Conduct of Business Before the Closing. (a) Except as required by applicable Law or as otherwise contemplated by or necessary to effectuate the Transaction Agreements, and except for matters identified on Schedule 6.01(a), during the Pre-Closing Period, unless Buyer otherwise consents in advance (which consent shall not be unreasonably withheld, conditioned or delayed), Seller will, and will cause Company and Company Subsidiary to, conduct the Business in the ordinary course of business consistent with past practice. Without limiting the foregoing, except as required by applicable Law or as otherwise contemplated by or necessary to effectuate the Transaction Agreements, and except for matters identified on Schedule 6.01(a), during the Pre-Closing Period, unless Buyer otherwise consents in advance (which consent shall not be unreasonably withheld, conditioned or delayed), Seller covenants and agrees that, neither Company nor Company Subsidiary shall: (i) amend or otherwise change its articles of incorporation or bylaws or any equivalent organizational documents; (ii) issue, sell, pledge, dispose of or encumber any of Company’s or Company Subsidiary’s Equity Interests, or grant to any Person any right to acquire any of Company’s or Company Subsidiary’s Equity Interests; (iii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of Company’s or Company Subsidiary’s Equity Interests, except for any dividend or distribution payable in cash by Company Subsidiary to Company or by Company or Company Subsidiary to Seller or any of its Affiliates; (iv) reclassify, split, combine or subdivide any shares of capital stock of Company or Company Subsidiary or redeem, repurchase or otherwise acquire any shares of capital stock of Company or Company Subsidiary; (v) (x) acquire (whether by merger, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or any assets, in each case, other than purchases of inventory and other non-material assets in the ordinary course of business or pursuant to existing contracts; or (y) sell or otherwise dispose of (whether by merger, consolidation or sale of stock or assets or otherwise) any assets of Company or Company Subsidiary, other than sales or dispositions of finished goods inventory in the ordinary course of business consistent with past practice; (vi) (A) make or rescind any material election relating to Taxes outside of the ordinary course of business, (B) settle or compromise any material Tax liability or refund, (C) implement or adopt any material change in its Tax methods of accounting outside of the ordinary course of business, except (x) as may be appropriate to conform to changes in statutory or regulatory accounting rules or GAAP or regulatory requirements with respect thereto, (y) as may be required by changes in the Tax methods of accounting, policies or practices of Seller other than, for the avoidance of doubt, with respect to a matter governed by Section 6.01(a)(vi)(E), or (z) as may be required by a change in applicable Law, (D) file any material amended Tax Return or claim for refund of Taxes, (E) adjust the Tax basis of any asset outside of the ordinary course of business (for this purpose, ordinary course of business with respect to the adjustment to the Tax basis of any receivable shall mean the accounting policy set forth in Schedule 6.01(a)(vi)), or (F) enter into any ruling request, closing agreement or similar agreement with any Taxing Authority; in each case to the extent such action could be expected to increase the Tax liability of Company or Company Subsidiary in any taxable period (or portion thereof) beginning after the Closing Date; notwithstanding the foregoing, neither Seller, Company nor Company Subsidiary shall be required to take any action or avoid taking any action (except as specified in Section 6.01(a)(vi)(E)) pursuant to this Section 6.01(a)(vi) unless the Buyer Indemnified Parties would incur a Loss as the result of such action for which Loss the Buyer Indemnified Parties are not indemnified by Seller under this Agreement and Seller does not otherwise agree to indemnify the Buyer Indemnified Parties for such Loss; (vii) agree to any exclusivity, non-competition or similar provision or covenant restricting Company or Company Subsidiary from competing in any line of business or with any Person or in any area or engaging in any activity or business (including with respect to the development, manufacture, marketing or distribution of their respective products or services), or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any effect on Company or Company Subsidiary after the Closing; (viii) adopt a shareholders rights plan; (ix) grant any registration rights to any Person or reach any agreement regarding Equity Interests of Company or Company Subsidiary, arrangement or understanding with respect to any such registration rights with any Person; (x) grant any severance or termination pay to any Business Employee, other than those made in Company’s or Company Subsidiary’s ordinary course of business and consistent with past practices or to the extent required by law, or pursuant to Company’s or Company Subsidiary’s existing employment, retention, severance and similar agreements with any Business Employee as disclosed in the Disclosure Schedule; (xi) extend an offer of employment to a candidate for an officer position of vice president or above or any position with annual compensation equal to or greater than $150,000 without prior consultation with Parent; (xii) except (i) in the ordinary course of business, or (ii) as provided for in Exhibit I, or (iii) as required by Law, or (iv) as permitted by Section 6.01(a)(x) and/or 6.01(a)(xi) or any Employee Plan of Business Plan in effect as of the date of this Agreement and disclosed in the