Conduct of Business of Target. During the period from the date of this Agreement to the Effective Time, except as provided in Section 5.1 of the Target Disclosure Schedule or as otherwise expressly contemplated or permitted in this Agreement or the Transaction Agreements and except to the extent Purchaser shall otherwise give its prior written consent, each of Target and its Subsidiaries shall: (i) conduct its business in the ordinary course and consistent with the budget attached hereto as Exhibit B (the “Budget”) and in compliance in all material respects with applicable Laws; (ii) pay or perform its material obligations when due; and (iii) use its commercially reasonable efforts consistent with past practices to: (A) preserve intact its present business organization, (B) keep available the services of its present officers and employees, (C) preserve in all material respects its relationships with customers, suppliers, distributors, joint venture partners, and others with which it has significant business dealings, and (D) preserve in all material respects any Target Intellectual Property. Without limiting the generality of the foregoing, except as provided in Section 5.1 of the Target Disclosure Schedule or as expressly contemplated or permitted by this Agreement or the Transaction Agreements, without the prior written consent of Purchaser, during the period from the date of this Agreement to the Effective Time, Target shall not, and shall not permit any of its Subsidiaries to, do any of the following: (a) amend the Target Charter Documents; (b) 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 (whether in cash, stock or property or any combination thereof) in respect of its capital stock, except for dividends paid to Target or any of its Subsidiaries by any Subsidiary that is, directly or indirectly, wholly-owned by Target; (c) adopt a plan or agreement of complete or partial liquidation, dissolution, winding up, merger, consolidation, amalgamation, restructuring, recapitalization or other material reorganization; (d) issue, deliver or sell, or authorize the issuance, delivery or sale of, any shares of its capital stock of any class or other equity interests or any securities convertible into or exercisable for, or any rights, warrants or options to acquire, any such capital stock or other equity interests, other than the issuances of shares of Target Common Stock upon the exercise of Options outstanding on the date hereof or issued after the date hereof in compliance with the terms of this Agreement in accordance with their present terms; (e) except as required to ensure that any Target Employee Plan in effect on the date of this Agreement is not then out of compliance with applicable Law or as specifically required or permitted pursuant to this Agreement or as provided in the Target Disclosure Schedule, (A) adopt, enter into, terminate or amend any Target Employee Plan, (B) increase in any manner the compensation or benefits of, or pay any bonus to, any employee of Target or its Subsidiaries, except as required by a Target Employee Plan or an employment agreement with an employee of Target or its Subsidiaries, (C) pay or provide to any employee of Target or its Subsidiaries any benefit not provided for under a Target Employee Plan as in effect on the date of this Agreement or as permitted by clause (B) above, (D) grant any awards under any Target Employee Plan (including the grant of stock or other equity options, stock or other equity appreciation rights, performance units, restricted stock or other equity, stock or other equity purchase rights or other stock or other equity-based or stock-related awards) or remove existing restrictions in any Target Employee Plan or awards made thereunder, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Target Employee Plan, except as required to comply with any Target Employee Plan as in effect on the date of this Agreement or (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Target Employee Plan; (f) except pursuant to agreements that are in effect as of the date hereof and previously disclosed to Purchaser, directly or indirectly purchase, redeem or otherwise acquire any shares of Target Common Stock or any shares of capital stock or other interests in the Subsidiaries of Target or any other securities thereof or any rights, warrant or options to acquire any such shares or other securities (which restriction shall not restrict any cashless exercise or similar transaction pursuant to any Options or other awards issued under an Target Employee Plan outstanding as of the date of this Agreement); (g) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any business; (h) other than pursuant to Contracts in effect as of the date hereof, sell, lease, license (as licensor or licensee), assign, encumber or otherwise transfer in one transaction or any series of related transactions, assets, property or rights; (i) incur, assume or guarantee any Indebtedness for borrowed money or issue or sell any debt securities or warrants or other rights to acquire debt securities or enter into any keep-well or other arrangements to maintain the financial condition of any other Person; (j) make any loan, advance or capital contribution to or investment in any Person, other than loans, advances or capital contributions to or investments (i) in its Subsidiaries or pursuant to Contracts in effect at the date hereof or (ii) in accordance with the Budget; (k) make or change any election, change an annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to Target or any of its Subsidiaries, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to Target 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, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action would have the effect of increasing the Tax liability of Target or any of its Subsidiaries for any period ending after the Closing Date or decreasing any Tax attribute of Target or any of its Subsidiaries existing on the Closing Date; (l) take any action that would, or would reasonably be expected to, prevent or materially impair or delay the ability of Target to consummate the transactions contemplated by this Agreement; (m) enter into, amend, cancel, terminate, or grant any waiver in respect of any Material Target Contract; (n) file any registration statement under the Securities Act or an amendment to any Securities Act registration statement; (o) make any capital expenditures in any fiscal quarter exceeding the Budget for such fiscal quarter; (p) enter into any hedging agreements whether or not in the ordinary course of business consistent with past practice; (q) waive, release, assign, settle or compromise any claim, action or proceeding, other than waivers, releases, assignments, settlements or compromises not exceeding the amount reserved against in the Target Financial Statements, or otherwise pay, discharge or satisfy any claim, liability or obligation; (r) enter into any “non-compete,” “non-solicit” or similar agreement that would materially restrict the businesses of Target or Purchaser following the Effective Time; (s) enter into any closing agreement with respect to material Taxes, settle or compromise any material liability for Taxes, make, revoke or change any material Tax election, agree to any adjustment of any material Tax attribute, file or surrender any claim for a material refund of Taxes, execute or consent to any waiver extending the statutory period of limitations with respect to the collection or assessment of material Taxes, file any material amended Tax Return or obtain any material Tax ruling; (t) enter into any new, or amend or otherwise alter any Affiliate Transaction or transaction that would be an Affiliate Transaction if such transaction occurred prior to the date hereof; or (u) agree or commit to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (Resource Capital Fund v L.P.), Merger Agreement (Uranium Resources Inc /De/)
Conduct of Business of Target. During the period from the date of this Agreement to the Effective Time, except Except as provided in Section 5.1 of the Target Disclosure Schedule or as otherwise expressly contemplated or permitted in this Agreement or the Transaction Agreements and except to the extent Purchaser shall otherwise give its prior written consent, each of Target and its Subsidiaries shall: (i) conduct its business in the ordinary course and consistent with the budget attached hereto as Exhibit B (the “Budget”) and in compliance in all material respects with applicable Laws; (ii) pay or perform its material obligations when due; and (iii) use its commercially reasonable efforts consistent with past practices to: (A) preserve intact its present business organization, (B) keep available the services of its present officers and employees, (C) preserve in all material respects its relationships with customers, suppliers, distributors, joint venture partners, and others with which it has significant business dealings, and (D) preserve in all material respects any Target Intellectual Property. Without limiting the generality of the foregoing, except as provided in Section 5.1 of the Target Disclosure Schedule or as expressly contemplated or permitted by this Agreement or the Transaction Agreements, without the prior written consent of PurchaserAgreement, during the period from the date of this Agreement to the Effective Time, Target and its Subsidiaries shall noteach (a) conduct its operations according to its ordinary and usual course of business and consistent with past practice, including, without limitation, continue its current drilling and workover program without cost ▇▇▇▇-up or promotion charges being added to capital or workover related costs, or for additional reserves resulting from the drilling or workover operations; (b) use its best efforts to preserve intact its business organization and assets in all material respects, and shall not permit maintain satisfactory relationships with suppliers, distributors, customers, banks and others having business relationships with them; (c) confer on a regular and frequent basis with one or more representatives of Parent to report operational matters of a material nature and the general status of ongoing operations; and (d) notify Parent of any emergency or other change in the normal course of its business or its Subsidiaries' businesses or in the operation of its properties or its Subsidiaries' properties and of any governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated). Without limiting the generality of the foregoing, and except as otherwise expressly provided in this Agreement, neither Target nor any of its Subsidiaries toSubsidiaries, do any as the case may be, shall, without the prior written consent of the following:
