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time and except (Ai) as otherwise set forth in Section 5.1 of the Company Disclosure Schedule, (ii) as required or expressly required permitted by this Agreement, including under the second sentence of this Section 5.1, (Biii) as required by applicable Laws, Law or (Civ) as with the prior written consent of Parent may consent to in writing (such consent not to be unreasonably withheld, delayed conditioned or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoingdelayed), from the date of this Agreement until the earlier of the Effective TimeTime and the termination of this Agreement in accordance with Article VII (the “Interim Period”), the Company will, and will cause each of its Subsidiaries to, conduct the business of the Company and its Subsidiaries in the Ordinary Course of Business. In addition, and without limiting the generality of the foregoing, except (Ai) as otherwise set forth in Section 5.1 of the Company Disclosure Schedule, (ii) as required or expressly required permitted by this Agreement, (Biii) as required by applicable Laws, Law or (Civ) as with the prior written consent of Parent may consent to in writing (such consent not to be unreasonably withheld, delayed conditioned or conditioned) or (D) as set forth in Section 6.1(a) of delayed), during the Company Disclosure ScheduleInterim Period, the Company will not not, and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with to, do any of the following:
(a) (i) declare, set aside or pay any dividends on, or make any other Persondistributions (whether in cash, except for stock or property or any such transactions among wholly owned Subsidiaries combination thereof) in respect of any Shares or capital stock or other equity interests, other than (1) dividends and other distributions by a direct or indirect Subsidiary to its parent in the Ordinary Course of Business, (2) dividends or other distributions by an entity in which the Company directly or indirectly owns at least a majority interest, in the Ordinary Course of Business, and (3) if applicable and upon consultation with Parent, to the extent reasonably necessary to maintain the Company’s qualification as a REIT and to avoid the imposition of entity-level income and excise taxes; (ii) split, combine, subdivide or reclassify shares of capital stock or other equity interests of the CompanyCompany or its Subsidiaries; or (iii) repurchase, or restructure, reorganize or completely or partially liquidate redeem or otherwise enter into acquire, directly or indirectly, any agreements Shares or arrangements imposing material changes capital stock or restrictions on other equity interests of the Company or its assetsSubsidiaries, operations or businessesother than the withholding of Shares to satisfy withholding Tax obligations with respect to Shares granted pursuant to Company Equity Awards and forfeitures of Company Equity Awards;
(iiib) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess ofexcept as required by Section 5.19, individually or in the aggregateissue, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issuedeliver, sell, pledge, dispose of, grant, transfer, encumber, pledge or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee otherwise encumber or encumbrance of, subject to any Lien (other than Liens imposed by applicable securities Laws) any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or any securities convertible into, exercisable or exchangeable into or exercisable for any shares of such capital stock, or any optionsrights, warrants or other rights of any kind options to acquire any shares of such capital stock or such convertible or exchangeable securities, in each case;
(vc) create except as required by Section 5.19, amend, supplement or incur any Lien material to modify, the Company or any of its Subsidiaries on any assets Organizational Documents of the Company or any of its Subsidiaries;
(vid) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend adopt a material change in its accounting methods, principles or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stockpractices, except from (A) holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such termination;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except insofar as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall may be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in GAAP, applicable Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect theretothereto or by any Governmental Authority (including the Financial Accounting Standards Board or any similar organization);
(Ae) settle except in relation to Liens to secure Indebtedness for borrowed money permitted to be incurred under Section 5.1(f), sell, lease (as lessor), license, mortgage, sell and leaseback or otherwise subject to any litigation Lien (other than Permitted Liens), or other proceedings before a Governmental Entity otherwise dispose of any properties or assets (including Company Owned Property) or any interests therein, in each case, with an aggregate value or purchase price in excess of $100,000 individually or $250,000 in the aggregate, in any transaction or series of related transactions, except where that the settlement is limited solely Company and its Subsidiaries may continue to lease Company Owned Properties in the Ordinary Course of Business;
(If) incur, create, assume, refinance, replace or prepay any Indebtedness for borrowed money or guarantee such Indebtedness of another Person, or issue, sell or amend the release terms of claims and (II) the monetary payment by any debt securities or rights to acquire any debt securities of the Company or any Subsidiary does not exceed $2,000,000 its Subsidiaries, other than (or $15,000,000 i) the incurrence of Indebtedness for borrowed money in the aggregate Ordinary Course of Business under, and in accordance with, the Existing Loan Agreements, as in effect as of the date hereof, (ii) intercompany Indebtedness or guarantees between or among the Company and any of its Subsidiaries that will be satisfied or discharged as of the Closing or (iii) in connection with the financing of accounts payable in the Ordinary Course of Business;