Disclosure Schedule, adopt or pay, accelerate, increase or accrue salary or other payments or benefits or promise or make discretionary employer contributions to, under, or with respect to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, group insurance, severance pay, retirement, or other employee benefit plan, agreement, or arrangement, or any employment or consulting agreement with or for the benefit of any Business Employee, or consultant to the Business, or amend any such existing plan, agreement, or arrangement; (xiii) agree to take any of the foregoing actions. (b) Except as required by applicable Law or as otherwise contemplated by or necessary to effectuate the Transaction Agreements, including consummation of the Permitted Financing (if any), and except for matters identified on Schedule 6.01(b), during the Pre-Closing Period unless Seller otherwise consents in advance (which consent shall not be unreasonably withheld, conditioned or delayed), Parent will, and will cause its Subsidiaries (including Buyer) to, conduct their businesses in the ordinary course of business consistent with past practice. Without limiting the foregoing, except as required by applicable Law or as otherwise contemplated by or necessary to effectuate the Transaction Agreements, including consummation of the Permitted Financing (other than with respect to Sections 6.01(b)(i) and (b)(ix)-(xi)), and except for matters identified on Schedule 6.01(b), during the Pre-Closing Period unless Seller otherwise consents in advance (which consent shall not be unreasonably withheld, conditioned or delayed), Parent covenants and agrees that, neither Parent nor any of its Subsidiaries (including Buyer) shall: (i) amend or otherwise change its articles of incorporation or bylaws or any equivalent organizational documents including, for the avoidance of doubt, in connection with a Permitted Financing (except with respect to the Certificate of Designation as expressly contemplated herein and for administerial changes for Subsidiaries); (ii) issue, sell, pledge, dispose of or encumber any of its or its Subsidiaries’ Equity Interests, or grant to any Person any right to acquire any of its or its Subsidiaries’ Equity Interests, except (x) in connection with a Permitted Financing, (y) pursuant to the exercise of Parent Stock Options or settlement of other awards outstanding as of the Agreement Date or (z) the grant of Parent Stock Options or other awards under any Parent Stock Plan (and issuances of Equity Interests pursuant thereto) made to employees, independent contractors, consultants, or medical doctors in the ordinary course of business consistent with past practices including in connection with the hiring of new employees, independent contractors, consultants or medical doctors, in each case under contract with Parent or Buyer; (iii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its Equity Interests, except for any dividend or distribution by a Subsidiary of Parent to Parent or to another Subsidiary or Subsidiaries of Parent; (iv) reclassify, split, combine or subdivide any shares of capital stock of Parent or redeem, repurchase or otherwise acquire any shares of capital stock of Parent; (v) (x) acquire (whether by merger, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or any assets, in each case (a “Third Party Acquisition”), other than purchases of inventory and other non-material assets in the ordinary course of business or pursuant to existing contracts; or (y) sell or otherwise dispose of (whether by merger, consolidation or sale of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or any assets of Parent or its Subsidiaries, other than sales or dispositions of finished goods inventory in the ordinary course of business consistent with past practice; (vi) implement or adopt any material change in its methods of accounting, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or GAAP or regulatory requirements with respect thereto; (vii) agree to any exclusivity, non-competition or similar provision or covenant restricting Parent, any of its Subsidiaries or any of their respective Affiliates, from competing in any line of business or with any Person or in any area or engaging in any activity or business (including with respect to the development, manufacture, marketing or distribution of their respective products or services), or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any effect on Seller or any of its Affiliates after the Closing; (viii) adopt a shareholders rights plan; (ix) fail to enter into a standstill and lock-up agreement with any Person, or two or more Persons deemed to be a “group” for purposes of Section 13(d)(3) of the Exchange Act, if in connection with any Permitted Financing such Person or Persons beneficially own (as determined for purposes of Rule 13d-3 under the Exchange Act) twenty percent (20%) or more of the outstanding shares of Common Stock, which agreement must contain standstill and lock-up provisions which are no less favorable to Parent than those to be contained in the Investor Rights Agreement to be entered into at Closing; (x) grant any registration rights to any Person or reach any agreement, arrangement or understanding with respect to registration rights with any Person (including, for the avoidance of doubt, in connection with a Permitted Financing), other than at Closing pursuant to the Registration Rights Agreement; (xi) increase or decrease the number of seats on the Parent Board or grant any Person the right to nominate or appoint any director to the Parent Board (including, for the avoidance of doubt, in connection with a Permitted Financing), other than at the Closing pursuant to the Investor Rights Agreement; or (xii) agree to take any of the foregoing actions.
