Conduct of Business Pending the Effective Time. SECTION 5.01. Conduct of Business by the Company Pending the Effective Time. The Company covenants and agrees that, between the date of this Agreement and the earlier of the termination of this Agreement pursuant to Article VIII hereof or the Effective Time, except as set forth on Schedule 5.01 of the Company Disclosure Schedule or unless Parent shall (in its sole discretion) otherwise agree in writing, the businesses of the Company and the Subsidiaries shall be conducted only in, and the Company and the Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement or as expressly set forth on Schedule 5.01 of the Company Disclosure Schedule, neither the Company nor any of the Subsidiaries shall, between the date of this Agreement and the earlier of the termination of this Agreement pursuant to Article VIII hereof or the Effective Time, directly or indirectly, do, propose or commit to do, or authorize any of the following, without the prior written consent of Parent: (a) amend, repeal or otherwise change the Company's or any of its Subsidiary's Organizational Documents; (b) issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any Shares or any shares of capital stock of any class of the Company or the Subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any Shares or shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary (except, subject to Section 2.04(a) hereof, for the issuance of shares of Common Stock pursuant to the exercise, in accordance with their respective terms, of employee stock options or other awards outstanding on the date hereof as set forth on Schedule 3.03-1 of the Company Disclosure Schedule); (c) transfer, lease, license, sell, mortgage, pledge, dispose of or encumber any assets of the Company or any Subsidiary, except for sales of finished goods, invoicing under cost-plus contracts and invoicing for the achievement of milestones under contracts, each in the ordinary course of business and in a manner consistent with past practice; (d) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except that a wholly-owned Subsidiary may declare and pay a dividend to its parent; (e) reclassify, combine, split or subdivide, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock; (i) acquire (including, without limitation, by merger, consolidation, or acquisition of capital stock or assets) (A) any corporation, partnership, other business organization or any division thereof or (B) any assets outside the ordinary course of business; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except in the ordinary course of business to vendors and/or employees and consistent with past practice; (iii) enter into any Material Contract, other than in the ordinary course of business, consistent with past practice; (iv) authorize any single capital expenditure in excess of $50,000 or capital expenditures, in the aggregate, in excess of $250,000 for the Company and the Subsidiaries taken as a whole; or (v) enter into or amend in any material respect any Material Contract or any contract, agreement, commitment or arrangement with respect to any matter set forth in this subsection (f); (g) increase (except salary increases in the ordinary course of business and consistent with past practice) the compensation payable or to become payable to its officers or employees generally or to any employee with an annual salary in excess of $90,000, or grant any bonus, severance, change of control or termination pay or material benefits to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company or any Subsidiary, or establish, adopt, enter into, terminate or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee; (h) take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivable); (i) pay, discharge or otherwise satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities as reflected or reserved against in the Company 2002 Balance Sheet, or subsequently incurred in the ordinary course of business and consistent with past practice; (j) fail to comply in all material respects with all applicable Laws; (k) fail to pay and discharge any Taxes on the Company (or any of its Subsidiaries) or against any of its properties or assets before the same shall become delinquent and before penalties accrue thereon, except to the extent and so long as the same are being contested in good faith and by appropriate proceedings; (l) fail to perform any of its material obligations under any of the Material Contracts or terminate any of the Material Contracts; or (m) settle or compromise any material claim or litigation.
Appears in 3 contracts
Sources: Merger Agreement (Crane Co /De/), Merger Agreement (Signal Technology Corp), Merger Agreement (Crane Co /De/)
Conduct of Business Pending the Effective Time. SECTION 5.01. Conduct of Business by the Company Pending the Effective Time. The Company TPC covenants and agrees that, between the date of this Agreement and the earlier of the termination of this Agreement pursuant to Article VIII hereof or the Effective Time, except as set forth on Schedule 5.01 of the Company Disclosure Schedule or unless Parent PHI shall (in its sole discretion) otherwise agree in writing, : (a) the businesses of the Company TPC and the Subsidiaries shall be conducted only in, and the Company TPC and the Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and the Company (b) TPC shall use its reasonable best efforts to preserve substantially intact its the business organizationorganization of TPC and the Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company TPC and the Subsidiaries and to preserve the current relationships of the Company TPC and the Subsidiaries with customers, suppliers and other persons with which the Company TPC or any Subsidiary has significant business relations; and (c) TPC shall maintain the assets of TPC and the Subsidiaries in good condition and repair, reasonable wear and tear accepted, and in material compliance with applicable governmental and regulatory agency requirements, and shall use its best efforts to maintain insurance with respect thereto of the same types and amounts currently in force. By way of amplification and not limitation, except as expressly contemplated or permitted by this Agreement or as expressly set forth on Schedule 5.01 of SCHEDULE 5, or to the Company Disclosure Scheduleextent that PHI shall otherwise consent in writing, neither the Company TPC nor any of the Subsidiaries Material Subsidiary shall, between the date of this Agreement and the earlier of the termination of this Agreement pursuant to Article VIII hereof or the Effective Time, directly or indirectly, indirectly do, or propose or commit to do, or authorize any of the following, without the prior written consent of Parent:
(a) amend, repeal amend or otherwise change the Company's its charter or any of its Subsidiary's Organizational Documentsbylaws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant or grant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any Shares or (i) any shares of capital stock of any class of the Company TPC or the Subsidiariesany Subsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any Shares or shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company TPC or any Subsidiary (except, subject to Section 2.04(a) hereof, except for the issuance of shares of Common Stock Shares issuable pursuant to the exercise, in accordance with their respective terms, of employee stock options or other awards outstanding on the date hereof as set forth on Schedule 3.03-1 or upon conversion of the Company Disclosure Schedule);
shares of Class B Common Stock) or (cii) transfer, lease, license, sell, mortgage, pledge, dispose of or encumber any assets of and properties material to TPC and the Company or any SubsidiarySubsidiaries, taken as a whole, except for (i) sales of finished goodsnatural gas, invoicing under cost-plus contracts and invoicing for the achievement of milestones under contracts, each in the ordinary course of business and in a manner consistent with past practice, by the marketing business of TPC or (ii) pledges of assets and properties required by any financing document to which TPC or a Subsidiary is a party on the date hereof;
(dc) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stockstock (except for such declarations, except that a whollyset-owned asides, dividends and other distributions made from any Subsidiary may declare and pay a dividend to its parentTPC);
(ed) reclassify, combine, split or subdivide, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(i) acquire (including, without limitation, by merger, consolidation, consolidation or acquisition of capital stock or assets)
(A) any corporation, partnership, partnership or other business organization or any division thereof or (B) any assets outside material amount of assets, except for acquisitions of natural gas, in the ordinary course of business, by the marketing business of TPC; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except borrowing in the ordinary course of business pursuant to vendors and/or employees and consistent with past practiceany existing revolving credit agreement of TPC; or (iii) enter into any Material Contract, other than in the ordinary course of business, consistent with past practice; (iv) authorize any single capital expenditure in excess of $50,000 or capital expenditures, in the aggregate, in excess of $250,000 for the Company and the Subsidiaries taken as a whole; or (v) enter into or amend in any material respect any Material Contract or any contract, agreement, commitment or arrangement with respect to any matter set forth in this subsection paragraph (fe);
(gf) increase (except salary increases in the ordinary course of business and consistent with past practice) the compensation payable or to become payable to its officers or employees generally or to any employee with an annual salary in excess of $90,000to, or grant any bonus, severance, change of control severance or termination pay to, its officers, employees, directors or material benefits toconsultants, except pursuant to existing contractual arrangements, or enter into any employment employment, consulting or severance agreement with, any director, officer or other employee or consultant of the Company TPC or any Subsidiary, or establish, adopt, enter into, terminate into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer officer, employee or employeeconsultant;
(h) take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivable);
(ig) pay, discharge or otherwise satisfy any claim, liability or obligation (absolute, absolute or accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities as reflected or reserved against in the Company 2002 Balance Sheetconsolidated balance sheet of TPC and the consolidated Subsidiaries as at December 31, 1996, including the notes thereto, or subsequently incurred in the ordinary course of business and consistent with past practice; or
(h) enter into any collective bargaining agreements or change accounting practices;
(i) make any contribution to the TPC ESOP in excess of the amount necessary to amortize existing loans from TPC over the remaining portion of the original seven year period of such loans;
(j) fail amend in any material respect any contract or agreement material to comply in all TPC and the Subsidiaries, taken as a whole, or terminate any such material respects with all applicable Laws;contract or agreement prior to the expiration of the term thereof; or
(k) fail agree to pay and discharge any Taxes on the Company (take in writing, or any of its Subsidiaries) or against any of its properties or assets before the same shall become delinquent and before penalties accrue thereonotherwise, except to the extent and so long as the same are being contested in good faith and by appropriate proceedings;
(l) fail to perform any of its material obligations under any of the Material Contracts actions described in paragraphs (a) through (j) of this Article V or terminate any action which would result in any of the Material Contracts; or
conditions to the Offer not being satisfied (m) settle or compromise any material claim or litigationother than as contemplated by this Agreement).
Appears in 2 contracts
Sources: Merger Agreement (TPC Corp), Merger Agreement (Pacificorp Holdings Inc)
Conduct of Business Pending the Effective Time. SECTION 5.01. Conduct of Business by At all times from the Company Pending the Effective Time. The Company covenants and agrees that, between the date execution of this Agreement and the earlier of the termination of this Agreement pursuant to Article VIII hereof or until the Effective Time, except as set forth on Schedule 5.01 in Section 6.1 of the Company Seller Disclosure Schedule or unless Parent shall (as expressly permitted elsewhere in its sole discretion) otherwise agree in writingthis Agreement, the businesses of the Company and the Subsidiaries shall be conducted only inSeller shall, and the Company and the Subsidiaries shall not take any action except incause each of its subsidiaries to, conduct its business in the ordinary course of business and in a manner consistent with past practice; practice and the Company shall in compliance in all material respects with all applicable Laws and regulations and to use its commercially reasonable best efforts to preserve substantially intact its business organization, to organizations and goodwill and keep available the services of the current officers, its officers and employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of with those Persons having business dealings with the Company and Seller. Furthermore, the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relations. By way of amplification and Seller agrees not limitation, except as contemplated by this Agreement or as expressly set forth on Schedule 5.01 of the Company Disclosure Schedule, neither the Company nor to take any of the Subsidiaries shall, between the date of this Agreement following actions (and the earlier of the termination of this Agreement pursuant to Article VIII hereof or the Effective Time, directly or indirectly, do, propose or commit cause its subsidiaries not to do, or authorize any of the following, take such actions) without the prior written consent of Parent:the Parent (which will not be unreasonably withheld or delayed):
(a) amendamend its Certificate of Incorporation or Bylaws, repeal or otherwise change the Company's or any and shall cause each of its Subsidiary's Organizational Documentssubsidiaries not to amend its charter, bylaws, joint venture documents, partnership agreements or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any Shares or any shares of capital stock of any class of the Company or the Subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any Shares or shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary (except, subject to Section 2.04(a) hereof, for the issuance of shares of Common Stock pursuant to the exercise, in accordance with their respective terms, of employee stock options or other awards outstanding on the date hereof as set forth on Schedule 3.03-1 of the Company Disclosure Schedule);
(c) transfer, lease, license, sell, mortgage, pledge, dispose of or encumber any assets of the Company or any Subsidiary, except for sales of finished goods, invoicing under cost-plus contracts and invoicing for the achievement of milestones under contracts, each in the ordinary course of business and in a manner consistent with past practice;
(d) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except that a wholly-owned Subsidiary may declare and pay a dividend to its parent;
(e) reclassify, combine, split or subdivide, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(i) acquire (including, without limitation, by merger, consolidation, or acquisition of capital stock or assets)
(A) except pursuant to the exercise of the Seller Stock Options, issue any corporationshares of its capital stock (other than up to 525,926 shares of restricted stock issued in connection with 2006 year-end bonuses), partnershipeffect any share split, share combination, reverse share split, share dividend, recapitalization or other business organization or any division thereof similar transaction, or (B) any assets outside the ordinary course of business; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except in the ordinary course of business to vendors and/or employees and consistent with past practice; (iii) enter into any Material Contract, other than in the ordinary course of business, consistent with past practice; (iv) authorize any single capital expenditure in excess of $50,000 or capital expenditures, in the aggregate, in excess of $250,000 for the Company and the Subsidiaries taken as a whole; or (v) enter into or amend in any material respect any Material Contract or any contract, agreement, commitment or arrangement with respect to any matter set forth in this subsection (f);
(g) increase (except salary increases grants of Seller Stock Options to new hires in the ordinary course of business and consistent with past practicepractice (up to, in the aggregate, Seller Stock Options for 250,000 shares of Seller Common Stock), grant, confer or award any option, right, warrant, deferred stock unit, conversion right or other right not existing on the date hereof to acquire any of its shares of capital stock (whether or not pursuant to existing Seller Stock Plans);
(c) except to the extent required under existing plans or arrangements set forth in Section 5.13(a) of the Seller Disclosure Schedule or the Seller Change in Control Severance Pay and Retention Bonus Plan as in effect on the date hereof and subject to the limitations referenced in Section 7.4(d) (and without giving any retention awards in addition to those previously disclosed to Parent) (A) increase any compensation payable or (other than in the ordinary course of business consistent with past practice to become payable to its officers or employees generally or to any employee with an annual salary in excess of $90,000, or grant any bonus, severance, change of control or termination pay or material benefits tonon-Key Personnel) of, or enter into or amend any employment or severance agreement withwith (or pay any amounts under any such agreements not otherwise due to), any director, officer employee or other employee of service provider, (B) except with respect to 2006 year-end bonuses, which shall not exceed in the Company or aggregate $14,000,000, grant any Subsidiary, or establish, adopt, enter into, terminate or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
bonuses (hx) take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice (including without limitation, grants of bonuses to new hires), to any of its employees (other than key personnel and directors), or (y) to any of its Key Personnel or directors, (C) adopt any new employee benefit plan (including any stock option, stock benefit or stock purchase plan) or amend any existing employee benefit plan in any material respect, or accelerate the vesting of any compensation (including equity-based awards) for the benefit of any current or former employee or other service provider, or (D) except as set forth in Section 6.1(c) of the Seller Disclosure Schedule, provide any funding for any rabbi trust or similar arrangement, (E) hire or otherwise employ any individual except in the ordinary course of business consistent with past practice so long as such individual is not a Key Personnel, or (F) terminate any Key Personnel other than for cause (including misconduct or breach of company policy);
(d) (A) declare, set aside or pay any dividend or make any other distribution or payment (whether in cash, stock or other property) with respect to any shares of Seller Common Stock or allow any of its subsidiaries to pay or make any such dividend, distribution or payment (other than dividends or distributions from a wholly owned Seller subsidiary to another Seller subsidiary or to the Seller) or (B) directly or indirectly redeem, purchase or otherwise acquire any of its shares of capital stock or any equity interest of any of the Seller subsidiaries, or make any commitment for any such action other than in connection with tax withholdings and exercise price settlement upon the exercise of Seller Stock Options or the lapse of restrictions on any Seller Restricted Shares;
(e) except as set forth in Section 6.1(e) of the Seller Disclosure Schedule, (A) sell, lease, sublease or license (including through a lease, sublease or license) or otherwise dispose of any material assets or properties or any of the capital stock of or other equity interests in any of its subsidiaries or (B) mortgage or pledge any of its property or assets or subject any such property or assets to any security interest or Encumbrance, other than, in the case of both (A) and (B) (and excluding leases, subleases and licenses of real property) in the ordinary course of business consistent with past practice, provided that they do not have a value in excess of $100,000 individually or $500,000 the aggregate;
(f) except with respect to ordinary course contracts with clients, customers, vendors or suppliers of Seller, enter into, or amend or terminate any Seller Contract (excluding contracts with respect to capital expenditures, which are governed by clause (g) below); provided that in no event shall Seller enter into any global procurement contracts which requires or involves the payment by Seller or any of its subsidiaries of more than $100,000 individually or $500,000 in the aggregate;
(g) make or commit to make capital expenditures in excess of $1,000,000 in the aggregate or $250,000 individually;
(h) merge with, enter into a consolidation with or acquire a material interest in any Person or acquire a substantial portion of the assets or business of any Person or any division or line of business thereof, or otherwise acquire (including, through leases, subleases and licenses of real property) any assets with a value of or for consideration in excess of $250,000 individually or $1,000,000 in the aggregate (including, with respect to accounting policies leases, subleases or procedures licenses of real property, rental or other payments); provided that no acquisitions that make it more difficult to obtain any approval or authorization required in connection with the transactions contemplated hereby under any Regulatory Law or that would reasonably be expected to prevent, delay, or impede consummation of the transactions contemplated hereby shall be permitted without consent;
(i) write down or write up or fail to write down or write up the value of any receivables or revalue any assets of the Seller other than in the ordinary course of business and in accordance with GAAP;
(j) create, incur or assume any indebtedness for borrowed money (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivablerefinancing or modifying any existing indebtedness);
(i) pay, discharge assume, guarantee, endorse or otherwise satisfy any claimbecome liable or responsible (whether, liability or obligation (absolutedirectly, accrued, asserted or unasserted, contingent contingently or otherwise)) for the indebtedness of another Person, other than enter into any agreement to maintain any financial statement condition of another Person or enter into any arrangement having the paymenteconomic effect of any of the foregoing, discharge except for (A) letters of credit or satisfaction, replacement letters of credit entered into in the ordinary course of business and consistent with past practice, practice under the Seller’s existing $30 million debt facility or (B) any indebtedness solely involving the Seller and/or any of liabilities as reflected its direct or reserved against in the Company 2002 Balance Sheet, or subsequently incurred in the ordinary course of business and consistent with past practice;
(j) fail to comply in all material respects with all applicable Lawsindirect wholly owned subsidiaries;
(k) fail make or change any material Tax election, file any material amended Tax Return, enter into any material closing agreement, settle or compromise any material liability with respect to pay and discharge Taxes, agree to any Taxes on the Company material adjustment of any Tax attribute, change (or make a request to any taxing authority to change) any of its Subsidiaries) methods of reporting income or against deductions for federal income tax purposes, file any claim for a material refund of its properties Taxes, or assets before consent to any extension or waiver of the same shall become delinquent and before penalties accrue thereon, except limitation period applicable to the extent and so long as the same are being contested in good faith and by appropriate proceedingsany material Tax claim or assessment;
(l) fail to perform change any of its material obligations under any methods, principles or practices of the Material Contracts or terminate any of the Material Contracts; orfinancial accounting currently in effect other than as required by GAAP;
(m) settle or compromise any material pending or threatened suit, action or claim arising out of or litigationin connection with any of the transactions contemplated by this Agreement for an amount in excess of $250,000;
(n) enter into or amend or otherwise modify any agreement or arrangement with Persons that are affiliates or are executive officers or directors of the Seller;
(o) except as otherwise permitted or contemplated by this Agreement, authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution of the Seller or any of its subsidiaries;
(p) knowingly take or fail to take any action in breach of this Agreement for the purpose of (or which would be reasonably expected to) materially delaying or preventing the consummation of the transactions contemplated hereby (other than as required by law); and
(q) agree in writing or otherwise to take any action inconsistent with any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (Digitas Inc), Merger Agreement (Digitas Inc)
Conduct of Business Pending the Effective Time. SECTION 5.01. Conduct of Business by the Company Pending the Effective Time. The Company covenants and agrees that, between the date of this Agreement and the earlier of the termination of this Agreement pursuant to Article VIII hereof or the Effective Time, except as set forth on Schedule 5.01 of the Company Disclosure Schedule or unless Parent shall (in its sole discretion) otherwise agree consent in writing, which consent shall not be unreasonably withheld, the businesses of the Company and the Subsidiaries shall be conducted only in, and the Company and the Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practicepractice or in furtherance of the transactions contemplated by this Agreement; and the Company shall use its all commercially reasonable best efforts to preserve substantially intact its business organization, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement or as expressly set forth on Schedule 5.01 of the Company Disclosure Schedule, neither the Company nor any of the Subsidiaries shall, between the date of this Agreement and the earlier of the termination of this Agreement pursuant to Article VIII hereof or the Effective Time, directly or indirectly, indirectly do, propose or commit to do, or authorize any of the following, without the prior written consent of Parent, which consent shall not be unreasonably withheld:
(a) amend, repeal or otherwise change the Company's or any of its Subsidiary's Organizational Documents;
(b) issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any Shares or any shares of any class of capital stock of any class of the Company or the Subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any Shares or shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary (except, subject to Section 2.04(a) 2.04 hereof, for the issuance of shares of Common Stock pursuant to the exerciseexercise or purchase, in accordance with their respective terms, of employee stock options or other awards outstanding on the date hereof as set forth on Schedule 3.03-1 of to the Company Disclosure Schedule, provided that if any payment is required in connection therewith, such payment shall be in cash or by net exercise, if permitted under the terms of such stock options);
(c) transfer, lease, license, sell, mortgage, pledge, dispose of or encumber any assets of the Company or any Subsidiary, except for sales of finished goods, invoicing under cost-plus contracts and invoicing for the achievement of milestones under contracts, each goods in the ordinary course of business and in a manner consistent with past practice;
(d) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except that a wholly-wholly owned Subsidiary may declare and pay a dividend to its parent;
(e) reclassify, combine, split or subdivide, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(i) acquire (including, without limitation, by merger, consolidation, consolidation or acquisition of capital stock or assets)
(A) any corporation, partnership, other business organization or any division thereof or (B) any assets outside the ordinary course of business; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except in the ordinary course of business to vendors and/or employees and consistent with past practice; (iii) enter into any Material Contract, other than in the ordinary course of business, consistent with past practice; (iv) authorize any single capital expenditure which is in excess of $50,000 25,000 or capital expenditures, in the aggregate, in excess of $250,000 200,000 for the Company and the Subsidiaries taken as a whole; or (viv) enter into or amend in any material respect any Material Contract or enter into or amend in any respect any contract, agreement, commitment or arrangement with respect to any matter set forth in this subsection (f);
(g) hire any employees or increase (except salary increases in the ordinary course of business and consistent with past practice) the compensation payable or to become payable to its officers or employees generally or to any employee with an annual salary in excess of $90,000150,000, or grant any bonus, severance, change of control severance or termination pay or material benefits to, or enter into any employment or severance agreement with, with any director, officer or other employee of the Company or any Subsidiary, or establish, adopt, enter into, terminate into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(h) take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivable);
(i) pay, discharge or otherwise satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities as reflected or reserved against in the Company 2002 2003 Balance Sheet, or subsequently incurred in the ordinary course of business and consistent with past practice;
(j) fail to comply in all material respects with all applicable Laws;
(k) fail to pay and discharge any Taxes on the Company (or any of its Subsidiaries) or against any of its properties or assets before the same shall become delinquent and before penalties accrue thereon, except to the extent and so long as the same are being contested in good faith and by appropriate proceedings;
(l) fail to perform any of its material obligations under any of the Material Contracts Contracts, or modify or terminate any of the Material Contracts; or
(m) settle or compromise any material claim claims or litigation.