(g) other than as permitted under another subsection of this Section 5.1, (i) materially modify, amend or waive any material right or Action under or renew any Material Contract or (ii) enter into any new Contract that would constitute a Material Contract if existing on the date hereof;
(i) enter into any Contract with any current or prospective director, employee, consultant or independent contractor, (ii) accelerate the vesting or payment of, or increase the amount of, the compensation or benefits with respect to any current or former employee, consultant or independent contractor of the Company or its Subsidiaries, other than (A) the payment of annual bonuses for all such settlements) completed periods in the Ordinary Course of Business or (B) commenceas required by any Company Benefit Plan in effect as of the date of this Agreement, joinor as otherwise required by any applicable Law, make an appeal (iii) adopt, materially amend or terminate any Company Benefit Plan (or any plan, program, policy, arrangement, Contract or understanding that would be a Company Benefit Plan if it were in existence on the date of this Agreement), except as required by applicable Law, (iv) grant any awards under any Company Benefit Plan, or (v) hire or engage, or terminate (other than for cause) the employment or engagement of any officer, employee, consultant or independent contractor;
(i) except as required by applicable Law or, following consultation with Parent, to qualify or preserve the status of any of the Company’s Subsidiaries as a disregarded entity or partnership for United States federal income tax purposes or as a taxable REIT subsidiary within the meaning of Section 856(l) of the Code, as the case may be, (i) make, change or revoke any material election with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of billsTaxes, (IIii) make a material change in any Tax accounting method (or file a request to make any such cases where change), (iii) file any material amended Tax Return (and, in the case of filing any such Tax Return as required by applicable Law prior to the Closing, the Company shall provide drafts of each such Tax Return and supporting documents to Parent for its review and comment at least five (5) Business Days prior to the date on which the Company will file such Tax Return and shall consider in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its businessany reasonable comments timely submitted by Parent), provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (IIIiv) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make(v) surrender any right to claim a material Tax refund, change offset or revoke credit, (vi) waive or extend the statute of limitations with respect to any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assetsTax, other than pursuant to Contracts in effect prior extensions of time to the date of this Agreement;
(xvi) other than file Tax Returns obtained in the ordinary course Ordinary Course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applicationsBusiness, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (Jvii) enter into any collective bargaining Tax protection agreement or other any closing agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Companyrespect to Taxes;
(xviiij) subject to Section 6.2settle or compromise (i) any Action, take any action in each case made or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in pending against any of the conditions to Company Properties, the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize Company or commit to do any of the foregoing.
Subsidiaries, excluding any such matter relating to Taxes (bwhich is covered by Section 5.1(i) Prior to making above), or (ii) any formal written communications Action involving any present, former or purported holder or group oral presentations to of holders of the directorsShares, officers or employees of in each case, in their capacity as such, where the amount paid by the Company or any of its Subsidiaries pertaining to compensation in settlement exceeds $100,000 individually or benefit matters that are affected is not settled solely by the transactions contemplated by this Agreement, payment of money damages and does not provide a full release of the Company shall provide Parent and its Subsidiaries;
(k) enter into any new line of business;
(l) adopt a plan of merger, complete or partial liquidation or resolutions providing for or authorizing such merger, liquidation or a dissolution, consolidation, recapitalization or bankruptcy reorganization;
(m) remove any material personal property owned or leased by the Company or any of its Subsidiaries from its Company Property except as may be required for necessary repair or replacement or as permitted by Section 5.1(f) above;
(n) initiate any Tax protest with respect to any Company Property;
(o) settle, agree to, or otherwise acquiesce to any condemnation or taking of all or any portion of a copy of Company Owned Property;
(p) make any capital expenditures in an amount exceeding $20,000 at a single Company Property or $150,000 in the intended communication, Parent shall have a reasonable aggregate in any period of time to review and comment on thirty (30) consecutive days between the communication (which comments shall not be unreasonably withheld or delayed), and Parent date of this Agreement and the Effective Time, or enter into any agreement to obligate the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to make such capital expenditures; or
(q) agree to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedforegoing actions.
