Conduct of the Business of the Company Pending the Closing Date. Except as specifically contemplated by this Agreement or as otherwise consented to or approved in writing by Parent, until the earlier of (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) the Effective Time: (a) the Company shall and shall cause each Subsidiary of the Company to conduct its operations only according to its ordinary course of business consistent with past practice and shall use all reasonable efforts to preserve intact their current business operations, keep available the services of their officers and employees, and maintain satisfactory relationships with lessors, lessees, suppliers, customers, partners and others having business relationships with them; and (b) without limiting the generality of the foregoing, neither the Company nor any Subsidiary of the Company shall: (i) amend its Certificate of Incorporation or By-Laws or comparable organizational documents; (ii) except for grants of Company Stock Options to new hires in the ordinary course of business and consistent with past practice (provided that in the aggregate, the Company may not grant options in the aggregate amount exceeding 50,000), issue or sell, or authorize the issuance or sale of, any shares of its capital stock or any other equity securities, or issue or sell, or authorize the issuance or sale of, any securities convertible into or options, warrants or rights to purchase or subscribe to, or enter into or create any contract with respect to the issuance or sale of, any shares of its capital stock or any other equity securities, or make any other changes in its capital structure, except for the issuance and sale of Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding on the date hereof and other than pursuant to the Company ESPP; (iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entity; (iv) except for payments of dividends by a Subsidiary of the Company, 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 its other securities; (v) enter into any contract which (i) if entered into prior to the date of this Agreement, would be a Material Company Contract, or (ii) involves payment by the Company and its Subsidiaries in excess of $150,000 or receipts by the Company and its Subsidiaries in excess of $250,000 in any consecutive twelve month period, or, in cases where the Company or a Subsidiary of the Company is the party responsible for such payment, which is not terminable upon thirty days notice; (vi) except to the extent required under Employee Plans in effect on the date of this Agreement, grant any options to purchase Shares, increase the compensation or fringe benefits of any of its directors, officers or employees, grant any severance or termination pay not currently required to be paid under existing severance plans; enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee; (vii) except as specifically set forth herein or as required in order to comply with applicable Law, (A) establish, enter into, adopt or amend or terminate any Employee Plan or Compensatory Agreement, (B) change any actuarial or other assumption used to calculate funding obligations with respect to any Employee Plan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not in the ordinary course of business consistent with past practice with respect to any Employee Plan, or (D) take any action to accelerate any rights or benefits under any collective bargaining agreement, Employee Plan or Compensatory Plan; (viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any Lien, any material assets other than entering into contracts with customers in the ordinary course of business consistent with past practice; (ix) sell, assign, transfer, license or modify or amend any rights to any Company Intellectual Property, except in the ordinary course of business consistent with past practice; (x) agree to the settlement of any material claim or Litigation; (xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return; (xii) except as required by applicable Law or GAAP, make any change in its accounting principles, practices or methods; (xiii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, other than in respect of indebtedness owing by the Company to any Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) make any loans or advances to any other Person, other than to the Company or to any Subsidiary of the Company; (A) accelerate the payment, right to payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than as described in Section 3.14(e) of the Company Disclosure Schedule, or, (B) except at Parent’s request in accordance with Section 5.3, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrant; (xv) pay, discharge or satisfy any liabilities other than the payment, discharge or satisfaction of any liabilities in the ordinary course of business and consistent with past practice; (xvi) delay or postpone the payment of accounts payable or other liabilities, other than in the ordinary course of business consistent with past practice; (xvii) modify, amend or terminate any contract which is material to its business or waive any of its material rights or claims, except in the ordinary course of business consistent with past practice; provided that the waiver of any “standstill provision” shall be deemed, for purposes of this Agreement, a waiver of a material right not in the ordinary course of business; (xviii) make any single capital expenditure or commitment in excess of $150,000 or make aggregate capital expenditures or commitments in excess of $250,000; (xix) merge or consolidate with another Person or purchase a substantial portion of the assets of any Person; (xx) enter into any joint venture, partnership or other similar arrangement; (xxi) subject to Section 5.5, take any action to exempt or make any Person (other than Parent) not subject to the provisions of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation; (xxii) subject to Section 5.5, take any action (including encouraging any other Person to take such action), engage in any transaction or enter into any agreement which would reasonably be likely to cause (A) any of the representations or warranties of the Company in this Agreement to be untrue at, or as of any time prior to the earlier of, (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), or (ii) the Effective Time; (B) any of the Tender Offer Conditions to not be satisfied; (C) any of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect on the Company or (E) any impairment of the ability of the Company, Parent, Sub or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation; (xxiii) sell or release, or agree to develop, sell or release, any product that the Company does not make generally available to its customers; or (xxiv) agree, in writing or otherwise, to take any of the foregoing actions.
Appears in 2 contracts
Sources: Merger Agreement (Mercator Software Inc), Merger Agreement (Ascential Software Corp)
Conduct of the Business of the Company Pending the Closing Date. Except The Company agrees that, except as permitted, required or specifically contemplated by by, or otherwise described in, this Agreement Agreement, as set forth on Schedule 6.3 of the Company's Disclosure Letter or as otherwise consented to or approved in writing by Parent, until during the earlier of (i) period commencing on the date upon which Parent’s designees constitute a majority hereof until such time as nominees of Parent shall comprise more than half of the members of the Board of Directors (of the Company or Parent has failed to designate at least 4 individuals this Agreement shall have been terminated pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) the Effective Time9.1 hereof:
(a) the The Company shall shall, and shall cause each Subsidiary of the Company to its Subsidiaries to, conduct its their respective operations only according to its their ordinary and usual course of business consistent with past practice and shall use all their reasonable best efforts to preserve intact their current respective business operationsorganization, keep available the services of their officers and employees, employees and maintain satisfactory relationships with lessors, lesseeslicensors, suppliers, customersdistributors, clients, joint venture partners and others having significant business relationships with them; and
(b) without limiting the generality The Company shall not, and shall cause each of the foregoing, neither the Company nor any Subsidiary of the Company shallits Subsidiaries not to:
(i) amend its Certificate of Incorporation or its By-Laws (or comparable organizational governing documents);
(ii) except for grants (A) upon the exercise of Company Options, Common Stock Options Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to new hires in the ordinary course terms of business the Ancillary Consideration Agreement, dated as of March 17, 1998, by and consistent with past practice (provided that in the aggregate, between the Company may not grant options in the aggregate amount exceeding 50,000)and Olivetti, issue or sell, or authorize the issuance to issue or sale ofsell, any shares of its capital stock or any other equity securities, or issue or sell, or authorize the issuance to issue or sale ofsell, any securities convertible into into, or options, warrants or rights to purchase or subscribe to, or enter into any arrangement or create any contract with respect to the issuance or sale of, any shares of its capital stock or any other equity securities, or make any other changes in its capital structure, except for the issuance and sale of Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding on the date hereof and other than pursuant to the Company ESPP;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entityPerson except to the extent required to be pledged to the collateral agent under the Credit Facility;
(iv) except for payments of dividends by a Subsidiary in the case of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside any dividend (other than dividends on the Series A Preferred Stock or Series B Preferred Stock in accordance with the terms of their respective Certificates of Designation) 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 its other securitiesstock;
(v) enter into any contract which (i) if entered into prior or commitment with respect to the date of this Agreement, would be capital expenditures with a Material Company Contractvalue in excess of, or (ii) involves payment requiring expenditures by the Company and its Subsidiaries in excess of of, $150,000 10 million, individually, or receipts by the Company and its Subsidiaries enter into contracts or commitments with respect to capital expenditures in excess in the aggregate of $250,000 those provided for in any consecutive twelve month period, or, in cases where the Company or a Subsidiary of the Company is the party responsible for such payment, which is not terminable upon thirty days noticePlan;
(vi) acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any material business or any Person, or otherwise acquire any assets of any Person (other than (A) the purchase of assets in the ordinary course of business and consistent with past practice, (B) intercompany transactions and (C) acquisitions which in the aggregate do not exceed $10 million);
(vii) except in the ordinary course of business consistent with the Plan including without limitation the implementation of the Company's job structures and broad bonding program and its various variable compensation programs (including its management incentives and sales compensation plans), and except to the extent required under Employee Plans benefit plans, agreements, collective bargaining agreements or their arrangements as in effect on the date of this AgreementAgreement or applicable law, grant any options to purchase Sharesrule or regulation, increase materially the compensation or fringe benefits of any of its directors, officers or employees, employees or grant any severance or termination pay not currently required to be paid under existing severance plans; or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee;
(vii) except as specifically set forth herein employee of the Company or as required in order to comply with applicable Lawany of its Subsidiaries, (A) or establish, adopt, enter intointo or, adopt or except in connection with the merger of various plans which will not materially increase the benefits payable thereunder, amend or terminate any Employee Plan or Compensatory Agreementcollective bargaining, (B) change any actuarial bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other assumption used plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to calculate funding obligations provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, the Company shall not be permitted to enter into such agreements with respect more than 25 employees and the aggregate maximum potential cost to any Employee Plan, the Company of all such agreements shall not exceed $1,000,000;
(Cviii) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not except in the ordinary course of business consistent with past practice with respect to any Employee Planpractice, or (D) take any action to accelerate any rights or benefits under any collective bargaining agreement, Employee Plan or Compensatory Plan;
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any Lienlien, any material assets or incur or modify any indebtedness or other than entering into contracts with customers in material liability, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the ordinary course obligations of business consistent with past practiceany Person or, make any loan or other extension of credit;
(ix) sellagree to the settlement of any material claim or litigation except for settlements which have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, assignwhen aggregated with the Excess Settlement Amounts (as hereinafter defined), transferdo not exceed $2,000,000; PROVIDED, license FURTHER that those items described in Section 6.3(b)(ix) of the Company Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement Amounts, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000;
(x) make or modify rescind any material tax election or amend settle or compromise any rights to material tax liability;
(xi) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any Company Intellectual Property, of its material Subsidiaries (other than the Merger);
(xii) except in the ordinary course of business consistent with past practice;
(x) agree to the settlement of any material claim or Litigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xii) except as required by applicable Law or GAAP, make any change in its accounting principles, practices or methods;
(xiii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, other than in respect of indebtedness owing by the Company to any Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) make any loans or advances to any other Person, other than to the Company or to any Subsidiary of the Company;
(A) accelerate the payment, right to payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than as described in Section 3.14(e) of the Company Disclosure Schedule, or, (B) except at Parent’s request in accordance with Section 5.3, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrant;
(xv) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained in the ordinary course of business and consistent with past practiceCommission Filings;
(xvixiii) delay or postpone the payment of accounts payable or other liabilities, other than in the ordinary course of business consistent with past practice;
(xvii) modify, amend or terminate any contract which is material to its business or waive any of its material rights or claims, except in the ordinary course of business consistent with past practice; provided , enter into any agreement, understanding or commitment that restrains, limits or impedes the waiver Company's or any of its Subsidiaries' ability to compete with or conduct any “standstill provision” shall be deemed, for purposes of this Agreement, a waiver of a material right not in the ordinary course business or line of business, including, but not limited to, geographic limitations on the Company's or any of its Subsidiaries' activities;
(xviiixiv) make any single capital expenditure or commitment in excess of $150,000 or make aggregate capital expenditures or commitments in excess of $250,000;
(xix) merge or consolidate with another Person or purchase a substantial portion of the assets of any Person;
(xx) enter into any joint venture, partnership or other similar arrangement;
(xxi) subject to Section 5.5, take any action to exempt or make any Person (other than Parent) not subject to the provisions of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;
(xxii) subject to Section 5.5, take any action (including encouraging any other Person to take such action), engage in any transaction or enter into any agreement which would reasonably be likely to cause (A) any of the representations or warranties of the Company in this Agreement to be untrue at, or as of any time prior to the earlier of, (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), or (ii) the Effective Time; (B) any of the Tender Offer Conditions to not be satisfied; ;
(Cxv) any in the case of the conditions set forth in Article VI Company only, take any action including, without limitation, the adoption of any shareholder rights plan or amendments to not be satisfied; its Certificate of Incorporation or By-Laws (D) a Material Adverse Effect on the Company or (E) any impairment of comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to vote, or otherwise to exercise the Companyrights and receive the benefits of a stockholder with respect to, Parent, securities of the Company that may be acquired or controlled by Parent or Sub or the holders permit any stockholder to acquire securities of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation;
(xxiii) sell or release, or agree to develop, sell or release, any product that the Company does on a basis not make generally available to Parent or Sub in the event that Parent or Sub were to acquire any shares of its customerscapital stock; or
(xxivxvi) agree, in writing or otherwise, to take any of the foregoing actions. The Company agrees to consult at least bi-weekly (or such shorter intervals as Parent may reasonably request) with Parent on ongoing operational issues with respect to the business and, in any event, shall keep Parent fully informed with respect to the progress of the transactions described on Schedule 6.3 of the Company Disclosure Letter. Each of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receipt.