Appears in 2 contracts
Sources: Merger Agreement (Computer Access Technology Corp), Merger Agreement (Lecroy Corp)
Conduct of Business Pending the Effective Time. SECTION 5.01. Conduct of Business by the Company Pending the Effective Time. The Company covenants and agrees that, between the date of this Agreement and the earlier of the termination of this Agreement pursuant to Article VIII hereof or the Effective Time, except as set forth unless disclosed on Schedule 5.01 of the Company Disclosure Schedule or unless Parent shall (in its sole discretion) otherwise agree in writing, the businesses of the Company and the Subsidiaries shall be conducted only in, and the Company and the Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practiceOrdinary Course; and the Company shall use its all commercially reasonable best efforts to preserve substantially intact its business organization, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement or as expressly set forth on Schedule 5.01 of the Company Disclosure ScheduleAgreement, neither the Company nor any of the Subsidiaries shall, between the date of this Agreement and the earlier of the termination of this Agreement pursuant to Article VIII hereof or the Effective Time, directly or indirectly, indirectly do, propose or commit to do, or authorize any of the following, following without the prior written consent of Parent:Parent (except as disclosed on Schedule 5.01 or as the same may be expressly required by or necessary to perform its obligations under this Agreement or any other Transaction Agreement):
(a) amend, repeal amend or otherwise change the Company's Certificate of Incorporation or By-laws or equivalent organizational documents of any of its Subsidiary's Organizational Documents;
(b) issue, sell, pledge, dispose of, grant or grant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, of any Shares or any shares of capital stock of any class of the Company or the Subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any Shares or shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary (except, subject to Section 2.04(a) hereof, except for the issuance of shares of Common Stock Shares issuable pursuant to the exercise, in accordance with their respective terms, exercise of employee stock options or other awards outstanding on the date hereof as set forth on Schedule 3.03-1 of 3.03 to the Company Disclosure ScheduleStatement);
(c) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any assets of the Company or any Subsidiary, except for sales of finished goods, invoicing under cost-plus contracts and invoicing for the achievement of milestones under contracts, each licenses in the ordinary course of business and in a manner consistent with past practiceOrdinary Course;
(d) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except that a wholly-owned Subsidiary may declare and pay a dividend to its parent;
(e) reclassify, combine, split or subdividesplit, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(i) acquire (including, without limitation, by merger, consolidation, or acquisition of capital stock or assets)
(A) any corporation, partnership, other business organization or any division thereof or (B) any assets outside the ordinary course of businessOrdinary Course; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except in the ordinary course of business to vendors and/or employees and consistent with past practice; (iii) enter into any Material Contract, other than in the ordinary course of business, consistent with past practice; (iv) authorize any single capital expenditure in excess of $50,000 or capital expenditures, in the aggregate, in excess of $250,000 for the Company and the Subsidiaries taken as a wholeOrdinary Course; or (viii) enter into or amend in any material respect any Material Contract or enter into any contractMaterial Contract that would be breached by, agreementor require the consent of any third party in order to continue in full force following, commitment or arrangement with respect to any matter set forth in this subsection (f)consummation of the Merger;
(g) increase (except salary increases in the ordinary course of business and consistent with past practiceOrdinary Course) the compensation payable or to become payable to its officers or employees generally or to any employee with an annual salary in excess of $90,000generally, or grant any bonus, severance, change of control severance or termination pay or material benefits to, or enter into any employment or severance agreement with, with any director, officer or other employee of the Company or any Subsidiary, or establish, adopt, enter into, terminate into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(h) take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practiceOrdinary Course, with respect to accounting policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivable);
(i) pay, discharge or otherwise satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practiceOrdinary Course, of liabilities as reflected or reserved against in the Company 2002 2003 Balance Sheet, or subsequently incurred in the ordinary course of business and consistent with past practiceOrdinary Course, or as permitted by clause (l) below;
(j) fail to comply in all material respects with all applicable Laws;
(k) fail to pay and discharge any Taxes on the Company (or any of its Subsidiaries) upon or against any of its properties or assets before the same shall become delinquent and before penalties accrue thereon, except to the extent and so long as the same are being contested in good faith and by appropriate proceedings;
(l) fail to perform settle or compromise any claims or litigation (x) for an amount in any case in excess of its material obligations under any $250,000 or (y) seeking injunctive relief against or on behalf of the Material Contracts or terminate any of the Material Contracts; orCompany;
(m) authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution of the Company or any of its Subsidiaries;
(n) make or revoke any material tax election not required by law or settle or compromise any material claim tax liability or litigationamend, in any material respect, any Tax Return or closing agreement with respect to Taxes;
(o) other than in the Ordinary Course, (i) waive any rights of material value or (ii) cancel or forgive any material indebtedness for borrowed money owed to the Company or any of its Subsidiaries other than indebtedness of the Company or a wholly-owned Subsidiary of the Company;
(p) except as may be required as a result of a change in law or under GAAP, make any material change in its methods, principles and practices of accounting, including tax accounting policies and procedures;
(q) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof material to the Company and its Subsidiaries taken as a whole;
(r) enter into any material joint venture, partnership or similar agreement;
(s) enter into any contract or agreement which limits the ability of the Company or any Subsidiary to compete in any material manner with or conduct any business or line of business in any geographic area;
(t) terminate or fail to maintain any insurance policies, other than with respect to Policies which are replaced in the Ordinary Course with policies of substantially similar type, term, amount of coverage, and premium; or
(u) commit to do any of the foregoing, take, or agree in writing or otherwise to take, any of the foregoing actions or take or fail to take any action which would make any representation or warranty of the Company contained in this Agreement untrue or incorrect as of the date when made or as if made as of the Effective Time (other than representations and warranties which address matters only as of a certain date(s), in which case untrue or incorrect as of such certain date(s).
Appears in 2 contracts
Sources: Merger Agreement (Daleen Technologies Inc), Merger Agreement (Behrman Capital Ii Lp)
Conduct of Business Pending the Effective Time. SECTION 5.01At all times from the execution of this Agreement until the Effective Time or the date, if any, on which this Agreement is terminated pursuant to Section 10.1, except as may be required by law, or as expressly required elsewhere in this Agreement, IONA shall, and shall cause each of its Subsidiaries to, conduct its business in the ordinary course consistent with past practice in all material respects and in compliance in all material respects with all applicable laws and regulations and shall use its reasonable endeavours to preserve substantially intact its business organizations and goodwill and keep available the services of its executive officers and key employees and preserve the relationships with those Persons having business dealings with IONA. Conduct Furthermore, IONA agrees not to take any of Business the following actions (and to cause its Subsidiaries not to take such actions) (except as expressly required by this Agreement, by the Company Pending Scheme or to the Effective Time. The Company covenants extent Buyer shall consent in writing):
(a) amend the memorandum and agrees thatarticles of association of IONA, between and shall cause each of its Subsidiaries not to amend its equivalent organizational documents;
(i) except pursuant to the exercise of the IONA Share Options granted prior to the date of this Agreement and listed on the earlier of the termination of this Agreement pursuant to Article VIII hereof or the Effective Time, except as set forth on Schedule 5.01 of the Company Disclosure Schedule or unless Parent shall (in its sole discretion) otherwise agree in writing, the businesses of the Company Option Report and the Subsidiaries shall be conducted only in, and exercise of options granted under the Company and the Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and the Company shall use its reasonable best efforts IONA Share Purchase Plan prior to preserve substantially intact its business organization, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement or as expressly set forth on Schedule 5.01 of the Company Disclosure Schedule, neither the Company nor any of the Subsidiaries shall, between the date of this Agreement and the earlier of the termination of this Agreement pursuant Agreement, issue or agree to Article VIII hereof or the Effective Time, directly or indirectly, do, propose or commit to doissue any shares, or authorize any of the following, without the prior written consent of Parent:
(a) amend, repeal rights or otherwise change the Company's securities convertible or any of its Subsidiary's Organizational Documents;
(b) issue, sell, pledge, dispose of, grant or encumberexchangeable into, or authorize grant the issuance, sale, pledge, disposition, grant or encumbrance right to call for the issue of, any Shares shares, effect any share split, share combination, reverse share split, share dividend, recapitalization, alter the rights attaching to any shares, or effect any reduction, repayment or cancellation of share capital or share premium or capitalize any reserves or redeem or buy-back any shares of capital stock of any class of the Company or the Subsidiaries, or any options, warrants, convertible securities or other rights of similar transaction, and (ii) grant, confer or award any kind to acquire any Shares or shares of such capital stockoption, or any other ownership interest (includingright, without limitationwarrant, any phantom interest)deferred stock unit, of the Company or any Subsidiary (except, subject to Section 2.04(a) hereof, for the issuance of shares of Common Stock pursuant to the exercise, in accordance with their respective terms, of employee stock options conversion right or other awards outstanding right not existing on the date hereof as set forth on Schedule 3.03-1 to acquire any of its shares (whether or not pursuant to the Company Disclosure ScheduleIONA Share Incentive Plans or the IONA Share Purchase Plan);
(c) transferexcept to the extent permitted by Section 4.2 of this Agreement and except to the extent required under existing plans, leaseagreements or arrangements Disclosed at Section 4.3.15 in the IONA Data Room (i) increase any compensation or enter into or amend any employment or severance agreement except as permitted by Section 4.1(c)(iv) or Section 4.1(c)(v) of this Agreement, license(ii) grant any bonuses, sell(iii) adopt any new employee benefit plan (including any stock option, mortgagestock benefit or stock purchase plan) or pension scheme or amend any existing employee benefit plan or pension scheme (including, pledge, dispose of or encumber any assets without prejudice to the generality of the Company foregoing, changing the entitlements to benefits under a pension scheme, or the benefits that accrue under a pension scheme, or the amounts payable thereunder, or the basis of calculation of such amounts, or the basis on which any Subsidiarypension scheme is funded), except for sales changes which are less favourable to participants in such plans or are required to implement the Scheme, (iv) commence or terminate the employment of finished goodsany employee or proposed employee whose annual remuneration exceeds US$100,000, invoicing under cost-plus contracts (v) increase the base salary of any executive officer or member of the IONA Senior Management Team, (vi) increase the base salary of any employee (other than an executive officer or a member of the IONA Senior Management Team) by more than five percent (5%) of such individual’s base salary and invoicing for provided that such increase is made in the achievement ordinary course of milestones under contractsemployee reviews and compensation adjustments as heretofore conducted, each or (vii) enter into or amend or otherwise modify any agreement or arrangement with Persons that are Affiliates or are officers or directors of IONA;
(d) (i) declare, set aside or pay any dividend or make any other distribution or payment (whether in cash, stock or other property) with respect to any IONA shares or allow any of IONA’s Subsidiaries to pay or make any such dividend, distribution or payment (other than dividends or distributions from a wholly owned IONA Subsidiary to another IONA Subsidiary or to IONA), or (ii) directly or indirectly redeem, purchase or otherwise acquire any of IONA’s shares or any equity interest of any of IONA Subsidiaries, other than in connection with (A) the acquisition of IONA Ordinary Shares from holders of IONA Share Options in full or partial payment of the exercise price payable by such holders upon exercise of IONA Share Options outstanding as of the date of this Agreement, and (B) tax withholdings upon the exercise of IONA Share Options;
(e) merge with, enter into a consolidation with, enter into a scheme of arrangement with or acquire an interest of 10% or more in any Person or acquire a substantial portion of the assets or business of any Person or any division or line of business thereof, or otherwise acquire any assets other than in the ordinary course of business and in a manner consistent with past practice, or enter into any agreement or arrangement for any of the above;
(df) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except that a wholly-owned Subsidiary may declare and pay a dividend to its parent;
(e) reclassify, combine, split or subdivide, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(i) acquire (including, without limitation, by merger, consolidation, or acquisition of capital stock or assets)
(A) any corporation, partnership, other business organization or any division thereof or (B) any assets outside the ordinary course of business; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except than in the ordinary course of business to vendors and/or employees and consistent with past practice; , sell, lease, license, pledge, transfer, or otherwise dispose of or encumber any properties or assets of IONA or of any of its Subsidiaries (including any accounts, leases, contracts or intellectual property or any assets or the stock of any of its Subsidiaries);
(g) (i) enter into any material joint venture or profit sharing agreement, (ii) license any material intellectual property rights from any third party which obligates the IONA Group to make payments in excess of US$50,000 during its fiscal year or that cannot be terminated at will by the IONA Group within three (3) years of the date hereof without payment or penalty, or (iii) enter into any Material Contractagreement the effect of which would be to impose non-compete, exclusivity or similar restrictive covenants on IONA or any of its Subsidiaries or which would, following the Effective Time, bind Buyer or any of its Subsidiaries (other than IONA and its Subsidiaries);
(h) (i) create, incur or suffer to exist any indebtedness for borrowed money other than (A) such indebtedness which existed as of March 31, 2008 as reflected on the balance sheet included in IONA’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2008 filed with the SEC, or (B) any indebtedness owed to IONA by any of its direct or indirect wholly owned Subsidiaries, or (ii) guarantee indebtedness of another Person, or (iii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of IONA or any of its Subsidiaries, or guarantee any debt securities of another Person;
(i) make any change to its methods, principles or practices of accounting currently in effect, except (i) as required by generally accepted accounting principles, (ii) as required by a Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization), or (iii) as required by a change in applicable law;
(j) make or change any tax election, settle or compromise any tax claim or amend any tax return;
(k) open or expand any facility or office;
(l) settle or compromise any litigation or other disputes (whether or not commenced prior to the date of this Agreement) other than settlements or compromises for litigation or other disputes where the settlement imposes no material (in this context, material shall mean material to either IONA or Buyer) obligation other than the payment of cash and the amount paid in settlement or compromise does not exceed US$250,000 in the aggregate for all such settlements or compromises, excluding any amounts that may be paid under existing insurance policies;
(m) authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution of IONA or any of its Subsidiaries;
(n) other than in accordance with the capital expenditure budget Disclosed at Section 7.12.1 in the IONA Data Room, incur any capital expenditure in excess of US$100,000 individually or US$200,000 in the aggregate;
(o) other than in the ordinary course of business, consistent with past practice; (iv) authorize any single capital expenditure in excess of $50,000 modify, amend or capital expenditures, in the aggregate, in excess of $250,000 for the Company and the Subsidiaries taken as a whole; or (v) enter into or amend in terminate any material respect any Material Contract contract or agreement to which IONA or any contract, agreement, commitment or arrangement with respect to any matter set forth in this subsection (f);
(g) increase (except salary increases in the ordinary course of business and consistent with past practice) the compensation payable or to become payable to its officers or employees generally or to any employee with an annual salary in excess of $90,000Subsidiaries is a party, or grant knowingly waive, release or assign any bonus, severance, change of control material rights or termination pay or material benefits to, or enter into claims (including any employment or severance agreement with, any director, officer write-off or other employee of the Company or any Subsidiary, or establish, adopt, enter into, terminate or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit compromise of any director, officer or employee;
(h) take any action, other than reasonable and usual actions in the ordinary course accounts receivable of business and consistent with past practice, with respect to accounting policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivable);
(i) pay, discharge or otherwise satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities as reflected or reserved against in the Company 2002 Balance Sheet, or subsequently incurred in the ordinary course of business and consistent with past practice;
(j) fail to comply in all material respects with all applicable Laws;
(k) fail to pay and discharge any Taxes on the Company (IONA or any of its Subsidiaries) or against any of its properties or assets before the same shall become delinquent and before penalties accrue thereon, except to the extent and so long as the same are being contested in good faith and by appropriate proceedings;
(l) fail to perform any of its material obligations under any of the Material Contracts or terminate any of the Material Contracts); or
(mp) settle authorize any of, or compromise commit or agree, in writing or otherwise, to take any material claim of the foregoing actions, or litigationotherwise agree to take any action inconsistent with any of the foregoing.
Section 4.1 is subject to, and shall not override the requirements of the provisions of, the Takeover Rules, in particular Rule 21 of the Takeover Rules.