Appears in 1 contract
Interim Operations. (a) The Except as otherwise (w) required by this Agreement, (x) required by applicable Law, (y) approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned) or (z) set forth on Section 6.1(a) of the Company covenants and agrees as to itself and its Subsidiaries thatDisclosure Schedule, after the date of this Agreement and prior to the Effective Time Time, the Company will, and except will cause its Subsidiaries to, use its and their reasonable best efforts to conduct their businesses in the ordinary course and, to the extent consistent therewith, the Company shall, and shall cause its Subsidiaries to, use its and their commercially reasonable efforts to preserve their business organizations intact (Aincluding the service of key employees) and maintain existing relations with key customers, suppliers and other Persons with whom the Company and its Subsidiaries have significant business relationships; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 6.1(b) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision of Section 6.1(b).
(b) Except as otherwise expressly (w) required by this Agreement, (Bx) as required by applicable LawsLaw, (Cy) as Parent may consent to approved in writing by Parent (such consent approval not to be unreasonably withheld, delayed or conditioned) or (Dz) as set forth in on Section 6.1(a6.1(b) of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will not not, and will not permit cause its Subsidiaries not to:
(i) (x) adopt or propose any change in its the certificate of incorporation or by-laws bylaws of the Company, or (y) adopt any change in the comparable organizational document of any Subsidiary of the Company that, in the case of this clause (y), would adversely affect the consummation of the Merger or the other applicable governing instrumentstransactions contemplated by this Agreement;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate the Company or otherwise enter into any agreements of its Subsidiaries, in each case other than any such transactions among any wholly-owned Subsidiaries of the Company which would not reasonably be expected to result in a restriction or arrangements imposing material changes or restrictions on its assets, operations or businessesreduction in any participation exemption available under non-U.S. Law with respect to any such Subsidiaries;
(iiiA) acquire or license tangible or intangible assets outside of the ordinary course of business from or (B) make any capital contributions to or investments in any Person, in the case of clauses (A) and (B), other Person with a value than any such transactions (I) among the Company and its wholly-owned Subsidiaries or purchase price among the Company’s wholly-owned Subsidiaries or (II) for amounts that do not exceed $200,000,000 in the aggregate in excess of, individually or any fiscal year of the Company (in the aggregatecase of clause (A), $2,500,000, other than acquisitions pursuant to Contracts in effect as determined based upon the greater of the date fair market value of this Agreementthe assets so acquired by the Company and its Subsidiaries or the fair market value of the consideration paid by the Company and its Subsidiaries);
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, encumber any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company OptionsSubsidiaries, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
, in each case, other than (vA) create or incur any Lien material to such transaction among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries or (B) any issuance, sale, grant or transfer of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than Shares pursuant to the terms settlement of Contracts in effect Company Options, Company SARs, Company RSUs, Company PSUs or Company Awards outstanding as of the date of this Agreement and provided to Parent prior to or granted after the date of this Agreement not in violation of this Agreement, ;
(v) make any loans, advancesadvances or guarantees outside the ordinary course of business, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of any such transactions (I) among the Company and other than its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries, (II) permitted under Section 6.1(b)(viii) or (III) not in excess of $25,000,000 in the Company or aggregate in any direct or indirect wholly owned Subsidiary fiscal year of the Company);
(viivi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends or other distributions paid by any direct or indirect wholly wholly-owned Subsidiary of the Company to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into Company and except for any agreement quarterly dividends to stockholders of the Company by the Company in an amount not to exceed $0.54 per Share, in each case declared and paid at such times and in such amounts as is consistent with respect historical practice over the most recent fiscal year ended prior to the voting date of its capital stockthis Agreement and (B) dividend equivalents paid in respect of Company RSUs, Company PSUs or Company Awards outstanding as of the date of this Agreement or granted thereafter in accordance with the terms of this Agreement, in each case, in accordance with their terms);