Appears in 2 contracts
Sources: Merger Agreement (Wang Laboratories Inc), Merger Agreement (Wang Laboratories Inc)
Conduct of the Business of the Company Pending the Closing Date. Except The Company agrees that, except as permitted, required or specifically contemplated by by, or otherwise described in, this Agreement or as otherwise consented to or approved in writing by ParentParent (which consent or approval shall not be unreasonably withheld or delayed), until during the earlier of (i) period commencing on the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) hereof until the Effective Time:
(a) the Company and each of its Subsidiaries shall and shall cause each Subsidiary of the Company to conduct its their respective operations in all material respects only according to its their ordinary and usual course of business consistent with past practice and shall use all their reasonable best efforts to preserve intact their current respective business operationsorganization, keep available the services of their officers and employees, employees and maintain satisfactory relationships with lessors, lesseeslicensors, suppliers, customersdistributors, clients, joint venture partners and others having significant business relationships with them; and
(b) without limiting the generality Except as set forth in Section 7.03(b) of the foregoingCompany Disclosure Letter or as expressly contemplated by this Agreement, neither the Company nor any Subsidiary of the Company its Subsidiaries shall:
(i) amend its make any change in or amendment to the Company's Certificate of Incorporation or its By-Laws or comparable organizational documentsLaws;
(ii) except for grants of Company Stock Options to new hires in the ordinary course of business and consistent with past practice (provided that in the aggregate, the Company may not grant options in the aggregate amount exceeding 50,000), issue or sell, or authorize the issuance to issue or sale ofsell, any shares of its capital stock or any other equity securities, or issue or sell, or authorize the issuance to issue or sale ofsell, any securities convertible into into, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or create any contract with respect to the issuance or sale of, any shares of its capital stock or any other equity securities, or make any other changes in its capital structure, except for other than (i) the issuance and sale of Shares Company Common Stock upon the exercise of Options or in connection with Company Stock Options or Company Warrants which are Rights outstanding on the date hereof and other than hereof, in each case in accordance with their present terms or pursuant to Options or other Company Stock Rights granted pursuant to clause (ii) below, (ii) the granting of Options or Company Stock Rights granted under the Company ESPPStock Plans in effect on the date hereof in the ordinary course of business consistent with past practice not in excess of the amounts set forth in Section 7.03(b) of the Company Disclosure Letter, (iii) issuances by a wholly-owned Subsidiary of the Company of capital stock to such Subsidiary's parent, the Company or another wholly-owned Subsidiary of the Company or (iv) issuances of Company Common Stock upon the conversion of convertible securities of the Company outstanding as of the date of this Agreement;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entity;
(iv) except for payments of dividends by a Subsidiary of the Company, 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 its other securities;
, other than dividends payable by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary of the Company (v) enter into any contract it being understood that the Company's Board of Directors may declare and the Company may pay quarterly dividends of not more than $0.25 per share on the schedule which (i) if entered into has been publicly announced by the Company on or prior to the date of this Agreement);
(iv) other than in connection with transactions permitted by Section 7.03(b)(v), would be a Material Company Contractincur any capital expenditures or any obligations or liabilities in respect thereof, or except for those (iiA) involves payment contemplated by the capital expenditure budgets for the Company and its Subsidiaries made available to Parent, (B) incurred in excess the ordinary course of $150,000 or receipts by business of the Company and its Subsidiaries or (C) not otherwise described in clauses (A) and (B) which, in the aggregate, do not exceed $25 million;
(v) acquire (whether pursuant to merger, stock or asset purchase or otherwise) in one transaction or series of related transactions (A) any assets (including any equity interests) having a fair market value in excess of $250,000 in any consecutive twelve month period25 million, or, in cases where the Company or a Subsidiary (B) all or substantially all of the Company is the party responsible for such payment, which is not terminable upon thirty days noticeequity interests of any Person or any business or division of any Person having a fair market value in excess of $25 million;
(vi) except in the ordinary course of business consistent with past practice and except to the extent required under Employee Plans existing employee and director benefit plans, agreements or arrangements as in effect on the date of this Agreement, grant any options to purchase Shares, increase the compensation or fringe benefits of any of its directors, officers or employees, employees or grant any severance or termination pay not currently required to be paid under existing severance plans; plans or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employeeemployee of the Company or any of its Subsidiaries, or establish, adopt, enter into or amend in any material respect or terminate 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 directors, officers or employees;
(vii) except as specifically set forth herein or as required in order to comply with applicable Law, (A) establish, enter into, adopt or amend or terminate any Employee Plan or Compensatory Agreement, (B) change any actuarial or other assumption used to calculate funding obligations with respect to any Employee Plan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not in the ordinary course of business consistent with past practice with respect to any Employee Plan, or (D) take any action to accelerate any rights or benefits under any collective bargaining agreement, Employee Plan or Compensatory Plan;
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any Lien, any material assets assets, other than entering into contracts with customers in the ordinary course of business consistent with past practicebusiness;
(ix) sell, assign, transfer, license or modify or amend any rights to any Company Intellectual Property, except in the ordinary course of business consistent with past practice;
(x) agree to the settlement of any material claim or Litigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xiiviii) except as required by applicable Law law or GAAP, make any material change in its accounting principles, practices or methodsmethod of accounting;
(xiiiix) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger) or any agreement relating to a Takeover Proposal, except as provided for in Section 7.07;
(x) (A) incur any material indebtedness for borrowed money or guarantee any such indebtedness of another Person, other than in respect indebtedness owing to or guarantees of indebtedness owing by the Company to any Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another any direct or indirect wholly-owned Subsidiary of the Company or (B) make any loans or advances to any other Person, other than to the Company or to any direct or indirect wholly-owned Subsidiary of the Company, except, in the case of clause (A), for borrowings in the ordinary course of business consistent with past practice, including without limitation borrowings under existing credit facilities described in the Company SEC Reports in the ordinary course of business consistent with past practice for working capital purposes;
(Axi) accelerate the payment, right to payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than as described in Section 3.14(e) of the Company Disclosure Schedule, or, (B) except at Parent’s request in accordance with Section 5.3, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrant;
(xvxii) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) over $15 million, individually or in the aggregate, other than the payment, discharge or satisfaction (A) of any such claims, liabilities or obligations in the ordinary course of business and consistent with past practicepractice or (B) of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained in the Company SEC Reports;
(xiii) enter into any agreement, understanding or commitment that materially restrains, limits or impedes the Company's or any of its Subsidiaries' ability to compete with or conduct any business or line of business, including, but not limited to, geographic limitations on the Company's or any of its Subsidiaries' activities;
(xiv) plan, 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 the Company or its Subsidiaries; provided, however, that routine employee terminations for cause shall not be considered subject to this clause (xiv);
(xv) take any action including, without limitation, the adoption of any shareholder rights plan or amendments to its Certificate of Incorporation or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to vote, or otherwise to exercise the rights and receive the benefits of a shareholder with respect to, securities of the Company acquired or controlled by Parent or Merger Sub or permit any shareholder to acquire securities of the Company on a basis not available to Parent or Merger Sub in the event that Parent or Merger Sub were to acquire any additional shares of the Company Common Stock;
(xvi) delay materially modify, amend or postpone the payment terminate any material contract to which it is a party or waive any of accounts payable its material rights or other liabilities, other than claims except in the ordinary course of business consistent with past practice;
(xvii) modify, amend or terminate any contract which is material to its business or waive any of its material rights or claims, except other than in the ordinary course of business consistent with past practice; provided that the waiver of any “standstill provision” shall be deemed, for purposes of this Agreement, a waiver of a material right not in the ordinary course of business;
(xviii) make any single capital expenditure or commitment in excess of $150,000 or make aggregate capital expenditures or commitments in excess of $250,000;
(xix) merge or consolidate with another Person or purchase a substantial portion of the assets of any Person;
(xx) enter into any joint venture, partnership or other similar arrangement;
(xxi) subject to Section 5.5, take any action to exempt or make any Person (other than Parent) not subject to the provisions of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;
(xxii) subject to Section 5.5, take any action (including encouraging any other Person to take such action), engage in any transaction tax election or enter into any agreement which would reasonably be likely settlement or compromise of any tax liability that in either case is material to cause (A) any of the representations or warranties business of the Company in this Agreement to be untrue at, or and its Subsidiaries as of any time prior to the earlier of, (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), or (ii) the Effective Time; (B) any of the Tender Offer Conditions to not be satisfied; (C) any of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect on the Company or (E) any impairment of the ability of the Company, Parent, Sub or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation;
(xxiii) sell or release, or agree to develop, sell or release, any product that the Company does not make generally available to its customerswhole; or
(xxivxviii) agree, in writing or otherwise, to take any of the foregoing actions.
Appears in 1 contract
Conduct of the Business of the Company Pending the Closing Date. Except as specifically contemplated by this Agreement or as otherwise consented to or approved in writing by Parent, until (a) The Company agrees that during the period commencing on the date hereof and ending on the earlier of (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), (ii) the termination of this Agreement, Agreement or (iii) the Effective Time:
(a) , the Company shall shall, and shall cause each Subsidiary of the Company to its Subsidiaries to, conduct its respective operations (including their respective working capital, capital expenditure, accounts receivable and accounts payable practices and cash management practices) only according to its in the ordinary course of business consistent with past practice and shall to use all its commercially reasonable efforts to preserve intact their current respective business operationsorganizations, keep available the services of their officers and employees, employees and maintain satisfactory relationships with lessors, lesseeslicensors, suppliers, customersvendors, partners distributors, clients and others having business relationships with them; and.
(b) without limiting In furtherance and not in limitation of Section 5.3(a), the generality Company agrees that during the period commencing on the date hereof and ending on the earlier of the foregoingtermination of this Agreement or the Effective Time, neither the Company nor shall not, and shall cause each of its Subsidiaries not to, effect any Subsidiary of the Company shall:following without the prior written consent of Parent (which consent shall not, in the cases of clauses (b)(xv) and (xxix) be unreasonably withheld):
(i) amend or restate its Certificate certificate of Incorporation incorporation or Byby-Laws laws or comparable organizational documentsother equivalent charter documents or create or form any Subsidiary;
(ii) except in each case for grants issuances of Company Capital Stock Options to new hires in upon conversion or exercise of any Company Preferred Stock, Company Restricted Stock or Company Options, and except for the ordinary course granting of business and consistent with past practice the Agreed RSU Awards, authorize for issuance, issue, sell or deliver (provided that in the aggregateA) any capital stock of, or other equity or voting interest in, the Company may not grant options in the aggregate amount exceeding 50,000)or any of its Subsidiaries or (B) any securities convertible into, issue or sellexchangeable for, or authorize evidencing the issuance right to subscribe for or sale acquire any (1) shares of capital stock of, or other equity or voting interest in, the Company or any of its Subsidiaries, (2) securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire, any shares of its the capital stock of, or other equity or voting interest in, the Company or any other equity securitiesof its Subsidiaries including rights, or issue or sell, or authorize the issuance or sale of, any securities convertible into warrants or options, warrants or rights to purchase or subscribe to, or enter into or create any contract with respect to the issuance or sale of, any shares of its capital (3) phantom stock or any other equity securities, or make any other changes in its capital structure, except for the issuance and sale of Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding on the date hereof and other than pursuant to the Company ESPPsimilar equity-based payment option;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entity;
(iv) except for payments of dividends by a Subsidiary of the Company, declare, pay or set aside any dividend or make any distribution (whether in cash, stock or other distribution or payment property) with respect to, or split, combine, redeem or redeem, reclassify, or purchase or otherwise acquireacquire directly, or indirectly, any shares of its capital stock of, or other equity or voting interest in, the Company or any of its Subsidiaries (other securitiesthan in connection with the repurchase of Company Restricted Stock upon the triggering of any applicable forfeiture condition in accordance with the applicable award agreement in existence on the date hereof);
(viv) establish, adopt, enter into or accelerate payment under, amend or terminate any contract which (i) if entered into prior to the date of this AgreementEmployee Benefit Plan or any collective bargaining, would be a Material Company Contractthrift, or (ii) involves payment by the Company and its Subsidiaries in excess of $150,000 or receipts by the Company and its Subsidiaries in excess of $250,000 in any consecutive twelve month period, or, in cases where the Company or a Subsidiary of the Company is the party responsible for such payment, which is not terminable upon thirty days notice;
(vi) except to the extent required under Employee Plans in effect on the date of this Agreement, grant any options to purchase Shares, increase the compensation or fringe benefits other plan, agreement, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees, grant other than (A) as expressly contemplated by this Agreement or (B) as required by Law;
(v) hire any severance new employee or termination consultant, or terminate the employment, other than for cause, of any Key Employee or officer-level employee;
(vi) pay not currently required to be paid under existing severance plans; or enter into any employment, consulting or severance agreement or arrangement with promise to pay (or amend, remove or change any present limitations on, or conditions to the payment of) any bonus, retention or incentive compensation to any current or former employee, consultant or director or otherwise increase (or amend, remove or change any limitations on, or conditions to the payment of) any compensation payable (including wages, salaries, bonuses, benefits or any other remuneration) or to become payable to any current or former officer, director, officer employee or other employeeagent;
(vii) except as specifically set forth herein accelerate, amend or as required change the period of exercisability or vesting of any Company Option or Company Restricted Stock or authorize any cash payment in order to comply with applicable Lawexchange for a Company Option, Company Restricted Stock or other equity award of the Company;
(viii) materially amend, violate, terminate or otherwise modify or waive any of the material terms of any Material Contract or any Company Leases;
(ix) (A) establishamend the terms and conditions of the Global Sales Compensation Plan, enter intoamended June 1, adopt or amend or terminate any Employee Plan or Compensatory Agreement2011, other than to extend the termination date thereof by not more than six (6) months, (B) change amend the terms and conditions of any actuarial or other assumption used to calculate funding obligations with respect to any Employee Planindividual sales compensation plan, (C) change amend the manner Company policy document on the recognition of orders, revenue and payments dated May 2, 2007, (D) provide any special or additional incentive to enter into multi-year renewals other than the incentives existing as of October 13, 2011, (E) increase (or take any action intended to increase) multi-year renewals other beyond the average level of multi-year bookings in which contributions 2009 and 2010, or (F) approve or agree to any Employee Plan are made customer discounts not in the ordinary course of business consistent with the Company's standard discount practices.