Appears in 2 contracts
Sources: Implementation Agreement (Iona Technologies PLC), Implementation Agreement (Progress Software Corp /Ma)
Conduct of Business Pending the Effective Time. SECTION 5.01. Conduct of Business by At all times from the Company Pending the Effective Time. The Company covenants and agrees that, between the date execution of this Agreement and the earlier of the termination of this Agreement pursuant to Article VIII hereof or until the Effective Time, except as set forth on Schedule 5.01 in Section 6.1 of the Company Seller Disclosure Schedule Letter or unless Parent shall (as expressly permitted elsewhere in its sole discretion) otherwise agree in writingthis Agreement, the businesses of the Company and the Subsidiaries shall be conducted only inSeller shall, and the Company and the Subsidiaries shall not take any action except incause each Seller Subsidiary to, conduct its business in the ordinary course of business and in a manner consistent with past practice; practice and in compliance in all material respects with all applicable Laws (including the Company shall rules of NASDAQ, excluding any stockholder voting requirements contained therein) and accounting standards (including GAAP), and use its commercially reasonable best efforts to preserve substantially keep intact its business organizationorganization and goodwill, to keep available the services of the current officers, its officers and employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons those Persons having business dealings with which the Company Seller or any Subsidiary has significant business relationsSeller Subsidiary. By way of amplification and not limitationFurthermore, except as contemplated by this Agreement or as expressly set forth on Schedule 5.01 in Section 6.1 of the Company Seller Disclosure ScheduleLetter, neither the Company nor Seller agrees not to take any of the Subsidiaries shall, between the date of this Agreement following actions (and the earlier of the termination of this Agreement pursuant to Article VIII hereof or the Effective Time, directly or indirectly, do, propose or commit cause each Seller Subsidiary not to do, or authorize any of the following, take such actions) without the prior written consent of Parent:
(a) amendamend its articles of organization, repeal certificate of incorporation or otherwise change the Company's bylaws, joint venture documents, partnership agreements or any of its Subsidiary's Organizational Documentsequivalent organizational documents;
(b) (i) issue, deliver, sell, pledge, transfer, dispose of, grant of or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any Shares or encumber any shares of capital stock or other equity or voting interests of Seller or any Seller Subsidiary or any securities convertible into, exchangeable or exercisable for or representing the right to subscribe for, purchase or otherwise receive any such shares or interests or any stock appreciation rights, "phantom" stock rights, performance units, rights to receive shares of capital stock or other rights that are linked to the value of Seller Common Stock or the value of Seller or any Seller Subsidiary or any part thereof, provided that none of the foregoing shall prohibit the issuance of Seller Common Stock upon the exercise of Seller Stock Options or the settlement of Seller Restricted Stock Units, in each case outstanding as of the date of this Agreement, or (ii) effect any stock split, stock combination, stock reclassification, reverse stock split, stock dividend, recapitalization or other similar transaction;
(c) grant, confer or award any option, right, warrant, deferred stock unit, conversion right or other right not existing on the date hereof to acquire any of its shares of capital stock or shares of deferred stock, restricted stock awards, restricted stock units, stock appreciation rights, "phantom" stock awards or other similar rights that are linked to the value of Seller Common Stock or the value of Seller or any Seller Subsidiary or any part thereof (whether or not pursuant to the Seller Stock Plan);
(d) (i) except to the extent required under existing plans or arrangements set forth in Section 5.13(a) of the Seller Disclosure Letter, increase any compensation or benefit (other than in the ordinary course of business consistent with past practice to non-executive officer employees, and not to exceed $250,000 in the aggregate) of, or enter into or amend any employment or severance agreement with (or pay any amounts under any Seller Plans) any Seller Personnel, (ii) grant any bonuses, other than in the ordinary course of business consistent with past practice, and not to exceed $250,000 in the aggregate (including grants of bonuses to new hires), to any Seller Personnel, (iii) adopt any new Seller Plan (including any stock option, stock benefit or stock purchase plan) or amend or modify any existing Seller Plan (except for amendments required by Law to be effected prior to the Effective Time), or accelerate the vesting of any class compensation (including equity-based awards) for the benefit of any Seller Personnel or grant or amend any award under any Seller Plan (including the grant of any equity or equity-based or related compensation), (iv) provide any funding for any rabbi trust or similar arrangement, (v) grant to any Seller Personnel any right to receive any severance, change-in-control, retention, termination or similar compensation or benefits or increases therein, (vi) hire or otherwise employ any individual other than in the ordinary course of business consistent with past practice or (vii) terminate any Key Employee other than for cause (including misconduct or breach of company policy);
(e) (i) declare, set aside or pay any dividend or make any other distribution or payment (whether in cash, stock or other property or any combination thereof) with respect to any shares of its capital stock or other equity or voting interests, other than such cash dividends as are expressly described in or permitted by Section 6.1(e) of the Company Seller Disclosure Letter, but in all cases, subject to the terms thereof (or the Subsidiariesdistributions from a wholly-owned Seller Subsidiary to another Seller Subsidiary or to Seller), or (ii) directly or indirectly redeem, purchase or otherwise acquire any of its shares of capital stock of, or other equity or voting interest in, any of Seller or any Seller Subsidiary, or any options, warrants, convertible securities calls or other rights of any kind to acquire any Shares or shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary (except, subject to Section 2.04(a) hereof, for the issuance of shares of Common Stock pursuant to the exercise, in accordance with their respective terms, of employee stock options or other awards securities, other than in connection with Tax withholdings and exercise price settlement upon the exercise of Seller Stock Options or the settlement of Seller Restricted Stock Units outstanding on the date hereof as set forth on Schedule 3.03-1 of the Company Disclosure Schedule)this Agreement;
(cf) (i) transfer, sell, lease, sublease, license, sell, mortgage, pledge, sublicense or otherwise dispose of any material assets or encumber properties of Seller or any Seller Subsidiary or (ii) mortgage or pledge any of the property or assets of Seller or any Seller Subsidiary, or subject any such property or assets to any other Encumbrance (except Permitted Encumbrances), other than, in the case of both (i) and (ii), in the ordinary course of business consistent with past practice;
(g) except in the ordinary course of business consistent with past practice, enter into, or amend or terminate any Seller Contract, Lease or any Seller Real Property Lease or sublease (excluding contracts with respect to capital expenditures, which are governed by clause (h) below); provided that in no event shall Seller or any Seller Subsidiary enter into any contracts that require or involve the payment by Seller or any Seller Subsidiary of more than $100,000 individually or $250,000 in the aggregate;
(h) make any capital expenditures in excess of $100,000 individually or $200,000 in the aggregate;
(i) (A) merge with, enter into a consolidation with or otherwise acquire a material portion of the outstanding equity interests in any Person or acquire any portion of the assets or business of any Person (or any division or line of business thereof) or (B) otherwise acquire (including, through leases, subleases and licenses of real property) any assets, except, in the case of this clause (B), in the ordinary course of business consistent with past practice; provided that no acquisitions that would reasonably be expected to make it more difficult in any material respect to obtain any approval or authorization required in connection with the transactions contemplated hereby under any Law or that would reasonably be expected to prevent, delay, or impede consummation of the transactions contemplated hereby shall be permitted without consent;
(j) write down or write up or fail to write down or write up the value of any receivables or revalue any assets of the Company Seller or any Subsidiary, except for sales of finished goods, invoicing under cost-plus contracts and invoicing for the achievement of milestones under contracts, each Seller Subsidiary other than in the ordinary course of business and in a manner consistent accordance with past practiceGAAP;
(dk) declarecreate, set aside, make incur or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except that a wholly-owned Subsidiary may declare and pay a dividend to its parent;
(e) reclassify, combine, split or subdivide, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(i) acquire (including, without limitation, by merger, consolidation, or acquisition of capital stock or assets)
(A) any corporation, partnership, other business organization or any division thereof or (B) any assets outside the ordinary course of business; (ii) incur assume any indebtedness for borrowed money or issue any debt securities or money, assume, guarantee or endorseguarantee, endorse or otherwise as an accommodation become liable or responsible for(whether, directly, contingently or otherwise) for the obligations indebtedness of any personanother Person, or make any loans or advances, except in the ordinary course of business to vendors and/or employees and consistent with past practice; (iii) enter into any Material Contract, other than in the ordinary course agreement to maintain any financial statement condition of business, consistent with past practice; (iv) authorize any single capital expenditure in excess of $50,000 another Person or capital expenditures, in the aggregate, in excess of $250,000 for the Company and the Subsidiaries taken as a whole; or (v) enter into any arrangement or amend in or modify any material respect existing arrangement having the economic effect of any Material Contract of the foregoing, except for (i) letters of credit or any contract, agreement, commitment or arrangement with respect to any matter set forth in this subsection (f);
(g) increase (except salary increases replacement letters of credit entered into in the ordinary course of business and consistent with past practice; (ii) the compensation payable any indebtedness owed to Seller by any of its direct or to become payable to its officers indirect wholly-owned Seller Subsidiaries; or employees generally (iii) purchase money debt, capital leases or to any employee with an annual salary in excess of $90,000, or grant any bonus, severance, change of control or termination pay or material benefits to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company or any Subsidiary, or establish, adopt, enter into, terminate or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(h) take any action, other than reasonable and usual actions guarantees in the ordinary course of business not involving indebtedness of more than $250,000 in the aggregate. The foregoing shall not restrict Seller and consistent each Seller Subsidiary from incurring indebtedness in connection with past practiceits lease business that complies with the terms of the Seller Credit Facility.
(l) change any of its methods, with respect to principles or practices of financial accounting policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivable)currently in effect other than as required by GAAP as concurred by its independent registered accountants;
(m) (i) paymodify or amend in a manner that is adverse in a material respect to Seller or any Seller Subsidiary, discharge or otherwise satisfy accelerate, terminate or cancel, any claimSeller Contract or Lease, liability (ii) enter into, amend or obligation modify any agreement with Persons that are Affiliates, or (absoluteiii) enter into, accruedextend or renew any contract which, asserted or unassertedif executed before the date of this Agreement, contingent or otherwise)would have been required to be disclosed pursuant to Section 5.15, other than the paymentthan, discharge or satisfactionin each case, in the ordinary course of business and consistent with past practice, of liabilities as reflected or reserved against in the Company 2002 Balance Sheet, or subsequently incurred in the ordinary course of business and consistent with past practice;
(jn) fail transfer or license on an exclusive basis to comply in all material respects with all applicable Lawsany Person any rights to Seller Intellectual Property;
(ko) fail authorize, recommend, propose or announce an intention to pay and discharge any Taxes on the Company (adopt a plan of complete or partial liquidation or dissolution of Seller or any of its Subsidiaries) or against any of its properties or assets before the same shall become delinquent and before penalties accrue thereon, except to the extent and so long as the same are being contested in good faith and by appropriate proceedingsSeller Subsidiary;
(lp) form any Subsidiary;
(q) settle, pay or discharge any litigation, investigation, or arbitration, other than the settlement, payment, discharge or satisfaction in the ordinary course of business consistent with past practice;
(r) knowingly take or fail to perform take any action in breach of its material obligations under any this Agreement for the purpose of (or which would be reasonably expected to) materially delaying or preventing the consummation of the Material Contracts or terminate any of the Material Contractstransactions contemplated hereby (other than as required by Law); or
(ms) settle authorize any of, or compromise commit, resolve, offer or agree to take any material claim of, the foregoing actions or litigationany other action inconsistent with the foregoing.
Appears in 1 contract
Conduct of Business Pending the Effective Time. SECTION 5.01. Conduct of Business by At all times from the Company Pending the Effective Time. The Company covenants and agrees that, between the date execution of this Agreement and the earlier of the termination of this Agreement pursuant to Article VIII hereof or until the Effective Time, except as set forth on Schedule 5.01 in Section 6.1 of the Company Disclosure Schedule Seller Letter or unless Parent shall (as expressly permitted elsewhere in its sole discretion) otherwise agree in writingthis Agreement, the businesses of the Company and the Subsidiaries shall be conducted only inSeller shall, and the Company and the Subsidiaries shall not take any action except incause each of its subsidiaries to, conduct its business in the ordinary course of business and in a manner consistent with past practice; practice and the Company shall in compliance in all material respects with all applicable Laws and regulations and to use its reasonable best efforts to preserve substantially intact its business organization, to organizations and goodwill and keep available the services of the current officers, its officers and employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of with those Persons having business dealings with the Company and Seller. Furthermore, the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relations. By way of amplification and Seller agrees not limitation, except as contemplated by this Agreement or as expressly set forth on Schedule 5.01 of the Company Disclosure Schedule, neither the Company nor to take any of the Subsidiaries shall, between the date of this Agreement following actions (and the earlier of the termination of this Agreement pursuant to Article VIII hereof or the Effective Time, directly or indirectly, do, propose or commit cause its subsidiaries not to do, or authorize any of the following, take such actions) without the prior written consent of Parent:the Parent (which will not be unreasonably delayed):
(a) amendamend its certificate of incorporation or bylaws, repeal joint venture documents, partnership agreements or otherwise change the Company's or any of its Subsidiary's Organizational Documentsequivalent organizational documents except as necessary to permit a Permitted Acquisition to occur;
(bA) except (x) upon the exercise of the Seller Stock Options outstanding as of the date of this Agreement, (y) as approved by the Parent in writing in connection with a Permitted Acquisition or (z) as set forth in Section 6.1(b) of the Seller Letter, issue, deliver, sell, pledge, dispose of, grant pledge or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any Shares or otherwise encumber any shares of its capital stock of any class of the Company or the Subsidiariesother equity or voting interests, or any optionssecurities convertible into, warrantsexchangeable or exercisable for or representing the right to subscribe for, convertible securities purchase or otherwise receive any such shares or interests or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of its capital stock or other rights that are linked to the value of any kind to acquire any Shares the Seller Common Stock or shares the value of such capital stock, the Seller or any other ownership interest part thereof or (includingB) effect any share split, without limitationshare combination, any phantom interest)share reclassification, of the Company or any Subsidiary (exceptreverse share split, subject to Section 2.04(a) hereofshare dividend, for the issuance of shares of Common Stock pursuant to the exercise, in accordance with their respective terms, of employee stock options recapitalization or other awards outstanding on the date hereof as set forth on Schedule 3.03-1 of the Company Disclosure Schedule)similar transaction;
(c) transfer, lease, license, sell, mortgage, pledge, dispose of or encumber any assets except as set forth in Section 6.1(b) of the Company Seller Letter, grant, confer or award any option, right, warrant, deferred stock unit, conversion right or other right not existing on the date hereof to acquire any of its shares of capital stock or shares of deferred stock, restricted stock awards, stock appreciation rights, “phantom” stock awards or other similar rights that are linked to the value of the Seller Common Stock or the value of the Seller or any Subsidiary, except for sales of finished goods, invoicing under cost-plus contracts and invoicing for the achievement of milestones under contracts, each in the ordinary course of business and in a manner consistent with past practicepart thereof (whether or not pursuant to existing Seller Stock Plans);
(d) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except that a wholly-owned Subsidiary may declare and pay a dividend to its parent;
(e) reclassify, combine, split or subdivide, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(i) acquire (including, without limitation, by merger, consolidation, except to the extent required under existing plans or acquisition of capital stock arrangements set forth in Section 5.13(a)(i) or assets)
(A) any corporation, partnership, other business organization or any division thereof or (B) any assets outside the ordinary course of business; (ii) incur of the Seller Letter that were in effect on December 31, 2006, increase any indebtedness for borrowed money compensation or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except in the ordinary course of business to vendors and/or employees and consistent with past practice; benefit (iii) enter into any Material Contract, other than in the ordinary course of business, business consistent with past practice; (ivpractice to non-Key Personnel) authorize any single capital expenditure in excess of $50,000 of, or capital expenditures, in the aggregate, in excess of $250,000 for the Company and the Subsidiaries taken as a whole; or (v) enter into or amend in any material respect any Material Contract employment or severance agreement with (or pay any contractamounts (other than in the ordinary course of business consistent with past practice to non-Key Personnel) under any Seller Benefit Plan or Seller Benefit Agreement not otherwise due to) any Seller Personnel, agreement(ii) except as set forth in Section 6.1(d) of the Seller Letter, commitment grant any bonuses, other than prior to the date of this Agreement in the ordinary course of business consistent with past practice (including grants of bonuses to new hires), to any Seller Personnel, (iii) adopt any new Seller Benefit Plan or arrangement Seller Benefit Agreement (including any stock option, stock benefit or stock purchase plan) or amend or modify any existing Seller Benefit Plan or Seller Benefit Agreement in any material respect, or accelerate the vesting of any compensation (including equity-based awards) for the benefit of any Seller Personnel or grant or amend in any material respect any award under any Seller Benefit Plan (including the grant of any equity or equity-based or related compensation), (iv) except as set forth in Section 6.1(d)of the Seller Letter, provide any funding for any rabbi trust or similar arrangement, or take any other action to fund or secure the payment of any compensation or benefit, (v) grant to any Seller Personnel any right to receive any severance, change in control, retention, termination or similar compensation or benefits or increases therein (other than, in the case of any non-Key Personnel, the payment of cash severance or the provision of continued welfare benefits in the ordinary course of business consistent with past practice), (vi) hire or otherwise employ any individual other than non-Key Personnel who are hired in the ordinary course of business consistent with past practice or (vii) terminate any Key Personnel other than for cause (including misconduct or breach of company policy);
(e) (A) declare, set aside or pay any dividend or make any other distribution or payment (whether in cash, stock or other property) with respect to any matter shares of its capital stock or other equity or voting interests (other than dividends or distributions from a wholly owned subsidiary of the Seller to another subsidiary of the Seller or to the Seller) or (B) directly or indirectly redeem, purchase or otherwise acquire any of its shares of capital stock of, or other equity or voting interest in, any of the Seller or any of its subsidiaries, or any options, warrants, calls or rights to acquire any such shares or other securities, other than in connection with tax withholdings and exercise price settlement upon (I) the exercise of the Seller Stock Options or (II) the lapse of restrictions on any Seller Restricted Shares, in each case, outstanding on the date of this Agreement;
(f) except as set forth in this subsection Section 6.1(f) of the Seller Letter, (fA) sell, lease, sublease or license (including through a lease, sublease or license) or otherwise dispose of any material assets or properties or any of the capital stock of or other equity interests in any of its subsidiaries or (B) mortgage or pledge any of its property or assets or subject any such property or assets to any security interest or Encumbrance, other than, in the case of both (A) and (B), in the ordinary course of business consistent with past practice;
(g) increase except with respect to ordinary course contracts with clients, customers, vendors or suppliers of the Seller, enter into, or amend or terminate any Seller Contract or any lease or sublease (excluding contracts with respect to capital expenditures, which are governed by clause (h) below); provided that in no event shall the Seller enter into any procurement contracts which requires or involves the payment by the Seller or any of its subsidiaries of more than $1,000,000 individually or $5,000,000 in the aggregate;
(h) make or commit to make capital expenditures in excess of $2,500,000 in the aggregate or $500,000 individually;
(i) except salary increases for any Permitted Acquisition, (A) merge with, enter into a consolidation with or acquire a material interest in any Person or acquire a substantial portion of the assets or business of any Person or any division or line of business thereof or (B) otherwise acquire (including, through leases, subleases and licenses of real property) any assets, except, in the case of this clause (B), in the ordinary course of business consistent (in type and manner) with past practice; provided that no acquisitions that make it more difficult to obtain any approval or authorization required in connection with the transactions contemplated hereby under any Regulatory Law or that would reasonably be expected to prevent, delay, or impede consummation of the transactions contemplated hereby shall be permitted without consent;
(j) write down or write up or fail to write down or write up the value of any receivables or revalue any assets of the Seller other than in the ordinary course of business and in accordance with GAAP;
(k) create, incur or assume any indebtedness for borrowed money (including refinancing or modifying any existing indebtedness), assume, guarantee, endorse or otherwise become liable or responsible (whether, directly, contingently or otherwise) for the indebtedness of another Person, enter into any agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, except for (A) letters of credit or replacement letters of credit entered into in the ordinary course of business and consistent with past practicepractice under the Seller’s existing debt facility; (B) any indebtedness solely involving the compensation payable Seller and/or any of its direct or to become payable to its officers indirect wholly owned subsidiaries or employees generally (C) purchase money debt, capital leases or to any employee with an annual salary in excess of $90,000, or grant any bonus, severance, change of control or termination pay or material benefits to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company or any Subsidiary, or establish, adopt, enter into, terminate or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(h) take any action, other than reasonable and usual actions guarantees in the ordinary course of business and consistent with past practice, with respect to accounting policies not involving indebtedness of more than $250,000 individually or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivable);
(i) pay, discharge or otherwise satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, $1,000,000 in the ordinary course of business and consistent with past practice, of liabilities as reflected or reserved against in the Company 2002 Balance Sheet, or subsequently incurred in the ordinary course of business and consistent with past practice;
(j) fail to comply in all material respects with all applicable Laws;
(k) fail to pay and discharge any Taxes on the Company (or any of its Subsidiaries) or against any of its properties or assets before the same shall become delinquent and before penalties accrue thereon, except to the extent and so long as the same are being contested in good faith and by appropriate proceedingsaggregate;
(l) fail to perform change any of its material obligations under any methods, principles or practices of the Material Contracts or terminate any of the Material Contracts; orfinancial accounting currently in effect other than as required by GAAP;
(m) settle (i) modify or compromise amend in a manner that is adverse in a material respect to the Seller or any of its subsidiaries, or accelerate, terminate or cancel, any material claim Contract, (ii) enter into, amend or litigation.modify any agreement or arrangement with Persons that are Affiliates or are executive officers or directors of the Seller,
Appears in 1 contract
Conduct of Business Pending the Effective Time. SECTION 5.01. Conduct of Business by At all times from the Company Pending the Effective Time. The Company covenants and agrees that, between the date execution of this Agreement and until the earlier of Effective Time or the termination of date, if any, on which this Agreement is terminated pursuant to Article VIII hereof or the Effective TimeSection 8.1, except as may be required by Law, as set forth on Schedule 5.01 in Section 5.1 of the Company Seller Disclosure Schedule Letter or unless Parent shall (as contemplated elsewhere in its sole discretion) otherwise agree in writingthis Agreement, the businesses of the Company and the Subsidiaries shall be conducted only inSeller shall, and the Company and the shall cause each of its Subsidiaries shall not take any action except into, conduct its business in the ordinary course of business and in a manner consistent with past practice; practice in all material respects and the Company in compliance in all material respects with all applicable Laws, and Seller shall use use, and shall cause each of its Subsidiaries to use, its commercially reasonable best efforts to preserve substantially intact its business organization, to organizations and goodwill and keep available the services of the current officers, its officers and key employees and consultants preserve the relationships with those Persons having business dealings with Seller. Furthermore, Seller agrees not to take any of the Company and the Subsidiaries following actions (and to preserve the current relationships of the Company and the cause its Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relations. By way of amplification and not limitation, to take such actions) (except as contemplated expressly permitted by this Agreement or as expressly contemplated by the transactions contemplated hereby, as set forth on Schedule 5.01 in Section 5.1 of the Company Seller Disclosure ScheduleLetter, neither or to the Company nor extent Buyer shall consent in writing, which consent shall not be unreasonably withheld):
(a) amend the Seller Charter or the Amended and Restated Bylaws of Seller, and shall cause each of its Subsidiaries not to amend its equivalent organizational documents;
(i) issue any shares of its capital stock (except pursuant to the exercise of the Subsidiaries shallSeller Stock Options or the conversion of Seller Deferred Stock Units, between in each case outstanding as of the date of this Agreement and the earlier of the termination of this Agreement pursuant to Article VIII hereof or the Effective Time, directly or indirectly, do, propose or commit to do, or authorize any of the following, without the prior written consent of Parent:
(a) amend, repeal or otherwise change the Company's or any of its Subsidiary's Organizational Documents;
(b) issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any Shares or any shares of capital stock of any class of the Company or the Subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any Shares or shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary (except, subject to Section 2.04(a) hereof, for the issuance of shares of Common Stock pursuant to the exercise, in accordance with their respective terms, of employee stock options or other awards outstanding on the date hereof as set forth on Schedule 3.03-1 Section 4.2(a) of the Company Seller Disclosure ScheduleLetter);
(c) transfer, leaseor effect any share split, licenseshare combination, sellreverse share split, mortgageshare dividend, pledge, dispose of or encumber any assets of the Company or any Subsidiary, except for sales of finished goods, invoicing under cost-plus contracts and invoicing for the achievement of milestones under contracts, each in the ordinary course of business and in a manner consistent with past practice;
(d) declare, set aside, make or pay any dividend recapitalization or other distributionsimilar transaction, payable in cash, stock, property or otherwise, (ii) except with respect to any grants of its capital stock, except that a wholly-owned Subsidiary may declare and pay a dividend Seller Stock Options or Seller Restricted Stock Awards to its parent;
(e) reclassify, combine, split new hires or subdivide, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(i) acquire (including, without limitation, by merger, consolidation, or acquisition of capital stock or assets)
(A) any corporation, partnership, other business organization or any division thereof or (B) any assets outside the ordinary course of business; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except in the ordinary course of business to vendors and/or promoted employees and consistent with past practice; (iii) enter into any Material Contract, other than in the ordinary course of business, consistent with past practice; (iv) authorize any single capital expenditure in excess of $50,000 or capital expenditures, in the aggregate, in excess of $250,000 for the Company and the Subsidiaries taken as a whole; or (v) enter into or amend in any material respect any Material Contract or any contract, agreement, commitment or arrangement with respect to any matter set forth in this subsection (f);
(g) increase (except salary increases in the ordinary course of business and consistent with past practice) the compensation payable practice or to become payable existing employees as a retention bonus, not to its officers exceed the number of Seller Stock Options or employees generally or Seller Restricted Stock Awards representing the right to any employee with an annual salary acquire 100,000 shares of Seller Common Stock in excess of $90,000the aggregate, or grant any bonus, severance, change with respect to Seller Deferred Stock Units awarded to non-employee directors of control or termination pay or material benefits to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company or any Subsidiary, or establish, adopt, enter into, terminate or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(h) take any action, other than reasonable and usual actions Seller in the ordinary course of business and consistent with Seller's past practicepractice under the Seller Stock Option Plans pursuant to Seller's existing Amended and Restated Non-Employee Directors' Compensation Plan as in effect on the date hereof, grant, confer or award any option, right, warrant, deferred stock unit, conversion right or any other right or instrument, the value of which is determined in whole or in part by reference to the market price or value of shares of Seller Common Stock, not existing on the date hereof to acquire any of its shares of capital stock (whether or not pursuant to existing Seller Stock Option Plans);
(c) (i) increase any compensation or enter into or amend any employment or severance agreement with any employees; (ii) grant any bonuses to any of its employees (including without limitation, grants of bonuses to new hires); or (iii) adopt any new employee benefit plan (including any stock option, stock benefit or stock purchase plan) or amend any existing employee benefit plan in any material respect; provided that such actions may be taken (x) to the extent required under existing plans, agreements, or arrangements as set forth in Section 5.1(c) of the Seller Disclosure Letter, (y) as required by Law, or (z), with respect to accounting policies or procedures clauses (includingi) and (ii) only, without limitation, procedures other than with respect to any Key Employee, "executive officer" (as such term is defined in Rule 3b-7 of the payment of accounts payable and collection of accounts receivable);
(iExchange Act) pay, discharge or otherwise satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfactiondirector, in the ordinary course of business and consistent with Seller's past practice so long as not material in the aggregate.