Appears in 2 contracts
Sources: Stock Purchase Agreement (General Electric Co), Stock Purchase Agreement (Neogenomics Inc)
Conduct of Business Before the Closing. (a) Except (x) as required by applicable Law or as otherwise contemplated required by or necessary to effectuate the Transaction Agreements, Agreements and except (y) for matters identified on Schedule 6.01(a)6.01, during the Pre-Closing Period, Period unless Buyer otherwise consents in writing in advance (which consent shall not be unreasonably withheld, conditioned or delayed), Seller will, and will cause Company and Company Subsidiary its Subsidiaries to, (a) conduct the Business in the ordinary course of business business, (b) use reasonable best efforts consistent with past practice. Without limiting practice to preserve existing relationships of the foregoingBusiness with its employees, except as required by applicable Law or as otherwise contemplated by or necessary to effectuate the Transaction Agreementscustomers, vendors, suppliers and other material business partners in all material respects, and except for matters identified on Schedule 6.01(a)(c) solely with respect to the Business, during not do any of the Pre-Closing Period, unless Buyer otherwise consents in advance (which consent shall not be unreasonably withheld, conditioned or delayed), Seller covenants and agrees that, neither Company nor Company Subsidiary shallfollowing:
(i) amend or otherwise change its articles of incorporation or bylaws or ▇. ▇▇▇▇▇ any equivalent organizational documents;
(ii) issue, sell, pledge, dispose of or encumber any of Company’s or Company Subsidiary’s Lien on the Transferred Equity Interests, the equity interests of the Business Subsidiaries or grant to any Person Transferred Assets (in each case, whether tangible or intangible), other than granting a Permitted Lien on any right to acquire any Transferred Assets in the ordinary course of Company’s or Company Subsidiary’s Equity Interestsbusiness;
ii. acquire or dispose of any interest in or liquidate or dissolve (iii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of Company’s or Company Subsidiary’s Equity Interests, except for any dividend or distribution payable in cash by Company Subsidiary to Company or by Company or Company Subsidiary to Seller or any of its Affiliates;
(iv) reclassify, split, combine or subdivide any shares of capital stock of Company or Company Subsidiary or redeem, repurchase or otherwise acquire any shares of capital stock of Company or Company Subsidiary;
(v) (x) acquire (whether by merger, consolidation consolidation, acquisition or acquisition disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof division;
iii. issue, sell, transfer, grant or otherwise dispose of any assetsshares of the capital stock or other equity interests of any Transferred Entity or securities convertible into or exchangeable thereto (except to the extent contemplated by Section 2.06);
iv. enter into or consummate any transaction involving the acquisition of assets or other properties of any other Person, other than (i) for an amount not exceeding $2,500,000 individually or $10,000,000 in the aggregate (but which shall not include real property) or (ii) in the ordinary course of business;
(A) grant or announce any increase in the wages, salaries, compensation, severance, bonuses, deferred compensation or incentives (including, for the avoidance of doubt, equity or equity-based incentives) payable to any Business Employee with an annual base salary above $150,000, (B) establish, adopt, terminate, amend, increase or promise to increase any benefits under any Employee Plan or (C) increase or accelerate the funding, payment or vesting of the compensation or benefits provided under any Business Plan or other Employee Plan that will be assumed by Buyer or its Affiliates as a result of this Agreement, except, in each case, other than purchases of inventory (1) as required by Law, any Employee Plan or any contract in existence on the Agreement Date and other non-material assets made available to Buyer, (2) increases in the ordinary course of business or pursuant to existing contracts; or (y) sell or otherwise dispose of (whether by mergerwages, consolidation or sale of stock or assets or otherwise) any assets of Company or Company Subsidiarysalaries, other than sales or dispositions of finished goods inventory bonuses and incentives in the ordinary course of business consistent with past practicepractice in the relevant market and (3) changes to benefits that are applicable to the covered employees of the Business and Seller generally or that result from ordinary course negotiations involving any labor union, works council, or equivalent employee representative body representing any Business Employees;