(x) mortgage, pledge or encumber any assets or otherwise permit any of its properties or assets to be subject to any Lien (other than Permitted Liens);
(xi) (i) dispose of, license or transfer to any Person any rights to Company Intellectual Property other than pursuant to non-exclusive licenses of binary code in connection with the formula by which such contributions are determined sale of the Products in the ordinary course of business, consistent with past licensing practice, (ii) abandon, permit to lapse or otherwise dispose of any Company Intellectual Property, or (iii) make any material determinations not change in any Company Intellectual Property;
(xii) sell, transfer, lease, license or otherwise dispose of any assets or properties except for (A) sales of inventory in the ordinary course of business consistent with past practice and (B) leases or licenses entered into in the ordinary course of business consistent with past practice with annual lease or royalty payments to the Company or any of its Subsidiaries that are not reasonably expected to exceed Fifty Thousand Dollars ($50,000);
(xiii) acquire any business, line of business or Person by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of related transactions, or enter into any Contract, letter of intent or similar arrangement (whether or not enforceable) with respect to the foregoing;
(xiv) enter into or amend any agreements pursuant to which any other Person is granted joint or exclusive rights of any type or scope with respect to any Employee PlanProducts or services of the Company;
(xv) make any capital expenditure or commitment therefor or enter into any operating lease in excess of Twenty-Five Thousand Dollars ($25,000) individually or Fifty Thousand Dollars ($50,000) in the aggregate or otherwise acquire any assets or properties (other than inventory in the ordinary course of business consistent with practice) or enter into any Contract, letter of intent or similar arrangement (Dwhether or not enforceable) with respect to the foregoing;
(xvi) (A) take any action reasonably likely to (i) accelerate the payment of accounts receivables (including shortening payment terms, providing incentives for early payment or otherwise) or (ii) delay the payment on accounts payable (other than those that are being contested in good faith by appropriate means or procedures) to suppliers, vendors, any rights Governmental Authority or benefits under others; or (B) make any collective bargaining agreement, Employee Plan changes to the cash management policies of the Company or Compensatory Planany of its Subsidiaries;
(viiixvii) transferestablish or close any bank account other than the establishment or closing of a bank account that is required or customary in connection with the settlement of a foreign exchange transaction;
(xviii) write off as uncollectible any notes or accounts receivable, leaseexcept write offs in the ordinary course of business consistent with past practice charged to applicable reserves;
(xix) except as required by GAAP, licensemake any change in any method of accounting or auditing method, guaranteeprinciple, sellpolicy, mortgageprocedure or practice;
(xx) make any Tax election or settle and/or compromise any Tax liability (other than the Company Sales Tax Liability, pledgewhich is the subject of (xxi) below); prepare any Returns in a manner which is inconsistent with the past practices of the Company or any of its Subsidiaries, dispose ofas applicable, encumber with respect to the treatment of items on such Returns; incur any liability for Taxes other than in the ordinary course of business or subject pursuant to the transactions contemplated by this Agreement, or file an amended Return or a claim for refund of Taxes with respect to the income, operations or property of the Company or its Subsidiaries;
(xxi) settle and/or compromise any Company Sales Tax Liability in any Specified State in excess of the amount set forth in Exhibit F-2;
(xxii) fail to pay, discharge, settle or satisfy any claims, actions, Liabilities or obligations, other than those that (A) are not past due, (B) are immaterial in amount, individually and in the aggregate, or (C) are being contested in good faith by appropriate means or procedures;
(xxiii) incur, repay, assume, guarantee or modify any Indebtedness, guarantee any such Indebtedness, issue or sell any debt securities or guarantee any debt securities of others;
(xxiv) make any loans, advances or capital contributions to, or investments in, any other Person other than (A) loans, advances or capital contributions by the Company or any of its Subsidiaries to any Lien, direct or indirect wholly owned Subsidiary of the Company or (B) travel and entertainment advances to the employees of the Company and any material assets other than entering into contracts with customers of its Subsidiaries extended in the ordinary course of business consistent with past practice;
(ixxxv) sell, assign, transfer, license initiate or modify or amend settle any rights to any Company Intellectual Property, except in the ordinary course of business consistent with past practicelitigation;
(xxxvi) agree to file a petition in bankruptcy, make an assignment for the settlement benefit of any material claim creditors, or Litigationfile a petition seeking reorganization or arrangement or other action under U.S. federal or state bankruptcy laws;
(xixxvii) except pursuant fail to Section 5.14(b)keep in full force and effect the Company’s and any of its Subsidiaries’ current insurance policies or reduce the amount of any insurance coverage provided by existing insurance policies;
(xxviii) plan, makeannounce, change implement or rescind effect any material Tax electionreduction in force, change any annual Tax accounting periodlayoff, adopt or change any method of Tax accountingearly retirement program, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset severance program or other reduction in Tax liability, consent to any extension program or waiver effort concerning the termination of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect employment of increasing the Tax liability employees of the Company or any of its Subsidiaries or file any income Tax Return or material non-income Tax Return(other than routine employee terminations for cause);
(xiixxix) except as required by applicable Law or GAAPenter into any Contract which, make any change in its accounting principles, practices or methods;
(xiii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, other than in respect of indebtedness owing by the Company to any Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company if entered into prior to the Company or another Subsidiary of the Company or (B) make any loans or advances date hereof would be required to any other Person, other than to the Company or to any Subsidiary of the Company;
(A) accelerate the payment, right to payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than as described be set forth in Section 3.14(e3.14(a) of the Company Disclosure ScheduleSchedule or commit or agree (whether or not such Contract, or, (Bcommitment or agreement is legally binding) except at Parent’s request in accordance with Section 5.3, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrant;
(xv) pay, discharge or satisfy any liabilities other than the payment, discharge or satisfaction of any liabilities in the ordinary course of business and consistent with past practice;
(xvi) delay or postpone the payment of accounts payable or other liabilities, other than in the ordinary course of business consistent with past practice;
(xvii) modify, amend or terminate any contract which is material to its business or waive do any of its material rights or claims, except in the ordinary course of business consistent with past practiceforegoing; provided that if the waiver Company reasonably believes, upon advice of any “standstill provision” counsel, that obtaining consent of Parent to entry into such Contract may violate Antitrust Laws, then such consent shall not be deemed, for purposes of this Agreement, a waiver of a material right not in the ordinary course of business;required; or
(xviiixxx) make any single capital expenditure agree in writing or commitment in excess of $150,000 or make aggregate capital expenditures or commitments in excess of $250,000;
(xix) merge or consolidate with another Person or purchase a substantial portion of the assets of any Person;
(xx) enter into any joint venture, partnership or other similar arrangement;
(xxi) subject to Section 5.5, take any action to exempt or make any Person (other than Parent) not subject to the provisions of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;
(xxii) subject to Section 5.5, take any action (including encouraging any other Person otherwise to take such action), engage in any transaction or enter into any agreement which would reasonably be likely to cause (Ai) any of the representations or warranties of the Company actions described in this Agreement to be untrue at, or as of any time prior to the earlier of, Sections 5.3(b)(i) through (ixxix) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3)above, or (ii) any other action that would prevent the Company from performing, or cause the Company not to perform, any of its covenants and agreements under this Agreement or under any of the Ancillary Agreements to which it is a party.
(c) Without limiting the foregoing, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time; (B) any of the Tender Offer Conditions to not be satisfied; (C) any of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect on , the Company will notify Parent in writing not less than five (5) Business Days prior to making any material modification to any Product, the Company’s website design or graphical user interface (including, without limitation, aspects of its design, such as colors, shapes, layout and typefaces, and the behavior of its dynamic elements, such as buttons, boxes, and menus) or (Eiii) making any impairment modifications to (x) the terms of the ability use and terms of service applicable to its members, web site visitors or other parties or (y) the Company, Parent, Sub or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation;
(xxiii) sell or release, or agree to develop, sell or release, any product that the Company does not make generally available to its customers; or
(xxiv) agree, in writing or otherwise, to take any of the foregoing actions’s privacy policies.
Appears in 1 contract
Sources: Sale and Purchase of Shares Agreement (Nice Systems LTD)
Conduct of the Business of the Company Pending the Closing Date. Except The Company agrees that, except as permitted, required or specifically contemplated by by, or otherwise described in, this Agreement or as otherwise consented to or approved in writing by ParentParent (which consent or approval shall not be unreasonably withheld or delayed), until during the earlier of (i) period commencing on the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) hereof until the Effective Time:
(a) the The Company and each of its Subsidiaries shall and shall cause each Subsidiary of the Company to conduct its their respective operations in all material respects only according to its their ordinary and usual course of business consistent with past practice and shall use all their reasonable best efforts to preserve intact their current respective business operationsorganizations, keep available the services of their officers and employees, employees and maintain satisfactory relationships with lessors, lesseeslicensors, suppliers, customersdistributors, clients, joint venture partners and others having significant business relationships with them; and;
(b) without limiting the generality Except as set forth in Section 7.3(b) of the foregoingCompany Disclosure Schedule or as expressly contemplated by this Agreement, neither the Company nor any Subsidiary of the Company its Subsidiaries shall:
(i1) amend its make any change in or amendment to the Company's Certificate of Incorporation or its By-Laws or comparable organizational documentsLaws;
(ii2) except for grants of Company Stock Options to new hires in the ordinary course of business and consistent with past practice (provided that in the aggregate, the Company may not grant options in the aggregate amount exceeding 50,000), issue or sell, or authorize the issuance to issue or sale ofsell, any shares of its capital stock or any other equity securities, or issue or sell, or authorize the issuance to issue or sale ofsell, any securities convertible into into, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or create any contract with respect to the issuance or sale of, any shares of its capital stock or any other equity securities, or make any other changes in its capital structure, except for other than (i) the issuance and sale of Shares Company Common Stock upon the exercise of Company Stock Options or Company Warrants which are outstanding on the date hereof and other than pursuant to the Company ESPP;
hereof, in accordance with their present terms, or (iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entity;
(iv) except for payments of dividends issuances by a wholly owned Subsidiary of the Company of capital stock to such Subsidiary's parent, the Company or another wholly owned Subsidiary of the Company, ;
(3) 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 its other securities, other than dividends payable by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(v4) enter into incur any contract which capital expenditures or any obligations or liabilities in respect thereof, except for those (iA) if entered into prior to contemplated by the date of this Agreement, would be a Material Company Contract, or (ii) involves payment by capital expenditure budget for the Company and its Subsidiaries made available to Parent, (B) incurred in excess the ordinary course of $150,000 or receipts by business of the Company and its Subsidiaries and set forth in excess of $250,000 in any consecutive twelve month period, or, in cases where the Company or a Subsidiary Schedule 7.3(b) of the Company is Disclosure Schedule (the party responsible for such payment"CAPITAL BUDGET") or (C) not otherwise described in clauses (A) and (B) which, which is in the aggregate, do not terminable upon thirty days noticeexceed U.S.$1.0 million;
(vi5) acquire or agree to acquire (A) by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization of division thereof (including any of the Company's Subsidiaries) or (B) any assets, including real estate, except (x) purchases of inventory, equipment, other non-material assets in the ordinary course of business consistent with past practice or (y) expenditures consistent with the Company's Capital Budget;
(6) except in the ordinary course of business consistent with past practice and except to the extent required under Employee Plans existing employee and director benefit plans, agreements or arrangements as in effect on the date of this Agreement, grant any options to purchase Shares, increase the compensation or fringe benefits of any of its directors, officers or employees, employees or grant any severance or termination pay not currently required to be paid under existing severance plans; plans or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employeeemployee of the Company or any of its Subsidiaries, or hire or agree to hire, or enter into any employment agreement with, any new or additional key employee or officer having an annual salary of U.S.$150,000 or more;
(vii7) except as specifically set forth herein or as required in order to comply with applicable Lawlaw or expressly provided in this Agreement, (A) establishadopt, enter into, adopt terminate or amend or terminate any Employee Company Benefit Plan or Compensatory other arrangement for the current or future benefit or welfare of any director, officer or current or former employee, except to the extent necessary to coordinate any such Company Benefit Plans with the terms of this Agreement, (B) change pay any actuarial or other assumption used to calculate funding obligations with respect to benefit not provided for under any Employee Company Benefit Plan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not in the ordinary course of business consistent with past practice with respect to any Employee Plan, or (D) take any action to accelerate any rights or benefits under any collective bargaining agreement, Employee Plan or Compensatory Plan;
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any Lien, any material assets other than entering into contracts with customers in the ordinary course of business consistent with past practice;
(ix) sell, assign, transfer, license or modify or amend any rights to any Company Intellectual Property, except in the ordinary course of business consistent with past practice;
(x) agree to the settlement of any material claim or Litigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xii) except as required by applicable Law or GAAP, make any change in its accounting principles, practices or methods;
(xiii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, other than in respect of indebtedness owing by the Company to any Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) make any loans or advances to any other Person, other than to the Company or to any Subsidiary of the Company;
(A) accelerate the payment, right to of payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, (C) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Company Benefit Plan (including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any Company Benefit Plans or agreements or awards made thereunder) or (D) except as required by the current terms thereof take any action to fund or in any other way secure the payment of compensation or benefits under any employee plan, agreement, contract or arrangement or Company Benefit Plan;
(8) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any Lien, any material assets, other than in the ordinary course of business;
(9) except as described required by applicable law or GAAP, make any change in Section 3.14(eits methods of accounting;
(10) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company Disclosure Scheduleor any of its Subsidiaries (other than the Merger) or any agreement relating to a Takeover Proposal, or, (B) except at Parent’s request as provided for in accordance with Section 5.3, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrant7.6;
(xv11) pay(i) incur or assume any long-term debt, discharge or satisfy except in the ordinary course of business, incur or assume any liabilities short-term indebtedness in amounts not consistent with past practice; (ii) incur or modify any material indebtedness or other than liability; (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the payment, discharge or satisfaction obligations of any liabilities other Person, except in the ordinary course of business and consistent with past practice; (iv) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of the Company, or by such Subsidiaries to the Company, or customary loans or advances to employees in accordance with past practice); (v) settle any claims in excess of U.S.$1 million other than in the ordinary course of business, in accordance with past practice, and without admission of liability; or (vi) enter into any material commitment or transaction in excess of U.S.$1 million except in the ordinary course of business;
(xvi12) delay pay, discharge or postpone the payment of accounts payable satisfy any claims, liabilities or other liabilitiesobligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries;
(13) enter into any agreement, understanding or commitment that materially restrains, limits or impedes the Company's or any of its Subsidiaries' ability to compete with or conduct any business or line of business, including, but not limited to, geographic limitations on the Company's or any of its Subsidiaries' activities;
(14) plan, 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 the Company or its Subsidiaries; PROVIDED, HOWEVER, that routine employee terminations for cause shall not be considered subject to this clause (14);
(15) take any action including, without limitation, the adoption of any shareholder rights plan or amendments to its Certificate of Incorporation or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to vote, or otherwise to exercise the rights and receive the benefits of a shareholder with respect to, securities of the Company acquired or controlled by Parent or Purchaser or permit any shareholder to acquire securities of the Company on a basis not available to Parent or Purchaser in the event that Parent or Purchaser were to acquire any additional shares of the Company Common Stock (subject to the Company's right to take action specifically permitted by Section 7.6);
(16) materially modify, amend or terminate any material contract to which it is a party or waive or assign any of its material rights or claims except in the ordinary course of business consistent with past practice;
(xvii17) modify, amend or terminate any contract which is material to its business or waive any of its material rights or claims, except other than in the ordinary course of business consistent with past practice; provided that the waiver of any “standstill provision” shall be deemed, for purposes of this Agreement, a waiver of a material right not in the ordinary course of business;
(xviii) make any single capital expenditure or commitment in excess of $150,000 or make aggregate capital expenditures or commitments in excess of $250,000;
(xix) merge or consolidate with another Person or purchase a substantial portion of the assets of any Person;
(xx) enter into any joint venture, partnership or other similar arrangement;
(xxi) subject to Section 5.5, take any action to exempt or make any Person (other than Parent) not subject to the provisions of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;
(xxii) subject to Section 5.5, take any action (including encouraging any other Person to take such action), engage in any transaction tax election or enter into any agreement which would reasonably be likely settlement or compromise of any tax liability that in either case is material to cause (A) any of the representations or warranties business of the Company in this Agreement to be untrue at, or and its Subsidiaries as of any time prior to the earlier of, (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), or (ii) the Effective Time; (B) any of the Tender Offer Conditions to not be satisfied; (C) any of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect on the Company or (E) any impairment of the ability of the Company, Parent, Sub or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation;
(xxiii) sell or release, or agree to develop, sell or release, any product that the Company does not make generally available to its customerswhole; or
(xxiv18) agree, in writing or otherwise, to take any of the foregoing actions.