(i) declare, set aside or pay any dividend or make any other distribution or payment (whether in cash, stock or other property) with respect to any shares of Seller Common Stock or allow any of Seller's Subsidiaries to pay or make any such dividend, distribution or payment (other than dividends or distributions from a wholly owned Subsidiary of Seller to another wholly-owned Subsidiary of Seller or to Seller), or (ii) directly or indirectly redeem, purchase or otherwise acquire any of Seller's shares of capital stock or any equity interest of any of Seller Subsidiaries, or make any commitment for any such action other than in connection with (A) the acquisition of Seller Common Stock from holders of Seller Stock Options in full or partial payment of the exercise price payable by such holders upon exercise of Seller Stock Options outstanding as of the date of this Agreement, and (B) tax withholdings upon the exercise of Seller Stock Options or the lapse of restriction of Seller Restricted Stock Awards;
(e) (i) sell, lease, license, sublease or sublicense, or otherwise dispose of or permit to lapse any rights to any material assets or properties or any of the capital stock of or other equity interests in any of its Subsidiaries, (ii) mortgage or pledge any of its property or assets or subject any such property or assets to any security interest, or (iii) disclose to any Person, other than representatives of Buyer, any Trade Secrets, other than, in the case of (i), in the ordinary course of business consistent with past practice or in accordance with the Contracts existing on the date hereof and set forth in Section 5.1(e) of the Seller Disclosure Letter;
(i) other than in the ordinary course of business consistent with Seller's past practice or Contracts set forth on Section 5.1(f) of the Seller Disclosure Letter, enter into a Contract that would be a Material Contract (if it existed as of the date of this Agreement) or (ii) amend, modify or terminate any Material Contract or grant any release or relinquishment of any rights under any Material Contract;
(g) (i) except as set forth on Section 5.1(g) of the Seller Disclosure Letter, make or commit to make capital expenditures or (ii) enter into any new line of business outside of its existing general industry or pursuant to the strategic transaction set forth on Section 5.1(g) of the Seller Disclosure Letter;
(h) merge with, enter into a consolidation with or acquire an interest in any Person or acquire a substantial portion of the assets or business of any Person or any division or line of business thereof, or otherwise acquire any assets other than in the ordinary course of business consistent with past practice;
(i) create, incur or assume any indebtedness for borrowed money (including, without limitation, refinancing or modifying any existing indebtedness), assume, guarantee, endorse or otherwise become liable or responsible (whether, directly, contingently or otherwise) for the indebtedness of liabilities as reflected another Person, enter into any agreement to maintain any financial statement condition of another Person or reserved against in enter into any arrangement having the Company 2002 Balance Sheeteconomic effect of any of the foregoing, or subsequently except (i) for short-term indebtedness incurred in the ordinary course of business and consistent with past practicepractice not exceeding $1,500,000 in the aggregate, (ii) for any capital lease not exceeding $250,000 in the aggregate, (iii) for any indebtedness solely involving Seller and/or direct or indirect wholly owned Subsidiaries, or (iv) as required by existing contracts;
(j) fail make or change any material Tax election, file any material amended Tax Return, adopt or change any material method of accounting for Tax purposes, amend any material Tax Return, claim any material Tax refund or credit, including in respect of a carry-back of losses, with respect to comply in all a taxable period for which an IRS Form 1120 (or similar annual Tax Return under state or local law) has previously been filed, settle any material respects with all applicable LawsTax claim, assessment or other proceeding, or enter into any closing agreement;
(k) fail make any material change to pay its methods, principles or practices of accounting currently in effect, except (i) as required by GAAP, Regulation S-X of the Exchange Act, or as required by a Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization), or (ii) as required by a change in applicable Law;
(l) settle, agree to settle or compromise any litigation, suit, action, claim, proceeding or investigation (whether or not commenced prior to the date of this Agreement and discharge including any Taxes on suit, action, claim, proceeding or investigation relating to this Agreement or the Company (transactions contemplated hereby), or consent to the same, other than settlements, compromises or agreements that involve only the payment of monetary damages not exceeding $250,000 individually or $750,000 in the aggregate, in any case without the imposition of material equitable relief on, or the admission of wrongdoing by, Seller or any of its Subsidiaries) or against any of its properties or assets before the same shall become delinquent and before penalties accrue thereon, except to the extent and so long as the same are being contested in good faith and by appropriate proceedings;
(l) fail to perform any of its material obligations under any of the Material Contracts or terminate any of the Material Contracts; or
(m) settle enter into or compromise amend or otherwise modify any agreement or arrangement with Persons that are Affiliates or, as of the date of this Agreement, are officers or directors of Seller;
(n) except as required by applicable Law, enter into, materially amend or extend any collective bargaining or other labor agreement;
(o) enter into any agreement, understanding or arrangement with respect to the voting or registration of the capital stock of Seller or any of its Subsidiaries;
(p) fail to use commercially reasonable efforts to keep in force its current material claim insurance policies or litigationreplacement or revised provisions providing reasonable insurance coverage with respect to the assets, operations and activities of Seller and its Subsidiaries;
(q) take any action to render inapplicable, or to exempt any third party from, the provisions of any antitakeover Laws of any Governmental Authority;
(r) except as otherwise permitted or contemplated by this Agreement, authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution of Seller or any of its Subsidiaries; and
(s) agree in writing or otherwise to take any action inconsistent with any of the foregoing.
Appears in 1 contract
Conduct of Business Pending the Effective Time. SECTION 5.01. Section 4.1 Conduct of Business by the Company Pending the Effective TimeEdge Business. The Company Edge covenants and agrees that, between the date of this Agreement and the earlier of the termination of this Agreement pursuant to Article VIII hereof or the Effective Time, except (i) with the prior written consent of Parent, which may not be unreasonably withheld, delayed or conditioned, (ii) as set forth on Schedule 5.01 of contemplated by this Agreement or by the Company Disclosure Schedule schedules hereto, (iii) as required by Applicable Law or unless Parent shall (in iv) for transactions between or among Edge and its sole discretionsubsidiaries:
(a) otherwise agree in writing, the respective businesses of the Company Edge and the Subsidiaries Edge subsidiaries shall be conducted only in, and the Company and the Subsidiaries shall not take any action except in, in the ordinary course of business and in a manner consistent with past practice; and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement or as expressly set forth on Schedule 5.01 of the Company Disclosure Schedule, neither the Company nor any of the Subsidiaries shall, between the date of this Agreement and the earlier of the termination of this Agreement pursuant to Article VIII hereof or the Effective Time, directly or indirectly, do, propose or commit to do, or authorize any of the following, without the prior written consent of Parent:
(a) amend, repeal or otherwise change the Company's or any of its Subsidiary's Organizational Documentsin each case in all material respects;
(b) except to the extent required to comply with Applicable Law, Edge and each of the Edge subsidiaries shall not amend or otherwise change its certificate of incorporation or bylaws;
(c) Edge shall not, and shall not permit any of the Edge subsidiaries to, issue, sell, pledge, dispose of, grant or grant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any Shares or of any shares of capital stock of any class of the Company Edge or the Subsidiariesany Edge subsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any Shares or shares of such capital stock, or any other ownership interest stock (including, without limitation, any phantom interest), of the Company or any Subsidiary (except, subject to Section 2.04(a) hereof, for the issuance of shares of Common Stock pursuant to the exercise, except in accordance with their respective terms, the terms of employee stock options or other awards securities outstanding on the date hereof as set forth on Schedule 3.03-1 or in respect of the Company Disclosure Scheduleoutstanding Units or the Edge 401(k) Plan);
(cd) transfer, lease, license, sell, mortgage, pledge, dispose of or encumber any assets of the Company or any Subsidiary, except for sales of finished goods, invoicing under cost-plus contracts and invoicing for the achievement of milestones under contracts, each in the ordinary course of business and in a manner consistent with past practice;
Edge shall not (dA) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, stock (except that a wholly-owned Subsidiary may declare and pay a dividend for regular quarterly dividends with respect to its parent;
the Edge Preferred Stock in the amount of $0.71875 per share) or (eB) reclassify, combine, split or subdivide, or redeem, purchase or otherwise acquireacquire (except in accordance with the terms of securities outstanding on the date hereof and except in connection with the payment of withholding Taxes and option exercise prices by Edge in connection with Edge Employee Benefit Plans or the Edge 401(k) Plan), directly or indirectly, any of its capital stock;
(e) Edge shall not, and shall not permit its subsidiaries to, (i) acquire (including, without limitation, by merger, consolidation, consolidation or acquisition of capital stock or assets)
(A) any corporation, partnership, partnership or other business organization or any division thereof or thereof, (Bii) acquire any material amount of assets outside (other than hydrocarbons), other than in the ordinary course of business; , (iiiii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any personperson (other than Edge or any of its subsidiaries), or make any loans or advances, except as would be permitted without the waiver or consent of any other party under the documents and instruments related to Edge Credit Agreement as in effect as of the ordinary course date of business this Agreement and without regard to vendors and/or employees and consistent with past practice; (iii) enter into any Material Contractsubsequent modification, other than in the ordinary course of businessamendment or replacement thereof, consistent with past practice; or (iv) authorize any single capital expenditure in excess of $50,000 or capital expenditures, in the aggregate, in excess of $250,000 for the Company and the Subsidiaries taken as a whole; or (v) enter into or amend in any material respect any Material Contract or any contract, agreement, commitment or arrangement with respect to any matter set forth in prohibited by this subsection paragraph (fe);
(gf) Edge shall not, and shall not permit its subsidiaries to, increase (except salary increases in the ordinary course of business and consistent with past practice) the compensation payable or to become payable to its officers or employees generally or to any employee with an annual salary in excess of $90,000, or grant any bonus, severance, change of control or termination pay or material benefits toemployees, or enter into any employment or severance agreement with, with or grant any severance or termination pay to any director, officer or other employee of the Company Edge or any Subsidiaryof its subsidiaries, or or, except as required by law, establish, adopt, enter into, terminate into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee; provided, that Edge may make payments under its cash bonus retention plan, a copy of which has been delivered to Parent; and provided further, that Edge may enter into employment agreements to secure the replacement of officers or employees, so long as such employment agreements do not (i) contemplate the issuance of any equity-based compensation, (ii) include any severance or termination pay provisions, and (iii) provide for cash-based compensation materially in excess of the amount paid to the officer or employee being replaced;
(g) Edge shall not, and shall not permit any of its subsidiaries to, make any capital expenditures, except as required on an emergency basis, in any fiscal quarter exceeding its capital expenditure budget (a copy of which is attached hereto as Section 4.1(g) of the Edge Schedule) for such fiscal quarter by more than $2 million, excluding any capital expenditures (i) to repair or replace equipment necessary to continue its operations in a manner consistent with such operations as of the date of this Agreement, (ii) to the extent covered by insurance proceeds and (iii) in amounts unspent but allowed in any prior quarter;
(h) take Edge shall not, and shall not permit any actionof its subsidiaries to, sell or transfer any Edge Properties or other assets other than reasonable and usual actions (i) sales of supplies, surplus or obsolete equipment or (ii) sales of other assets in the ordinary course of business business. Edge shall not, and consistent with past practiceshall not permit any of its subsidiaries to, with respect enter into any farmout agreements; provided, that in the event Edge or its subsidiaries determines to accounting policies or procedures (includingfarmout an Edge Property to a third party, without limitation, procedures with respect then to the payment extent allowed by the applicable lease, joint operating or other applicable agreement, (A) Edge will first offer to Parent the Edge Property on the same terms and conditions as Edge intends to offer to such third party, (B) such offer by Edge shall include a form of accounts payable farmout agreement, and collection (C) Parent will promptly thereafter arrange to meet with Edge at its offices to review the technical merits of accounts receivable);the proposed farmout. Edge agrees at such meeting to provide Parent all supporting information used by Edge in making its decision to farmout the Edge Property. If Parent does not elect to execute such farmout agreement within five business days of such review, it shall be deemed a decision by Parent to reject such offer and will entitle Edge to farmout such Edge Property to any third party on the same terms as those in the form of farmout agreement delivered to Parent.
(i) payEdge shall not, discharge and shall not permit any of its subsidiaries to, enter into any “non-compete,” “non-solicit” or otherwise satisfy any claim, liability similar agreement that would materially restrict the businesses of the Surviving Entity or obligation (absolute, accrued, asserted its subsidiaries or unasserted, contingent their ability to solicit customers or otherwise), other than employees following the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities as reflected or reserved against in the Company 2002 Balance Sheet, or subsequently incurred in the ordinary course of business and consistent with past practiceEffective Time;
(j) fail to comply in all material respects with all applicable LawsEdge shall not, and shall not permit any of its subsidiaries to, adopt a plan of complete or partial liquidation, dissolution, merger or consolidation of such entity;
(k) fail to pay Edge shall not, and discharge any Taxes on the Company (or shall not permit any of its Subsidiaries) or against any subsidiaries to, change its methods of its properties or assets before the same shall become delinquent and before penalties accrue thereonaccounting, including Tax accounting, except in accordance with changes in GAAP as concurred to the extent and so long by Edge’s independent auditors or, as the same are being contested in good faith and by appropriate proceedingsapplicable, Tax advisors;
(l) fail Edge shall not, and shall not permit its subsidiaries to, enter into any agreement pursuant to perform which any affiliate of its material obligations under any Edge is a party that is of the Material Contracts or terminate any type that would be required to be disclosed under Item 404 of Regulation S-K under the Material ContractsSecurities Act; orand
(m) settle Edge shall not, and shall not permit any of its subsidiaries (as applicable) to, agree or compromise formally commit to do any material claim or litigationof the foregoing.