(vi) (A) make any change in any method of accounting or rescind any material election relating to Taxes outside accounting methodology, practice or policy used by the Business in the preparation of its financial statements, other than such changes as are consistent with the ordinary course of businessTransaction Accounting Principles or changes required by GAAP or applicable Law, (B) settle change policies, practices and procedures with respect to working capital or compromise any material Tax liability cash management, accrual of revenue, collection or refundaccrual of accounts receivable, payment or accrual of expenses, accounts payable or other Liabilities in a manner inconsistent with past practice, (C) implement or adopt any material change in its Tax methods of accounting accelerate customer product delivery outside of the ordinary course of business, except (x) as may be appropriate to conform to changes in statutory or regulatory accounting rules or GAAP or regulatory requirements with respect thereto, (y) as may be required by changes in the Tax methods of accounting, policies or practices of Seller other than, for the avoidance of doubt, with respect to a matter governed by Section 6.01(a)(vi)(E), or (z) as may be required by a change in applicable Law, (D) file any material amended Tax Return or claim for refund of Taxes, (E) adjust the Tax basis of any asset outside of the ordinary course of business (for this purpose, ordinary course of business with respect to the adjustment to the Tax basis of any receivable shall mean the accounting policy set forth in Schedule 6.01(a)(vi)), or (F) enter into any ruling request, closing agreement or similar agreement with any Taxing Authority; in each case to the extent such action could be expected to increase the Tax liability of Company or Company Subsidiary in any taxable period (or portion thereof) beginning after the Closing Date; notwithstanding the foregoing, neither Seller, Company nor Company Subsidiary shall be required to take any action or avoid taking any action (except as specified in Section 6.01(a)(vi)(E)) pursuant to this Section 6.01(a)(vi) unless the Buyer Indemnified Parties would incur a Loss as the result of such action for which Loss the Buyer Indemnified Parties are not indemnified by Seller under this Agreement and Seller does not otherwise agree to indemnify the Buyer Indemnified Parties for such Loss;
(vii) agree to any exclusivity, non-competition or similar provision or covenant restricting Company or Company Subsidiary from competing in any line of business or with any Person or in any area or engaging in any activity or business (including with respect to the development, manufacture, marketing or distribution of their respective products or services), or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any effect on Company or Company Subsidiary after the Closing;
(viii) adopt a shareholders rights plan;
(ix) grant any registration rights to any Person or reach any agreement regarding Equity Interests of Company or Company Subsidiary, arrangement or understanding with respect to any such registration rights with any Person;
(x) grant any severance or termination pay to any Business Employee, other than those made in Company’s or Company Subsidiary’s ordinary course of business and consistent with past practices or to the extent required by law, or pursuant to Company’s or Company Subsidiary’s existing employment, retention, severance and similar agreements with any Business Employee as disclosed in the Disclosure Schedule;
(xi) extend an offer of employment to a candidate for an officer position of vice president or above or any position with annual compensation equal to or greater than $150,000 without prior consultation with Parent;
(xii) except (i) in the ordinary course of business, or (ii) as provided for in Exhibit I, or (iii) as required by Law, or (iv) as permitted by Section 6.01(a)(x) and/or 6.01(a)(xi) or any Employee Plan of Business Plan in effect as of the date of this Agreement and disclosed in the Disclosure Schedule, adopt or pay, accelerate, increase or accrue salary or other payments or benefits or promise or make discretionary employer contributions to, under, or with respect to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, group insurance, severance pay, retirement, or other employee benefit plan, agreement, or arrangement, or any employment or consulting agreement with or for the benefit of any Business Employee, or consultant to the Business, or amend any such existing plan, agreement, or arrangement;
(xiii) agree to take any of the foregoing actions.