Parent, (a) amend the Target Charter Documents;
(b) 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 (whether in cash, stock or property or any combination thereof) in respect of its capital stock, except for dividends paid to Target or any of its Subsidiaries by any Subsidiary that is, directly or indirectly, wholly-owned by Target;
(c) adopt a plan or agreement of complete or partial liquidation, dissolution, winding up, merger, consolidation, amalgamation, restructuring, recapitalization or other material reorganization;
(di) issue, deliver sell or sellpledge, or commit, authorize or propose the issuance, delivery sale or sale of, any pledge of (A) additional shares of its capital stock of any class (including the Shares), or other equity interests or any securities convertible into or exercisable forany such shares, or any rights, warrants or options to acquire, any such capital stock or other equity interests, other than the issuances of shares of Target Common Stock upon the exercise of Options outstanding on the date hereof or issued after the date hereof in compliance with the terms of this Agreement in accordance with their present terms;
(e) except as required to ensure that any Target Employee Plan in effect on the date of this Agreement is not then out of compliance with applicable Law or as specifically required or permitted pursuant to this Agreement or as provided in the Target Disclosure Schedule, (A) adopt, enter into, terminate or amend any Target Employee Plan, (B) increase in any manner the compensation or benefits of, or pay any bonus to, any employee of Target or its Subsidiaries, except as required by a Target Employee Plan or an employment agreement with an employee of Target or its Subsidiaries, (C) pay or provide to any employee of Target or its Subsidiaries any benefit not provided for under a Target Employee Plan as in effect on the date of this Agreement or as permitted by clause (B) above, (D) grant any awards under any Target Employee Plan (including the grant of stock or other equity options, stock or other equity appreciation rights, performance units, restricted stock or other equity, stock or other equity purchase rights or other stock or other equity-based or stock-related awards) or remove existing restrictions in any Target Employee Plan or awards made thereunder, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Target Employee Plan, except as required to comply with any Target Employee Plan as in effect on the date of this Agreement or (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Target Employee Plan;
(f) except pursuant to agreements that are in effect as of the date hereof and previously disclosed to Purchaser, directly or indirectly purchase, redeem or otherwise acquire any shares of Target Common Stock or any shares of capital stock or other interests in the Subsidiaries of Target or any other securities thereof or any rights, warrant or options to acquire any such shares or other convertible securities, or grant or accelerate any right to convert or exchange any securities of Target for Shares, or (B) any other securities in respect of, in lieu of or in substitution for Shares outstanding on the date thereof; (ii) purchase or otherwise acquire, or propose to purchase or otherwise acquire, any of its outstanding securities (which restriction shall not restrict including the Shares); (iii) split, combine or reclassify any cashless exercise shares of its capital stock, or similar transaction pursuant to redeem or otherwise acquire any Options of its securities; (iv) declare or other awards issued under an Target Employee Plan outstanding as pay any dividend or distribution on any shares of the date capital stock of this Agreement);
Target; (gv) acquire (by merger, consolidation, make any acquisition of stock or a material amount of assets or otherwise), directly or indirectlysecurities, any business;
(h) other than pursuant to Contracts in effect as disposition of the date hereof, sell, lease, license (as licensor a material amount of assets or licensee), assign, encumber or otherwise transfer in one transaction securities or any series of related transactionsmaterial change in its capitalization, assets, property or rights;
(i) incur, assume or guarantee any Indebtedness for borrowed money or issue or sell any debt securities or warrants or other rights to acquire debt securities or enter into a material contract or release or relinquish any keep-well or other arrangements to maintain the financial condition of any other Person;
(j) make any loan, advance or capital contribution to or investment in any Person, other than loans, advances or capital contributions to or investments (i) in its Subsidiaries or pursuant to Contracts in effect at the date hereof or (ii) in accordance with the Budget;
(k) make or change any election, change an annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to Target or any of its Subsidiaries, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to Target 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, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action would have the effect of increasing the Tax liability of Target or any of its Subsidiaries for any period ending after the Closing Date or decreasing any Tax attribute of Target or any of its Subsidiaries existing on the Closing Date;
(l) take any action that would, or would reasonably be expected to, prevent or materially impair or delay the ability of Target to consummate the transactions contemplated by this Agreement;
(m) enter into, amend, cancel, terminate, or grant any waiver in respect of any Material Target Contract;
(n) file any registration statement under the Securities Act or an amendment to any Securities Act registration statement;
(o) make any capital expenditures in any fiscal quarter exceeding the Budget for such fiscal quarter;
(p) enter into any hedging agreements whether or material contract rights not in the ordinary course of business consistent with past practice;
business; (qvi) waiveincur any long-term debt for borrowed money or short-term debt for borrowed money; (vii) assume, releaseguarantee, assignendorse or otherwise become liable or responsible (whether directly, settle contingently or compromise otherwise) for the obligations of any claimother person; (viii) make any loans, action or proceeding, advances (other than waivers, releases, assignments, settlements or compromises not exceeding the amount reserved against advances to employees for travel and entertainment in the Target Financial Statementsordinary course of business) or capital contributions to, or otherwise investments in, any other person; (ix) pay, discharge or satisfy any claimclaims, liability liabilities or obligation;
obligations (rabsolute, accrued, contingent or otherwise), other than when due; (x) waive, release, grant or transfer any rights of value or modify or change in any material respect any existing material license, lease, contract or other agreement or arrangement; (xi) other than in the ordinary course of business and consistent with past practice and not in an amount in excess of $50,000 or other than capital expenditures budgeted for the current period, make any capital expenditures or commitments for capital expenditures; (xii) acquire, sell, lease or dispose of (directly or by merger, consolidation or other business combination) any assets outside the ordinary course of business or any material assets, or enter into any commitment or transaction outside the ordinary course of business or adopt a plan of liquidation or resolutions providing for its liquidation, dissolution, merger, consolidation or other reorganization; (xiii) propose or adopt any amendments to its Articles of Incorporation or Bylaws; (xiv) enter into any “non-compete,” “non-solicit” or similar agreement that would materially restrict the businesses of Target or Purchaser following the Effective Time;
(s) enter into any closing new employment agreement with respect to material Taxesany officer, settle director or compromise employee or grant any material liability for Taxes, make, revoke increase in the compensation or change any material Tax election, agree benefits to any adjustment officer, director or employee; (xv) take any action to terminate any of its employee benefit plans; (xvi) take any material Tax attribute, file or surrender any claim for a material refund of Taxes, execute or consent to any waiver extending the statutory period of limitations action with respect to the collection grant of any severance or assessment of material Taxes, file any material amended Tax Return termination pay (otherwise than pursuant to written policies or obtain any material Tax ruling;
(t) enter into any new, or amend or otherwise alter any Affiliate Transaction or transaction that would be an Affiliate Transaction if such transaction occurred consistent with written practices in effect prior to the date hereof) or with respect to any increase of benefits payable under its written severance or termination pay practices in effect on the date hereof; (xvii) adopt or amend any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, agreement, trust, fund, plan or arrangement for the benefit or welfare of any employee or pay any benefit not required by any existing plan or arrangement (including, without limitation, the granting of stock options, stock appreciation rights, shares of restricted stock or performance units); (xviii) file any consolidated Federal Tax Return relating to Taxes or income other than a Federal Tax Return to be filed by Target on or before January 15, 2007, in respect of federal income taxes for the fiscal year ended April 30, 2006; (xix) materially change accounting policies or procedures or any of its methods of reporting income, deductions or other material items for income tax purposes, except as required by GAAP or applicable law; or (uxx) agree in writing or commit otherwise to do take any of the foregoingforegoing actions or any action which would make any representation or warranty in this Agreement untrue or incorrect.