(viiivii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, stock (except from for (A) holders any such transaction by a wholly-owned Subsidiary of the Company Options and (B) acquisitions of Shares in full satisfaction of withholding obligations or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise price in respect of Company Options, Company SARs, Company RSUs, Company PSUs or Company Awards outstanding as of the Company Options date of this Agreement pursuant to its terms or Company SARs or the lapse granted thereafter not in violation of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (B) former employees, directors or consultants following termination of their relationship with the Company in accordance with applicable agreements providing for the repurchase of shares upon such terminationthis Agreement);
(ixviii) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its SubsidiariesIndebtedness, except for inter-company borrowings solely (A) intercompany Indebtedness among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries, (B) Indebtedness not to exceed $1,500,000,000 in aggregate principal amount incurred to replace, renew, extend, refinance or refund any existing Indebtedness of the Company, which Indebtedness is (I) prepayable without premium or penalty (other than customary LIBOR breakage amounts) or (II) on terms that (x) taken as a whole, are substantially consistent with or not more restrictive than those contained in the Indebtedness being replaced, renewed, extended, refinanced or refunded and (y) permit parent guarantees and parent company reporting to be substituted for Company reporting, (C) Indebtedness under commercial paper arrangements, revolving credit facilities and other working capital or liquidity facilities not to exceed $3,500,000,000 in aggregate principal amount at any time outstanding pursuant to this subclause (C), (D) guarantees of Indebtedness of the Company or its wholly-owned Subsidiaries outstanding on the date hereof or otherwise incurred in compliance with this Section 6.1(b), (E) Indebtedness of the Subsidiaries of the Company organized under the laws of a country other than the United States in an aggregate principal amount (for all such Subsidiaries, taken together) not to exceed $500,000,000 at any time outstanding pursuant to this subclause (E), (F) Indebtedness pursuant to receivables financing or factoring arrangements (but in any event for which the factoring balance does not exceed $2,400,000,000 at any time outstanding (it being understood that this clause (viii)(F) and clause (xv)(D), taken together, permit a factoring balance that does not exceed $2,400,000,000)), (G) Indebtedness pursuant to capitalized leases (1) entered into in the ordinary course consistent of business or (2) entered into in connection with past practicethe Arizona Greenhouse project, (H) Indebtedness in respect of swaps, options, derivatives and other hedging Contracts entered into in the ordinary course of business, (I) Indebtedness under letters of credit, bank guarantee arrangements and any related reimbursement obligations entered into in the ordinary course of business or (J) Indebtedness not to exceed $250,000,000 in aggregate principal amount that may be incurred other than in accordance with subclauses (A) through (I) inclusive;
(xA) except as set forth make or authorize any payment of, or accrual or commitment for, capital expenditures that, in the aggregate, exceed by more than 5%, or (B) fail to make payments of capital budgets expenditures that, in the aggregate, are no less than 90%, in the case of each of clauses (A) and (B), of the aggregate amounts set forth in Section 6.1(a)(x6.1(b)(ix) of the Company Disclosure Schedule and consistent therewith(the “Capex Budget”) for the respective periods set forth therein, make except with respect to acquisitions or authorize any capital expenditurelicenses of tangible or intangible assets permitted by clause (II) of Section 6.1(b)(iii);
(xix) other than in the ordinary course of business or in connection with any matter to the extent such matter is expressly permitted by any other clause of this Section 6.1(b), (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) terminate or waive, or materially amend, modify or terminate supplement, any rights or interests pursuant to or in any Material Contract, other than expirations of any such Contract in accordance with the terms of such Contract;
(xi) enter into any Contract that (x) materially restricts the ability of the Company or cancelany of its Subsidiaries (or, modify following the consummation of the Merger, would materially restrict the ability of the Surviving Corporation or waive its Affiliates) to compete in any debtsbusiness or geographic area, rights or claims thereunder; for purposes (y) grants “most favored nation” status that, following the consummation of this Section 6.1the Merger, would be material to the Company or the crop science business of Parent and would apply to Parent, the monetary reference in clause (A) Company or any of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000their respective Subsidiaries;