(b) Except as required by applicable Law or as otherwise contemplated by or necessary to effectuate the Transaction Agreements, including consummation of the Permitted Financing (if any), and except for matters identified on Schedule 6.01(b), during the Pre-Closing Period unless Seller otherwise consents in advance (which consent shall not be unreasonably withheld, conditioned or delayed), Parent will, and will cause its Subsidiaries (including Buyer) to, conduct their businesses in the ordinary course of business consistent with past practice. Without limiting the foregoing, except as required by applicable Law or as otherwise contemplated by or necessary to effectuate the Transaction Agreements, including consummation of the Permitted Financing (other than with respect to Sections 6.01(b)(i) and (b)(ix)-(xi)), and except for matters identified on Schedule 6.01(b), during the Pre-Closing Period unless Seller otherwise consents in advance (which consent shall not be unreasonably withheld, conditioned or delayed), Parent covenants and agrees that, neither Parent nor any of its Subsidiaries (including Buyer) shall:
(i) amend or otherwise change its articles of incorporation or bylaws or any equivalent organizational documents including, for the avoidance of doubt, in connection with a Permitted Financing (except with respect to the Certificate of Designation as expressly contemplated herein and for administerial changes for Subsidiaries);
(ii) issue, sell, pledge, dispose of or encumber any of its or its Subsidiaries’ Equity Interests, or grant to any Person any right to acquire any of its or its Subsidiaries’ Equity Interests, except (x) in connection with a Permitted Financing, (y) pursuant to the exercise of Parent Stock Options or settlement of other awards outstanding as of the Agreement Date or (z) the grant of Parent Stock Options or other awards under any Parent Stock Plan (and issuances of Equity Interests pursuant thereto) made to employees, independent contractors, consultants, or medical doctors in the ordinary course of business consistent with past practices including in connection with the hiring of new employees, independent contractors, consultants or medical doctors, in each case under contract with Parent or Buyer;
(iii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its Equity Interests, except for any dividend or distribution by a Subsidiary of Parent to Parent or to another Subsidiary or Subsidiaries of Parent;
(iv) reclassify, split, combine or subdivide any shares of capital stock of Parent or redeem, repurchase or otherwise acquire any shares of capital stock of Parent;
(v) (x) acquire (whether by merger, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or any assets, in each case (a “Third Party Acquisition”), other than purchases of inventory and other non-material assets in the ordinary course of business or pursuant to existing contracts; or (y) sell or otherwise dispose of (whether by merger, consolidation or sale of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or any assets of Parent or its Subsidiaries, other than sales or dispositions of finished goods inventory in the ordinary course of business consistent with past practice;
(vi) implement or adopt any material change in its methods of accounting, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or GAAP or regulatory requirements with respect thereto;
(vii) agree to any exclusivity, non-competition or similar provision or covenant restricting Parent, any of its Subsidiaries or any of their respective Affiliates, from competing in any line of business or with any Person or in any area or engaging in any activity or business (including with respect to the development, manufacture, marketing or distribution of their respective products or services), or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any effect on Seller or any of its Affiliates after the Closing;
(viii) adopt a shareholders rights plan;
(ix) fail to enter into a standstill and lock-up agreement with any Person, or two or more Persons deemed to be a “group” for purposes of Section 13(d)(3) of the Exchange Act, if in connection with any Permitted Financing such Person or Persons beneficially own (as determined for purposes of Rule 13d-3 under the Exchange Act) twenty percent (20%) or more of the outstanding shares of Common Stock, which agreement must contain standstill and lock-up provisions which are no less favorable to Parent than those to be contained in the Investor Rights Agreement to be entered into at Closing;
(x) grant any registration rights to any Person or reach any agreement, arrangement or understanding with respect to registration rights with any Person (including, for the avoidance of doubt, in connection with a Permitted Financing), other than at Closing pursuant to the Registration Rights Agreement;
(xi) increase or decrease the number of seats on the Parent Board or grant any Person the right to nominate or appoint any director to the Parent Board (including, for the avoidance of doubt, in connection with a Permitted Financing)normal purchase order practices, other than at the Closing pursuant request of a customer and which do not exceed $15,000,000 in any fiscal quarter, or (D) provide discounts for accelerated product delivery (other than time value of money discounts in accordance with Seller’s accounting policies and consistent with past practice);
vii. enter into any settlement or release with respect to any Action relating to the Investor Rights Agreement; or
Business other than (xiiA) agree to take any settlement or release that contemplates only the payment of money in an amount not exceeding $2,500,000 individually or $15,000,000 in the aggregate and results in a full release of the foregoing actions.claims giving rise to such Action,