Appears in 1 contract
Conduct of Business Pending the Effective Time. SECTION 5.01. Conduct of Business by At all times from the Company Pending the Effective Time. The Company covenants and agrees that, between the date execution of this Agreement and the earlier of the termination of this Agreement pursuant to Article VIII hereof or until the Effective Time, except as set forth on Schedule 5.01 in Section 6.1 of the Company Seller Disclosure Schedule or unless Parent shall (as expressly permitted elsewhere in its sole discretion) otherwise agree in writingthis Agreement, the businesses of the Company and the Subsidiaries shall be conducted only inSeller shall, and the Company and the shall cause each of its Subsidiaries shall not take any action except into, conduct its business in the ordinary course of business and in a manner consistent with past practice; practice and the Company shall in compliance in all material respects with all applicable Laws, and use its commercially reasonable best efforts to to, preserve substantially intact its business organizationorganizations and goodwill, to keep available the services of the current officers, its officers and employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons those Persons having business dealings with which the Company Seller or any Subsidiary has significant business relationsof its Subsidiaries. By way of amplification and not limitationFurthermore, except as contemplated by this Agreement set forth in Section 6.1 of the Seller Disclosure Schedule or as expressly set forth on Schedule 5.01 of the Company Disclosure Schedulepermitted elsewhere in this Agreement, neither the Company nor Seller agrees not to take any of the following actions (and to cause its Subsidiaries shall, between the date of this Agreement and the earlier of the termination of this Agreement pursuant not to Article VIII hereof or the Effective Time, directly or indirectly, do, propose or commit to do, or authorize any of the following, take such actions) without the prior written consent of Parent:Parent (which will not be unreasonably withheld):
(a) amendamend its articles of organization, repeal certificate of incorporation or otherwise change bylaws, joint venture documents, partnership agreements or equivalent organizational documents or, except as set forth in this Agreement, amend the Company's terms of any outstanding security of Seller or any of its Subsidiary's Organizational DocumentsSubsidiaries;
(bi) except upon the exercise of Seller Stock Options outstanding as of the date of this Agreement, issue, deliver, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any Shares or any shares of capital stock of any class of the Company or the Subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any Shares or shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary (except, subject to Section 2.04(a) hereof, for the issuance of shares of Common Stock pursuant to the exercise, in accordance with their respective terms, of employee stock options or other awards outstanding on the date hereof as set forth on Schedule 3.03-1 of the Company Disclosure Schedule);
(c) transfer, lease, license, sell, mortgage, pledge, dispose of or encumber any assets shares of the Company capital stock or other equity or voting interests of Seller or any Subsidiaryof its Subsidiaries, except or any securities convertible into, exchangeable or exercisable for sales or representing the right to subscribe for, purchase or otherwise receive any such shares or interests or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of finished goodscapital stock or other rights that are linked to the value of Seller Common Stock or the value of Seller or any of its Subsidiaries or any part thereof or (ii) effect any stock split, invoicing under cost-plus contracts and invoicing for stock combination, stock reclassification, reverse stock split, stock dividend, recapitalization or other similar transaction;
(c) grant, confer or award any option, right, warrant, deferred stock unit, conversion right or other right not existing on the achievement date hereof to acquire any of milestones under contractsits shares of capital stock or shares of deferred stock, each in restricted stock awards, stock appreciation rights, “phantom” stock awards or other similar rights that are linked to the ordinary course value of business and in a manner consistent with past practiceSeller Common Stock or the value of Seller or any of its Subsidiaries or any part thereof (whether or not pursuant to existing Seller Stock Plans);
(d) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except that a wholly-owned Subsidiary may declare and pay a dividend to its parent;
(e) reclassify, combine, split or subdivide, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(i) acquire except to the extent required under existing plans or arrangements set forth in Section 5.13(a) of the Seller Disclosure Schedule, increase any compensation or benefit (including, without limitation, by merger, consolidation, or acquisition of capital stock or assets)
(A) any corporation, partnership, other business organization or any division thereof or (B) any assets outside the ordinary course of business; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except in the ordinary course of business to vendors and/or employees and consistent with past practice; (iii) enter into any Material Contract, other than in the ordinary course of business, business consistent with past practice; (ivpractice to non-Key Employees) authorize any single capital expenditure in excess of $50,000 of, or capital expenditures, in the aggregate, in excess of $250,000 for the Company and the Subsidiaries taken as a whole; or (v) enter into or amend in any material respect any Material Contract employment or severance agreement with (or pay any amounts (other than in the ordinary course of business consistent with past practice to non-Key Employees) under any Seller Benefit Plans or Seller Other Plans not otherwise due to) any Seller Personnel, (ii) grant any bonuses, other than in the ordinary course of business consistent with past practice (including grants of bonuses to new hires) to any Seller Personnel, (iii) adopt any new Seller Pension Plan, Seller Benefit Plan or Seller Other Plan (including any stock option, stock benefit or stock purchase plan) or amend or modify any existing Seller Pension Plan, Seller Benefit Plan or Seller Other Plan in any material respect, or accelerate the vesting of any compensation (including equity-based awards) for the benefit of any Seller Personnel or grant or amend in any material respect any award under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan (including the grant of any equity or equity-based or related compensation), (iv) provide any funding for any rabbi trust or similar arrangement, or take any other action to fund or secure the payment of any compensation or benefit, (v) grant to any Seller Personnel any right to receive any severance, change in control, retention, termination or similar compensation or benefits or increases therein (other than, in the case of any non-Key Employee, the payment of cash severance or the provision of continued welfare benefits in the ordinary course of business consistent with past practice), (vi) hire or otherwise employ any individual other than in the ordinary course of business consistent with past practice or (vii) terminate any Key Employee other than for cause (including misconduct or breach of company policy);
(e) (A) declare, set aside or pay any dividend or make any other distribution or payment (whether in cash, stock or other property or any contract, agreement, commitment or arrangement combination thereof) with respect to any matter set forth shares of its capital stock or other equity or voting interests (other than dividends or distributions from a wholly owned Subsidiary of Seller to another Subsidiary of Seller or to Seller) or (B) directly or indirectly redeem, purchase or otherwise acquire any of its shares of capital stock of, or other equity or voting interest in, any of Seller or any of its Subsidiaries, or any options, warrants, calls or rights to acquire any such stock or other securities, other than in connection with tax withholdings and exercise price settlement upon the exercise of Seller Stock Options or the lapse of the risk of forfeiture under Restricted Stock outstanding on the date of this subsection Agreement;
(f) (A) transfer, sell, lease, sublease or license or otherwise dispose of any material assets or properties of Seller or any of its Subsidiaries or (B) mortgage or pledge any of the property or assets of Seller or any of its Subsidiaries, or subject any such property or assets to any other Encumbrance (except Permitted Encumbrances), other than, in the case of both (A) and (B), in the ordinary course of business consistent with past practice;
(g) increase except in the ordinary course of business consistent with past practice, enter into, or amend or terminate any Seller Contract or any lease or sublease (excluding contracts with respect to capital expenditures, which are governed by clause (h) below), or grant any right to any Person to any of the Source Code to any Seller Product; provided that in no event shall Seller enter into any procurement contracts which require or involve the payment by Seller or any of its Subsidiaries of more than $750,000 individually or $3,000,000 in the aggregate;
(h) make any capital expenditures in excess of $750,000 individually or $2,000,000 in the aggregate;
(i) (A) merge with, enter into a consolidation with or otherwise acquire a material portion of the outstanding equity interests in any Person or acquire any portion of the assets or business of any Person (or any division or line of business thereof) having a fair market value in excess of $2,000,000 or (B) otherwise acquire (including, through leases, subleases and licenses of real property) any assets, except, in the case of this clause (B), in the ordinary course of business consistent with past practice; provided that no acquisitions that make it more difficult in any material respect to obtain any approval or authorization required in connection with the transactions contemplated hereby under any Law or that would reasonably be expected to prevent, delay, or impede consummation of the transactions contemplated hereby shall be permitted without consent;
(j) write down or write up or fail to write down or write up the value of any receivables or revalue any assets of Seller other than in the ordinary course of business and in accordance with GAAP;
(k) create, incur or assume any indebtedness for borrowed money, assume, guarantee, endorse or otherwise become liable or responsible (whether, directly, contingently or otherwise) for the indebtedness of another Person, enter into any agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, except salary increases for (A) letters of credit or replacement letters of credit entered into in the ordinary course of business and consistent with past practice; (B) the compensation payable any indebtedness owed to Seller by any of its direct or to become payable to its officers indirect wholly owned Subsidiaries; or employees generally (C) purchase money debt, capital leases or to any employee with an annual salary in excess of $90,000, or grant any bonus, severance, change of control or termination pay or material benefits to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company or any Subsidiary, or establish, adopt, enter into, terminate or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(h) take any action, other than reasonable and usual actions guarantees in the ordinary course of business and consistent with past practicenot involving indebtedness of more than $250,000 individually or $1,000,000 in the aggregate;
(l) change any of its methods, with respect to principles or practices of financial accounting policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivable)currently in effect other than as required by GAAP as concurred by its independent registered accountants;
(i) paymodify or amend in a manner that is adverse in a material respect to Seller or any of its Subsidiaries, discharge or otherwise satisfy accelerate, terminate or cancel, any claimSeller Contract, liability (ii) enter into, amend or obligation modify any agreement or arrangement with Persons that are Affiliates, or (absoluteiii) enter into, accruedextend or renew any contract which, asserted or unassertedif executed prior to the date of this Agreement, contingent or otherwise)would have been required to be disclosed pursuant to Section 5.15, other than the paymentthan, discharge or satisfactionin each case, in the ordinary course of business and consistent with past practice, of liabilities as reflected or reserved against in the Company 2002 Balance Sheet, or subsequently incurred in the ordinary course of business and consistent with past practice;
(jn) fail transfer or license on an exclusive basis to comply in all material respects with all applicable Lawsany Person any rights to Seller Intellectual Property Assets or Seller Technology;
(ko) fail authorize, recommend, propose or announce an intention to pay and discharge any Taxes on the Company (adopt a plan of complete or partial liquidation or dissolution of Seller or any of its Subsidiaries) or against any of its properties or assets before the same shall become delinquent and before penalties accrue thereon, except to the extent and so long as the same are being contested in good faith and by appropriate proceedings;
(lp) form any Subsidiary;
(q) settle, pay or discharge any litigation, investigation, or arbitration, other than the settlement, payment, discharge or satisfaction in the ordinary course of business consistent with past practice;
(r) knowingly take or fail to perform take any action in breach of its material obligations under any this Agreement for the purpose of (or which would be reasonably expected to) materially delaying or preventing the consummation of the Material Contracts or terminate any of the Material Contractstransactions contemplated hereby (other than as required by Law); orand
(ms) settle authorize any of, or compromise commit, resolve, offer or agree to take any material claim of, the foregoing actions or litigationany other action inconsistent with the foregoing.
Appears in 1 contract
Sources: Merger Agreement (BladeLogic, Inc.)
Conduct of Business Pending the Effective Time. SECTION 5.015.1. Conduct of Business by the Company in Ordinary Course. Pending the Effective Time. The Company covenants and agrees that, between the date of this Agreement and the earlier of the termination of this Agreement pursuant to Article VIII hereof or the Effective Time, except as set forth on Schedule 5.01 of the Company Disclosure Schedule otherwise consented to in writing by Respironics or unless Parent shall (in its sole discretion) otherwise agree in writing, the businesses of the Company and the Subsidiaries shall be conducted only in, and the Company and the Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement or as expressly set forth on Schedule 5.01 of the Company Disclosure ScheduleAgreement, neither the Company nor any of the Subsidiaries shall, between the date of this Agreement and the earlier of the termination of this Agreement pursuant to Article VIII hereof or the Effective Time, directly or indirectly, do, propose or commit to do, or authorize any of the following, without the prior written consent of Parent:
(a) amend, repeal or otherwise change Healthdyne will and will cause each Healthdyne Subsidiary to (i) conduct its business only in the Company's or any of its Subsidiary's Organizational Documents;
(b) issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any Shares or any shares of capital stock of any class of the Company or the Subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any Shares or shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary (except, subject to Section 2.04(a) hereof, for the issuance of shares of Common Stock pursuant to the exercise, in accordance with their respective terms, of employee stock options or other awards outstanding ordinary course thereof as conducted on the date hereof as set forth on Schedule 3.03and (ii) use its commercially reasonable efforts to preserve its business organization and assets intact and to preserve its good will with its customers and others having business relations with it; and (b) Healthdyne will not and, except in the case of clause (ii) below, will not permit any Healthdyne Subsidiary to:
(i) amend its Articles of Incorporation or By-1 of Laws or the Company Disclosure Schedule)Healthdyne Rights Agreement;
(c) transfer, lease, license, sell, mortgage, pledge, dispose of or encumber any assets of the Company or any Subsidiary, except for sales of finished goods, invoicing under cost-plus contracts and invoicing for the achievement of milestones under contracts, each in the ordinary course of business and in a manner consistent with past practice;
(dii) declare, pay or set aside, make or pay aside any dividend or other distribution, payable distribution in cash, stock, property or otherwise, with respect to any of its capital stock, except that a wholly-owned Subsidiary may declare and pay a dividend to its parent;
(e) reclassify, combine, split or subdivide, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(iiii) acquire (includingexcept for the issuance and sale of Healthdyne Common Stock upon exercise of the Outstanding Healthdyne Options or pursuant to Healthdyne's Employee Stock Purchase Plan or pursuant to Healthdyne's Rights Agreement, without limitationissue, by mergersell, consolidationpurchase, redeem or otherwise dispose of or acquire, or acquisition grant any shares of its capital stock or assets)options, warrants or other rights to purchase or acquire, or combine, split or reclassify, any shares of its capital stock or any securities convertible into its capital stock, or modify or amend any Healthdyne Option Plans or Outstanding Healthdyne Options;
(Aiv) adopt or modify to increase the compensation or benefits under any Healthdyne Employee Benefit Plan or otherwise increase the compensation payable to its employees, except for modifications or increases required by law or existing contract or involving merit increases in accordance with past practices, normal cost-of-living increases, regular bonuses (including under Healthdyne's executive incentive plan) and normal increases related to promotions or increased job responsibilities;
(v) subject to the proviso to the first sentence of Section 6.8, merge or consolidate with or into any other corporation, partnership, other business organization or any division thereof or (B) any assets outside the ordinary course of business; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorseacquire control over, or acquire any equity interest in, any other corporation, firm, entity or organization; liquidate; or purchase or acquire or sell or otherwise as an accommodation become responsible for, the obligations dispose of any person, or make any loans or advances, except in the ordinary course of business to vendors and/or employees and consistent with past practice; (iii) enter into any Material Contract, other material assets otherwise than in the ordinary course of business, consistent with past practice; (iv) authorize any single capital expenditure in excess of $50,000 or capital expenditures, in the aggregate, in excess of $250,000 for the Company and the Subsidiaries taken as a whole; or (v) enter into or amend in any material respect any Material Contract or any contract, agreement, commitment or arrangement with respect to any matter set forth in this subsection (f);
(gvi) increase (make any material expenditure for a capital asset or lease any real property, except salary increases for capital expenditures and leases in the ordinary course accordance with Healthdyne's capital expenditure budget or similar plans applicable to leases approved by Healthdyne's Board of business and consistent with past practice) the compensation payable or to become payable to its officers or employees generally or to any employee with an annual salary in excess of $90,000, or grant any bonus, severance, change of control or termination pay or material benefits to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company or any Subsidiary, or establish, adopt, enter into, terminate or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employeeDirectors;
(hvii) take any action, other than reasonable and usual actions in action which if taken as of the ordinary course date hereof would constitute a material breach of business and consistent with past practice, with respect to accounting policies any representation or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivable)warranty contained herein;
(i) pay, discharge or otherwise satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities as reflected or reserved against in the Company 2002 Balance Sheet, or subsequently incurred in the ordinary course of business and consistent with past practice;
(j) fail to comply in all material respects with all applicable Laws;
(k) fail to pay and discharge any Taxes on the Company (or any of its Subsidiaries) or against any of its properties or assets before the same shall become delinquent and before penalties accrue thereon, except to the extent and so long as the same are being contested in good faith and by appropriate proceedings;
(l) fail to perform any of its material obligations under any of the Material Contracts or terminate any of the Material Contracts; or
(mviii) settle or compromise any material claim claims or litigationlitigation or, except, in the ordinary and usual course of business modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims (other than shareholder litigation in connection with this Agreement or the attempted acquisition of Healthdyne by Invacare Corporation or any of its affiliates, provided that in the case of such litigation or attempted acquisition, Respironics shall have the right to consent to any settlement or compromise (unless such litigation is covered by insurance and a full release of Healthdyne and Respironics, if applicable, and the other named parties is obtained in connection therewith), but such consent shall not be unreasonably withheld or delayed);
(ix) make any tax election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, except in the ordinary and usual course of business;
(x) take any action or omit to take any action that would prevent the Merger from qualifying for "pooling-of-interests" accounting treatment or as a "reorganization" within the meaning of Section 368(a) of the Code; or
(xi) enter into any agreement, commitment or understanding with any person relating to any action prohibited by this Agreement, subject the proviso to the first sentence of Section 6.8.
Appears in 1 contract
Sources: Agreement and Plan of Reorganization (Healthdyne Technologies Inc)
Conduct of Business Pending the Effective Time. SECTION 5.01. Conduct of Business Except as permitted or required by this Agreement or otherwise consented to in writing by Cirrus, until the Closing, the Company Pending the Effective Time. shall take all action, or refrain from taking any action, necessary to ensure that:
(a) The Company covenants Company:
(i) conducts its operations only according to its usual regular and agrees that, between the date of this Agreement and the earlier of the termination of this Agreement pursuant to Article VIII hereof or the Effective Time, except as set forth on Schedule 5.01 of the Company Disclosure Schedule or unless Parent shall (in its sole discretion) otherwise agree in writing, the businesses of the Company and the Subsidiaries shall be conducted only in, and the Company and the Subsidiaries shall not take any action except in, the ordinary course of business in substantially the same manner as heretofore conducted, and in a manner consistent with past practice; and the Company shall use uses its reasonable best efforts to preserve substantially intact its business organization, to keep available the services of the its current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current its present relationships of the Company and the Subsidiaries with customers, suppliers and other persons Persons with which the Company or any Subsidiary it has significant a business relations. By way of amplification and not limitation, except as contemplated by this Agreement or as expressly set forth on Schedule 5.01 of the Company Disclosure Schedule, neither the Company nor any of the Subsidiaries shall, between the date of this Agreement and the earlier of the termination of this Agreement pursuant to Article VIII hereof or the Effective Time, directly or indirectly, do, propose or commit to do, or authorize any of the following, without the prior written consent of Parent:
(a) amend, repeal or otherwise change the Company's or any of its Subsidiary's Organizational Documentsrelationship;
(bii) issuepreserves all of its right, sell, pledge, dispose of, grant or encumber, or authorize title and interest in and to the issuance, sale, pledge, disposition, grant or encumbrance of, any Shares or any shares of capital stock of any class assets of the Company or the SubsidiariesCompany, or any options, warrants, convertible securities or other rights of any kind to acquire any Shares or shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest)its product designs, layouts, drawings, net lists, engineering documentation, user documentation, masks and other manufacturing tools, firmware and software, and test programs, except such of the Company or any Subsidiary (except, subject to Section 2.04(a) hereof, for the issuance of shares of Common Stock pursuant to the exercise, in accordance with their respective terms, of employee stock options or other awards outstanding on the date hereof assets as set forth on Schedule 3.03-1 of the Company Disclosure Schedule);
(c) transfer, lease, license, sell, mortgage, pledge, dispose of or encumber any assets of the Company or any Subsidiary, except for sales of finished goods, invoicing under cost-plus contracts and invoicing for the achievement of milestones under contracts, each are consumed in the ordinary course of business and in a manner consistent with past practicepractice between the date hereof and the Closing Date;
(diii) declaremaintains in good operating condition and repair, set asideordinary wear and tear excepted, make or pay any dividend or other distribution, payable in cash, stock, all of the tangible property or otherwise, with respect to any of its capital stock, except that a wholly-owned Subsidiary may declare and pay a dividend to its parentthe Company;
(eiv) reclassify, combine, split or subdivide, or redeem, purchase or otherwise acquire, directly or indirectly, any maintains in force all insurance in effect on the date of its capital stockthis Agreement;
(iv) acquire (including, without limitation, by merger, consolidation, or acquisition maintains all of capital stock or assets)
(A) any corporation, partnership, other business organization or any division thereof or (B) any assets outside the ordinary course of business; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except in the ordinary course of business to vendors and/or employees Books and Records consistent with past practicepractices;
(vi) operates its business in compliance with all applicable laws, rules and regulations; and
(iiivii) enter into any Material Contract, other than extends trade credit only in the ordinary course of business, consistent with past practice.
(b) The Company shall not:
(i) amend its Certificate of Incorporation or Bylaws (or similar constitutive documents);
(ii) issue or sell, or authorize the issuance or sale of, any shares of its capital stock or any other securities, other than the issuance of shares of capital stock upon the exercise of outstanding options or warrants which are included in the definition of Fully Diluted Shares;
(iii) issue or sell, or authorize the issuance or sale of, any securities convertible into, or options, warrants or rights to purchase or subscribe to its capital stock or any other securities; provided that the Company may issue or sell or authorize the issuance or sale of options to employees, directors and consultants pursuant to the Company's Option Plan in amounts and on terms consistent with past practices and at exercise prices as mutually agreed by the Company and Cirrus or as otherwise set forth on Schedule 6.1(b)(iii);
(iv) authorize enter into any single arrangement or contract with respect to the issuance or sale of any shares of its capital expenditure stock or any other securities, or make any changes in its capital structure, except for the taking of the Loan;
(v) sell or agree to sell or create or agree to create any Encumbrance on any stock or other equity interest owned by it in any other Person;
(vi) declare, pay or set aside any dividend or other distribution or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stock or other securities, or make any other payments to its stockholders or Affiliates;
(vii) enter into any contract or commitment with respect to capital expenditures individually or in the aggregate in excess of $50,000 or capital expenditures, 100,000;
(viii) acquire any interest in the aggregateequity, in excess assets or business of $250,000 for the Company and the Subsidiaries taken any Person, except as a whole; or (v) enter into or amend in any material respect any Material Contract or any contract, agreement, commitment or arrangement with respect to any matter set forth in this subsection (fotherwise permitted by Section 6.1(b)(xi);
(gix) increase (except salary increases to the extent required under applicable law, rule or regulation, or as permitted or required by this Agreement, or otherwise in the ordinary course of business and consistent in accordance with past practice) practices, increase the compensation payable or to become payable to fringe benefits of, or pay any bonuses to, any of its directors, officers or employees generally or to any employee with an annual salary in excess of $90,000, or grant any bonus, severance, change of control severance or termination pay or material benefits topay, or enter into any employment employment, consulting or severance agreement with, or arrangement with any present or former director, officer or other employee of the Company or any Subsidiaryemployee, or establish, adopt, enter into, amend or terminate or amend any collective bargaining, bonus, profit profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directorof its directors, officer officers or employeeemployees;
(hx) take create any action, Encumbrance on any of its assets or incur or modify any indebtedness or other liability (other than reasonable and usual actions the incurrence of trade payables in the ordinary course of business and consistent with past practicebusiness) or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loan or other extension of credit, other than the Loan from Cirrus to the Company pursuant to Section 7.5 hereof;
(xi) purchase or sell any assets other than Products in the ordinary course of business;
(xii) enter into any capital lease or lease any of its assets;
(xiii) enter into any material contract, transaction or activity;
(xiv) pay or set aside any dividend or make or set aside any other distribution with respect to, or redeem, purchase or otherwise acquire, any shares of its capital stock or other securities, or make any other payment to the Shareholders or any Affiliate thereof or of the Company, other than in connection with the cancellation of warrants to purchase up to 62,727 shares of Company Common Stock/Preferred Stock provided that the repurchase of such warrants shall not exceed $70,000 in the aggregate;
(xv) make or rescind any tax election or settle or compromise any tax liability;
(xvi) make any change in its accounting policies or procedures (includingor make any changes in any accounting method or, without limitationexcept upon the written advice of its independent auditors, procedures with respect to the payment its system of accounts payable and collection of accounts receivable)internal accounting controls;
(ixvii) except in the ordinary course of business, pay, discharge or otherwise satisfy any claimclaims, liability liabilities or obligation obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfactionsatisfaction of claims, in the ordinary course of business and consistent with past practice, of liabilities as or obligations reflected or reserved against in the Company 2002 Balance Sheet, Financial Statements;
(xviii) increase or subsequently incurred decrease prices charged to its customers other than in the ordinary course of business and consistent with past practicebusiness;
(jxix) fail to comply enter into any contract or transaction with any of its directors, officers, Shareholders or Affiliates, other than as expressly provided in all material respects with all applicable Lawsthis Agreement;
(kxx) fail file or cause to pay and discharge be filed or be a party to any Taxes on the Company (action, suit or proceeding at law or in equity, or any of its Subsidiaries) arbitration, or against any of its properties administrative or assets other proceeding by or before the same shall become delinquent and before penalties accrue thereon, except to the extent and so long as the same are being contested in good faith and by appropriate proceedingsany Governmental Authority;
(lxxi) fail to perform engage in any new line of its material obligations under any of the Material Contracts or terminate any of the Material Contractsbusiness; or
(mxxii) settle agree, in writing or compromise otherwise, to take any of the foregoing actions.