(xii) make any material changes with respect to financial accounting policies or procedures, except as required by changes in Law, proposed Law or applicable by U.S. GAAP or statutory or regulatory accounting rules or interpretations with respect thereto or by any Governmental Entity or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(xiii) settle any action, suit, claim, hearing, arbitration, investigation or other proceedings (other than any audit or other proceeding in respect of Taxes), in each case made or pending against the Company or any of its Subsidiaries (and not including any settlement with respect to matters in which any of them is a plaintiff) for an amount in excess of $150,000,000 in the aggregate in any fiscal year of the Company or on a basis that would result in the imposition of any writ, judgment, decree, settlement, award, injunction or similar order of any Governmental Entity that, in the aggregate, would materially restrict the future activity or conduct of Parent, the Company or any of their respective Subsidiaries, other than with respect to monetary settlements only, settlements or compromises of any action, suit, claim, hearing, arbitration, investigation or other proceedings to the extent reflected or reserved against in the balance sheet (or the notes thereto) of the Company included in the Company’s Quarterly Report on Form 10-Q for the quarter ended May 31, 2016 for an amount not in excess of the amount so reflected or reserved;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except (other than in the ordinary course of business), (B) settle or compromise any material Tax liabilityliability for an amount materially in excess of the amount reserved or accrued on the Company’s most recent consolidated balance sheet included in the Company Reports, (C) make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law(other than an entity classification election under Treasury Regulation Section 301.7701-3 in respect of any Subsidiary that is not material), (D) change any material method of Tax accountingaccounting or (E) terminate, except as required by law, consent to the termination of or take agree to any material modification of any ruling or agreement listed in Section 5.1(n)(iii) of the Company Disclosure Schedule (or that would be necessary to be listed therein in order to prevent a breach of Section 5.1(n)(iii)) if such action which would materially adversely affect is reasonably expected to result in a material increase in the Tax position liability of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire cancel or otherwise dispose of any assetsassets (other than Intellectual Property Rights, licensesGermplasm, operations, rights, product lines, businesses or interests therein Biological Materials) of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales for transfers, sales, leases, divestments, cancellations or other dispositions (A) of Company Products in the ordinary course of business products and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than services in the ordinary course of business, (B) of obsolete inventory and equipment in the ordinary course of business, (C) of tangible assets having a net present value not in excess of $35,000,000 individually or $60,000,000 in the aggregate in any fiscal year of the Company (it being understood that the net present value of such assets shall count against the thresholds set forth in Section 6.1(b)(xvi)(IV)), (D) of receivables, invoices and related rights and assets pursuant to receivables financing or factoring arrangements (but in any event for which the factoring balance does not exceed $2,400,000,000 at any time outstanding (it being understood that this clause (xv)(D) and clause (viii)(F), taken together, permit a factoring balance that does not exceed $2,400,000,000)) and (E) among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries;
(xvi) (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire divest or otherwise dispose of any Intellectual Property Rights, Germplasm or Biological Materials or (B) except in the ordinary course of business, grant, extend, amend amend, fail to diligently prosecute or cancel, abandon or allow to lapse (in each case, except as required in the diligent prosecution of Owned Registered Intellectual Property), waive or modify modify, as applicable, any material rights in or to material Owned Intellectual Property, Germplasm or Biological Materials, except, in the case of each of clauses (CA) fail to diligently prosecute and (B), for (I) non-exclusive licenses of Intellectual Property Rights, Germplasm or Biological Materials in the ordinary course of business, (II) exclusive licenses of Intellectual Property Rights, Germplasm or Biological Materials in the ordinary course of business, provided such licenses are not exclusive in all fields of use, and provided, further, that such licenses retain the Company’s rights to offer or develop products or services that the Company is offering or developing or planning to offer or develop, as the case may be, at any time from the date hereof and through the Effective Time, (III) transfers, sales, licenses, mortgages, pledges, encumbrances, divestments and other dispositions among the Company and its Subsidiaries’ patent applicationswholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries and (IV) transfers, sales, licenses, divestments or other dispositions of Intellectual Property Rights, Germplasm or Biological Materials having a net present value not in excess of $35,000,000 individually or $60,000,000 in the aggregate in any fiscal year of the Company (D) fail to exercise a right it being understood that the net present value of removal such Intellectual Property Rights, Germplasm or extension under any material Owned Intellectual PropertyBiological Materials shall count against the thresholds set forth in Section 6.1(b)(xv)(C));