(c) The Company shall not, and shall not permit any of its Subsidiaries to, take any voluntary action that would result in (i) any of its representations and warranties set forth in this Agreement that are qualified as to materiality becoming untrue, (ii) any of such representations and warranties that are not so qualified becoming untrue in any material manner having a Company Material Adverse Effect or (iii) any of the conditions to the Offer set forth in subsections (a), (c), (d) and (e) of Annex I not being satisfied (subject to the Company's right to take action specifically permitted by Section 7.6).
Appears in 1 contract
Sources: Merger Agreement (Endosonics Corp)
Conduct of the Business of the Company Pending the Closing Date. Except The Company agrees that, except as specifically contemplated (A) set forth on Schedule 5.3, (B) may be required by this Agreement Agreement, (C) required by Law or by a Governmental Entity, (D) as otherwise consented to or approved in writing by Parent (such consent not to be unreasonably withheld, conditioned or delayed; provided, that the consent of Parent shall be deemed to have been given if Parent does not object within five (5) Business Days from the date on which a request for such consent is provided by the Company to Parent), until during the period commencing on the date hereof and ending at the earlier of (ix) the date upon which Parent’s designees constitute a majority Closing and (y) termination of the Board of Directors (or Parent has failed to designate at least 4 individuals this Agreement pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) the Effective Time7.1:
(a) the Company shall shall, and shall cause each Subsidiary of the Company to conduct its operations only according to its ordinary course of business consistent with past practice and shall Subsidiaries to, use all commercially reasonable efforts to preserve intact conduct their current business operations, keep available the services of their officers and employees, and maintain satisfactory relationships with lessors, lessees, suppliers, customers, partners and others having business relationships with them; and
(b) without limiting the generality of the foregoing, neither the Company nor any Subsidiary of the Company shall:
(i) amend its Certificate of Incorporation or By-Laws or comparable organizational documents;
(ii) except for grants of Company Stock Options to new hires respective businesses in the ordinary course of business and consistent with past practice in all material respects;
(provided that in the aggregate, b) the Company may shall not, and shall cause the Company Subsidiaries not grant options to, effect any of the following:
(i) make any change in the aggregate amount exceeding 50,000)or amendment to its Charter Documents, as applicable;
(ii) issue or sell, or authorize the issuance to issue or sale ofsell, any shares of its capital stock Shares, or any other equity securitiesownership interests, as applicable, or issue or sell, or authorize the issuance to issue or sale ofsell, any securities convertible into or exchangeable for, or options, warrants or rights to purchase or subscribe tofor, or enter into or create any contract Contract with respect to the issuance or sale of, any shares of its Shares, capital stock or any other equity securitiesownership interests, or make any other changes in its capital structure, except for the issuance and sale of Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding on the date hereof and other than pursuant to the Company ESPPas applicable;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entity;
(iv) except for payments of dividends by a Subsidiary of the Company, 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 Shares or any other ownership interests, as applicable;
(iv) other than in the ordinary course of business, (A) sell, lease or otherwise dispose of any of its capital stock properties or assets (including all Company Intellectual Property) that are material to its other securitiesbusiness or (B) acquire any business of any Person or all or substantially all of the assets of any Person;
(v) other than in the ordinary course of business, amend in any material respect or terminate any Material Contract or enter into any contract which (i) if a Contract which, had it been entered into prior to the date of this Agreementhereof, would be have been a Material Company Contract; provided, or (ii) involves payment by however, that the Company and its Subsidiaries in excess of $150,000 or receipts by the Company and Subsidiaries may renegotiate the terms of, or otherwise extend, any Material Contract that has expired in accordance with its Subsidiaries terms prior to the date hereof or is scheduled to expire in excess of $250,000 in any consecutive twelve month period, or, in cases where accordance with its terms within six (6) months after the Company or a Subsidiary of the Company is the party responsible for such payment, which is not terminable upon thirty days noticedate hereof;
(vi) except to other than in the extent required under Employee Plans in effect on the date ordinary course of this Agreementbusiness, grant any options to purchase Shares, increase the compensation or fringe benefits of any of its directors, officers or employees, grant any severance or termination pay not currently required to be paid under existing severance plans; enter into any employmentarrangement, consulting or severance agreement or arrangement transaction with (i) any present Affiliate of the Company (other than another member of the Group), (ii) the Key Stockholder or former directorany Affiliate of the Key Stockholder (other than another member of the Group), officer or other employeeand (iii) any Company Related Party;
(vii) except as specifically set forth herein other than Indebtedness that will be repaid in full at or as required in order prior to comply with applicable Lawthe Closing, (A) establishincur any material funded Indebtedness, enter into, adopt or amend or terminate any Employee Plan or Compensatory Agreementother than (i) Indebtedness that will be repaid at Closing, (Bii) change any actuarial short-term Indebtedness or other assumption used to calculate funding obligations with respect to any Employee Plan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not letters of credit incurred in the ordinary course of business consistent with past practice with respect to any Employee Plan, or (Diii) take any action to accelerate any rights or benefits borrowings under any collective bargaining agreement, Employee Plan or Compensatory Plan;
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any Lien, any material assets other than entering into contracts with customers in the ordinary course of business consistent with past practice;
(ix) sell, assign, transfer, license or modify or amend any rights to any Company Intellectual Property, except in the ordinary course of business consistent with past practice;
(x) agree to the settlement of any material claim or Litigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xii) except as required by applicable Law or GAAP, make any change in its accounting principles, practices or methods;
(xiii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, other than in respect of indebtedness owing by the Company to any Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another Subsidiary of the Company existing credit facilities or (B) make any loans or advances to any other Person, other than loans and advances to employees made in the ordinary course of business;
(viii) grant or agree to grant to any officer or employee of the Company or to any Company Subsidiary of the Company;
(A) accelerate the payment, right to payment any material increase in wages or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other or establish any new compensation or employee benefit plans or arrangements, or amend or agree to amend any existing Employee Benefit Plans (except to the extent that such amendment would not result in more than as described in Section 3.14(e) of a de minimis increase to the cost to the Company Disclosure Scheduleunder such arrangement or plan), or, except (A) as may be required by applicable Law (B) except at Parent’s request pursuant to any Employee Benefit Plan in accordance with Section 5.3effect on the date hereof, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrant;
(xvC) pay, discharge or satisfy any liabilities other than the payment, discharge or satisfaction of any liabilities for merit-based increases in compensation in the ordinary course of business and consistent with past practicepractices during the Company’s annual review period or in connection with a promotion, it being understood that any such increases in guaranteed payments shall not be greater than 20% individually or 3% in the aggregate, or (D) as otherwise provided for in this Agreement;
(xviix) delay or postpone the payment of accounts payable or other liabilities, other than in the ordinary course of business consistent with past practicebusiness, (A) make any material Tax election not required by Law that would have a continuing effect on the Company following the Closing Date, (B) adopt a new method of accounting (whether or not such method is impermissible) for Tax purposes or (C) settle or compromise any material Tax liability imposed on the Company;
(xviix) modify, amend or terminate any contract which is material to its business or waive any of its material rights or claims, except in the ordinary course of business consistent with past practice; provided that the waiver of any “standstill provision” shall be deemed, for purposes of this Agreement, a waiver of a material right not other than in the ordinary course of business, (A) waive any rights of substantial value or (B) cancel or forgive any material Indebtedness owed to the Company or any Company Subsidiary, other than Indebtedness of the Company owed to a Company Subsidiaries or Indebtedness for borrowed money of a Company Subsidiaries to the Company or to another Company Subsidiary;
(xviiixi) except as may be required by any Governmental Entity or under GAAP, make any single capital expenditure or commitment material change in excess its methods, principles and practices of $150,000 or make aggregate capital expenditures or commitments in excess of $250,000;accounting; or
(xixxii) merge authorize any of, or consolidate with another Person commit or purchase a substantial portion of the assets of any Person;
(xx) enter into any joint venture, partnership or other similar arrangement;
(xxi) subject agree to Section 5.5, take any action to exempt or make any Person (other than Parent) not subject to of, the foregoing actions in respect of which it is restricted by the provisions of this Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;5.3.
(xxiic) subject to Section 5.5, take any action (including encouraging any other Person to take such action), engage in any transaction or enter into any agreement which would reasonably be likely to cause (A) any of the representations or warranties of the Company Notwithstanding anything contained in this Agreement to the contrary, the Company and the Company Subsidiaries shall be untrue atpermitted to maintain through the Closing Date the cash management systems of the Company and the Company Subsidiaries, maintain the cash management procedures as currently conducted by the Company and the Company Subsidiaries, and periodically settle intercompany balances consistent with past practices (including through dividends and capital contributions and all such intercompany balances shall be settled at the Closing in accordance with their terms). The Company and the Company Subsidiaries are allowed to dividend or as distribute any and all Cash and Cash Equivalents of the Company and the Company Subsidiaries to the Key Stockholder at any time prior to the earlier ofdelivery of the Closing Estimate Statement.