(c) The Company shall notify Cirrus and Acquisition Sub in writing of any material claim adverse change since the date hereof in the business, assets, liabilities, operations, results of operations, condition (financial or litigationotherwise) or prospects of the Company promptly upon becoming aware thereof.
Appears in 1 contract
Sources: Merger Agreement (Cirrus Logic Inc)
Conduct of Business Pending the Effective Time. SECTION 5.01. Conduct of Business by At all times from the Company Pending the Effective Time. The Company covenants and agrees that, between the date execution of this Agreement and the earlier of the termination of this Agreement pursuant to Article VIII hereof or until the Effective Time, except as set forth on Schedule 5.01 in Section 6.1 of the Company Disclosure Schedule or unless Parent shall (as expressly permitted elsewhere in its sole discretion) otherwise agree in writingthis Agreement, the businesses of the Company and the Subsidiaries shall be conducted only inshall, and the Company and the shall cause each of its Subsidiaries shall not take any action except into, conduct its business in the ordinary course of business and in a manner consistent with past practice; practice and the Company shall in compliance in all material respects with all applicable Laws, and use its commercially reasonable best efforts to to, preserve substantially intact its business organizationorganizations and goodwill, to keep available the services of the current officers, its officers and employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons those Persons having business dealings with which the Company or any Subsidiary has significant business relationsof its Subsidiaries. By way of amplification and not limitationFurthermore, except as contemplated by this Agreement or as expressly set forth on Schedule 5.01 in Section 6.1 of the Company Disclosure ScheduleSchedule or as expressly permitted elsewhere in this Agreement, neither the Company nor agrees not to take any of the following actions (and to cause its Subsidiaries shall, between the date of this Agreement and the earlier of the termination of this Agreement pursuant not to Article VIII hereof or the Effective Time, directly or indirectly, do, propose or commit to do, or authorize any of the following, take such actions) without the prior written consent of Parent:
(a) amendamend its articles of organization, repeal certificate of incorporation or otherwise change bylaws, joint venture documents, partnership agreements or equivalent organizational documents or amend the terms of any outstanding security of Company's or any of its Subsidiary's Organizational Documents;
(bi) except upon the exercise of Company Stock Options or Company SARs or vesting of Company RSUs outstanding as of the date of this Agreement or pursuant to the ESPP, issue, grant, confer, award, deliver, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any Shares or any shares of capital stock of any class of the Company or the Subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any Shares or shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary (except, subject to Section 2.04(a) hereof, for the issuance of shares of Common Stock pursuant to the exercise, in accordance with their respective terms, of employee stock options or other awards outstanding on the date hereof as set forth on Schedule 3.03-1 of the Company Disclosure Schedule);
(c) transfer, lease, license, sell, mortgage, pledge, dispose of or encumber any assets shares of the capital stock or other equity or voting interests of Company or any Subsidiary, except for sales of finished goods, invoicing under cost-plus contracts and invoicing for the achievement of milestones under contracts, each in the ordinary course of business and in a manner consistent with past practice;
(d) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except that a wholly-owned Subsidiary may declare and pay a dividend to its parent;
(e) reclassify, combine, split or subdivideSubsidiaries, or redeemany securities convertible into, exchangeable or exercisable for or representing the right to subscribe for, purchase or otherwise acquirereceive any such shares or interests or any stock appreciation rights, directly “phantom” stock rights, performance units, rights to receive shares of capital stock or indirectly, other rights that are linked to the value of the capital stock of Company or any of its capital stockSubsidiaries or the value of Company or any of its Subsidiaries or any part thereof; or (ii) effect any stock split, stock combination, stock reclassification, reverse stock split, stock dividend, recapitalization or other similar transaction;
(i) acquire (including, without limitation, by merger, consolidationexcept to the extent required under existing plans or arrangements set forth in Section 5.13(a) of the Company Disclosure Schedule, or acquisition to the extent necessary or desirable to comply with Section 409A of capital stock or assets)
(A) any corporation, partnership, other business organization the Code or any division thereof other Laws, increase any compensation or (B) any assets outside the ordinary course of business; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorsebenefit of, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except in the ordinary course of business to vendors and/or employees and consistent with past practice; (iii) enter into any Material Contract, other than in the ordinary course of business, consistent with past practice; (iv) authorize any single capital expenditure in excess of $50,000 or capital expenditures, in the aggregate, in excess of $250,000 for the Company and the Subsidiaries taken as a whole; or (v) enter into or amend in any material respect any Material Contract employment or severance agreement with (or pay any amounts under any Company Plan not otherwise due to) any Company Personnel, (ii) grant any bonuses, to any Company Personnel, (iii) adopt any new Company Plan (including any stock option, stock benefit or stock purchase plan) or amend or modify any existing Company Plan in any material respect, or accelerate the vesting of any compensation (including equity-based awards) for the benefit of any Company Personnel (except as required by the terms of any Company Plan) or grant or amend in any material respect any award under any Company Plan (including the grant of any equity or equity-based or related compensation), (iv) provide any funding for any rabbi trust or similar arrangement, or take any other action to fund or secure the payment of any compensation or benefit except as otherwise required by the terms of the Company Plan, (v) grant to any Company Personnel any right to receive any severance, change in control, retention, termination or similar compensation or benefits or increases therein, (vi) hire, or otherwise commence the employment of, any individual to whom a written offer of employment has not previously been offered and accepted prior to the date of this Agreement, (vii) promote or change the position, title or primary work location of any Company Personnel or (viii) terminate any Key Employee other than for cause (including misconduct or breach of company policy);
(d) (i) declare, set aside or pay any dividend or make any other distribution or payment (whether in cash, stock or other property or any contract, agreement, commitment or arrangement combination thereof) with respect to any matter set forth shares of its capital stock or other equity or voting interests other than dividends or distributions from a wholly owned Subsidiary of Company to another Subsidiary of Company or to Company or (ii) directly or indirectly redeem, purchase or otherwise acquire any of the shares of capital stock of, or other equity or voting interest in, Company or any of its Subsidiaries, or any options, warrants, calls or rights to acquire any such stock or other securities, other than in connection with (x) tax withholdings and exercise price settlement upon the exercise of Company Stock Options, Company SARs, and Company RSUs outstanding on the date of this subsection Agreement, (y) redemption or other acquisition of Company Common Stock in accordance with the terms of Company Restricted Stock Awards outstanding on the date of this Agreement, or (z) repurchases of unvested shares in connection with the termination of the employment relationship with any employee or upon the resignation of any director or consultant, in each case, pursuant to stock option or purchase agreements in effect on the date hereof;]
(e) (i) transfer, sell, lease, sublease or license (other than with respect to Intellectual Property Assets, Technology, Company Intellectual Property Assets or Company Technology) or otherwise dispose of any material assets or properties of Company or any of its Subsidiaries or (ii) mortgage or pledge any of the property or assets of Company or any of its Subsidiaries, or subject any such property or assets to any other Encumbrance (except Permitted Encumbrances), other than, in the case of both (i) and (ii), in the ordinary course of business consistent with past practice;
(f) except in the ordinary course of business consistent with past practice, (i) modify or amend in a manner that is adverse to Company or any of its Subsidiaries, or accelerate, terminate or cancel, or waive, release or assign any of the material terms of, any Company Material Contract (excluding contracts with respect to capital expenditures, which are governed by clause (g) below), or grant any right to any Person to any of the Source Code to any Company Product, (ii) enter into, amend, modify, accelerate any agreement or arrangement with Persons that are Affiliates or waive or release any of the material terms thereof, or (iii) enter into, extend or renew any contract which, if executed prior to the date of this Agreement, would have been required to be disclosed on Section 5.15 of the Company Disclosure Schedule; provided that in no event shall Company enter into any procurement contracts or otherwise make any capital expenditures which require or involve the payment by Company or any of its Subsidiaries of more than $5,000,000 in the aggregate per month;
(g) increase (i) merge with, enter into a consolidation with or otherwise acquire a material portion of the outstanding equity interests in any Person or any division or line of business thereof or (ii) otherwise acquire (including, through leases, subleases and licenses of real property) any assets, except, in the case of this clause (ii), in the ordinary course of business; provided that no acquisitions that would reasonably be expected to prevent, delay, or impede consummation of the transactions contemplated hereby shall be permitted without consent;
(h) make a material write down or write up the value of any receivables or materially revalue any assets of Company other than as required by GAAP;
(i) create, incur or assume any indebtedness for borrowed money, assume, guarantee, endorse or otherwise become liable or responsible (whether, directly, contingently or otherwise) for the indebtedness of another Person, enter into any agreement to maintain any financial statement condition of another Person except salary increases pursuant to (i) the Credit Agreement, dated as of December 24, 2008, as amended, by and among Company, each of the lenders party thereto from time to time and ▇▇▇▇▇ Fargo Foothill, LLC, as Arranger and Administrative Agent (the “Credit Facility”), as amended from time to time, and the ancillary documents and subsidiary guarantees related thereto; (ii) any replacement credit facility on terms not materially less favorable (including with respect to guarantees by Subsidiaries and with respect to prepayment penalties, termination fees or similar costs) to Company than the Credit Facility (provided that prior to or concurrently with entering into any replacement facility, the Company shall pay all liabilities, obligations and fees owed under the Credit Facility); (iii) letters of credit or replacement letters of credit entered into in the ordinary course of business and consistent with past practice; (iv) the compensation payable any indebtedness owed to Company by any of its direct or to become payable to its officers indirect wholly owned Subsidiaries; or employees generally (v) purchase money debt, capital leases or to any employee with an annual salary in excess of $90,000, or grant any bonus, severance, change of control or termination pay or material benefits to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company or any Subsidiary, or establish, adopt, enter into, terminate or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(h) take any action, other than reasonable and usual actions guarantees in the ordinary course of business and not involving indebtedness of more than $250,000 individually or $1,000,000 in the aggregate;
(j) make any material change to any of its methods, principles or practices of financial accounting currently in effect other than as required by GAAP as concurred in by its independent registered accountants;
(k) transfer, license or obtain from any Person (except as permitted by Section 6.1(k)(ii)) any rights to Intellectual Property Assets or Technology, or transfer, license or grant to any Person any rights to any Company Intellectual Property Assets or Company Technology, other than (i) non-exclusive licenses (excluding Patents) from Company in the ordinary course consistent with past practice, with respect to accounting policies or procedures (including, without limitation, procedures with respect to the payment ii) transfer or license Intellectual Property Assets (excluding Patents) or Technology from any Person at a cost of accounts payable and collection of accounts receivable)less than $150,000 per year;
(il) payauthorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution of Company or any of its Subsidiaries;
(m) announce, implement or effect any material reduction in labor force, lay-off, early retirement program, severance program or other program or effort concerning the termination of employment of employees of Company or any of its Subsidiaries other than routine employee terminations;
(n) settle, voluntarily pay or discharge any litigation, investigation or otherwise satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), arbitration other than the payment, discharge or satisfactionsatisfaction of such claims, in the ordinary course of business and consistent with past practice, of liabilities as reflected or obligations (i) disclosed or reserved against in the Company 2002 Balance Sheet, Financial Statements included in the Company SEC Reports filed prior to the date hereof in amounts no greater than the amount reserved with respect to the relevant liability therein or subsequently (ii) incurred in the ordinary course of business and since the date of such Company Financial Statements or (iii) otherwise in the ordinary course of business consistent with past practicepractice or in accordance with their terms, of claims not in excess of $100,000 individually or $1,000,000 in the aggregate;
(jo) fail adopt any shareholder rights plan (other than any shareholder rights plan that would not prevent, delay or restrict the transactions contemplated by this Agreement) or otherwise take any action which would, directly or indirectly, restrict or impair the ability of Purchaser to comply in all material respects vote, or otherwise to exercise the rights and receive the benefits of a stockholder with all applicable Lawsrespect to, securities of Company acquired or controlled or to be acquired or controlled by Parent or Purchaser;
(kp) fail take any action to pay and discharge exempt any Taxes Person from, or make any acquisition of securities by any Person not subject to, any state takeover statute or similar statute or regulation that applies to Company with respect to an Acquisition Proposal or otherwise, including the restrictions on “business combinations” set forth in Section 203 of the Company (DGCL, except for Parent, Purchaser or any of its Subsidiaries) their respective Subsidiaries or against any affiliates, or the acquisition of its properties or assets before shares of Company Common Stock pursuant to this Agreement, including the same shall become delinquent Offer, the Merger and before penalties accrue thereon, except to the extent and so long as the same are being contested in good faith and by appropriate proceedingsother transactions contemplated hereby;
(lq) fail to perform enter into any of its material obligations under agreement, any of the Material Contracts benefits to any party of which will be increased, or terminate the vesting of the benefits to any party of which will be accelerated, by the occurrence of the Offer, the Merger or any of the Material Contracts; orother transactions contemplated by this Agreement;
(mr) settle make a binding offer to take, take or compromise agree to take any material claim or litigationof the foregoing actions.
Appears in 1 contract
Sources: Merger Agreement (Adobe Systems Inc)
Conduct of Business Pending the Effective Time. SECTION 5.01. Conduct Each of Business by BancFirst, BancFirst Bank, UNB, and UNB Bank agrees as to itself and the Company Pending BancFirst Subsidiaries and the Effective Time. The Company covenants and agrees UNB Subsidiaries, as applicable, that, between from and after the date of this Agreement and the earlier of the termination of this Agreement pursuant to Article VIII hereof or until the Effective Time, except insofar as set forth on Schedule 5.01 of the Company Disclosure Schedule other party shall otherwise consent in writing (such consent not to be unreasonably withheld or unless Parent shall (in its sole discretiondelayed) otherwise agree in writing, the businesses of the Company and the Subsidiaries shall be conducted only in, and the Company and the Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relations. By way of amplification and not limitation, except as otherwise expressly contemplated by this Agreement, the Bank Merger Agreement or as expressly set forth on Schedule 5.01 of the Company Disclosure Schedule, neither the Company nor any of the Subsidiaries shall, between the date of this Agreement and the earlier of the termination of this Agreement pursuant to Article VIII hereof or the Effective Time, directly or indirectly, do, propose or commit to do, or authorize any of the following, without the prior written consent of ParentOption Agreements:
(a) amendThe business of it and the BancFirst Subsidiaries or the UNB Subsidiaries, repeal as applicable, will be conducted only in the ordinary and usual course and, to the extent consistent therewith, it and the BancFirst Subsidiaries or otherwise change the Company's or UNB Subsidiaries, as applicable, will use all reasonable efforts to preserve intact their business organizations and assets and maintain their rights, franchises and existing relations with customers, suppliers, employees and business associates and to take no action that would:
(i) Adversely affect the ability of any of them to obtain any necessary approvals of Governmental Entities required for the transactions contemplated hereby;
(ii) Adversely affect its Subsidiary's Organizational Documents;ability to perform its obligations under this Agreement, the Bank Merger Agreement or the Option Agreements; or
(iii) Be reasonably likely to result in a Material Adverse Effect.
(b) issue, sell, pledge, dispose of, grant It will not:
(i) Sell or encumber, pledge or authorize the issuance, sale, pledge, disposition, grant agree to sell or encumbrance of, pledge or permit any Shares or Lien to exist on any shares of capital stock owned by it of any class of the Company BancFirst Subsidiaries or the UNB Subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any Shares or shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary (except, subject to Section 2.04(a) hereof, for the issuance of shares of Common Stock pursuant to the exercise, in accordance with their respective terms, of employee stock options or other awards outstanding on the date hereof as set forth on Schedule 3.03-1 of the Company Disclosure Schedule)applicable;
(cii) transfer, lease, license, sell, mortgage, pledge, dispose Amend its Articles of Incorporation or encumber any assets Code of the Company Regulations or any Subsidiary, except for sales of finished goods, invoicing under costBy-plus contracts and invoicing for the achievement of milestones under contracts, each in the ordinary course of business and in a manner consistent with past practicelaws;
(diii) Split, combine or reclassify any outstanding capital stock;
(iv) Other than as permitted by Section 6.2, declare, set aside, make aside or pay any dividend or other distribution, payable in cash, stock, stock or other property or otherwise, with respect to any of its capital stock, except that a wholly-owned Subsidiary may declare and pay a dividend to its parent;; or
(ev) reclassifyRepurchase, combine, split redeem or subdivideotherwise acquire, or redeem, permit any BancFirst Subsidiary or UNB Subsidiary to purchase or otherwise acquire, directly or indirectly, any shares of its capital stock or any securities convertible into or exercisable for any shares of its capital stock;.
(c) Neither it nor any of the BancFirst Subsidiaries or the UNB Subsidiaries, as applicable, will:
(i) acquire (includingIssue, without limitationsell, by mergerpledge, consolidationdispose of or encumber, or acquisition authorize or propose the issuance, sale, pledge, disposition or encumbrance of, any shares of, or securities convertible or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, with the exception of BancFirst Shares or assets)UNB Shares issuable as of the date hereof pursuant to the BancFirst Option Plan or UNB Plan I and UNB Plan II, respectively, consistent with past practice, and the Option Agreements;
(Aii) Transfer, lease, license, guarantee, sell, mortgage, pledge or dispose of any corporationother material property or assets or encumber any property or assets other than to a direct or indirect wholly owned Subsidiary of it;
(iii) Cancel, partnershiprelease, assign or modify any material amount of indebtedness of any other business organization individual, corporation or other entity (collectively, a "Person") other than in the ordinary and usual course of business; or
(iv) Authorize capital expenditures other than in the ordinary and usual course of business.
(d) Except as expressly contemplated in this Agreement and except for internal reorganizations involving existing Subsidiaries, as applicable, neither it nor any division thereof of the BancFirst Subsidiaries or the UNB Subsidiaries, as applicable, will make any material 48 51 acquisition of, or investment in, assets or stock of any other Person not in the ordinary and usual course of business.
(Be) any assets outside Other than in the ordinary course of business; (ii) business consistent with past practice, it will not incur or permit any of the BancFirst Subsidiaries or the UNB Subsidiaries, as applicable, to incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorseguarantee, endorse or otherwise as an accommodation become responsible for, for the obligations of any person, other Person or make any loans loan or advancesadvance.
(f) Except as required by agreements or arrangements Previously Disclosed or as provided in Section 6.1(k) or as contemplated by Article II and Section 7.7, neither it nor any of the BancFirst Subsidiaries or the UNB Subsidiaries, as applicable, will:
(i) Grant any increase in compensation or benefits to its Employees or to its officers, except in the ordinary course of business to vendors and/or employees and for normal increases consistent with past practice or as required by law;
(ii) Pay any bonus except as consistent with past practice; ;
(iii) enter Grant any severance or termination pay to any director, officer or other of its Employees except as consistent with past practice;
(iv) Enter into or amend any Material Contractemployment or severance agreement with any director, officer or other than of its Employees (provided that this clause 6.1(f)(iv) shall not prohibit either party from approving a renewal or other extension of an existing employment or severance agreement in accordance with its terms and in the ordinary course of business, consistent with past practice; (iv) authorize any single capital expenditure in excess of $50,000 or capital expenditures, in the aggregate, in excess of $250,000 for the Company and the Subsidiaries taken as a whole; or (v) enter into or amend in any material respect any Material Contract or any contract, agreement, commitment or arrangement with respect to any matter set forth in this subsection (f);
(v) Grant any increase in fees or other increases in compensation or other benefits to any of its present or former directors; or
(vi) Effect any change in retirement benefits for any class of its Employees or officers (unless such change is required by applicable law or, in the written opinion of counsel, is necessary or advisable to maintain the tax qualification of any plan under which the retirement benefits are provided).
(g) increase (except salary increases Except as provided in the ordinary course of business Section 6.1(k) and consistent with past practice) the compensation payable or as may be required to become payable to its officers or employees generally or to any employee with an annual salary in excess of $90,000, or grant any bonus, severance, change of control or termination pay or material benefits to, or enter into any employment or severance agreement with, any director, officer or other employee satisfy contractual obligations existing as of the Company date hereof and the requirements of applicable law, neither it nor any of the BancFirst Subsidiaries or any Subsidiarythe UNB Subsidiaries, or as applicable, will establish, adopt, enter intointo or make any new, terminate or amend any existing, collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, employee stock ownership, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directordirectors, officer officers or employee;employees.