Appears in 2 contracts
Sources: Merger Agreement (Platinum Energy Resources Inc), Merger Agreement (Platinum Energy Resources Inc)
Conduct of Business of Target. During the period from the date ----------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, and except (i) as contemplated or permitted by the terms of this Agreement, (ii) as provided in Section 5.1 4.1 of the Target Disclosure Schedule or as otherwise expressly contemplated or permitted in this Agreement or the Transaction Agreements and except (iii) to the extent Purchaser otherwise previously consented to by Acquiror in writing (which consent shall otherwise give its prior written consentbe withheld or delayed in Acquiror's sole discretion), each of Target and its Subsidiaries shall: (i) conduct each Target Subsidiary shall carry on its business in the usual, regular and ordinary course and consistent with course, in substantially the budget attached hereto same manner as Exhibit B (the “Budget”) heretofore conducted and in compliance in with all material respects with applicable Laws; (ii) pay or perform its material obligations when due; laws and (iii) regulations, and use its commercially reasonable efforts consistent with past practices to: and policies to (Aa) preserve intact its present business organization, (Bb) keep available the services of its present officers and employees, employees and (Cc) preserve in all material respects its relationships with customers, suppliers, distributors, joint venture partnerslicensors, licensees, and others with which it has significant business dealings. In addition, Target will promptly notify Acquiror of any event that it reasonably believes could have a Material Adverse Effect on Target or the Surviving Corporation. In addition, except as contemplated or permitted by the terms of this Agreement and (D) preserve in all material respects any Target Intellectual Property. Without limiting the generality of the foregoing, except as provided in Section 5.1 4.1 of the Target Disclosure Schedule or as expressly contemplated or permitted by this Agreement or the Transaction AgreementsSchedule, without the prior written consent of PurchaserAcquiror (which consent shall be withheld or delayed in Acquiror's sole discretion), during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Target shall notnot do, cause or permit, and shall not permit any of its Subsidiaries toto do, do cause or permit any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted pursuant to any employee, consultant, director or other stock plans, including the Target Charter DocumentsEquity Plans, or authorize cash payments in exchange for any options granted under any of such plans;
(b) splitGrant any severance or termination pay, combine, subdivide or reclassify any shares of its capital stock or other equity interests economic rights, to any officer or declareemployee, except pursuant to written agreements outstanding or published policies existing on the date hereof and as previously disclosed in writing or made available to Acquiror, or adopt any new severance plan;
(c) Transfer or license to any person or otherwise extend, amend or modify in any material respect any rights to, or enter into grants to future rights related to, any Target Intellectual Property, except non-exclusive licenses to end users in the ordinary course of business consistent with past practices;
(d) Declare, set aside or pay any dividend dividends on or make any other distribution distributions (whether in cash, stock stock, equity securities or property or any combination thereofproperty) in respect of its any capital stock (other than distributions from a Target Subsidiary to Target) or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, except for dividends paid to Target redeem or any of its Subsidiaries by any Subsidiary that isotherwise acquire, directly or indirectly, wholly-owned by Targetany shares of capital stock of Target or the Target Subsidiaries, except repurchases of unvested shares at cost or lower in connection with the termination of the employment relationship with any employee pursuant to and in accordance with the express terms of a stock option purchase agreement or employment agreement in effect on the date hereof;
(cf) adopt a plan or agreement of complete or partial liquidationIssue, dissolutiondeliver, winding up, merger, consolidation, amalgamation, restructuring, recapitalization or other material reorganization;
(d) issue, deliver or sell, authorize, pledge or authorize the issuance, delivery or sale of, otherwise encumber any shares of its capital stock of any class or other equity interests or any securities convertible into or exercisable forshares of capital stock, or any subscriptions, rights, warrants or options to acquire, acquire any such shares of capital stock or any securities convertible into shares of capital stock, including under any of the Target Equity Plans, or enter into other equity interestsagreements or commitments of any character obligating it to issue any such shares or convertible securities, other than the issuances issuance, delivery and/or sale of shares of Target Common Stock upon pursuant to the exercise for cash of Options Target options or stock purchase rights outstanding on the date hereof or issued after the date hereof in compliance with the terms of this Agreement in accordance with their present terms;
(e) except as required to ensure that any Target Employee Plan in effect on the date of this Agreement is not then out of compliance with applicable Law or as specifically required or permitted pursuant to this Agreement or as provided in under the Target Disclosure Schedule, (A) adopt, enter into, terminate or amend any Target Employee Plan, (B) increase in any manner the compensation or benefits of, or pay any bonus to, any employee of Target or its Subsidiaries, except as required by a Target Employee Plan or an employment agreement with an employee of Target or its Subsidiaries, (C) pay or provide to any employee of Target or its Subsidiaries any benefit not provided for under a Target Employee Plan as in effect on the date of this Agreement or as permitted by clause (B) above, (D) grant any awards under any Target Employee Plan (including the grant of stock or other equity options, stock or other equity appreciation rights, performance units, restricted stock or other equity, stock or other equity purchase rights or other stock or other equity-based or stock-related awards) or remove existing restrictions in any Target Employee Plan or awards made thereunder, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Target Employee Plan, except as required to comply with any Target Employee Plan as in effect on the date of this Agreement or (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Target Employee Plan;
(f) except pursuant to agreements that are in effect as of the date hereof and previously disclosed to Purchaser, directly or indirectly purchase, redeem or otherwise acquire any shares of Target Common Stock or any shares of capital stock or other interests in the Subsidiaries of Target or any other securities thereof or any rights, warrant or options to acquire any such shares or other securities (which restriction shall not restrict any cashless exercise or similar transaction pursuant to any Options or other awards issued under an Target Employee Plan outstanding Equity Plans as of the date of this Agreement);
(g) acquire (by mergerCause, consolidationpermit or propose any amendments to the Certificate of Incorporation, acquisition Bylaws or similar organizational documents of stock Target or assets or otherwise), directly or indirectly, any businessTarget Subsidiary;
(h) other than pursuant Acquire, or propose or agree to Contracts acquire, by merging or consolidating with, or by purchasing any equity interest in effect as or a material portion of the date hereofassets of, sellor by any other manner, leaseany business or any corporation, license (as licensor partnership, association or licensee), assign, encumber other business organization or division thereof or otherwise transfer acquire or agree to acquire any assets or capital stock that is material, individually or in one transaction the aggregate, to the business of Target or the Target Subsidiaries or enter into any series of related transactionsmaterial joint ventures, assets, property strategic partnerships or rightsalliances;
(i) incurSell, assume lease, license, pledge, encumber or guarantee any Indebtedness for borrowed money or issue or sell any debt securities or warrants or other rights to acquire debt securities or enter into any keep-well or other arrangements to maintain the financial condition otherwise dispose of any other Person;
(j) make any loan, advance properties or capital contribution to or investment in any Person, other than loans, advances or capital contributions to or investments (i) in its Subsidiaries or pursuant to Contracts in effect at the date hereof or (ii) in accordance with the Budget;
(k) make or change any election, change an annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to Target or any of its Subsidiaries, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to Target 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, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action would have the effect of increasing the Tax liability assets of Target or any of its Subsidiaries for any period ending after the Closing Date or decreasing any Tax attribute of Target or any of its Subsidiaries existing on the Closing Date;
(l) take any action that wouldSubsidiaries, or would reasonably be expected to, prevent or materially impair or delay the ability of Target to consummate the transactions contemplated by this Agreement;
(m) enter into, amend, cancel, terminate, or grant any waiver in respect of any Material Target Contract;
(n) file any registration statement under the Securities Act or an amendment to any Securities Act registration statement;
(o) make any capital expenditures in any fiscal quarter exceeding the Budget for such fiscal quarter;
(p) enter into any hedging agreements whether or not except in the ordinary course of business consistent with past practice, or enter into a new line of business;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Target or any Target Subsidiary, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with Target's financing of ordinary-course trade payables consistent with past practice and not to exceed $2,000,000 in the aggregate (it being understood and agreed that Target shall not borrow, draw down upon, request any letters of credit or otherwise incur any indebtedness obligations under that certain Loan and Security Agreement dated February 26, 1993 (as amended) between Target and Silicon Valley Bank or any amendments, modifications, continuations or replacements thereto);
(k) Except as set forth in Sections 1.6(d)(iv), 1.6(e) and 5.15(b), adopt, amend or terminate any employee benefit plan or employee stock purchase or employee stock option plan, including the Target Equity Plans, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will" without severance), pay any special bonus or special remuneration to any director or executive officer, or except in the ordinary course of business consistent with past practice, increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of, its directors, officers, employees or consultants, or change in any material respect any management policies or procedures;