(d) Notwithstanding anything contained in this Agreement to the contrary, neither the Company nor any of the Company Subsidiaries shall be deemed to have operated outside the ordinary course of business because the Company or any of the Company Subsidiaries were responding to any of the following in good faith and such actions shall not be deemed to be a breach of Section 5.3(a) or Section 5.3(b) in response to any of the following (so long as such action or such refraining from action is done in a manner materially consistent with how a similarly situated company in the same industry acting reasonably could reasonably be expected to act or refrain from acting under similar circumstances and reasonably informed by the past practice of the Company and the Company Subsidiaries (taken as a whole)): (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (changes or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), proposed changes in Laws or Orders or interpretations thereof or changes in GAAP or other accounting requirements or principles; (ii) the Effective Time; negotiation, execution, announcement or performance of this Agreement or the transactions contemplated hereby or any communication by Parent, Merger Sub or any of their respective Affiliates of its plans or intentions (including in respect of employees) with respect to any of the businesses of the Company and the Company Subsidiaries, including (A) losses or threatened losses of, or any adverse change in the relationship, contractual or otherwise, with employees, customers, suppliers, distributors, financing sources, joint venture partners, licensors, licensees or others having relationships with the Company or any Company Subsidiary and (B) the initiation of litigation or other administrative proceedings by any Person with respect to this Agreement or any of the Tender Offer Conditions transactions contemplated hereby; (iii) the consummation of the transactions contemplated by this Agreement or any actions by PLC, Parent, Merger Sub, the Company or any Company Subsidiary taken pursuant to this Agreement; (iv) conduct by the Company or any Company Subsidiary (A) prohibited under Section 5.3 for which Parent gave its prior written consent or (B) in order to comply with its obligations under Section 5.3; (v) any natural disaster or any acts of terrorism, cyberterrorism, sabotage, military action, armed hostilities, war (whether or not be satisfieddeclared), epidemic, pandemic or disease outbreak or the response of any Governmental Entity thereto, in each case whether or not occurring or commenced before or after the date of this Agreement; (vi) (A) proposing, negotiating, committing to or effecting, by consent decree, hold separate order or otherwise, the sale, transfer, divestiture, license or disposition of operations, divisions, businesses, product lines, customers or assets arising from Parent’s or Merger Sub’s compliance with its obligations under Section 5.5, (B) otherwise taking or committing to take actions that limit or could limit Parent’s or its Affiliates’ (including, after the Closing, the Company’s and the Company Subsidiaries’) freedom of action with respect to, or their ability to retain, one or more of their respective operations, divisions, businesses, product lines, customers or assets arising solely from Parent’s or Merger Sub’s compliance with its obligations under Section 5.5, or (C) the application of applicable Laws (including any action or judgment arising under applicable Laws) to the transactions contemplated by this Agreement; or (ix) any failure, in and of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect on itself, by the Company or any Company Subsidiary to meet any internal projections or forecasts (E) as distinguished from any impairment of the ability of the CompanyEvent giving rise or contributing to such failure), Parent, Sub or the holders of Shares provided that prior to consummate the Offer or the Merger in accordance with the terms hereof or materially delay taking any such consummation;
(xxiii) sell or release, or agree to develop, sell or release, any product that action the Company does not make generally available to shall use its customers; or
(xxiv) agree, in writing or otherwisecommercially reasonable efforts, to take any of the foregoing actionsextent practicable, notify and discuss in good faith with Parent their intended action(s).
Appears in 1 contract
Sources: Merger Agreement (Endava PLC)
Conduct of the Business of the Company Pending the Closing Date. Except The Company agrees that, except as specifically contemplated expressly permitted or required by this Agreement or as otherwise consented to or approved in writing by with the prior written consent of Parent, until during the period commencing on the date hereof and ending at the earlier of (ix) the date upon which Parent’s designees constitute a majority Effective Time and (y) termination of the Board of Directors (or Parent has failed to designate at least 4 individuals this Agreement pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) the Effective Time7.1:
(a) the Company and each of its Subsidiaries shall and shall cause each Subsidiary of the Company to conduct its their respective operations only according to its their ordinary and usual course of business consistent with past practice and shall use all their commercially reasonable efforts to preserve intact their current respective business operationsorganization, keep available the services of their officers and employeesemployees who are employed by the Company on the date hereof, and maintain satisfactory relationships with lessors, lesseeslicensors, suppliers, customersdistributors, partners clients, customers and others having significant business relationships with them; and, maintain their Intellectual Property, and preserve and keep confidential their trade secrets;
(b) without limiting the generality of the foregoing, neither the Company nor any Subsidiary of the Company its Subsidiaries shall:
(i) amend make any change in or amendment to its Certificate of Incorporation or its By-Laws laws (or comparable organizational governing documents);
(ii) except for grants of Company Stock Options to new hires in the ordinary course of business and consistent with past practice (provided that in the aggregate, the Company may not grant options in the aggregate amount exceeding 50,000), issue or sell, or authorize the issuance to issue or sale ofsell, any shares of its capital stock or any other equity securities, or issue or sell, or authorize the issuance to issue or sale ofsell, any securities convertible into or exchangeable for, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or create any contract with respect to the issuance or sale of, any shares of its capital stock or any other equity securities, or make any other changes in its capital structure, except for the issuance and sale of Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding on the date hereof and other than pursuant to the Company ESPP;
(iii) sell sell, pledge or pledge dispose of or agree to sell sell, pledge or pledge dispose of any stock or other equity interest owned by it in any other entityPerson;
(iv) except for payments of dividends by a Subsidiary of the Company, 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 its other securities;
(v) enter into any contract which (i) if entered into prior or commitment with respect to the date of this Agreement, would be capital expenditures with a Material Company Contractvalue in excess of, or (ii) involves payment requiring expenditures by the Company and its Subsidiaries in excess of of, $150,000 50,000, individually, or receipts enter into contracts or commitments with respect to capital expenditures with a value in excess of, or requiring expenditures by the Company and its Subsidiaries in excess of of, $250,000 in any consecutive twelve month period, or50,000, in cases where the Company or a Subsidiary of the Company is the party responsible for such payment, which is not terminable upon thirty days noticeaggregate;
(vi) acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any business or any Person, or otherwise acquire any assets of any Person (other than the purchase of assets in the ordinary course of business and consistent with past practice);
(vii) except to the extent required under Employee Plans existing employee and director benefit plans, agreements or arrangements in effect on the date of this Agreement, grant any options to purchase SharesAgreement and set forth on Schedule 5.2(b)(vii), increase the compensation or fringe benefits of any of its directors, officers or employees, or grant any severance or termination pay not currently required to be paid under existing severance plans; , or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee;
(vii) employee of the Company or any of its Subsidiaries, or, except as specifically set forth herein or as required in order to comply with applicable Lawlaw or Section 280G of the Code, (A) establish, adopt, enter into, adopt into or amend or terminate any Employee Plan or Compensatory Agreementcollective bargaining, (B) change any actuarial bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other assumption used to calculate funding obligations with respect to any Employee Planplan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not in the ordinary course of business consistent with past practice with respect to any Employee Plan, or (D) take any action to accelerate any rights or benefits under any collective bargaining agreement, Employee Plan trust, fund, policy or Compensatory Planarrangement for the benefit of any directors, officers or employees;
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any Lien, any material assets Lien (other than entering into contracts with customers a Lien permitted hereby) or otherwise encumber any assets, or incur or modify any Indebtedness or other liability, other than in the ordinary course of business consistent with past practice, 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;
(ix) sell, assign, transfer, enter into any agreement for the acquisition by or license to the Company or modify any of Subsidiaries of any software or amend technology of any rights to any Company Intellectual Property, except in the ordinary course of business consistent with past practicethird party;
(x) agree to the settlement of or waive any material claim or Litigationlitigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xii) except as required by applicable Law law or GAAP, make any change in its accounting principlesmethod of accounting;
(xii) adopt or enter into a plan of complete or partial liquidation, practices dissolution, merger, consolidation, restructuring, recapitalization or methodsother reorganization of the Company or any of its Subsidiaries (other than the Merger);
(xiii) (Ax) incur incur, assume or prepay any indebtedness for borrowed money Indebtedness or guarantee any such indebtedness Indebtedness of another Person, other than in respect intercompany indebtedness or guarantees of intercompany indebtedness owing by among the Company to and any direct or indirect wholly-owned Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another Subsidiary of the Company Company, or (By) make any loans loans, extensions of credit or advances to any other Person, other than to the Company or to any direct or indirect wholly-owned Subsidiary of the Company;
(Axiv) other than pursuant to arrangements in effect on the date hereof and as set forth on Schedule 5.2(b)(xiv), accelerate the payment, right to payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than as described in Section 3.14(e) of the Company Disclosure Schedule, or, (B) except at Parent’s request in accordance with Section 5.3, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrant;
(xv) pay, discharge or satisfy any material claims, liabilities other than the paymentor obligations (absolute, discharge accrued, asserted or satisfaction of any liabilities in the ordinary course of business and consistent with past practiceunasserted, contingent or otherwise);
(xvi) delay or postpone the payment of accounts payable or other liabilitiesenter into, other than in the ordinary course of business consistent with past practice;
(xvii) materially modify, amend or terminate any contract which is material to its business Material Contract or waive any of its material rights or claims;
(xvii) enter into any agreement or arrangement that materially limits or otherwise restricts the Company, except any of its Subsidiaries, or any successor thereto, or that would, after the Effective Time, limit or restrict the Surviving Corporation and its affiliates (including Parent) or any successor thereto, from engaging or competing in the ordinary course any line of business consistent with past practiceor in any geographic area; provided that the waiver of any “standstill provision” shall be deemed, for purposes of this Agreement, a waiver of a material right not in the ordinary course of business;or
(xviii) make other than pursuant to arrangements set forth on Schedule 5.2(b)(xviii), plan, announce, implement or effect any single capital expenditure reduction in force, lay-off, early retirement program, severance program or commitment in excess other program or effort concerning the termination of $150,000 employment of employees of the Company or make aggregate capital expenditures or commitments in excess of $250,000its Subsidiaries;
(xix) merge or consolidate with another Person or purchase a substantial portion of the assets of any Person;
(xx) enter into any joint venture, partnership or other similar arrangement;
(xxi) subject to Section 5.5, take any action to exempt or make any Person (other than Parent) not subject to the provisions of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;
(xxii) subject to Section 5.5, take any action (including encouraging any other Person to take such action), engage in any transaction or enter into any agreement which would reasonably be likely to cause (A) any of the representations or warranties of the Company in this Agreement to be untrue at, or as of any time prior to the earlier of, (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), or (ii) the Effective Time; (B) any of the Tender Offer Conditions to not be satisfied; (C) any of the conditions set forth in Article VI to not be satisfied; (D) 3 that are subject to, or qualified by, a “Material Adverse Effect Effect,” “material adverse change” or other materiality qualification to be untrue as of the Effective Time, or any such representations and warranties that are not so qualified to be untrue in any material respect;
(xx) other than pursuant to arrangements set forth on Schedule 5.2(b)(xx), purchase or acquire, or offer to purchase or acquire, any shares of Company Stock;
(xxi) take any action, including the adoption of any stockholder-rights plan or amendments to its Certificate of Incorporation or By-laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to vote or otherwise to exercise the rights and receive the benefits of a stockholder with respect to securities of the Company that may be acquired or controlled by Parent or Sub, or which would permit any stockholder to acquire securities of the Company on a basis not available to Parent or Sub in the event that Parent or Sub were to acquire any shares of Company Stock;
(xxii) (v) file or cause to be filed any amended Returns or claims for refund of Taxes, (w) prepare any Return in a manner which is inconsistent with the past practices of the Company or a Subsidiary, as the case may be, with respect to the treatment of items on such Returns; (Ex) make any impairment Tax election; (y) incur any liability for Taxes other than in the ordinary course of the ability of the Company, Parent, Sub business; (z) enter into any settlement or the holders of Shares to consummate the Offer or the Merger in accordance closing agreement with the terms hereof or materially delay such consummationa taxing authority;
(xxiii) sell or release, or agree fail to develop, sell or release, any product that the Company does not make generally available to maintain with financially responsible insurance companies insurance on its customerstangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice; or
(xxiv) agree, in writing or otherwise, or commit to take any of the foregoing actions.