(h) take Neither it nor any actionof the BancFirst Subsidiaries or the UNB Subsidiaries, as applicable, will implement or adopt any change in its accounting principles, practices or methods, other than reasonable and usual actions as may be required by generally accepted accounting principles.
(i) Neither it nor any of the BancFirst Subsidiaries or the UNB Subsidiaries, as applicable, shall make any tax election, other than in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivable);
(i) pay, discharge or otherwise satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities as reflected or reserved against in the Company 2002 Balance Sheet, or subsequently incurred in the ordinary course of business and consistent with past practice;business.
(j) fail Neither it nor any of the BancFirst Subsidiaries or the UNB Subsidiaries, as applicable, will authorize or enter into an agreement to comply take any of the actions referred to in all material respects with all applicable Laws;paragraphs 6.1
(a) through 6.1(i) above.
(k) fail to pay Notwithstanding the provisions of Sections 6.1(f) and discharge any Taxes on the Company (or any of its Subsidiaries) or against any of its properties or assets before the same shall become delinquent and before penalties accrue thereon, except to the extent and so long as the same are being contested in good faith and by appropriate proceedings;
(l) fail to perform any of its material obligations under any of the Material Contracts or terminate any of the Material Contracts; or
(m) settle or compromise any material claim or litigation.6.1
Appears in 1 contract
Sources: Merger Agreement (Unb Corp/Oh)
Conduct of Business Pending the Effective Time. SECTION 5.01Section 5.1. Conduct of Business by the Company Company, Parent and Merger Sub Pending the Effective Time. The Company covenants and agrees thatExcept as otherwise contemplated by this Agreement, between or otherwise in connection with Parent's termination of Parent's acquisition of Global, after the date of this Agreement hereof and prior to the Effective Time or earlier of the termination of this Agreement pursuant to Article VIII hereof or Agreement, unless the Effective Time, except as set forth on Schedule 5.01 of the Company Disclosure Schedule or unless Parent parties shall (in its sole discretion) otherwise agree in writing, the businesses of the Company Company, Parent and the Subsidiaries Merger Sub shall be conducted only in, and the Company and the Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement or as expressly set forth on Schedule 5.01 of the Company Disclosure Schedule, neither the Company nor any of the Subsidiaries shall, between the date of this Agreement and the earlier of the termination of this Agreement pursuant to Article VIII hereof or the Effective Time, directly or indirectly, do, propose or commit to do, or authorize any of the following, without the prior written consent of Parenteach:
(a) amend, repeal or otherwise change the Company's or any of conduct its Subsidiary's Organizational Documents;
(b) issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any Shares or any shares of capital stock of any class of the Company or the Subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any Shares or shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary (except, subject to Section 2.04(a) hereof, for the issuance of shares of Common Stock pursuant to the exercise, in accordance with their respective terms, of employee stock options or other awards outstanding on the date hereof as set forth on Schedule 3.03-1 of the Company Disclosure Schedule);
(c) transfer, lease, license, sell, mortgage, pledge, dispose of or encumber any assets of the Company or any Subsidiary, except for sales of finished goods, invoicing under cost-plus contracts and invoicing for the achievement of milestones under contracts, each business in the ordinary and usual course of business and in a manner consistent with past practice;
(db) not (i) amend or propose to amend its respective Certificate of Incorporation or Bylaws, except for the filing by Parent of a Certificate of Amendment of the Certificate of Incorporation authorizing the class of Parent Preferred Stock, substantially in the form attached as Exhibit 5.1(b) to this Agreement, (ii) split, combine or reclassify its outstanding capital stock or declare, set aside, make aside or pay any dividend or other distribution, distribution payable in cash, stock, property or otherwise, (iii) spin-off any assets or businesses, (iv) engage in any transaction for the purpose of effecting a recapitalization of any party or subsidiary or (v) engage in any transaction or series of related transactions which has a similar effect to any of the foregoing;
(c) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock or amend or modify the terms and conditions of any of the foregoing, except that (i) nothing herein will prevent Parent from granting employee stock options consistent with past practices or issuing Parent Common Stock upon exercise or conversion of outstanding options, warrants and convertible securities and (ii) nothing herein will prevent the Company from issuing Company Common Stock upon exercise of outstanding options;
(d) not (i) incur or become contingently liable with respect to any of its capital stock, except that a wholly-owned Subsidiary may declare and pay a dividend to its parent;
(e) reclassify, combine, split or subdivide, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(i) acquire (including, without limitation, by merger, consolidation, or acquisition of capital stock or assets)
(A) any corporation, partnership, other business organization or any division thereof or (B) any assets outside the ordinary course of business; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advancesmoney, except in the ordinary course of business business, (ii) redeem, purchase, acquire or offer to vendors and/or employees and consistent with past practice; purchase or acquire any shares of its respective capital stock, other than as required by the governing terms of such securities, (iii) enter into take or fail to take any Material Contractaction which action or failure to take action would cause the Company or the Company's shareholders (except to the extent that any shareholders receive cash in lieu of fractional shares) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger, other than (iv) make any acquisition of any assets (except in the ordinary course of business) or businesses, consistent with past practice; (iv) authorize any single capital expenditure in excess of $50,000 or capital expenditures, in the aggregate, in excess of $250,000 for the Company and the Subsidiaries taken as a whole; or (v) sell any assets (except in the ordinary course of business) or businesses or (vi) enter into or amend in any material respect any Material Contract or any contract, agreement, commitment or arrangement with respect to any matter set forth of the foregoing;
(e) use all reasonable efforts to preserve intact its respective business organization and goodwill, keep available the services of its present officers and key employees and preserve the goodwill and business relationships with suppliers, distributors, customers and others having business relationships with the Company or Parent and not engage in any action, directly or indirectly, with the intent to impact adversely the transactions contemplated by this subsection Agreement;
(f)) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors or officers;
(g) not increase (the rate of remuneration payable to any of its respective directors or officers, except salary increases in the ordinary customary and usual course of business and consistent with past practice) the compensation payable or to become payable to its officers or employees generally or to any employee with an annual salary in excess of $90,000practices, or grant any bonus, severance, change of control or termination pay or material benefits to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company or any Subsidiary, or establish, agree to do so;
(h) not adopt, enter into, terminate into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employmenthealth care, termination, severance employment or other employee benefit plan, agreement, trust, fund, policy fund or arrangement for the benefit or welfare of any directoremployee or retiree, officer or employee;
(h) take any action, other than reasonable and usual actions except in the ordinary and usual course of business and business, consistent with past practice, practices or as required to comply with respect to accounting policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable changes in applicable law and collection of accounts receivable)except as contemplated on Schedule 5.1(h) hereto;
(i) payfile with the SEC all forms, discharge or otherwise satisfy any claimstatements, liability or obligation reports and documents (absoluteincluding all exhibits, accrued, asserted or unasserted, contingent or otherwise), other than amendments and supplements thereto) required to be filed by Parent pursuant to the payment, discharge or satisfaction, Exchange Act; and
(j) maintain with financially responsible insurance companies insurance on its respective tangible assets and its respective business in the ordinary course of business such amounts and against such risks and losses as are consistent with past practice, of liabilities as reflected or reserved against in the Company 2002 Balance Sheet, or subsequently incurred in the ordinary course of business and consistent with past practice;
(j) fail to comply in all material respects with all applicable Laws;
(k) fail to pay and discharge any Taxes on the Company (or any of its Subsidiaries) or against any of its properties or assets before the same shall become delinquent and before penalties accrue thereon, except to the extent and so long as the same are being contested in good faith and by appropriate proceedings;
(l) fail to perform any of its material obligations under any of the Material Contracts or terminate any of the Material Contracts; or
(m) settle or compromise any material claim or litigation.
Appears in 1 contract
Conduct of Business Pending the Effective Time. SECTION 5.01. Conduct of Business by During the Company Pending the Effective Time. The Company covenants and agrees that, between period commencing on the date of this Agreement and ending at the Effective Time or such earlier of date as this Agreement may be terminated in accordance with its terms (the termination “Pre-Closing Period”), Seller agrees (unless it is required to take such action pursuant to Law or the terms of this Agreement pursuant to Article VIII hereof or Buyer shall give its prior written consent (including, without limitation, e-mail notification by the Effective Timeindividuals named in Section 3.28 or Section 4.7, except as set forth on Schedule 5.01 of the Company Disclosure Schedule applicable), which consent shall not be unreasonably withheld, conditioned or unless Parent shall (in its sole discretiondelayed) otherwise agree in writing, the businesses of the Company and the Subsidiaries shall be conducted only into, and to cause each of its Subsidiaries to, carry on its business in the Company usual, regular and the Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; , including with respect to working capital management, pay its Liabilities and the Company shall Taxes consistent with Seller’s past practices (and in any event when due), pay or perform other obligations when due consistent with Seller’s past practices (other than Liabilities, Taxes and other obligations, if any, contested in good faith through appropriate proceedings), and use its all commercially reasonable best efforts to preserve substantially intact its present business organization, to keep available (and cooperate in any reasonable measures by Buyer for the purposes of keeping available) the services of the current officers, its present officers and employees and consultants of the Company and the Subsidiaries and to preserve the current its relationships of the Company and the Subsidiaries with material customers, suppliers suppliers, distributors, licensors, licensees, independent contractors and other persons Persons having business dealings with which it, all with the Company express purpose and intent of preserving unimpaired its goodwill and ongoing businesses. In addition, during the Pre-Closing Period, unless required by Law or the terms of this Agreement, none of Seller or any Subsidiary has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement or as expressly set forth on Schedule 5.01 of the Company Disclosure Schedule, neither the Company nor any of the its Subsidiaries shall, between the date of this Agreement and the earlier of the termination of this Agreement pursuant to Article VIII hereof or the Effective Time, directly or indirectly, do, propose or commit to do, or authorize any of the following, without the prior written consent of Parent:
(a) amend, repeal or otherwise change the Company's or any of its Subsidiary's Organizational Documents;
(b) issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any Shares or any shares of capital stock of any class of the Company or the Subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any Shares or shares of such capital stock, or any other ownership interest Buyer (including, without limitation, any phantom intereste-mail notification by the individuals named in Section 3.28 or Section 4.7, as applicable), in its reasonable discretion, take or agree in writing or otherwise to take, any action that would result in the occurrence of any of the Company changes described in Section 3.7 or any Subsidiary other action that would make any of Seller’s representations or warranties contained in this Agreement untrue or incorrect in any material respect or prevent Seller from performing or cause Seller not to perform its agreements and covenants hereunder or cause any condition to Buyer’s closing obligations in Section 7.1 or Section 7.2 (exceptor Seller’s closing obligations in Section 7.1 or Section 7.3) not to be satisfied. Without limiting the generality of the foregoing, subject to Section 2.04(a) hereofduring the Pre-Closing Period, for the issuance of shares of Common Stock pursuant to the exercise, in accordance with their respective terms, of employee stock options or other awards outstanding on the date hereof except as set forth on Schedule 3.03-1 in Section 5.1 of the Company Seller Disclosure Schedule);
(c) transferSchedule or as required by Law, leaseSeller shall not do, licensecause or permit, selland shall cause its Subsidiaries not to do, mortgage, pledge, dispose of cause or encumber any assets of the Company or any Subsidiary, except for sales of finished goods, invoicing under cost-plus contracts and invoicing for the achievement of milestones under contracts, each in the ordinary course of business and in a manner consistent with past practice;
(d) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except that a wholly-owned Subsidiary may declare and pay a dividend to its parent;
(e) reclassify, combine, split or subdivide, or redeem, purchase or otherwise acquire, directly or indirectlypermit, any of the following actions, without the prior written consent of Buyer, in its capital stock;
(i) acquire sole discretion (including, without limitation, e-mail notification by mergerthe individuals named in Section 3.28 or Section 4.7, consolidationas applicable), except as expressly provided or acquisition of capital stock or assets)permitted in this Agreement:
(Aa) (i) declare, set aside or pay any corporation, partnership, other business organization or any division thereof or (B) any assets outside the ordinary course of business; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any persondividends on, or make any loans other distributions (whether in cash, securities or advancesother property) in respect of, except any of its capital stock (other than dividends and distributions paid to Seller or its Subsidiaries), (ii) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in the ordinary course respect of, in lieu of business to vendors and/or employees and consistent with past practice; or in substitution for shares of its capital stock or any of its other securities, or (iii) purchase, redeem or otherwise acquire any shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock or any other of its securities or any rights, warrants or options to acquire any such shares or other securities (other than acquisitions of convertible securities upon conversion of such securities, acquisitions of exercisable securities upon exercise of such securities, acquisitions of unvested stock in connection with a termination of the holder’s employment, or acquisitions of securities in connection with the “cashless exercise” of currently outstanding securities);
(b) (i) authorize for issuance, issue, deliver or sell or agree or commit to issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) or accelerate the vesting of any stock of any class or any other securities or equity equivalents (including, without limitation, stock appreciation rights) of Seller and its Subsidiaries (other than issuances upon conversion or exercise of currently outstanding securities), or (ii) enter into any Material Contractcontract with respect to the foregoing, or (iii) permit any grants of restricted stock or issuance of similar stock-based employee rights;
(c) cause, make or permit any change or amendment to the organizational documents of Seller or any of its Subsidiaries, or change the authorized capital stock or equity interests of Seller or any of its Subsidiaries;
(d) enter into or amend any agreement pursuant to which any other Person is granted any joint or exclusive marketing or other joint or exclusive right of any type or scope with respect to any of the Products or Intellectual Property other than any such agreement that may be terminated without penalty by Seller or its Subsidiaries upon not more than ninety (90) days’ notice, other than in the ordinary course of business, business consistent with past practice; ;
(ive) authorize any single capital expenditure in excess of $50,000 or capital expenditures, in the aggregate, in excess of $250,000 for the Company and the Subsidiaries taken as a whole; or (vi) enter into or amend in any material respect any Material Contract or any contract, agreement, commitment or arrangement other than with respect to capitalized leases, incur any matter set forth in this subsection Indebtedness or guarantee any Indebtedness of another Person, (f);
ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of Seller or any of its Subsidiaries, guarantee any debt securities of another Person, or enter into any arrangement having the economic effect of any of the foregoing, (giii) increase (except salary increases make any loans, advances or capital contributions to, or investment in, any other Person, other than Seller or any of its direct or indirect wholly owned Subsidiaries, other than in the ordinary course of business and consistent with past practice, or (iv) mortgage, pledge or otherwise encumber any material assets, or create or suffer any material Encumbrance thereupon, except, in each case, in the ordinary course of business consistent with past practice pursuant to credit facilities in existence on the date hereof (or any extensions or renewals thereof) and Permitted Encumbrances;
(f) (i) prepay any loans (if any) from its stockholders, officers or directors or any Person affiliated with any of the foregoing, (ii) amend its borrowing arrangements or (iii) waive, release or assign any material rights or claims, other than in the ordinary course of business consistent with past practice;
(g) materially reduce the amount of any insurance coverage provided by its existing insurance policies;
(h) materially change or implement accounting policies, methods or procedures, except as required by GAAP;
(i) (i) increase the annual or discretionary amounts of base salary, bonus compensation or any other form of compensation payable or to become payable to any officer, employee, agent or consultant of Seller or any of its officers Subsidiaries; (ii) grant or employees generally agree to grant or accelerate any right to any severance or termination pay or enter into any contract to make or grant any severance or termination pay or pay or agree to pay any bonus or other incentive compensation to any officer or employee or (iii) enter into any new, or amend, terminate or renew any existing employment, severance, consulting or salary continuation agreements (provided that merit-based salary increases or cash bonuses consistent with past practice shall not be construed as an amendment to an agreement for the purposes of this clause);
(j) enter into, establish, adopt, amend or terminate (except, in each case, (i) as may be required by applicable Laws or (ii) to satisfy contractual obligations existing as of the date hereof), any pension, retirement, stock purchase, savings, profit sharing, deferred compensation, consulting, bonus, group insurance or other employee benefit, incentive or welfare contract, plan or arrangement, or any trust agreement (or similar arrangement) related thereto, or communicate any intention to take such foregoing actions, in respect of any director, officer or employee of Seller or any of its Subsidiaries;
(k) hire any employee or consultant with an annual salary in excess of $90,000, or grant any bonus, severance, change of control or termination pay or material benefits to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company or any Subsidiary, or establish, adopt, enter into, terminate or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee150,000;
(hl) take make any actionmaterial acquisition or capital expenditure in excess of $250,000 in the aggregate for Seller and its Subsidiaries, taken as a whole, other than reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivable);
(i) pay, discharge or otherwise satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities as reflected or reserved against in the Company 2002 Balance Sheet, or subsequently incurred in the ordinary course of business and consistent with past practice;
(jm) fail to comply in all material respects with all applicable Laws;
(k) fail to pay and discharge sell, lease, license, pledge or otherwise dispose of, distribute or encumber any Taxes on the Company (tangible properties or assets of Seller or any of its SubsidiariesSubsidiaries other than in the ordinary course of business consistent with past practice;
(n) other than in the ordinary course of business consistent with past practice (including the granting of non-exclusive licenses in connection with the sale of the Products), (i) dispose of, license, grant, or against obtain, or permit to lapse any rights to, any Intellectual Property or (ii) dispose of or disclose to any Person, other than Representatives of Buyer or Merger Sub, any Trade Secret of Seller;
(o) other than in the ordinary course of business consistent with past practice, enter into, modify, amend, violate or terminate any Seller Contract or agreement to which Seller or any of its properties Subsidiaries is party, or assets before knowingly waive, release or assign any rights or claims (other than any write-off or other compromise of any accounts receivable of Seller or any of its respective Subsidiaries in accordance with GAAP);
(p) except as otherwise required by applicable Law, as determined in the same shall become delinquent and before penalties accrue thereongood faith judgment of Seller, except make or change any Tax election, change any method of Tax accounting, file or amend any income Tax Return, settle any audit, claim, examination or deficiency litigation with respect to a material amount of Taxes, request any private letter or similar Tax ruling, enter into any closing agreement with any Taxing Authority with respect to any amount of Taxes or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, without, in each case, providing at least ten (10) days’ notice to Buyer and, to the extent and so long as that Buyer notifies Seller within such ten-day period that Buyer reasonably believes that such action will cause a material adverse effect on Buyer’s Tax Returns for periods following the same are being contested in good faith and Closing, Seller shall use reasonable best efforts to accommodate any reasonable requests by appropriate proceedingsBuyer;
(lq) fail to perform enter, modify, or terminate any of its material obligations Lease, or take any action under any of the Material Contracts or terminate any Leased Real Property not otherwise required to be taken pursuant to the terms of the Material ContractsLeases; orprovided that, Seller shall promptly notify Buyer of, and furnish Buyer with information relating to, any actual or threatened breach of any material term of any such lease or sublease upon Seller having actual knowledge of such actual or threatened breach;
(mr) acquire or sell any Owned Real Property, or cause or permit any Encumbrance other than a Permitted Encumbrance to become effective against the Owned Real Property;
(s) settle or compromise any material claim pending or litigationthreatened Action (whether or not commenced prior to the date of this Agreement);
(t) revalue any of its assets, including writing down the value of inventory or writing off notes or accounts receivable, except as required by GAAP;
(u) other than at the direction of Seller’s auditors or as otherwise required by GAAP, change or alter its treatment of deferred revenues in any way that would have anything other than a de minimis impact on Seller’s consolidated financial statements; or
(v) agree, commit to or enter into any contract or arrangement to take any of the actions referred to in Section 5.1(a) through Section 5.1(u) above, or any other action that would prevent Seller from performing, or cause Seller not to perform, any of its covenants and agreements hereunder. Notwithstanding the foregoing, nothing contained in this Agreement shall give Buyer, directly or indirectly, the right to control or direct the operations of Seller prior to the Effective Time. Prior to the Effective Time, Seller shall exercise, consistent with the terms and conditions of this Agreement, control, supervision and management over its and its Subsidiaries’ operations.