(l) Enter into, modify, amend or terminate any material contract or agreement to which Target or any Target Subsidiary is a party or waive, release or assign any material rights or claims thereunder;
(i) Other than in the ordinary course of business and in each case after consultation with Acquiror (except in cases of closing out sales in the Pipeline in the ordinary course of business consistent with past practice), enter into any contracts, agreements or obligations relating to the distribution, sale, license or marketing by third parties of Products or other products licensed by Target or any Target Subsidiary or (ii) enter into any agreement that provides for payments by Target in excess of $200,000;
(n) Revalue any of its assets or, except as required by GAAP, change its accounting methods, principles or practices as in effect as of the Target Balance Sheet Date;
(o) Engage in any action or enter into any transaction or permit any action to be taken or transaction to be entered into that could reasonably be expected to (i) delay in any material respect the consummation of, or otherwise adversely affect, any of the transactions contemplated by this Agreement, or (ii) increase the likelihood that a Governmental Entity will seek to object to or challenge the consummation of any of the transactions contemplated by this Agreement;
(p) Fail to make in a timely matter any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(q) waive, release, assign, settle Make any capital expenditure in excess of (i) $75,000 individually or compromise any claim, action or proceeding, other than waivers, releases, assignments, settlements or compromises not exceeding the amount reserved against (ii) $225,000 in the Target Financial Statementsaggregate, or otherwise pay, discharge or satisfy any claim, liability or obligation;
(r) enter taking into any “non-compete,” “non-solicit” or similar agreement that would materially restrict account all capital expenditures between the businesses date of Target or Purchaser following this Agreement and the Effective Time;
(sr) Make or change any Tax election, adopt or change any accounting method in respect of Taxes, enter into any closing agreement with agreement, consent to any extension or waiver of the limitations period applicable to any claim or assessment in respect to material of Taxes, or settle or compromise any material liability for TaxesTax liability; or
(s) Agree in writing to or otherwise take any of the actions described in Clauses (a) through (r) above. Notwithstanding the foregoing provisions of this Section 4.1, make, revoke or change any material Tax election, agree to any adjustment of any material Tax attribute, file or surrender any claim for a material refund of Taxes, execute or consent to any waiver extending the statutory period of limitations with respect to the collection or assessment of material Taxes, file any material amended Tax Return or obtain any material Tax ruling;Target may:
(t) Continue negotiations with the entities (other than Silicon Valley Bank) specifically listed in Section 2.8(i) of the Target Disclosure Schedule, and enter into any newcommercial agreements with such entities in connection with such negotiations, in each case with the consent of Acquiror (such consent not to be unreasonably withheld so long as such commercial agreements do not contain terms and conditions (i) that are manifestly adverse to Target or amend (ii) that adversely impact or otherwise alter conflict with Acquiror's current distribution and partnership relationships); provided, that Target shall actively and consistently keep Acquiror apprised of the status of negotiations and shall promptly deliver to Acquiror all information in respect of such negotiations that is reasonably requested by Acquiror as well as a true and correct copy of any Affiliate Transaction or transaction that would be an Affiliate Transaction if such transaction occurred prior to the date hereoffinal executed documentation; or and
(u) agree or commit to do any Continue negotiations and enter into a credit facility with Silicon Valley Bank; provided, however, that such credit facility shall be on the terms and conditions as set forth in Exhibit 2.8(i) of the foregoingTarget Disclosure Schedule or on terms and conditions that are not materially less favorable to Target; and provided further, that Target shall actively and consistently keep Acquiror apprised of the status of negotiations with Silicon Valley Bank and shall promptly deliver to Acquiror all information in respect of such negotiations that is reasonably requested by Acquiror as well as a true and correct copy of any final executed documentation.
Appears in 2 contracts
Sources: Merger Agreement (Data Critical Corp), Merger Agreement (Data Critical Corp)
Conduct of Business of Target. During the period from the date of this Agreement to and continuing until the earlier of the termination of this Agreement and the Effective Time, Target and each of its respective subsidiaries shall, except as provided in Section 5.1 of the Target Disclosure Schedule or as otherwise expressly contemplated or permitted in this Agreement or the Transaction Agreements and except to the extent Purchaser that Parent shall otherwise give its prior written consentconsent in writing, each of Target and its Subsidiaries shall: (i) conduct carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, to pay its debts and consistent with the budget attached hereto as Exhibit B (the “Budget”) and in compliance in all material respects with applicable Laws; (ii) Taxes when due, to pay or perform its material other obligations when due; and (iii) , and, to the extent consistent with such business, to use its commercially all reasonable efforts consistent with past practices to: (A) practice and policies to preserve intact its present business organization, (B) keep available the services of its present officers and employees, (C) key employees and preserve in all material respects its their relationships with customers, suppliers, distributors, joint venture partnerslicensors, licensees, and others having business dealings with which it has significant business dealingsit, all with the goal of preserving unimpaired its goodwill and ongoing businesses at the Effective Time. Target shall promptly notify Parent of any event or occurrence or emergency not in the ordinary course of its business, and (D) preserve in all any material respects any event involving or adversely affecting Target Intellectual Propertyor its business. Without limiting the generality of the foregoing, except as provided in Section 5.1 of the Target Disclosure Schedule or Except as expressly contemplated or permitted by this Agreement or the Transaction Agreementsrequired by law, Target shall not, without the prior written consent of Purchaser, during the period from the date of this Agreement to the Effective Time, Target shall not, and Parent (which consent shall not permit any of its Subsidiaries to, do any of the following:be unreasonably withheld):
(a) amend Enter into any commitment, activity or transaction not in the Target Charter Documentsordinary course of business;
(b) splitTransfer or license to any Person or entity or otherwise extend, combineamend or modify any rights to the Target Intellectual Property, subdivide or reclassify enter into grants to transfer or license to any shares Person future rights to the Target Intellectual Property, in each case other than non-exclusive licenses entered into in the ordinary course of its capital stock business and consistent with past practice, or transfer or license from any Person or entity any Intellectual Property other equity interests than in the ordinary course of business and consistent with past practice; provided that in no event shall Target (i) license, on an exclusive basis, or declareenter into a distribution, reseller or similar arrangement, on an exclusive basis, or sell or transfer the ownership of, any Intellectual Property; or (ii) enter into any Contract (A) containing pricing or discounting terms or provisions other than in the ordinary course of business consistent with past practice, (B) limiting the right of Target to engage in any line of business or to compete with any Person, or (C) providing for unlimited indemnification;
(c) Hire any officers, consultants, independent contractors or employees or enter into, or amend or extend the term of, any employment or consulting agreement with any Employee other than in the ordinary course of business and consistent with past practice;
(d) Amend or otherwise modify (or agree to do so) or violate the terms of, any of the agreements set aside forth or pay described in the Target Disclosure Letter other than amendments to or modifications of any dividend such agreements that are being negotiated by the Company as of the date hereof;
(e) Commence or other distribution settle any threatened or pending litigation;
(f) Engage in any transaction with the intent to, directly or indirectly, adversely impact or materially delay the consummation of the transactions contemplated by this Agreement;
(g) Except as expressly provided in the Redemption Documents, make any distributions (whether in cash, stock securities or property or any combination thereofproperty) in respect of any of its capital stockequity securities or any of its Subsidiaries’ equity securities or split, except combine or reclassify any of its equity securities or any of its Subsidiaries’ equity securities or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for dividends paid to its equity securities of Target or any of its Subsidiaries by any Subsidiary that isSubsidiaries;
(h) Except as expressly provided in the Redemption Documents, purchase, redeem or otherwise acquire, directly or indirectly, wholly-owned by Targetany of its equity securities or any of its Subsidiaries’ equity securities (nor shall Target allow any of its Subsidiaries to do the same) or securities exercisable or convertible into such equity securities;
(ci) adopt a plan or agreement of complete or partial liquidationIssue, dissolutiondeliver, winding up, merger, consolidation, amalgamation, restructuring, recapitalization or other material reorganization;
(d) issue, deliver or sell, purchase or authorize or pledge or otherwise encumber, or propose any of the issuance, delivery or sale of, foregoing with respect to any shares of its capital stock equity securities or any of any class or other its Subsidiaries’ equity interests securities or any securities exercisable or convertible into or exercisable for, its equity securities or any Subsidiaries’ equity securities or subscriptions, rights, warrants or options to acquireacquire any of its equity securities or any of its Subsidiaries or any securities exercisable or convertible into such equity securities, or enter into other agreements or commitments of any character obligating it to issue any such equity securities or securities exercisable or convertible into such equity securities other than the issuance of options to purchase up to 36,237 Target Common Shares to new hires or other employees pursuant to Target’s 2006 Option Plan;