Appears in 1 contract
Conduct of the Business of the Company Pending the Closing Date. Except The Company agrees that, except as permitted, required or specifically contemplated by by, or otherwise described in, this Agreement or as Schedule 5.2 or otherwise consented to or approved in writing by ParentEMKT (which consent shall not be unreasonably withheld, until delayed or conditioned), during the earlier of (i) period commencing on the date upon which Parent’s designees constitute a majority of hereof and ending on the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) the Effective TimeClosing Date:
(a) the The Company shall and shall cause each Subsidiary of the Company to its Subsidiaries will conduct its their respective operations only according to its their ordinary and usual course of business consistent with past practice and shall will use all reasonable their best efforts to preserve intact their current respective business operationsorganization, keep available the services of their officers and employees, employees and maintain satisfactory relationships with lessors, lesseeslicensers, suppliers, customersdistributors, partners clients and others having business relationships with them; and;
(b) without limiting the generality of the foregoing, neither Neither the Company nor any Subsidiary of the Company shall:
its Subsidiaries shall (i) amend make any change in or amendment to its Certificate of Incorporation or By-Laws (or comparable organizational governing documents;
); (ii) except for grants of Company Stock Options to new hires in the ordinary course of business and consistent with past practice (provided that in the aggregate, the Company may not grant options in the aggregate amount exceeding 50,000), issue or sell, or authorize the issuance or sale of, sell any shares of its capital stock (other than in connection with the exercise of Company Options outstanding on the date hereof) or any of its other equity securities, or issue or sell, or authorize the issuance or sale of, any securities convertible into into, or options, warrants or rights to purchase or subscribe to, or enter into any arrangement or create any contract with respect to the issuance or sale of, any shares of its capital stock or any of its other equity securities, or make any other changes in its capital structure, except for the issuance and sale of Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding on the date hereof and other than pursuant to the Company ESPP;
; (iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entity;
(iv) except for payments of dividends by a Subsidiary of the Company, declare, pay or set aside make 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 its other securities;
stock; (viv) enter into any contract which (i) if entered into prior to the date of this Agreementor commitment, would be a Material Company Contract, or (ii) involves payment by the Company and its Subsidiaries in excess of $150,000 or receipts by the Company and its Subsidiaries in excess of $250,000 in any consecutive twelve month period, or, in cases where the Company or a Subsidiary of the Company is the party responsible except for such payment, which is not terminable upon thirty days notice;
(vi) except to the extent required under Employee Plans in effect on the date of this Agreement, grant any options to purchase Shares, increase the compensation or fringe benefits of any of its directors, officers or employees, grant any severance or termination pay not currently required to be paid under existing severance plans; enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee;
(vii) except as specifically set forth herein or as required in order to comply with applicable Law, (A) establish, enter into, adopt or amend or terminate any Employee Plan or Compensatory Agreement, (B) change any actuarial or other assumption used to calculate funding obligations with respect to any Employee Plan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not contracts in the ordinary course of business consistent with past practice with respect to business, including without limitation, any Employee Planacquisition of a material amount of assets or securities, any disposition of a material amount of assets or securities or release or relinquish any material contract rights; (Dv) take any action to accelerate any rights or benefits under any collective bargaining agreement, Employee Plan or Compensatory Plan;
(viii) transfer, lease, licenseassume, guarantee, sellendorse or otherwise become liable or responsible (whether directly, mortgagecontingently, pledge, dispose of, encumber or subject to otherwise) for the obligations of any Lien, any material assets other Person other than entering into contracts with customers in the ordinary course of business consistent with past practice;
(ix) sell, assign, transfer, license or modify or amend any rights to any Company Intellectual Property, except in the ordinary course of business consistent with past practice;
(x) agree to the settlement of any material claim or Litigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xii) except as required by applicable Law or GAAP, make any change in its accounting principles, practices or methods;
(xiii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, other than in respect of indebtedness owing by the Company to any Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) make any loans or advances to any other Person, other than to the Company or to any Subsidiary of the Company;
(A) accelerate the payment, right to payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than as described in Section 3.14(e) of the Company Disclosure Schedule, or, (B) except at Parent’s request in accordance with Section 5.3, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrant;
(xv) pay, discharge or satisfy any liabilities other than the payment, discharge or satisfaction of any liabilities in the ordinary course of business and consistent with past practice;
(xvi) delay or postpone the payment of accounts payable or other liabilities, other than in the ordinary course of business consistent with past practice;
(xvii) modify, amend or terminate any contract which is material to its business or waive any of its material rights or claims, except in the ordinary course of business consistent with past practice; provided that the waiver of any “standstill provision” shall be deemed, for purposes of this Agreement, a waiver of a material right not in the ordinary course of business;
(xviii) make any single capital expenditure or commitment in excess of $150,000 or make aggregate capital expenditures or commitments in excess of $250,000;
(xix) merge or consolidate with another Person or purchase a substantial portion of the assets of any Person;
(xx) enter into any joint venture, partnership or other similar arrangement;
(xxi) subject to Section 5.5, take any action to exempt or make any Person (other than Parent) not subject to the provisions of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;
(xxii) subject to Section 5.5, take any action (including encouraging any other Person to take such action), engage in any transaction or enter into any agreement which would reasonably be likely to cause (A) any of the representations or warranties of the Company in this Agreement to be untrue at, or as of any time prior to the earlier of, (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), or (ii) the Effective Time; (B) any of the Tender Offer Conditions to not be satisfied; (C) any of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect on the Company or (E) any impairment of the ability of the Company, Parent, Sub or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation;
(xxiii) sell or release, or agree to develop, sell or release, any product that the Company does not make generally available to its customers; or
(xxiv) agree, in writing or otherwise, to take any of the foregoing actions.
Appears in 1 contract
Sources: Stock Purchase and Contribution Agreement (Emarketplace Inc)
Conduct of the Business of the Company Pending the Closing Date. Except During the period commencing on the date hereof and ending at the earlier of (x) the Closing Date and (y) the termination of this Agreement pursuant to Section 9.1, except as specifically contemplated by expressly required under this Agreement or as otherwise consented to or approved set forth in writing by Parent, until the earlier of (i) the date upon which Parent’s designees constitute a majority Section 6.3 of the Board of Directors (or Parent has failed Company Disclosure Letter, the Company shall, and the Seller shall cause the Company to designate at least 4 individuals pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) the Effective Time:
(a) the Company shall and shall cause each Subsidiary of the Company to conduct its operations only according to its business in the ordinary course of business consistent with past practice practice, and shall (b) use all its commercially reasonable efforts to preserve intact their current its business operationsorganizations and relationships with third parties, including its customers, suppliers and others having business dealings with them, and to keep available the services of their present officers and employeessignificant employees (provided that this clause (b) shall not oblige the Company to make any out-of-pocket payments to such third parties, and maintain satisfactory relationships with lessors, lesseescustomers, suppliers, customers, partners and others having business relationships with them; and
(b) without officers or significant employees). Without limiting the generality of the foregoing, neither the Company nor except (A) as expressly required under this Agreement, (B) as required by applicable Laws or any Subsidiary Governmental Entity or (C) as otherwise set forth in Section 6.3 of the Company shall:Disclosure Letter or required under Contracts which are in existence on the date hereof, from the date hereof until the earlier of (x) the Closing Date and (y) the termination of this Agreement pursuant to Section 9.1, the Company shall not, and the Seller shall cause the Company not to, take any of the following actions without the prior written consent of the Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed):
(ia) amend its Certificate the Company’s certificate of Incorporation formation or By-Laws or comparable organizational documentslimited liability company agreement;
(iib) except authorize the issuance of or grant any membership interests of the Company, transfer, sell or otherwise dispose of, purchase, redeem or subject to any new Lien (other than Permitted Liens) any membership interests of the Company or issue or become obligated with respect to any Commitment with respect to the Company;
(c) sell, transfer or otherwise dispose of, or subject to any new Lien (other than Permitted Liens), any Owned Real Property or fixed assets that are material to the conduct of the business of the Company;
(d) incur any new Company Indebtedness for grants of Company Stock Options borrowed money with any third party or with the Seller or its Affiliates, other than as reasonably necessary to new hires meet working capital requirements or in the ordinary course of business and consistent with past practice (or in replacement of existing Company Indebtedness, provided that in such new Company Indebtedness is fully prepayable at the aggregate, the Company may not grant options in the aggregate amount exceeding 50,000), issue or sell, or authorize the issuance or sale of, any shares of its capital stock or any other equity securities, or issue or sell, or authorize the issuance or sale of, any securities convertible into or options, warrants or rights to purchase or subscribe to, or enter into or create any contract with respect to the issuance or sale of, any shares of its capital stock or any other equity securities, or make any other changes in its capital structure, except for the issuance and sale of Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding on the date hereof and other than pursuant to the Company ESPPClosing without penalty;
(iiie) sell split, combine, divide, distribute, or pledge reclassify any membership interests of the Company, declare, pay, or agree to sell or pledge set aside for payment any stock non-cash dividend or other equity interest owned by it non-cash distribution in respect of the Company’s membership interests;
(f) undertake a Bankruptcy Event;
(g) dissolve, liquidate or merge or consolidate the Company with or into any other entity;
(ivh) establish, sponsor, amend or terminate (except for payments of dividends by a Subsidiary of amendments which do not increase costs to the Company, 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 its other securitiesEmployee Plan;
(v) enter into any contract which (i) if entered into prior to the date of this Agreementcomplete any acquisition (by merger, would be a Material Company Contractconsolidation, or (iiacquisition of stock or assets) involves payment by the Company and its Subsidiaries in excess of $150,000 any Person or receipts by the Company and its Subsidiaries in excess of $250,000 in any consecutive twelve month period, or, in cases where the Company division or a Subsidiary of the Company is the party responsible for such payment, which is not terminable upon thirty days noticeassets thereof;
(vij) except to the extent required under Employee Plans in effect on the date of this Agreement, grant any options to purchase Shares, materially increase the compensation payable or fringe benefits of paid, whether conditionally or otherwise, to any of its directors, officers or employees, grant any severance or termination pay not currently required to be paid under existing severance plans; enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer officer, Employee, consultant or agent other employee;
(vii) except as specifically set forth herein or as required in order to comply with applicable Law, (A) establish, enter into, adopt or amend or terminate any Employee Plan or Compensatory Agreement, (B) change any actuarial or other assumption used to calculate funding obligations with respect to any Employee Plan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not than in the ordinary course of business consistent with past practice with respect to any Employee Planpractices, or (D) take any action to accelerate any rights enter into or benefits under any collective bargaining agreementamend arrangements requiring severance, Employee Plan change of control or Compensatory Planother payments in connection with the transactions contemplated hereby;
(viiik) transferexcept as required by GAAP (or interpretations thereof by recognized accounting boards or institutions) or by applicable Law, lease, licensechange any of the material accounting principles or practices used by the Company;
(l) assume, guarantee, sellendorse, mortgageor otherwise become liable or responsible (whether directly, pledgecontingently, dispose of, encumber or subject to otherwise) for the obligations of any Lien, any material assets person other than entering into contracts with customers the Company (other than endorsements of checks in the ordinary course) or make any loans, advances (other than advances or loans to Employees in the ordinary course of business consistent with past practice), or capital contributions to, or investments in, any other Person;
(ixm) sell, assign, transfer, license make or modify or amend any rights to any Company Intellectual Property, except in the ordinary course of business consistent with past practice;
(x) agree to the settlement of any material claim or Litigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any material method of Tax accounting, amend any material Tax Returns or file any claims for material amended Tax Returnrefunds, enter into any material closing agreement, settle any material Tax claim claim, audit or assessment, assessment or surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, consent provided that, this Section 6.3(m) shall not apply to any extension Consolidated Tax or waiver Tax Return of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any Seller Consolidated Group unless such action would be reasonably expected to cause any adverse effect (other than a de minimis one) on the Company or omission would have the effect Purchaser after the Closing;
(n) engage in any transaction with the Seller or any of increasing its respective Affiliates, other than (i) ordinary course transactions and arrangements consistent with past practices, (ii) the Tax liability distribution to the Seller of all cash and other funds of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xii) except as required by applicable Law or GAAP, make any change in its accounting principles, a manner consistent with past practices or methods;
(xiiiiii) (A) incur any indebtedness for borrowed money purchase, sale or guarantee any such indebtedness of another Personother trade transactions in the ordinary course consistent with past practices, other than in respect of indebtedness owing by the Company to any Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) make any loans or advances to any other Person, other than to the Company or to any Subsidiary of the Companyeach case on arm’s length terms;
(A) accelerate the payment, right make any material payments or grant any material discounts or any other consideration to payment customers or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than as described in Section 3.14(e) suppliers of the Company Disclosure ScheduleCompany, or, (B) except at Parent’s request in accordance with Section 5.3, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrant;
(xv) pay, discharge or satisfy any liabilities other than the payment, discharge or satisfaction of any liabilities in the ordinary course of business and consistent with past practice;
(xvi) delay or postpone the payment of accounts payable or other liabilitieseach case, other than in the ordinary course of business consistent with past practicepractice or (B) otherwise change any billing or cash management practices or methods used by the Company, other than in the ordinary course of business;
(xviip) modifymake any amendment, amend forgive, cancel, compromise or waive any material claim, debt or right of the Company;
(q) enter into, assume, amend, assign or terminate any contract which is material to its business Material Contract or waive any of its material rights or claimsagreement that would be a Material Contract, except other than Material Contracts entered into in the ordinary course of business consistent with past practice; provided that practice and providing for payments over the waiver term of such agreements of no more than $1,000,000 with respect to any “standstill provision” shall be deemed, for purposes of this Agreement, a waiver of a material right not single agreement and $3,000,000 in the ordinary course of businessaggregate;
(xviiir) make acquire or dispose of any single capital expenditure real property or commitment any direct or indirect interest in excess of $150,000 or make aggregate capital expenditures or commitments in excess of $250,000any real property;
(xixs) merge forgive, cancel or consolidate with another Person compromise any material debt or purchase a substantial portion claim, or waive or release any right of the assets of any Personmaterial value;
(xxt) settle or compromise any material litigation, enter into a new line of business that is material to the Company; or
(u) enter into any joint ventureContract with respect to, partnership or other similar arrangement;
(xxi) subject to Section 5.5authorize, take any action to exempt or make any Person (other than Parent) not subject to the provisions of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;
(xxii) subject to Section 5.5, take any action (including encouraging any other Person to take such action), engage in any transaction or enter into any agreement which would reasonably be likely to cause (A) any of the representations or warranties of the Company actions described in this Agreement to be untrue at, or as of any time prior to the earlier of, (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), or (ii) the Effective Time; (B) any of the Tender Offer Conditions to not be satisfied; (C) any of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect on the Company or (E) any impairment of the ability of the Company, Parent, Sub or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation;
(xxiii) sell or release, or agree to develop, sell or release, any product that the Company does not make generally available to its customers; or
(xxiv) agree, in writing or otherwise, to take any of the foregoing actionsclauses (a) through (t).