Appears in 1 contract
Sources: Equity and Asset Purchase Agreement (Danaher Corp /De/)
Conduct of Business Before the Closing. (a) Except as required by applicable Law or as otherwise contemplated required by this Agreement or necessary the other Transaction Agreements prior to effectuate the Transaction AgreementsClosing, and except for matters identified on Schedule 6.01(a)in Section 6.01 of the Seller Disclosure Letter, during the Pre-Closing Period, Period unless Buyer otherwise consents in advance in writing (which consent shall not be unreasonably withheld, conditioned or delayed), the Seller Parties will, and will cause Company and Company Subsidiary the Companies to, (x) conduct the Business in the ordinary course of business consistent with past practice. Without limiting the foregoing, except as required by applicable Law or as otherwise contemplated by or necessary to effectuate the Transaction Agreementsbusiness, and except for matters identified on Schedule 6.01(a)(y) use commercially reasonable efforts to preserve intact their business organizations related to the Business and preserve their current business relationships and goodwill. With respect to the Business, during the Pre-Closing PeriodCompanies, unless Buyer otherwise consents in advance their respective assets (which consent including the Acquired Assets) and/or the Assumed Liabilities, the Seller Parties shall not, and shall cause each of its applicable Affiliates (including each Company) not be unreasonably withheldto, conditioned directly or delayed), Seller covenants and agrees that, neither Company nor Company Subsidiary shallindirectly:
(i) amend the organizational documents of any of the Companies or otherwise change its articles form any Subsidiary of incorporation or bylaws or any equivalent organizational documentsa Company;
(ii) issue, sell, pledge, dispose of or encumber any of Company’s or Company Subsidiary’s Equity Interests, or grant to any Person any right to acquire any of Company’s or Company Subsidiary’s Equity Interests;
(iii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of Company’s or Company Subsidiary’s Equity Interests, except for any dividend or distribution payable in cash by Company Subsidiary to Company or by Company or Company Subsidiary to Seller or any of its Affiliates;
(iv) reclassify, split, combine or subdivide any shares of capital stock of Company or Company Subsidiary or redeem, repurchase or otherwise acquire any shares of capital stock of Company or Company Subsidiary;
(v) (x) acquire (whether by merger, consolidation or consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business Person, business, organization or division thereof (or any assetsmaterial assets of any of the foregoing);
(iii) incur any Indebtedness (including any intercompany loan or intercompany debt), issue any debt securities or assume, grant, guarantee or endorse, or otherwise as an accommodation become responsible for, the Liabilities of any Person, or make any loans or advances (in each case, other than purchases of inventory and other non-material assets (A) in the ordinary course of business or (B) pursuant to existing contractsintercompany borrowing arrangements, in each case, that will be either Excluded Liabilities or settled or repaid in full, or canceled or terminated at or before the Closing with no Liability to the Business or the Companies arising therefrom for all periods after Closing);
(iv) (A) redeem, dispose of, issue or sell any shares of, or other equity interests in, any Company, or securities convertible into or exchangeable for such shares or equity interests, or redeem, dispose of, issue or grant any options, warrants, calls, subscription rights or other rights of any kind to acquire such shares, other equity interests or securities; or (yB) sell split, subdivide, combine or otherwise dispose of (whether by merger, consolidation or sale of reclassify the outstanding capital stock or assets equity interests of any Company;
(v) (A) grant or otherwiseannounce any new incentive awards, bonus or similar compensation or any increase in the wages, salaries, compensation, bonuses, or incentives payable to any Business Employee, or (B) establish or increase or promise to increase any assets of Company benefits under any Employee Plan, except, in either case, (1) as required by Law, any Employee Plan in existence on the Agreement Date that has been previously disclosed to Buyer, (2) increases in wages, salaries, compensation, bonuses and incentives to the extent required by Law or Company Subsidiaryif the Closing Date is after December 31, other than sales or dispositions of finished goods inventory 2015, annual increases in wages and base salaries in the ordinary course of business consistent with past practice, (3) the payment of annual bonuses in the ordinary course consistent with past practice as required under the terms of the applicable Employee Plan in existence on the Agreement Date that has been previously disclosed to Buyer and (4) changes to benefits that are applicable to the covered employees of the Business and the Seller Parties generally or that result from negotiations involving any labor union representing any employees of the Business, or (D) terminate any Business Employee other than for cause as determined in the sole discretion of the Seller Parties and the Companies;