(j) Cause or permit any amendments to its certificate of formation or Operating Agreement or similar documents of any of its Subsidiaries other than as may be necessary to give effect to the Redemption;
(k) Acquire or agree to acquire by merging or consolidating with, or by purchasing any assets or equity securities of, or by any other manner, any such capital stock business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to its business;
(l) Sell, lease, license, encumber or otherwise dispose of any of its, or any of its Subsidiaries’, assets or properties other than in the ordinary course of business and consistent with past practices, or create any security interest in such assets or properties other than security interests granted in favor of Amp Capital as security for the Amp Capital Note;
(m) Grant any loan to any Person or entity, incur any indebtedness or guarantee any indebtedness, issue or sell any debt securities, guarantee any debt securities of others, purchase any debt securities of others or amend the terms of any outstanding agreements related to borrowed money, except for (i) advances to employees for travel and business expenses in the ordinary course of business consistent with past practices (ii) the Amp Capital note and (iii) up to $5,000,000 of indebtedness incurred to finance the ongoing operations of the Company and its Subsidiaries;
(n) Grant or pay, or enter into any agreement, arrangement or amendment to an existing agreement or arrangement providing for any severance or termination pay (whether in cash, stock, equity interestssecurities, or property) or the acceleration of vesting or other benefits (i) to any director, officer or manager (ii) to any employee or consultant, except (A) payments made pursuant to standard written agreements outstanding as of the date hereof and disclosed on Schedule 4.1(n) or (B) the acceleration of vesting contained in any option agreement entered into pursuant to Section 4.1(i) above after the date hereof, or increase in the salary or other compensation payable or to become payable by Target to any of its officers, directors, managers, employees or advisors, other than increases in the issuances ordinary course of shares business and consistent with past practice, or declare, pay or make any commitment or obligation of any kind for the payment by Target Common Stock upon or any of its subsidiaries of a bonus or other additional salary or compensation to any such Person, other than in the exercise ordinary course of Options outstanding on the date hereof business and consistent with past practice, or adopt or amend any employee benefit plan or enter into any employment contract other than offer letters issued to employees hired after the date hereof in compliance with the terms ordinary course of this Agreement in accordance with their present termsbusiness;
(eo) except as required Enter into or amend any Contract pursuant to ensure that which any other party is granted exclusive rights or “most favored party” rights of any type or scope with respect to any Target Employee Plan in Intellectual Property, products, services or business, or containing any non-competition covenants or other material restrictions relating to its business activities or the effect on of which would be to grant to a third party following the date of this Agreement is not then out of compliance with applicable Law Merger the actual or as specifically required or permitted pursuant potential right to this Agreement or as provided in the license any Target Disclosure Schedule, Intellectual Property;
(Ap) adopt, enter intoAdopt, terminate or amend any Target Employee Plan or enter into any Target Employee Plan, or amend any compensation, bonus, commission, insurance coverage (B) increase in except as contemplated by this Agreement), benefit, entitlement, grant or award provided or made under any manner the compensation Target Employee Plan; or benefits of, or enter into any collective bargaining agreement; pay any bonus tospecial bonus, any employee of Target commission or its Subsidiaries, except as required by a Target Employee Plan or an employment agreement with an employee of Target or its Subsidiaries, (C) pay or provide special remuneration to any employee Employee (cash, equity or otherwise); increase the salaries, bonuses, commissions or wage rates or fringe benefits (including rights to severance or indemnification) of Target or its Subsidiaries Employees, other than increases in the ordinary course of business and consistent with past practice; pay any benefit not provided for under a Target Employee Plan as in effect on the date of this Agreement or as permitted by clause (B) above, (D) grant any awards under any Target Employee Plan (including the grant of stock or other equity options, stock or other equity appreciation rights, performance units, restricted stock or other equity, stock or other equity purchase rights or other stock or other equity-based or stock-related awards) or remove existing restrictions in any Target Employee Plan or awards made thereunder, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Target Employee Plan, except as required to comply with any Target Employee Plan as in effect on the date of this Agreement or (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Target Employee Plan;
(f) except pursuant to agreements that are in effect as of the date hereof and previously disclosed to Purchaser, directly or indirectly purchase, redeem or otherwise acquire any shares of Target Common Stock or any shares of capital stock or other interests in the Subsidiaries of Target or any other securities thereof or any rights, warrant or options to acquire any such shares or other securities (which restriction shall not restrict any cashless exercise or similar transaction pursuant to any Options or other awards issued under an Target Employee Plan outstanding as of the date of this Agreement)Agreement under any Target Employee Plan; or add any new members to the Board of Managers of Target;
(gq) acquire Revalue any of its assets, including without limitation writing down the value of inventory or writing off notes or accounts receivable other than in the ordinary course of business and consistent with past practice;
(r) Take any action to accelerate, amend or change the vesting schedule of any Target Equity Securities or securities convertible or exchangeable into any Target Equity Securities, waive any repurchase rights, accelerate, amend any Target Equity Securities or securities convertible or exchangeable into any Target Equity Securities other than as required by mergerexisting agreements outstanding on the date hereof;
(s) Amend or change any other terms of Target Equity Securities or securities convertible or exchangeable into any Target Equity Securities except as may be required to give effect to the Redemption;
(t) Pay, consolidationdischarge or satisfy, acquisition in an amount in excess of stock $50,000 (in the aggregate) any claim, liability or assets obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), directly other than the payment, discharge or indirectly, any businesssatisfaction in the ordinary course of business of liabilities reflected or reserved against in the Target Financial Statements;
(hu) other than pursuant to Contracts in effect as of the date hereof, sell, lease, license (as licensor or licensee), assign, encumber or otherwise transfer in one transaction or any series of related transactions, assets, property or rights;
(i) incur, assume or guarantee any Indebtedness for borrowed money or issue or sell any debt securities or warrants or other rights to acquire debt securities or enter into any keep-well or other arrangements to maintain the financial condition of any other Person;
(j) make any loan, advance or capital contribution to or investment in any Person, other than loans, advances or capital contributions to or investments (i) in its Subsidiaries or pursuant to Contracts in effect at the date hereof or (ii) in accordance with the Budget;
(k) make or change any election, change an annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter Enter into any closing agreement, settle any Tax claim or assessment relating to Target or any of its Subsidiaries, surrender any right to claim a refund in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to Target or any in respect of its Subsidiaries, or take any other similar action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action would have the effect of increasing the Tax liability of Target or any of its Subsidiaries for any period ending after the Closing Date or decreasing any Tax attribute of Target or any of its Subsidiaries existing on the Closing DateTaxes;
(lv) take Enter into any action that wouldstrategic alliance, joint development or would reasonably be expected to, prevent joint marketing arrangement or materially impair or delay the ability of Target to consummate the transactions contemplated by this Agreementagreement;
(mw) enter intoFail to pay or otherwise satisfy its monetary obligations as they become due, amend, cancel, terminate, or grant any waiver except such as are being contested in respect of any Material Target Contractgood faith;
(nx) file Waive or commit to waive any registration statement under rights with a value in excess of $50,000 (in the Securities Act or an amendment to any Securities Act registration statementaggregate);
(oy) make Cancel, materially amend or renew any capital expenditures in any fiscal quarter exceeding the Budget for such fiscal quarter;
(p) enter into any hedging agreements whether or not insurance policy other than in the ordinary course of business consistent with past practicebusiness;
(qz) waive, release, assign, settle or compromise any claim, action or proceeding, other than waivers, releases, assignments, settlements or compromises not exceeding the amount reserved against in the Target Financial StatementsAlter, or otherwise pay, discharge or satisfy any claim, liability or obligation;
(r) enter into any “non-compete,” “non-solicit” commitment to alter, its interest in any corporation, association, joint venture, partnership or similar agreement that would materially restrict the businesses of Target business entity in which it directly or Purchaser following the Effective Time;
(s) enter into indirectly holds any closing agreement with respect to material Taxes, settle or compromise any material liability for Taxes, make, revoke or change any material Tax election, agree to any adjustment of any material Tax attribute, file or surrender any claim for a material refund of Taxes, execute or consent to any waiver extending the statutory period of limitations with respect to the collection or assessment of material Taxes, file any material amended Tax Return or obtain any material Tax ruling;
(t) enter into any new, or amend or otherwise alter any Affiliate Transaction or transaction that would be an Affiliate Transaction if such transaction occurred prior to interest on the date hereof; or
(aa) Take, or (u) agree in writing or commit otherwise to do take, any of the foregoingactions described in Sections 4.1(a) through (z) above, or any other action that could reasonably be expected to prevent Target from performing or cause Target not to perform its covenants hereunder.