Appears in 1 contract
Sources: Equity Purchase Agreement (Nci Building Systems Inc)
Conduct of the Business of the Company Pending the Closing Date. Except The Company agrees that, except as specifically contemplated expressly permitted or required by this Agreement or as otherwise consented to or approved in writing by ParentAgreement, until during the period commencing on the date hereof and ending at the earlier of (ix) the date upon which Parent’s designees constitute a majority Closing Date and (y) termination of the Board of Directors (or Parent has failed to designate at least 4 individuals this Agreement pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) the Effective Time8.1:
(a) the Company and each of its Significant Subsidiaries shall and shall cause each Subsidiary of conduct their respective operations in all material respects only in the Company to conduct its operations only according to its ordinary course of business consistent with past practice and shall and, to the extent consistent therewith, use all their commercially reasonable efforts to preserve intact their current respective business operationsorganization, keep available the services of their officers and employees, current senior management as a group and maintain satisfactory relationships with lessors, lessees, suppliers, customers, partners and others any Person having significant business relationships with themthe Company or any of such Significant Subsidiaries; and
(b) without limiting the generality of the foregoing, neither the Company nor any Subsidiary of its Significant Subsidiaries shall effect any of the Company shall:following without the prior written consent of the Purchasers (such consent not to be unreasonably withheld, conditioned or delayed):
(i) amend make any change in or amendment to its Certificate certificate of Incorporation incorporation or Byits by-Laws laws (or comparable organizational governing documents), except for any amendment (including, without limitation, the Charter Amendment) required in Stock Purchase Agreement connection with the performance by Company or a Significant Subsidiary of its obligations under this Agreement;
(ii) except for grants of Company Stock Options to new hires in the ordinary course of business and consistent with past practice (provided that in the aggregate, the Company may not grant options in the aggregate amount exceeding 50,000), issue or sell, or authorize the issuance to issue or sale ofsell, any shares of its capital stock or any other equity securitiesownership interests, or issue or sell, or authorize the issuance to issue or sale ofsell, any securities convertible into or exchangeable for, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or create any contract Contract with respect to the issuance or sale of, any shares of its capital stock or any other equity securities, or make any other changes in its capital structure, ownership interests except for the issuance and sale by the Company of Option Exercise Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding on the date hereof and other than pursuant to the Company ESPPterms of any Exercise Options;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entity;
(iv) except for payments of dividends by a Subsidiary of the Company, 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 its other securitiessecurities except for the acquisition of Options from holders of Options in full or partial payment of the exercise price payable by such holder upon exercise of Options and other than in accordance with the terms of this Agreement (including, without limitation, the Reclassification);
(iv) except as contemplated by Section 6.13, acquire, make any dividend or distribution to, make any investment in, or make any capital contributions to, any Person, other than investments or capital contributions by the Company to any wholly-owned subsidiary of the Company or by any wholly-owned subsidiary of the Company to another wholly-owned subsidiary of the Company;
(v) transfer, sell, lease, pledge or otherwise dispose of any of its properties or assets that are material to its business;
(vi) amend in any material respect or terminate any Material Contract or enter into any contract which (i) if a Contract which, had it been entered into prior to the date of this Agreementhereof, would be have been a Material Company Contract, or (ii) involves payment by the Company and its Subsidiaries in excess of $150,000 or receipts by the Company and its Subsidiaries in excess of $250,000 in any consecutive twelve month period, or, in cases where the Company or a Subsidiary of the Company is the party responsible for such payment, which is not terminable upon thirty days notice;
(vi) except to the extent required under Employee Plans in effect on the date of this Agreement, grant any options to purchase Shares, increase the compensation or fringe benefits of any of its directors, officers or employees, grant any severance or termination pay not currently required to be paid under existing severance plans; enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee;
(vii) except as specifically set forth herein (x) incur any indebtedness, other than short-term indebtedness or as required in order to comply with applicable Law, (A) establish, enter into, adopt or amend or terminate any Employee Plan or Compensatory Agreement, (B) change any actuarial or other assumption used to calculate funding obligations with respect to any Employee Plan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not letters of credit incurred in the ordinary course of business consistent with past practice with respect to any Employee Plan, or (D) take any action to accelerate any rights or benefits borrowings under any collective bargaining agreement, Employee Plan or Compensatory Plan;
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any Lien, any material assets other than entering into contracts with customers existing credit facilities described in the ordinary course of business consistent with past practice;
(ix) sell, assign, transfer, license Commission Filings or modify or amend any rights to any Company Intellectual Property, except set forth in the ordinary course of business consistent with past practice;
(x) agree to the settlement of any material claim or Litigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability 3.14 of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xii) except as required by applicable Law or GAAP, make any change in its accounting principles, practices or methods;
(xiii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, other than in respect of indebtedness owing by the Company to any Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another Subsidiary of the Company Disclosure Letter or (By) make any loans or advances to any other Person, other than routine advances to employees consistent with past practice;
(viii) grant or agree to grant to any officer, employee, director or consultant of the Company or to any Subsidiary of the Company;
(A) accelerate the payment, right to payment its Significant Subsidiaries any increase in wages or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than or establish any new compensation or benefit plans or arrangements, or amend or agree to amend any existing Employee Benefit Plans, except (w) as described in Section 3.14(emay be required under applicable Law, (x) pursuant to the Employee Benefit Plans or collective bargaining agreements of the Company Disclosure Schedule, oror any of its Subsidiaries in effect on the date hereof, (By) except at Parent’s request in accordance with Section 5.3, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrant;
(xv) pay, discharge or satisfy any liabilities other than the payment, discharge or satisfaction of any liabilities in the ordinary Stock Purchase Agreement course of business and consistent with past practicepractice or (z) pursuant to employment, retention, change-of-control or similar type agreements existing as of the date hereof that are disclosed in the Company Disclosure Letter;
(xviix) delay make any material Tax election not required by law or postpone the payment of accounts payable settle or other liabilities, compromise any material Tax liability other than in the ordinary course of business consistent with past practice;
(xvii) modify, amend or terminate any contract which is material to its business or waive any of its material rights or claims, except in the ordinary course of business consistent with past practice; provided that the waiver of any “standstill provision” shall be deemed, for purposes of this Agreement, a waiver of a material right not in the ordinary course of business;
(xviiix) make other than in the ordinary course of business, (A) waive any single capital expenditure rights of substantial value or commitment in excess (B) cancel or forgive any material indebtedness for borrowed money owed to the Company or any of $150,000 its Significant Subsidiaries, other than indebtedness for borrowed money of the Company to a wholly-owned Subsidiary of the Company or make aggregate capital expenditures or commitments in excess indebtedness for borrowed money of $250,000a wholly-owned Subsidiary of the Company to the Company to another wholly-owned Subsidiary of the Company;
(xixxi) merge except as may be required by the Commission or consolidate with another Person any Governmental Entity or purchase a substantial portion under GAAP, make any material change in its methods, principles and practices of the assets of any Personaccounting, including tax accounting policies and procedures;
(xxxii) enter into any joint venturecontract or commitment with respect to capital expenditures with a value in excess of, partnership or other similar arrangement;
(xxi) subject to Section 5.5requiring expenditures by Company and its Significant Subsidiaries in excess of, take any action to exempt or make any Person (other than Parent) not subject to the provisions of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;
(xxii) subject to Section 5.5$250,000, take any action (including encouraging any other Person to take such action)individually, engage in any transaction or enter into any agreement which would reasonably be likely contracts or commitments with respect to cause (A) any of the representations or warranties of the Company capital expenditures with a value in this Agreement to be untrue atexcess of, or as of any time prior to the earlier requiring expenditures by Company and its Significant Subsidiaries in excess of, (i) $1,000,000, in the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3)aggregate, or (ii) the Effective Time; (B) any of the Tender Offer Conditions to not be satisfied; (C) any of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect on the Company or (E) any impairment of the ability of the Company, Parent, Sub or the holders of Shares to consummate the Offer or the Merger other than in accordance with the terms hereof or materially delay such consummationcapital expenditure budgets of the Company provided in writing to the Purchasers prior to the date of this Agreement;
(xxiiixiii) sell sell, pledge or release, dispose of any stock or agree other equity interest owned by it to develop, sell or release, any product that the Company does not make generally available to its customersother person; or
(xxivxiv) agreeauthorize any of, in writing or otherwise, commit or agree to take any of of, the foregoing actionsactions in respect of which it is restricted by the provisions of this Section 6.3.
Appears in 1 contract
Conduct of the Business of the Company Pending the Closing Date. Except (a) Sellers and the Company agree that, except as specifically contemplated by this Agreement or as otherwise consented to or approved in writing by Parent, until the earlier of (i) the date upon which Parent’s designees constitute a majority set forth in Section 6.3(a) of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3)Sellers Disclosure Letter, (ii) the termination of may be required by or as otherwise set forth in this Agreement, or (iii) required by Law, by a Governmental Entity, or by any Contract to which the Effective Time:
Company or any of the Company Subsidiaries is a party, during the period commencing on the date hereof and ending on the earlier of (aA) the Closing and (B) the termination of this Agreement pursuant to Section 8.1 the Company shall and shall cause each Subsidiary of the Company Subsidiaries to conduct its their respective operations in all material respects only according to its ordinary course in the Ordinary Course of business Business consistent with past practice and shall use all reasonable efforts to preserve intact their current business operations, keep available the services of their officers and employees, and maintain satisfactory relationships with lessors, lessees, suppliers, customers, partners and others having business relationships with thempractice; and
(bi) without limiting the generality of the foregoing, neither the Company nor any Subsidiary shall not and shall cause each of the Company shall:Subsidiaries not to effect any of the following without the prior written consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed; provided, that the consent of Purchaser shall be deemed to have been given if Purchaser does not object within three (3) Business Days from the date on which request for such consent is provided by Sellers to Purchaser)):
(iA) amend make any change in or amendment to its Certificate certificate of Incorporation incorporation or Byby-Laws laws or comparable organizational other equivalent charter documents, as applicable, in a manner that would delay or impede the Company’s ability to consummate the transactions contemplated by this Agreement;
(iiB) except for grants of Company Stock Options to new hires in the ordinary course of business and consistent with past practice (provided that in the aggregate, the Company may not grant options in the aggregate amount exceeding 50,000), issue or sell, or authorize the issuance to issue or sale ofsell, any shares of its capital stock or any other equity securitiesownership interests, as applicable, or issue or sell, or authorize the issuance to issue or sale ofsell, any securities convertible into or exchangeable for, or options, warrants or rights to purchase or subscribe tofor, or enter into or create any contract Contract with respect to the issuance or sale of, any shares of its capital stock or any other equity securitiesownership interests, or make any other changes in its capital structure, except for the issuance and sale of Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding on the date hereof and other than pursuant to the Company ESPPas applicable;
(iiiC) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entity;
(iv) except for payments of dividends by a Subsidiary of the Company, 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 its other securities, as applicable;
(vD) other than in the Ordinary Course of Business consistent with past practice, sell, lease or otherwise dispose of any of its Assets other than Parcels and in no event over $100,000 without Purchasers consent that shall not be unreasonably delayed or withheld; provided that the restrictions set forth in this Section 6.3(a)(i) shall not apply to any sales of Inventory made after seven (7) calendar days from the date hereof.
(E) sell, lease or otherwise dispose of, or enter into any contract which Contract or arrangement for the sale, lease or other disposition of, any Parcel and will not buy or acquire any legal or beneficial interest in any real property and not occupy, lease, manage or control or agree to occupy, lease, manage or control any facility or property;
(iF) if grant or perfect, or permit the granting, attachment or perfection of, any Lien on any Parcel (other than Permitted Liens);
(G) create any Lien other than Permitted Liens;
(H) other than in the Ordinary Course of Business consistent with past practice, amend in any material respect or terminate any Material Contract or enter into a Contract which, had it been entered into prior to the date of this Agreementhereof, would be have been a Material Company Contract; provided, or (ii) involves payment by however, that the Company and its Subsidiaries in excess of $150,000 or receipts by the Company and Subsidiaries may renegotiate the terms of, or otherwise extend, any Material Contract that has expired in accordance with its Subsidiaries terms prior to the date hereof or is scheduled to expire in excess of $250,000 in any consecutive twelve month periodaccordance with its terms within six (6) months after the date hereof with, orto the extent legally permissible, in cases where the Company Purchaser’s consent not to be unreasonably withheld or a Subsidiary of the Company is the party responsible for such payment, which is not terminable upon thirty days noticedelayed;
(viI) incur any Indebtedness, other than letters of credit incurred in the Ordinary Course of Business or borrowings under existing credit facilities set forth in Section 4.15 of the Sellers Disclosure Letter, except to the extent required under Employee Plans in effect on the date that they are deemed Indebtedness for purposes of this Agreement, grant any options to purchase Shares, increase the compensation or fringe benefits of any of its directors, officers or employees, grant any severance or termination pay not currently required to be paid under existing severance plans; enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee;
(vii) except as specifically set forth herein or as required in order to comply with applicable Law, (A) establish, enter into, adopt or amend or terminate any Employee Plan or Compensatory Agreement, (B) change any actuarial or other assumption used to calculate funding obligations with respect to any Employee Plan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not in the ordinary course of business consistent with past practice with respect to any Employee PlanWorking Capital, or (D) take any action to accelerate any rights or benefits under any collective bargaining agreement, Employee Plan or Compensatory Plan;
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any Lien, any material assets other than entering into contracts with customers in the ordinary course of business consistent with past practice;
(ix) sell, assign, transfer, license or modify or amend any rights to any Company Intellectual Property, except in the ordinary course of business consistent with past practice;
(x) agree to the settlement of any material claim or Litigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xii) except as required by applicable Law or GAAP, make any change in its accounting principles, practices or methods;
(xiii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, other than in respect of indebtedness owing by the Company to any Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) make any loans or advances to any other Person, other than ;
(J) grant or agree to grant to any officer of the Company or to any Subsidiary of the Company;
(A) accelerate the paymentCompany Subsidiaries any increase in wages or bonus, right to payment or vesting of any bonuscontract extension, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than or establish any new compensation or benefit plans or arrangements, or amend or agree to amend any existing employee benefit plans, except (w) as described in Section 3.14(emay be required under applicable Law, (x) pursuant to the employee benefit plans or collective bargaining agreements of the Company Disclosure Scheduleor any of the Company Subsidiaries in effect on the date hereof, or, or (By) except at Parent’s request in accordance with Section 5.3, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company WarrantOrdinary Course of Business;
(xvK) paymake any tax election not required by Law that could have a continuing effect on the Company following the Closing Date, discharge or satisfy settle or compromise any liabilities other than the payment, discharge or satisfaction of any liabilities in the ordinary course of business and consistent with past practice;
(xvi) delay or postpone the payment of accounts payable or other liabilities, material Tax liability other than in the ordinary course Ordinary Course of business consistent with past practiceBusiness; unless it has received Purchaser’s prior written consent, not to be unreasonably withheld or delayed;
(xviiL) modify, amend or terminate any contract which is material to its business or (x) waive any rights of its substantial value or (y) cancel or forgive any material rights Indebtedness owed to the Company or claimsany of the Company Subsidiaries, except in other than Indebtedness of the ordinary course Company owed to a Subsidiary of business consistent with past practice; provided that the waiver of any “standstill provision” shall be deemed, Company or Indebtedness for purposes of this Agreement, a waiver borrowed money of a material right not in Company Subsidiary owed to the ordinary course of businessCompany or to another Company Subsidiary;
(xviiiM) except as may be required by any Governmental Entity or under GAAP make any single capital expenditure or commitment material change in excess its methods, principles and practices of $150,000 or make aggregate capital expenditures or commitments in excess of $250,000accounting, including tax accounting policies and procedures;
(xixN) merge authorize any of, or consolidate with another Person commit or purchase a substantial portion agree to take any of, the foregoing actions in respect of which it is restricted by the assets provisions of any Personthis Section 6.3;
(xxO) enter into buy or acquire any joint venturelegal or beneficial interest or title in any real property, partnership or other similar arrangement;
(xxi) subject to Section 5.5occupy, take any action to exempt lease, mortgage or make any Person control (other than Parent) not subject to the provisions of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;
(xxii) subject to Section 5.5, take any action (including encouraging any other Person to take such actionParcels), engage in any transaction or enter into any new agreement which would reasonably be likely to cause occupy, lease, mortgage or control, any real property or facility; or
(AP) terminate any lease identified in Section 4.17(a) of the representations Sellers Disclosure Letter, or warranties enter into any new lease, amendment, renewal, extension or other modification of the Company any such lease.