(vi) enter into any settlement or release with respect to any Action relating to the Business other than (A) make any settlement or rescind any material election relating release that contemplates only the payment of money (which payment shall be fully paid prior to Taxes outside the Closing Date) without admission of wrongdoing or misconduct, without ongoing limits on the ownership, conduct or operation of the ordinary course Business, the Companies, their respective assets (including the Acquired Assets) or Assumed Liabilities and results in a full and absolute release of businessthe claims giving rise to such Action, or (B) settle any settlement or compromise any material Tax liability or refund, (C) implement or adopt any material change in its Tax methods release involving the payment of accounting outside of Excluded Liabilities reflected on the ordinary course of business, except (x) as may be appropriate to conform to changes in statutory or regulatory accounting rules or GAAP or regulatory requirements with respect thereto, (y) as may be required by changes in the Tax methods of accounting, policies or practices of Seller other than, for the avoidance of doubt, with respect to a matter governed by Section 6.01(a)(vi)(E), or (z) as may be required by a change in applicable Law, (D) file any material amended Tax Return or claim for refund of Taxes, (E) adjust the Tax basis of any asset outside of the ordinary course of business (for this purpose, ordinary course of business with respect to the adjustment to the Tax basis of any receivable shall mean the accounting policy set forth in Schedule 6.01(a)(vi)), or (F) enter into any ruling request, closing agreement or similar agreement with any Taxing Authority; in each case to the extent such action could be expected to increase the Tax liability of Company or Company Subsidiary in any taxable period (or portion thereof) beginning after the Closing Date; notwithstanding the foregoing, neither Seller, Company nor Company Subsidiary shall be required to take any action or avoid taking any action (except as specified in Section 6.01(a)(vi)(E)) pursuant to this Section 6.01(a)(vi) unless the Buyer Indemnified Parties would incur a Loss as the result of such action for which Loss the Buyer Indemnified Parties are not indemnified by Seller under this Agreement and Seller does not otherwise agree to indemnify the Buyer Indemnified Parties for such LossDisclosure Letter;
(vii) agree to enter into any exclusivitytransactions, non-competition contracts or similar provision or covenant restricting Company or Company Subsidiary from competing in any line of business or understandings with any Person or in any area or engaging in any activity or business (including with respect to the development, manufacture, marketing or distribution of their respective products or services), or pursuant to which any benefit or right Affiliates that would be required to be given binding on the Business, any Company (or lost as a result of so competing its assets, including the Acquired Assets) or engaging, or which would have any effect on Company or Company Subsidiary Assumed Liabilities after the Closing;
(viii) adopt a shareholders rights plan;
(ixA) incur, create, assume, or grant any registration rights to any Person or reach any agreement regarding Lien on the (1) Company Equity Interests (whether tangible or intangible); (2) the Business; or (3) other than granting or suffering to exist a Permitted Lien, the Acquired Intellectual Property or the assets of the Companies (including the Acquired Assets), (B) sell, assign, transfer, pledge, encumber, license, or sublicense (other than, in the case of Company or Company SubsidiaryIntellectual Property, arrangement or understanding with respect non-exclusive licenses granted to any such registration rights with any Person;
(x) grant any severance or termination pay to any Business Employee, other than those made in Company’s or Company Subsidiary’s ordinary course of business and consistent with past practices or to the extent required by law, or pursuant to Company’s or Company Subsidiary’s existing employment, retention, severance and similar agreements with any Business Employee as disclosed in the Disclosure Schedule;
(xi) extend an offer of employment to a candidate for an officer position of vice president or above or any position with annual compensation equal to or greater than $150,000 without prior consultation with Parent;
(xii) except (i) customers in the ordinary course of business), convey surrender, relinquish, abandon or otherwise dispose of any Acquired Intellectual Property or options or rights in or to any Acquired Intellectual Property, or (iiC) enter into any new or discontinue any line of business material to the Business;
(ix) except as provided for may be required as a result of a change in Exhibit ILaw or GAAP first arising after the Agreement Date, change any of the financial accounting principles or practices, methods of accounting or accounting practice or policy used by the Seller Parties or their Affiliates (iii) as required by Lawit relates to the Business, or the Companies, their respective assets (iv) as permitted by Section 6.01(a)(x) and/or 6.01(a)(xiincluding the Acquired Assets) or Assumed Liabilities), including any Employee Plan changes to the working capital policies applicable to the Business (including by accelerating the receipt of Business Plan in effect as of the date of this Agreement and disclosed in the Disclosure Schedule, adopt or pay, accelerate, increase or accrue salary or other payments or benefits or promise or make discretionary employer contributions to, under, or amounts due with respect to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, group insurance, severance pay, retirement, receivables or other employee benefit plan, agreement, or arrangement, or any employment or consulting agreement with or lengthening the period for the benefit payment of any Business Employee, or consultant to the Business, or amend any such existing plan, agreement, or arrangement;
(xiii) agree to take any of the foregoing actions.