Appears in 1 contract
Conduct of Business of Target. During the period from the date of ----------------------------- this Agreement to and continuing until the earlier of the termination of this Agreement or the Effective Time, except as provided in Section 5.1 of the Target Disclosure Schedule or as otherwise expressly contemplated or permitted in this Agreement or the Transaction Agreements and agrees (except to the extent Purchaser shall otherwise give its prior written consent, each of Target and its Subsidiaries shall: (iexpressly contemplated by this Agreement or as consented to in writing by the Acquiror) conduct to carry on its business in the usual, regular and ordinary course in substantially the same manner as previously conducted. Target further agrees to pay debts and consistent with the budget attached hereto as Exhibit B Taxes when due (the “Budget”) and in compliance in all material respects with applicable Laws; (ii) subject to good faith disputes over such debts or Taxes), to pay or perform its material other obligations when due; due (subject to Acquiror's consent to the filing of material Tax Returns if applicable), and (iii) to use its commercially all reasonable efforts consistent with past practices to: (A) practice and policies to preserve intact its present business organizationorganizations, (B) keep available the services of its present officers and employees, (C) employees and preserve in all material respects its relationships with customers, suppliers, distributors, joint venture partnerslicensors, licensees, and others having business dealings with which it has significant business dealingsit, to the end that its goodwill and ongoing businesses shall be unimpaired at the Effective Time. Target agrees to promptly notify Acquiror of any event or occurrence not in the ordinary course of its business, and (D) preserve in all material respects of any Target Intellectual Propertyevent that could have a Material Adverse Effect on Target. Without limiting the generality of the foregoing, except as provided in Section 5.1 of the Target Disclosure Schedule or as expressly contemplated or permitted by this Agreement or the Transaction AgreementsAgreement, Target shall not, without the prior written consent of Purchaser, during the period from the date of this Agreement to the Effective Time, Target shall not, and shall not permit any of its Subsidiaries to, do any of the followingAcquiror:
(a) amend the Target Charter DocumentsCause or permit any amendments to its Articles of Incorporation or Bylaws;
(b) split, combine, subdivide or reclassify any shares of its capital stock or other equity interests or declare, set aside Declare or pay any dividend dividends on or make any other distribution distributions (whether in cash, stock or property or any combination thereofproperty) in respect of any of its capital stock, except for dividends paid to Target or split, combine or reclassify any of its Subsidiaries by capital stock or issue or authorize the issuance of any Subsidiary that isother securities in respect of, in lieu of or in substitution for shares of its capital stock, or repurchase or otherwise acquire, directly or indirectly, wholly-owned by Target;
(c) adopt a plan or agreement of complete or partial liquidation, dissolution, winding up, merger, consolidation, amalgamation, restructuring, recapitalization or other material reorganization;
(d) issue, deliver or sell, or authorize the issuance, delivery or sale of, any shares of its capital stock stock;
(c) Enter into any Material Contract or violate, amend or otherwise modify or waive any of any class or other equity interests or any securities convertible into or exercisable for, or any rights, warrants or options to acquire, any such capital stock or other equity interests, other than the issuances of shares of Target Common Stock upon the exercise of Options outstanding on the date hereof or issued after the date hereof in compliance with the terms of this Agreement in accordance with their present terms;
(e) except as required to ensure that any Target Employee Plan in effect on the date of this Agreement is not then out of compliance with applicable Law or as specifically required or permitted pursuant to this Agreement or as provided in the Target Disclosure Schedule, (A) adopt, enter into, terminate or amend any Target Employee Plan, (B) increase in any manner the compensation or benefits of, or pay any bonus to, any employee of Target or its Subsidiaries, except as required by a Target Employee Plan or an employment agreement with an employee of Target or its Subsidiaries, (C) pay or provide to any employee of Target or its Subsidiaries any benefit not provided for under a Target Employee Plan as in effect on the date of this Agreement or as permitted by clause (B) above, (D) grant any awards under any Target Employee Plan (including the grant of stock or other equity options, stock or other equity appreciation rights, performance units, restricted stock or other equity, stock or other equity purchase rights or other stock or other equity-based or stock-related awards) or remove existing restrictions in any Target Employee Plan or awards made thereunder, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Target Employee Plan, except as required to comply with any Target Employee Plan as in effect on the date of this Agreement or (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Target Employee Plan;
(f) except pursuant to agreements that are in effect as of the date hereof and previously disclosed to Purchaser, directly or indirectly purchase, redeem or otherwise acquire any shares of Target Common Stock or any shares of capital stock or other interests in the Subsidiaries of Target or any other securities thereof or any rights, warrant or options to acquire any such shares or other securities (which restriction shall not restrict any cashless exercise or similar transaction pursuant to any Options or other awards issued under an Target Employee Plan outstanding as of the date of this Agreement);
(g) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any business;
(h) Material Contract other than pursuant to Contracts in effect as of the date hereof, sell, lease, license (as licensor or licensee), assign, encumber or otherwise transfer in one transaction or any series of related transactions, assets, property or rights;
(i) incur, assume or guarantee any Indebtedness for borrowed money or issue or sell any debt securities or warrants or other rights to acquire debt securities or enter into any keep-well or other arrangements to maintain the financial condition of any other Person;
(j) make any loan, advance or capital contribution to or investment in any Person, other than loans, advances or capital contributions to or investments (i) in its Subsidiaries or pursuant to Contracts in effect at the date hereof or (ii) in accordance with the Budget;
(k) make or change any election, change an annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to Target or any of its Subsidiaries, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to Target 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, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action would have the effect of increasing the Tax liability of Target or any of its Subsidiaries for any period ending after the Closing Date or decreasing any Tax attribute of Target or any of its Subsidiaries existing on the Closing Date;
(l) take any action that would, or would reasonably be expected to, prevent or materially impair or delay the ability of Target to consummate the transactions contemplated by this Agreement;
(m) enter into, amend, cancel, terminate, or grant any waiver in respect of any Material Target Contract;
(n) file any registration statement under the Securities Act or an amendment to any Securities Act registration statement;
(o) make any capital expenditures in any fiscal quarter exceeding the Budget for such fiscal quarter;
(p) enter into any hedging agreements whether or not in the ordinary course of business consistent with past practice;
(qd) waiveIssue, releasedeliver or sell or authorize or propose the issuance, assigndelivery or sale of, settle or compromise purchase or propose the purchase of, any shares of its capital stock or securities convertible into, or subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating it to issue any such shares or other convertible securities;
(e) Transfer or license to any person or entity, or otherwise extend, amend or modify any rights to, Target Intellectual Property, other than the grant of nonexclusive licenses in the ordinary course of business consistent with past practice;
(f) Enter into or amend any agreements pursuant to which any third party is granted exclusive marketing, manufacturing or other exclusive rights of any type or scope with respect to any of Target's products or technology;
(g) Sell, lease, license or otherwise dispose of or encumber any of its properties or assets that are material, individually or in the aggregate, to its business, taken as a whole;
(h) Incur or commit to incur any indebtedness for borrowed money or guarantee any such indebtedness or issue or sell any debt securities or guarantee any debt securities of others;
(i) Enter into any operating lease requiring payments in excess of $5,000 in the aggregate;
(j) Pay, discharge or satisfy in an amount in excess of $5,000 in any one case, or $10,000 in the aggregate, any claim, action liability or proceedingobligation (absolute, accrued, asserted or unasserted, contingent or otherwise) arising other than in the ordinary course of business, other than waiversthe payment, releases, assignments, settlements discharge or compromises not exceeding the amount satisfaction of liabilities reflected or reserved against in the Target Financial Statements, or otherwise pay, discharge or satisfy any claim, liability or obligation;