(xvii) except to make changes that are as required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure SchedulePlans, (A) terminate, adopt, establish, enter into, materially amend or renew (or communicate any intention to take such action) any material Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants who are natural persons of the Company or its Subsidiaries, other than routine annual salary or base pay increases (and corresponding increases in bonus or incentive payments to the extent determined by reference to salary or base pay) for non-executive officer employees, in the ordinary course of business consistent with past practice, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned Plan, other than payments based on actual performanceperformance for completed performance periods, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation restrictions, or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Planvesting requirements, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied.with
Appears in 1 contract
Sources: Merger Agreement
Interim Operations. (a) The Company and STI each covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time (except for subsection (iii) below which will continue after the Effective Time) (unless STI or the Company, as the case may be, shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed, and except (A) as otherwise expressly required contemplated by this Agreement, (B) Agreement or in its respective Disclosure Letter or as required by applicable Laws, Law):
(Ci) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective all reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations organization intact and maintain its existing relations and goodwill with Governmental Entities, customers, licenseessuppliers, development collaboration or similar commercialization partners, manufacturers, suppliersregulators, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except associates;
(ii) it shall not (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in amend its certificate of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and by- laws; (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeemreclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, or (D) repurchase, redeem or otherwise acquire, except in the case of STI, in connection with the redemption of outstanding STI Redeemable Warrants or permit any of its Subsidiaries to purchase or otherwise acquire, directly or indirectly, any shares of its capital stock or any securities convertible into or exchangeable into or exercisable for any shares of its capital stock, except from ;
(iii) neither it nor any of its Subsidiaries shall knowingly take or fail to take any action if the result of such taking or failure would be to (A) holders prevent the Merger from qualifying for "pooling of Company Options in full interests" accounting treatment or partial payment as a "reorganization" within the meaning of Section 368(a) of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements Code or (B) former employees, directors or consultants following termination cause any of their relationship with the Company its representations and warranties herein to become untrue in accordance with applicable agreements providing for the repurchase of shares upon such terminationany material respect;
(ixiv) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or neither it nor any of its SubsidiariesSubsidiaries will authorize, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of removal or extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) accelerate the vesting of or lapsing of restrictions with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (K) terminate without cause the employment of any officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize or commit to do any of the foregoing; and
(v) each shall cause its respective Affiliates not to knowingly take or fail to take any action which it has agreed to do, or not do, herein.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent STI and the Company shall cooperate in providing agree that any such mutually agreeable communication.
(c) Subject to written approval obtained under this Section 6.5, Parent shall not take 6.1 may be relied upon by the other party if signed by the President or permit any of its Subsidiaries to take any action that is reasonably likely to prevent, interfere with or delay the consummation another executive officer of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfiedother party.
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