(b) Except as required by applicable Law or as otherwise contemplated by or necessary to effectuate the Transaction Agreements, including consummation of the Permitted Financing (if anyaccounts payable), and except for matters identified on Schedule 6.01(b), during the Pre-Closing Period unless Seller otherwise consents in advance (which consent shall not be unreasonably withheld, conditioned or delayed), Parent will, and will cause its Subsidiaries (including Buyer) to, conduct their businesses other than in the ordinary course of business consistent with past practice. Without limiting the foregoing, except as required by applicable Law or as otherwise contemplated by or necessary to effectuate the Transaction Agreements, including consummation of the Permitted Financing (other than with respect to Sections 6.01(b)(i) and (b)(ix)-(xi)), and except for matters identified on Schedule 6.01(b), during the Pre-Closing Period unless Seller otherwise consents in advance (which consent shall not be unreasonably withheld, conditioned or delayed), Parent covenants and agrees that, neither Parent nor any of its Subsidiaries (including Buyer) shall:
(i) amend or otherwise change its articles of incorporation or bylaws or any equivalent organizational documents including, for the avoidance of doubt, in connection with a Permitted Financing (except with respect to the Certificate of Designation as expressly contemplated herein and for administerial changes for Subsidiaries)Business;
(iiA) issue, sell, pledge, dispose of make or encumber change any of its or its Subsidiaries’ Equity Interests, or grant to any Person any right to acquire any of its or its Subsidiaries’ Equity Interests, Tax election (except (x) in connection with a Permitted Financing, (y) pursuant to the exercise of Parent Stock Options or settlement of other awards outstanding as of the Agreement Date or (z) the grant of Parent Stock Options or other awards under any Parent Stock Plan (and issuances of Equity Interests pursuant thereto) made to employees, independent contractors, consultants, or medical doctors in the ordinary course of business consistent with past practices including business), (B) change an annual accounting period for Tax purposes, (C) adopt or change any Tax accounting method, (D) file any amended Tax Return, (E) enter into any closing agreement, (F) settle any Tax Claim or assessment, (G) surrender any right to claim a refund or other reduction of Taxes, or (H) consent to any extension or waiver of the limitation period applicable to any material Tax Claim or assessment (except in connection with the hiring ordinary course of new employees, independent contractors, consultants or medical doctorsbusiness), in each case under contract with Parent except to the extent that such action would not have the effect of increasing in any material respect the Tax Liability of either Company for any period ending after the Closing Date or Buyerdecreasing in any material respect any Tax attribute of the Company existing on the Closing Date;
(iiixi) declare(A) other than in the ordinary course of Business, set asideenter into, make amend, renew, terminate, waive or pay otherwise modify any dividend Material Contract, or other distribution(B) enter into any contract that restrains, payable restricts or limits the ability of the Companies or the Business to compete with or conduct any business or line of business in cash, stock, property or otherwise, with respect to any of its Equity Interests, except for any dividend or distribution by a Subsidiary of Parent to Parent or to another Subsidiary or Subsidiaries of Parentgeographic area;
(ivxii) reclassify, split, combine fail to maintain in full force and effect any Business Policies or subdivide fail to take commercially reasonable efforts to replace or renew any shares of capital stock of Parent or redeem, repurchase or otherwise acquire any shares of capital stock of Parentsuch policies;
(vxiii) (xA) acquire (whether by mergermake or commit to make any non-budgeted, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or any assets, in each case (a “Third Party Acquisition”)capital expenditures, other than purchases of inventory and other non-material assets capital expenditures made in order to continue to operate the Business in the ordinary course of business or pursuant to existing contracts; or (y) sell or otherwise dispose of (whether by merger, consolidation or sale of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or any assets of Parent or its Subsidiaries, other than sales or dispositions of finished goods inventory in the ordinary course of business consistent with past practice;
(vi) implement or adopt any material change in its methods of accounting, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or GAAP or regulatory requirements with respect thereto;
(vii) agree to any exclusivity, non-competition or similar provision or covenant restricting Parent, any of its Subsidiaries or any of their respective Affiliates, from competing in any line of business or with any Person or in any area or engaging in any activity or business (including with respect to the development, manufacture, marketing or distribution of their respective products or services), or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any effect on Seller or any of its Affiliates after the Closing;
(viii) adopt a shareholders rights plan;
(ixB) fail to enter into a standstill and lock-up agreement with make any Person, or two or more Persons deemed to be a “group” for purposes of Section 13(d)(3) of the Exchange Act, if in connection with any Permitted Financing such Person or Persons beneficially own (as determined for purposes of Rule 13d-3 under the Exchange Act) twenty percent (20%) or more of the outstanding shares of Common Stock, which agreement must contain standstill and lock-up provisions which are no less favorable to Parent than those to be contained in the Investor Rights Agreement to be entered into at Closing;
(x) grant any registration rights to any Person or reach any agreement, arrangement or understanding with respect to registration rights with any Person (including, for the avoidance of doubt, in connection with a Permitted Financing), other than at Closing pursuant to the Registration Rights Agreement;
(xi) increase or decrease the number of seats on the Parent Board or grant any Person the right to nominate or appoint any director to the Parent Board (including, for the avoidance of doubt, in connection with a Permitted Financing), other than at the Closing pursuant to the Investor Rights Agreementbudgeted capital expenditures; or
(xiixiv) agree enter into any legally binding commitment or contract with respect to take any of the foregoing actionsforegoing.
Appears in 1 contract
Sources: Stock Purchase Agreement (Investment Technology Group, Inc.)