(rk) Incur or commit to incur any capital expenditures in excess of $5,000 in the aggregate;
(l) Terminate or reduce the amount of any insurance coverage provided by existing insurance policies;
(m) Terminate or waive any right of substantial value, other than in the ordinary course of business;
(n) Take any of the following actions: (i) increase or agree to increase the compensation payable or to become payable to its officers or employees, except for increases in salary or wages of nonofficer employees in the ordinary course of business and in accordance with past practices, (ii) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, any officer or employee, (iii) enter into any “non-compete,” “non-solicit” collective bargaining agreement, (iv) establish, adopt, enter into or similar agreement amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any directors, officers or employees, or (v) pay any bonus to any of its officers or employees; provided, however, that would materially restrict the businesses foregoing provisions of Target or Purchaser following the Effective Timethis subsection shall not apply to any amendments to employee benefit plans described in ERISA Section 3(3) that may be required by law;
(so) enter into Commence a lawsuit or arbitration proceeding other than for the routine collection of bills or for a breach of this Agreement;
(p) Acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any closing agreement with respect other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to material Taxesacquire any assets that are material, settle individually or compromise in the aggregate, to its business, taken as a whole;
(q) Make any material liability for TaxesTax election other than in the ordinary course of business and consistent with past practice, make, revoke or change any material Tax election, agree to adopt any adjustment Tax accounting method other than in the ordinary course of business and consistent with past practice, change any material Tax attributeaccounting method, file any Tax return (other than any estimated tax returns, immaterial information returns, payroll tax returns or surrender sales tax returns) or any amendment to a Tax return, enter into any closing agreement, settle any Tax claim for a material refund of Taxesor assessment, execute or consent to any waiver extending Tax claim or assessment, provided that Acquiror shall not unreasonably withhold or delay approval of any of the statutory period foregoing actions;
(r) Take any action that would be reasonably expected to interfere with Acquiror's ability to account for the Merger as a pooling of limitations interests;
(s) Revalue any of its assets, including without limitation writing down the value of inventory or writing off notes or accounts receivable other than in the ordinary course of business consistent with respect to the collection or assessment of material Taxes, file any material amended Tax Return or obtain any material Tax ruling;past practice; or
(t) enter into any new, Take or amend agree in writing or otherwise alter any Affiliate Transaction or transaction that would be an Affiliate Transaction if such transaction occurred prior to the date hereof; or (u) agree or commit to do take any of the foregoingactions described in Sections 5.1(a) through (s) above, or any action that would make any of Target's representations or warranties contained in this Agreement untrue or incorrect or prevent it from performing or cause it not to perform its covenants hereunder.
Appears in 1 contract
Sources: Merger Agreement (Hei Inc)
Conduct of Business of Target. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, and except (i) as contemplated or permitted by the terms of this Agreement, (ii) as provided in Section 5.1 4.1 of the Target Disclosure Schedule or as otherwise expressly contemplated or permitted in this Agreement or the Transaction Agreements and except (iii) to the extent Purchaser otherwise previously consented to by Acquiror in writing (which consent shall otherwise give its prior written consentbe withheld or delayed in Acquiror's sole discretion), each of Target and its Subsidiaries shall: (i) conduct each Target Subsidiary shall carry on its business in the usual, regular and ordinary course and consistent with course, in substantially the budget attached hereto same manner as Exhibit B (the “Budget”) heretofore conducted and in compliance in with all material respects with applicable Laws; (ii) pay or perform its material obligations when due; laws and (iii) regulations, and use its commercially reasonable efforts consistent with past practices to: and policies to (Aa) preserve intact its present business organization, (Bb) keep available the services of its present officers and employees, employees and (Cc) preserve in all material respects its relationships with customers, suppliers, distributors, joint venture partnerslicensors, licensees, and others with which it has significant business dealings. In addition, Target will promptly notify Acquiror of any event that it reasonably believes could have a Material Adverse Effect on Target or the Surviving Corporation. In addition, except as contemplated or permitted by the terms of this Agreement and (D) preserve in all material respects any Target Intellectual Property. Without limiting the generality of the foregoing, except as provided in Section 5.1 4.1 of the Target Disclosure Schedule or as expressly contemplated or permitted by this Agreement or the Transaction AgreementsSchedule, without the prior written consent of PurchaserAcquiror (which consent shall be withheld or delayed in Acquiror's sole discretion), during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Target shall notnot do, cause or permit, and shall not permit any of its Subsidiaries toto do, do cause or permit any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted pursuant to any employee, consultant, director or other stock plans, including the Target Charter DocumentsEquity Plans, or authorize cash payments in exchange for any options granted under any of such plans;
(b) splitGrant any severance or termination pay, combine, subdivide or reclassify any shares of its capital stock or other equity interests economic rights, to any officer or declareemployee, except pursuant to written agreements outstanding or published policies existing on the date hereof and as previously disclosed in writing or made available to Acquiror, or adopt any new severance plan;
(c) Transfer or license to any person or otherwise extend, amend or modify in any material respect any rights to, or enter into grants to future rights related to, any Target Intellectual Property, except non-exclusive licenses to end users in the ordinary course of business consistent with past practices;
(d) Declare, set aside or pay any dividend dividends on or make any other distribution distributions (whether in cash, stock stock, equity securities or property or any combination thereofproperty) in respect of its any capital stock (other than distributions from a Target Subsidiary to Target) or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, except for dividends paid to Target redeem or any of its Subsidiaries by any Subsidiary that isotherwise acquire, directly or indirectly, wholly-owned by Targetany shares of capital stock of Target or the Target Subsidiaries, except repurchases of unvested shares at cost or lower in connection with the termination of the employment relationship with any employee pursuant to and in accordance with the express terms of a stock option purchase agreement or employment agreement in effect on the date hereof;
(cf) adopt a plan or agreement of complete or partial liquidationIssue, dissolutiondeliver, winding up, merger, consolidation, amalgamation, restructuring, recapitalization or other material reorganization;
(d) issue, deliver or sell, authorize, pledge or authorize the issuance, delivery or sale of, otherwise encumber any shares of its capital stock of any class or other equity interests or any securities convertible into or exercisable forshares of capital stock, or any subscriptions, rights, warrants or options to acquire, acquire any such shares of capital stock or any securities convertible into shares of capital stock, including under any of the Target Equity Plans, or enter into other equity interestsagreements or commitments of any character obligating it to issue any such shares or convertible securities, other than the issuances issuance, delivery and/or sale of shares of Target Common Stock upon pursuant to the exercise for cash of Options Target options or stock purchase rights outstanding on the date hereof or issued after the date hereof in compliance with the terms of this Agreement in accordance with their present terms;
(e) except as required to ensure that any Target Employee Plan in effect on the date of this Agreement is not then out of compliance with applicable Law or as specifically required or permitted pursuant to this Agreement or as provided in under the Target Disclosure Schedule, (A) adopt, enter into, terminate or amend any Target Employee Plan, (B) increase in any manner the compensation or benefits of, or pay any bonus to, any employee of Target or its Subsidiaries, except as required by a Target Employee Plan or an employment agreement with an employee of Target or its Subsidiaries, (C) pay or provide to any employee of Target or its Subsidiaries any benefit not provided for under a Target Employee Plan as in effect on the date of this Agreement or as permitted by clause (B) above, (D) grant any awards under any Target Employee Plan (including the grant of stock or other equity options, stock or other equity appreciation rights, performance units, restricted stock or other equity, stock or other equity purchase rights or other stock or other equity-based or stock-related awards) or remove existing restrictions in any Target Employee Plan or awards made thereunder, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Target Employee Plan, except as required to comply with any Target Employee Plan as in effect on the date of this Agreement or (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Target Employee Plan;