Appears in 1 contract
Sources: Merger Agreement (Ansys Inc)
Conduct of Business Pending the Effective Time. SECTION 5.01. Conduct of Business by At all times from the Company Pending the Effective Time. The Company covenants and agrees that, between the date execution of this Agreement and until the earlier of the termination of this Agreement pursuant to Article VIII hereof upon its terms or the Effective Time, except as set forth on Schedule 5.01 in Section 6.1 of the Company Seller Disclosure Schedule or unless Parent shall (as expressly permitted elsewhere in its sole discretion) otherwise agree in writingthis Agreement, the businesses of the Company and the Subsidiaries shall be conducted only inSeller shall, and the Company and the shall cause each of its Subsidiaries shall not take any action except into, conduct its business in the ordinary course of business and in a manner consistent with past practice; practice and the Company shall in compliance in all material respects with all applicable Laws, and use its commercially reasonable best efforts to preserve substantially intact its business organizationorganizations and goodwill, to keep available the services of the current officers, its officers and employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons those Persons having business dealings with which the Company Seller or any Subsidiary has significant business relationsof its Subsidiaries. By way of amplification and not limitationFurthermore, except as contemplated by this Agreement or as expressly set forth on Schedule 5.01 of the Company Disclosure Schedule, neither the Company nor any of the Subsidiaries shall, between the date of this Agreement and until the earlier of the termination of this Agreement pursuant to Article VIII hereof upon its terms or the Effective Time, directly except as set forth in Section 6.1 of the Seller Disclosure Schedule or indirectlyas expressly permitted elsewhere in this Agreement, do, propose or commit Seller agrees not to do, or authorize take any of the following, following actions (and to cause its Subsidiaries not to take such actions) without the prior written consent of Parent:
(a) amend, repeal or otherwise change the Company's amend its or any Subsidiary’s articles of its Subsidiary's Organizational Documentsorganization, articles of incorporation or bylaws, joint venture documents, partnership agreements or equivalent organizational documents;
(bi) except upon the exercise prior to the Acceptance Date of Seller Stock Options or Seller Warrants outstanding as of the date of this Agreement or the conversion of any Seller Series A Convertible Preferred Stock outstanding as of the date of this Agreement, issue, deliver, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any Shares or any shares of capital stock of any class of the Company or the Subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any Shares or shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary (except, subject to Section 2.04(a) hereof, for the issuance of shares of Common Stock pursuant to the exercise, in accordance with their respective terms, of employee stock options or other awards outstanding on the date hereof as set forth on Schedule 3.03-1 of the Company Disclosure Schedule);
(c) transfer, lease, license, sell, mortgage, pledge, dispose of or encumber any assets shares of the Company capital stock or other equity or voting interests of Seller or any Subsidiaryof its Subsidiaries, except or any securities convertible into, exchangeable or exercisable for sales or representing the right to subscribe for, purchase or otherwise receive any such shares or interests or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of finished goodscapital stock or other rights that are linked to the value of any capital stock of Seller or any of its Subsidiaries or the value of Seller or any of its Subsidiaries or any part thereof or (ii) effect any stock split, invoicing under cost-plus contracts and invoicing for stock combination, stock reclassification, reverse stock split, stock dividend, recapitalization or other similar transaction;
(c) grant, confer or award any option, right, warrant, deferred stock unit, conversion right or other right not existing on the achievement date hereof to acquire any of milestones under contractsits shares of capital stock or shares of deferred stock, each in restricted stock awards, stock appreciation rights, “phantom” stock awards or other similar rights that are linked to the ordinary course value of business and in a manner consistent with past practiceany capital stock of Seller or any of its Subsidiaries or the value of Seller or any of its Subsidiaries or any part thereof (whether or not pursuant to existing Seller Stock Plans);
(d) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except that a wholly-owned Subsidiary may declare and pay a dividend to its parent;
(e) reclassify, combine, split or subdivide, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(i) acquire except to the extent required under existing plans or arrangements set forth in Section 5.13(a) of the Seller Disclosure Schedule, increase any compensation or benefit (including, without limitation, by merger, consolidation, or acquisition of capital stock or assets)
(A) any corporation, partnership, other business organization or any division thereof or (B) any assets outside the ordinary course of business; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except in the ordinary course of business to vendors and/or employees and consistent with past practice; (iii) enter into any Material Contract, other than in the ordinary course of business, business consistent with past practice; (ivpractice to non-Key Employees) authorize any single capital expenditure in excess of $50,000 of, or capital expenditures, in the aggregate, in excess of $250,000 for the Company and the Subsidiaries taken as a whole; or (v) enter into or amend in any material respect any Material Contract employment or severance agreement with (or pay any amounts (other than in the ordinary course of business consistent with past practice to non-Key Employees) under any Seller Employee Program not otherwise due to) any Seller Personnel, (ii) grant any bonuses to any Seller Personnel, (iii) adopt any new Seller Employee Program (including any stock option, stock benefit or stock purchase plan) or amend or modify any existing Seller Employee Program in any material respect, or accelerate the vesting of any compensation (including equity-based awards) for the benefit of any Seller Personnel or grant or amend in any material respect any award under any Seller Employee Program (including the grant of any equity or equity-based or related compensation), (iv) provide any funding for any rabbi trust or similar arrangement, or take any other action to fund or secure the payment of any compensation or benefit, (v) grant to any Seller Personnel any right to receive any severance, change in control, retention, termination or similar compensation or benefits or increases therein (other than, in the case of any non-Key Employee, the payment of continued welfare benefits in the ordinary course of business consistent with past practice), (vi) hire or otherwise employ any individual other than in the ordinary course of business consistent with past practice or (vii) terminate any Key Employee other than for cause (including misconduct or breach of company policy);
(e) (i) declare, set aside or pay any dividend or make any other distribution or payment (whether in cash, stock or other property or any contract, agreement, commitment or arrangement combination thereof) with respect to any matter set forth shares of its capital stock or other equity or voting interests (other than dividends or distributions from a wholly owned Subsidiary of Seller to another Subsidiary of Seller or to Seller) or (ii) directly or indirectly redeem, purchase or otherwise acquire any shares of capital stock of, or other equity or voting interest in, Seller or any of its Subsidiaries, or any options, warrants, calls or rights to acquire any such stock or other securities, other than in connection with tax withholdings and exercise price settlement upon the exercise of Seller Stock Options or Seller Warrants outstanding on the date of this subsection Agreement;
(f)) (i) transfer, sell, lease, sublease, license, sublicense or otherwise dispose of, or permit to lapse any rights to, any material assets or properties of Seller or any of its Subsidiaries (except for sales of Seller Products in the ordinary course of business consistent with past practice) or (ii) mortgage or pledge any of the property or assets of Seller or any of its Subsidiaries, or subject any such property or assets to any other Encumbrance;
(g) increase except in the ordinary course of business consistent with past practice, enter into, extend, renew, amend or terminate any Seller Contract or any material lease or sublease (except salary increases excluding contracts with respect to capital expenditures, which are governed by clause (h) below); provided that in no event shall Seller enter into any procurement contracts which require or involve the payment by Seller or any of its Subsidiaries of more than $50,000 individually or $150,000 in the aggregate;
(h) make any capital expenditures in excess of $50,000 individually or $150,000 in the aggregate;
(i) (A) merge with, enter into a consolidation with or otherwise acquire a portion of the outstanding equity interests in any Person or acquire any portion of the assets or business of any Person (or any division or line of business thereof) or (B) otherwise acquire (including, through leases, subleases, licenses or sublicenses of real property) any material assets;
(j) write down or write up or fail to write down or write up the value of any receivables or revalue any assets of Seller, other than in the ordinary course of business and in accordance with GAAP;
(k) create, incur or assume any indebtedness for borrowed money, assume, guarantee, endorse or otherwise become liable or responsible (whether, directly, contingently or otherwise) for the indebtedness of another Person, enter into any agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, except: (i) for letters of credit or replacement letters of credit entered into in the ordinary course of business and consistent with past practice; (ii) the compensation payable for any indebtedness owed to Seller by any of its direct or to become payable to its officers indirect wholly owned Subsidiaries; (iii) for purchase money debt, capital leases or employees generally or to any employee with an annual salary in excess of $90,000, or grant any bonus, severance, change of control or termination pay or material benefits to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company or any Subsidiary, or establish, adopt, enter into, terminate or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(h) take any action, other than reasonable and usual actions guarantees in the ordinary course of business and not involving indebtedness of more than $50,000 individually or $150,000 in the aggregate; (iv) in connection with the financing of ordinary course trade payables consistent with past practice, with respect ; or (v) pursuant to accounting policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivable);
(i) pay, discharge or otherwise satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, existing credit facilities in the ordinary course of business and consistent with past practice, up to a maximum of liabilities as reflected or reserved against $1,000,000 in the Company 2002 Balance Sheet, or subsequently incurred in the ordinary course of business and consistent with past practiceaggregate outstanding at any time;
(jl) fail to comply change any of its methods, principles or practices of financial accounting currently in all material respects with all applicable Lawseffect other than as required by GAAP as concurred by its independent registered accountants;
(km) fail (i) modify or amend in a manner that is adverse in a material respect to pay and discharge any Taxes on the Company (Seller or any of its Subsidiaries, or accelerate, terminate or cancel, any Seller Contract or (ii) enter into, amend or against modify any of its properties agreement or assets before the same shall become delinquent and before penalties accrue thereon, except to the extent and so long as the same arrangement with Persons that are being contested in good faith and by appropriate proceedingsAffiliates;
(ln) fail (i) dispose of, transfer or license, on an exclusive basis to perform any Person, any of its material obligations the Seller Intellectual Property Assets or any rights to or under any of the Material Contracts Seller Intellectual Property Assets, or terminate (ii) allow any of the Material Contracts; orSeller Intellectual Property Assets to expire, or be cancelled or abandoned;
(mo) settle authorize, recommend, propose or compromise announce an intention to adopt a plan of complete or partial liquidation or dissolution of Seller or any of its Subsidiaries;
(p) form any Subsidiary;
(q) settle, pay or discharge any (i) litigation described in Section 7.13, (ii) litigation, investigation, or arbitration involving non-monetary damages or equitable relief, or (iii) other litigation, investigation, or arbitration in excess of $100,000, either individually or in the aggregate;
(r) except as required by applicable Law, enter into, materially amend or extend any collective bargaining or other labor agreement;
(s) enter into any agreement, understanding or arrangement with respect to the voting or registration of the capital stock of Seller or any of its Subsidiaries;
(t) fail to use reasonable commercial efforts to keep in force its current material claim insurance policies or litigationreplacement or revised provisions providing reasonable insurance coverage with respect to the assets, operations and activities of Seller and its Subsidiaries;
(u) knowingly take or fail to take any action in breach of this Agreement or for the purpose of materially delaying or preventing (or which would be reasonably expected to materially delay or prevent) the consummation of the transactions contemplated hereby; and
(v) authorize any of, or commit, resolve, offer or agree to take any of, the foregoing actions or any other action inconsistent with the foregoing.
Appears in 1 contract
Conduct of Business Pending the Effective Time. SECTION 5.01. Conduct of Business by At all times from the Company Pending the Effective Time. The Company covenants and agrees that, between the date execution of this Agreement and the earlier of the termination of this Agreement pursuant to Article VIII hereof or until the Effective Time, except as set forth on Schedule 5.01 in Section 6.1 of the Company Seller Disclosure Schedule or unless Parent shall (as expressly permitted elsewhere in its sole discretion) otherwise agree in writingthis Agreement, the businesses of the Company and the Subsidiaries shall be conducted only inSeller shall, and the Company and the shall cause each of its Subsidiaries shall not take any action except into, conduct its business in the ordinary course of business and in a manner consistent with past practice; practice and the Company shall in compliance in all material respects with all applicable Laws, and use its commercially reasonable best efforts to to, preserve substantially intact its business organizationorganizations and goodwill, to keep available the services of the current officers, its officers and employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons those Persons having business dealings with which the Company Seller or any Subsidiary has significant business relationsof its Subsidiaries. By way of amplification and not limitationFurthermore, except as contemplated by this Agreement set forth in Section 6.1 of the Seller Disclosure Schedule or as expressly set forth on Schedule 5.01 of the Company Disclosure Schedulepermitted elsewhere in this Agreement, neither the Company nor Seller agrees not to take any of the following actions (and to cause its Subsidiaries shall, between the date of this Agreement and the earlier of the termination of this Agreement pursuant not to Article VIII hereof or the Effective Time, directly or indirectly, do, propose or commit to do, or authorize any of the following, take such actions) without the prior written consent of Parent:Parent (which will not be unreasonably withheld):
(a) amendamend its articles of organization, repeal certificate of incorporation or otherwise change bylaws, joint venture documents, partnership agreements or equivalent organizational documents or, except as set forth in this Agreement, amend the Company's terms of any outstanding security of Seller or any of its Subsidiary's Organizational DocumentsSubsidiaries;
(bi) except upon the exercise of Seller Stock Options outstanding as of the date of this Agreement, issue, deliver, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any Shares or any shares of capital stock of any class of the Company or the Subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any Shares or shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary (except, subject to Section 2.04(a) hereof, for the issuance of shares of Common Stock pursuant to the exercise, in accordance with their respective terms, of employee stock options or other awards outstanding on the date hereof as set forth on Schedule 3.03-1 of the Company Disclosure Schedule);
(c) transfer, lease, license, sell, mortgage, pledge, dispose of or encumber any assets shares of the Company capital stock or other equity or voting interests of Seller or any Subsidiaryof its Subsidiaries, except or any securities convertible into, exchangeable or exercisable for sales or representing the right to subscribe for, purchase or otherwise receive any such shares or interests or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of finished goodscapital stock or other rights that are linked to the value of Seller Common Stock or the value of Seller or any of its Subsidiaries or any part thereof or (ii) effect any stock split, invoicing under cost-plus contracts and invoicing for stock combination, stock reclassification, reverse stock split, stock dividend, recapitalization or other similar transaction;
(c) grant, confer or award any option, right, warrant, deferred stock unit, conversion right or other right not existing on the achievement date hereof to acquire any of milestones under contractsits shares of capital stock or shares of deferred stock, each in restricted stock awards, stock appreciation rights, “phantom” stock awards or other similar rights that are linked to the ordinary course value of business and in a manner consistent with past practiceSeller Common Stock or the value of Seller or any of its Subsidiaries or any part thereof (whether or not pursuant to existing Seller Stock Plans);
(d) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except that a wholly-owned Subsidiary may declare and pay a dividend to its parent;
(e) reclassify, combine, split or subdivide, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(i) acquire except to the extent required under existing plans or arrangements set forth in Section 5.13(a) of the Seller Disclosure Schedule, increase any compensation or benefit (including, without limitation, by merger, consolidation, or acquisition of capital stock or assets)
(A) any corporation, partnership, other business organization or any division thereof or (B) any assets outside the ordinary course of business; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except in the ordinary course of business to vendors and/or employees and consistent with past practice; (iii) enter into any Material Contract, other than in the ordinary course of business, business consistent with past practice; (ivpractice to non-Key Employees) authorize any single capital expenditure in excess of $50,000 of, or capital expenditures, in the aggregate, in excess of $250,000 for the Company and the Subsidiaries taken as a whole; or (v) enter into or amend in any material respect any Material Contract employment or severance agreement with (or pay any amounts (other than in the ordinary course of business consistent with past practice to non-Key Employees) under any Seller Benefit Plans or Seller Other Plans not otherwise due to) any Seller Personnel, (ii) grant any bonuses, other than in the ordinary course of business consistent with past practice (including grants of bonuses to new hires) to any Seller Personnel, (iii) adopt any new Seller Pension Plan, Seller Benefit Plan or Seller Other Plan (including any stock option, stock benefit or stock purchase plan) or amend or modify any existing Seller Pension Plan, Seller Benefit Plan or Seller Other Plan in any material respect, or accelerate the vesting of any compensation (including equity-based awards) for the benefit of any Seller Personnel or grant or amend in any material respect any award under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan (including the grant of any equity or equity-based or related compensation), (iv) provide any funding for any rabbi trust or similar arrangement, or take any other action to fund or secure the payment of any compensation or benefit, (v) grant to any Seller Personnel any right to receive any severance, change in control, retention, termination or similar compensation or benefits or increases therein (other than, in the case of any non-Key Employee, the payment of cash severance or the provision of continued welfare benefits in the ordinary course of business consistent with past practice), (vi) hire or otherwise employ any individual other than in the ordinary course of business consistent with past practice or (vii) terminate any Key Employee other than for cause (including misconduct or breach of company policy);
(e) (A) declare, set aside or pay any dividend or make any other distribution or payment (whether in cash, stock or other property or any contract, agreement, commitment or arrangement combination thereof) with respect to any matter set forth shares of its capital stock or other equity or voting interests (other than dividends or distributions from a wholly owned Subsidiary of Seller to another Subsidiary of Seller or to Seller) or (B) directly or indirectly redeem, purchase or otherwise acquire any of its shares of capital stock of, or other equity or voting interest in, any of Seller or any of its Subsidiaries, or any options, warrants, calls or rights to acquire any such stock or other securities, other than in connection with tax withholdings and exercise price settlement upon the exercise of Seller Stock Options or the lapse of the risk of forfeiture under Restricted Stock outstanding on the date of this subsection Agreement;
(f) (A) transfer, sell, lease, sublease or license or otherwise dispose of any material assets or properties of Seller or any of its Subsidiaries or (B) mortgage or pledge any of the property or assets of Seller or any of its Subsidiaries, or subject any such property or assets to any other Encumbrance (except Permitted Encumbrances), other than, in the case of both (A) and (B), in the ordinary course of business consistent with past practice;
(g) increase except in the ordinary course of business consistent with past practice, enter into, or amend or terminate any Seller Contract or any lease or sublease (excluding contracts with respect to capital expenditures, which are governed by clause (h) below), or grant any right to any Person to any of the Source Code to any Seller Product; provided that in no event shall Seller enter into any procurement contracts which require or involve the payment by Seller or any of its Subsidiaries of more than $750,000 individually or $3,000,000 in the aggregate;
(h) make any capital expenditures in excess of $750,000 individually or $2,000,000 in the aggregate;
(i) (A) merge with, enter into a consolidation with or otherwise acquire a material portion of the outstanding equity interests in any Person or acquire any portion of the assets or business of any Person (or any division or line of business thereof) having a fair market value in excess of $2,000,000 or (B) otherwise acquire (including, through leases, subleases and licenses of real property) any assets, except, in the case of this clause (B), in the ordinary course of business consistent with past practice; provided that no acquisitions that make it more difficult in any material respect to obtain any approval or authorization required in connection with the transactions contemplated hereby under any Law or that would reasonably be expected to prevent, delay, or impede consummation of the transactions contemplated hereby shall be permitted without consent;
(j) write down or write up or fail to write down or write up the value of any receivables or revalue any assets of Seller other than in the ordinary course of business and in accordance with GAAP;
(k) create, incur or assume any indebtedness for borrowed money, assume, guarantee, endorse or otherwise become liable or responsible (whether, directly, contingently or otherwise) for the indebtedness of another Person, enter into any agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, except salary increases for (A) letters of credit or replacement letters of credit entered into in the ordinary course of business and consistent with past practice; (B) the compensation payable any indebtedness owed to Seller by any of its direct or to become payable to its officers indirect wholly owned Subsidiaries; or employees generally (C) purchase money debt, capital leases or to any employee with an annual salary in excess of $90,000, or grant any bonus, severance, change of control or termination pay or material benefits to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company or any Subsidiary, or establish, adopt, enter into, terminate or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(h) take any action, other than reasonable and usual actions guarantees in the ordinary course of business and consistent with past practice, with respect to accounting policies not involving indebtedness of more than $250,000 individually or procedures (including, without limitation, procedures with respect to $1,000,000 in the payment of accounts payable and collection of accounts receivable)aggregate;
(l) change any of its methods, principles or practices of financial accounting currently in effect other than as required by GAAP as concurred by its independent registered accountants;
(m) (i) paymodify or amend in a manner that is adverse in a material respect to Seller or any of its Subsidiaries, discharge or otherwise satisfy accelerate, terminate or cancel, any claimSeller Contract, liability (ii) enter into, amend or obligation modify any agreement or arrangement with Persons that are Affiliates, or (absoluteiii) enter into, accruedextend or renew any contract which, asserted or unassertedif executed prior to the date of this Agreement, contingent or otherwise)would have been required to be disclosed pursuant to Section 5.15, other than the paymentthan, discharge or satisfactionin each case, in the ordinary course of business and consistent with past practice, of liabilities as reflected or reserved against in the Company 2002 Balance Sheet, or subsequently incurred in the ordinary course of business and consistent with past practice;
(jn) fail transfer or license on an exclusive basis to comply in all material respects with all applicable Lawsany Person any rights to Seller Intellectual Property Assets or Seller Technology;
(ko) fail authorize, recommend, propose or announce an intention to pay and discharge any Taxes on the Company (adopt a plan of complete or partial liquidation or dissolution of Seller or any of its Subsidiaries) or against any of its properties or assets before the same shall become delinquent and before penalties accrue thereon, except to the extent and so long as the same are being contested in good faith and by appropriate proceedings;
(lp) form any Subsidiary;
(q) settle, pay or discharge any litigation, investigation, or arbitration, other than the settlement, payment, discharge or satisfaction in the ordinary course of business consistent with past practice;
(r) knowingly take or fail to perform take any action in breach of its material obligations under any this Agreement for the purpose of (or which would be reasonably expected to) materially delaying or preventing the consummation of the Material Contracts or terminate any of the Material Contractstransactions contemplated hereby (other than as required by Law); orand
(ms) settle authorize any of, or compromise commit, resolve, offer or agree to take any material claim of, the foregoing actions or litigationany other action inconsistent with the foregoing.
Appears in 1 contract
Sources: Merger Agreement (BMC Software Inc)