(f) except pursuant to agreements that are in effect as of the date hereof and previously disclosed to Purchaser, directly or indirectly purchase, redeem or otherwise acquire any shares of Target Common Stock or any shares of capital stock or other interests in the Subsidiaries of Target or any other securities thereof or any rights, warrant or options to acquire any such shares or other securities (which restriction shall not restrict any cashless exercise or similar transaction pursuant to any Options or other awards issued under an Target Employee Plan outstanding Equity Plans as of the date of this Agreement);
(g) acquire (by mergerCause, consolidationpermit or propose any amendments to the Certificate of Incorporation, acquisition Bylaws or similar organizational documents of stock Target or assets or otherwise), directly or indirectly, any businessTarget Subsidiary;
(h) other than pursuant Acquire, or propose or agree to Contracts acquire, by merging or consolidating with, or by purchasing any equity interest in effect as or a material portion of the date hereofassets of, sellor by any other manner, leaseany business or any corporation, license (as licensor partnership, association or licensee), assign, encumber other business organization or division thereof or otherwise transfer acquire or agree to acquire any assets or capital stock that is material, individually or in one transaction the aggregate, to the business of Target or the Target Subsidiaries or enter into any series of related transactionsmaterial joint ventures, assets, property strategic partnerships or rightsalliances;
(i) incurSell, assume lease, license, pledge, encumber or guarantee any Indebtedness for borrowed money or issue or sell any debt securities or warrants or other rights to acquire debt securities or enter into any keep-well or other arrangements to maintain the financial condition otherwise dispose of any other Person;
(j) make any loan, advance properties or capital contribution to or investment in any Person, other than loans, advances or capital contributions to or investments (i) in its Subsidiaries or pursuant to Contracts in effect at the date hereof or (ii) in accordance with the Budget;
(k) make or change any election, change an annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to Target or any of its Subsidiaries, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to Target 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, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action would have the effect of increasing the Tax liability assets of Target or any of its Subsidiaries for any period ending after the Closing Date or decreasing any Tax attribute of Target or any of its Subsidiaries existing on the Closing Date;
(l) take any action that wouldSubsidiaries, or would reasonably be expected to, prevent or materially impair or delay the ability of Target to consummate the transactions contemplated by this Agreement;
(m) enter into, amend, cancel, terminate, or grant any waiver in respect of any Material Target Contract;
(n) file any registration statement under the Securities Act or an amendment to any Securities Act registration statement;
(o) make any capital expenditures in any fiscal quarter exceeding the Budget for such fiscal quarter;
(p) enter into any hedging agreements whether or not except in the ordinary course of business consistent with past practice, or enter into a new line of business;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Target or any Target Subsidiary, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with Target's financing of ordinary-course trade payables consistent with past practice and not to exceed $2,000,000 in the aggregate (it being understood and agreed that Target shall not borrow, draw down upon, request any letters of credit or otherwise incur any indebtedness obligations under that certain Loan and Security Agreement dated February 26, 1993 (as amended) between Target and Silicon Valley Bank or any amendments, modifications, continuations or replacements thereto);
(k) Except as set forth in Sections 1.6(d)(iv), 1.6(e) and 5.15(b), adopt, amend or terminate any employee benefit plan or employee stock purchase or employee stock option plan, including the Target Equity Plans, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will" without severance), pay any special bonus or special remuneration to any director or executive officer, or except in the ordinary course of business consistent with past practice, increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of, its directors, officers, employees or consultants, or change in any material respect any management policies or procedures;
(l) Enter into, modify, amend or terminate any material contract or agreement to which Target or any Target Subsidiary is a party or waive, release or assign any material rights or claims thereunder;
(i) Other than in the ordinary course of business and in each case after consultation with Acquiror (except in cases of closing out sales in the Pipeline in the ordinary course of business consistent with past practice), enter into any contracts, agreements or obligations relating to the distribution, sale, license or marketing by third parties of Products or other products licensed by Target or any Target Subsidiary or (ii) enter into any agreement that provides for payments by Target in excess of $200,000;
(n) Revalue any of its assets or, except as required by GAAP, change its accounting methods, principles or practices as in effect as of the Target Balance Sheet Date;
(o) Engage in any action or enter into any transaction or permit any action to be taken or transaction to be entered into that could reasonably be expected to (i) delay in any material respect the consummation of, or otherwise adversely affect, any of the transactions contemplated by this Agreement, or (ii) increase the likelihood that a Governmental Entity will seek to object to or challenge the consummation of any of the transactions contemplated by this Agreement;
(p) Fail to make in a timely matter any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(q) waive, release, assign, settle Make any capital expenditure in excess of (i) $75,000 individually or compromise any claim, action or proceeding, other than waivers, releases, assignments, settlements or compromises not exceeding the amount reserved against (ii) $225,000 in the Target Financial Statementsaggregate, or otherwise pay, discharge or satisfy any claim, liability or obligation;
(r) enter taking into any “non-compete,” “non-solicit” or similar agreement that would materially restrict account all capital expenditures between the businesses date of Target or Purchaser following this Agreement and the Effective Time;
(sr) Make or change any Tax election, adopt or change any accounting method in respect of Taxes, enter into any closing agreement with agreement, consent to any extension or waiver of the limitations period applicable to any claim or assessment in respect to material of Taxes, or settle or compromise any material liability for TaxesTax liability; or
(s) Agree in writing to or otherwise take any of the actions described in Clauses (a) through (r) above. Notwithstanding the foregoing provisions of this Section 4.1, make, revoke or change any material Tax election, agree to any adjustment of any material Tax attribute, file or surrender any claim for a material refund of Taxes, execute or consent to any waiver extending the statutory period of limitations with respect to the collection or assessment of material Taxes, file any material amended Tax Return or obtain any material Tax ruling;Target may:
(t) Continue negotiations with the entities (other than Silicon Valley Bank) specifically listed in Section 2.8(i) of the Target Disclosure Schedule, and enter into any newcommercial agreements with such entities in connection with such negotiations, in each case with the consent of Acquiror (such consent not to be unreasonably withheld so long as such commercial agreements do not contain terms and conditions (i) that are manifestly adverse to Target or amend (ii) that adversely impact or otherwise alter conflict with Acquiror's current distribution and partnership relationships); provided, that Target shall actively and consistently keep Acquiror apprised of the status of negotiations and shall promptly deliver to Acquiror all information in respect of such negotiations that is reasonably requested by Acquiror as well as a true and correct copy of any Affiliate Transaction or transaction that would be an Affiliate Transaction if such transaction occurred prior to the date hereoffinal executed documentation; or and
(u) agree or commit to do any Continue negotiations and enter into a credit facility with Silicon Valley Bank; provided, however, that such credit facility (i) shall be on the terms and conditions as set forth in Exhibit 2.8(i) of the Target Disclosure Schedule or on terms and conditions that are not materially less favorable to Target and (ii) notwithstanding the foregoing, shall provide for the early prepayment and/or termination thereof without penalty, termination fee or similar charges or costs in the event of the occurrence of the Effective Time; and provided further, that Target shall actively and consistently keep Acquiror apprised of the status of negotiations with Silicon Valley Bank and shall promptly deliver to Acquiror all information in respect of such negotiations that is reasonably requested by Acquiror as well as a true and correct copy of any final executed documentation.
Appears in 1 contract
Sources: Merger Agreement (Vitalcom Inc)