(b) Notwithstanding anything contained in this Agreement to the contrary, the Company and the Company Subsidiaries shall be untrue atpermitted to maintain through the Closing Date the cash management systems and procedures of the Company and the Company Subsidiaries as currently conducted by the Company and the Company Subsidiaries, or as and periodically settle intercompany balances in the Ordinary Course of any time Business consistent with past practices (including through dividends and capital contributions and all such intercompany balances shall be settled at the Closing in accordance with their terms). The Company and the Company Subsidiaries are allowed to dividend all Cash and Cash Equivalents of the Company and the Company Subsidiaries to Sellers immediately prior to the earlier of, Closing.
(ic) From the date upon which Parent’s designees constitute a majority hereof until Closing, the Company and the Company Subsidiaries shall comply in all material respects with the obligations of and the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), or (ii) the Effective Time; (B) any of the Tender Offer Conditions to not be satisfied; (C) any of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect prohibitions on the Company or and the Company Subsidiaries under Sections 7.1(d)(vi) through (Eix) any impairment and 7.3(b), (c), (d) and (g) of the ability of the Company, Parent, Sub or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation;
(xxiii) sell or release, or agree to develop, sell or release, any product that the Company does not make generally available to its customers; or
(xxiv) agree, in writing or otherwise, to take any of the foregoing actions2008 Purchase Agreement.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Globe Specialty Metals Inc)
Conduct of the Business of the Company Pending the Closing Date. Except The Company agrees that, except as permitted, required or specifically contemplated by by, or otherwise described in, this Agreement or as Schedule 5.2 or otherwise consented to or approved in writing by ParentEMKT (which consent shall not be unreasonably withheld, until delayed or conditioned), during the earlier of (i) period commencing on the date upon which Parent’s designees constitute a majority of hereof and ending on the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) the Effective TimeClosing Date:
(a) the The Company shall and shall cause each Subsidiary of the Company to its Subsidiaries will conduct its their respective operations only according to its their ordinary and usual course of business consistent with past practice and shall will use all reasonable their best efforts to preserve intact their current respective business operationsorganization, keep available the services of their officers and employees, employees and maintain satisfactory relationships with lessors, lesseeslicensers, suppliers, customersdistributors, partners clients and others having business relationships with them; and;
(b) without limiting the generality of the foregoing, neither Neither the Company nor any Subsidiary of the Company shall:
its Subsidiaries shall (i) amend make any change in or amendment to its Certificate of Incorporation or By-Laws (or comparable organizational governing documents;
); (ii) except for grants of Company Stock Options to new hires in the ordinary course of business and consistent with past practice (provided that in the aggregate, the Company may not grant options in the aggregate amount exceeding 50,000), issue or sell, or authorize the issuance or sale of, sell any shares of its capital stock (other than in connection with the exercise of Company Options outstanding on the date hereof) or any of its other equity securities, or issue or sell, or authorize the issuance or sale of, any securities convertible into into, or options, warrants or rights to purchase or subscribe to, or enter into any arrangement or create any contract with respect to the issuance or sale of, any shares of its capital stock or any of its other equity securities, or make any other changes in its capital structure, except for the issuance and sale of Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding on the date hereof and other than pursuant to the Company ESPP;
; (iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entity;
(iv) except for payments of dividends by a Subsidiary of the Company, declare, pay or set aside make 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 its other securities;
stock; (viv) enter into any contract which (i) if entered into prior to the date of this Agreementor commitment, would be a Material Company Contract, or (ii) involves payment by the Company and its Subsidiaries in excess of $150,000 or receipts by the Company and its Subsidiaries in excess of $250,000 in any consecutive twelve month period, or, in cases where the Company or a Subsidiary of the Company is the party responsible except for such payment, which is not terminable upon thirty days notice;
(vi) except to the extent required under Employee Plans in effect on the date of this Agreement, grant any options to purchase Shares, increase the compensation or fringe benefits of any of its directors, officers or employees, grant any severance or termination pay not currently required to be paid under existing severance plans; enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee;
(vii) except as specifically set forth herein or as required in order to comply with applicable Law, (A) establish, enter into, adopt or amend or terminate any Employee Plan or Compensatory Agreement, (B) change any actuarial or other assumption used to calculate funding obligations with respect to any Employee Plan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not contracts in the ordinary course of business consistent with past practice with respect to business, including without limitation, any Employee Planacquisition of a material amount of assets or securities, any disposition of a material amount of assets or securities or release or relinquish any material contract rights; (Dv) take any action to accelerate any rights or benefits under any collective bargaining agreement, Employee Plan or Compensatory Plan;
(viii) transfer, lease, licenseassume, guarantee, sellendorse or otherwise become liable or responsible (whether directly, mortgagecontingently, pledge, dispose of, encumber or subject to otherwise) for the obligations of any Lien, any material assets other Person other than entering into contracts with customers in the ordinary course of business consistent with past practice;
(ix) sell, assign, transfer, license or modify or amend any rights to any Company Intellectual Property, except in the ordinary course of business consistent with past practice;
(x) agree to the settlement of any material claim or Litigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xii) except as required by applicable Law or GAAP, make any change in its accounting principles, practices or methods;
(xiii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, other than in respect of indebtedness owing by the Company to any Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) make any loans or advances to any other Person, other than to the Company or to any Subsidiary of the Company;
(A) accelerate the payment, right to payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than as described in Section 3.14(e) of the Company Disclosure Schedule, or, (B) except at Parent’s request in accordance with Section 5.3, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrant;
(xv) pay, discharge or satisfy any liabilities other than the payment, discharge or satisfaction of any liabilities in the ordinary course of business and consistent with past practice;
; (xvivi) delay incur, assume or postpone the payment of accounts payable prepay any indebtedness or other liabilitiesmaterial liabilities other than in the ordinary course of business and consistent with past practices, except that the Company may prepay its legal fees in connection with the Transactions to the extent they do not exceed the amount set forth in Section 9.1(a); (vii) make any loans, advances or capital contributions to, or investments in, any other Person, other than to Subsidiaries; (viii) authorize capital expenditures in excess of the amount currently budgeted therefor; (ix) permit any insurance policy naming the Company or any Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; (x) amend any employee or nonemployee benefit plan or program, employment agreement, license agreement or retirement agreement, or pay any bonus or contingent compensation, except in each case in the ordinary course of business consistent with past practice;
(xvii) modify, amend or terminate any contract which is material practice prior to its business or waive any of its material rights or claims, except in the ordinary course of business consistent with past practice; provided that the waiver of any “standstill provision” shall be deemed, for purposes date of this Agreement, a waiver of a material right not in the ordinary course of business;
(xviii) make any single capital expenditure or commitment in excess of $150,000 or make aggregate capital expenditures or commitments in excess of $250,000;
(xix) merge or consolidate with another Person or purchase a substantial portion of the assets of any Person;
(xx) enter into any joint venture, partnership or other similar arrangement;
(xxi) subject to Section 5.5, take any action to exempt or make any Person (other than Parent) not subject to the provisions of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;
(xxii) subject to Section 5.5, take any action (including encouraging any other Person to take such action), engage in any transaction or enter into any agreement which would reasonably be likely to cause (A) any of the representations or warranties of the Company in this Agreement to be untrue at, or as of any time prior to the earlier of, (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), or (ii) the Effective Time; (B) any of the Tender Offer Conditions to not be satisfied; (C) any of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect on the Company or (E) any impairment of the ability of the Company, Parent, Sub or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation;
(xxiii) sell or release, or agree to develop, sell or release, any product that the Company does not make generally available to its customers; or
(xxivxi) agree, in writing or otherwise, to take any of the foregoing actions; or (xii) agree to the settlement of any litigation;
(c) The Company shall not, and shall not permit any of its Subsidiaries to (i) take any action, engage in any transaction or enter into any agreement which would cause any of the representations or warranties set forth in Article III to be untrue as of the Closing Date, or (ii) purchase or acquire, or offer to purchase or acquire, any shares of capital stock of the Company and the Company shall not sell or pledge or agree to sell or pledge any stock owned by it in any of the Subsidiaries, or allow any Subsidiary to pledge or agree to sell or pledge any stock owned by it in any other Subsidiary.
(d) The Company will use its commercially reasonable best efforts to deliver to EMKT prior to the Closing a consolidated balance sheet as of the end of the fiscal year ended July 31, 1999 and the related consolidated statements of operations, stockholders' equity and cash flows for the fiscal year then ended, prepared in accordance with GAAP and on a basis consistent with that of the statements delivered pursuant to Section 3.5.
Appears in 1 contract
Sources: Stock Purchase and Contribution Agreement (Emarketplace Inc)
Conduct of the Business of the Company Pending the Closing Date. Except The Company agrees that, except as permitted, required or specifically contemplated by by, or otherwise described in, this Agreement or as Schedule 5.2 or otherwise consented to or approved in writing by ParentEMKT (which consent shall not be unreasonably withheld, until delayed or conditioned), during the earlier of (i) period commencing on the date upon which Parent’s designees constitute a majority of hereof and ending on the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) the Effective TimeClosing Date:
(a) the The Company shall and shall cause each Subsidiary of the Company to its Subsidiaries will conduct its their respective operations only according to its their ordinary and usual course of business consistent with past practice and shall will use all reasonable their best efforts to preserve intact their current respective business operationsorganization, keep available the services of their officers and employees, employees and maintain satisfactory relationships with lessors, lesseeslicensers, suppliers, customersdistributors, partners clients and others having business relationships with them; and;
(b) without limiting the generality of the foregoing, neither Neither the Company nor any Subsidiary of the Company shall:
its Subsidiaries shall (i) amend make any change in or amendment to its Certificate Articles of Incorporation or By-Laws (or comparable organizational governing documents;
); (ii) except for grants of Company Stock Options to new hires in the ordinary course of business and consistent with past practice (provided that in the aggregate, the Company may not grant options in the aggregate amount exceeding 50,000), issue or sell, or authorize the issuance or sale of, sell any shares of its capital stock (other than in connection with the exercise of Company Options outstanding on the date hereof) or any of its other equity securities, or issue or sell, or authorize the issuance or sale of, any securities convertible into into, or options, warrants or rights to purchase or subscribe to, or enter into any arrangement or create any contract with respect to the issuance or sale of, any shares of its capital stock or any of its other equity securities, or make any other changes in its capital structure, except for the issuance and sale of Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding on the date hereof and other than pursuant to the Company ESPP;
; (iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entity;
(iv) except for payments of dividends by a Subsidiary of the Company, declare, pay or set aside make 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 its other securities;
stock; (viv) enter into any contract which (i) if entered into prior to the date of this Agreementor commitment, would be a Material Company Contract, or (ii) involves payment by the Company and its Subsidiaries in excess of $150,000 or receipts by the Company and its Subsidiaries in excess of $250,000 in any consecutive twelve month period, or, in cases where the Company or a Subsidiary of the Company is the party responsible except for such payment, which is not terminable upon thirty days notice;
(vi) except to the extent required under Employee Plans in effect on the date of this Agreement, grant any options to purchase Shares, increase the compensation or fringe benefits of any of its directors, officers or employees, grant any severance or termination pay not currently required to be paid under existing severance plans; enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee;
(vii) except as specifically set forth herein or as required in order to comply with applicable Law, (A) establish, enter into, adopt or amend or terminate any Employee Plan or Compensatory Agreement, (B) change any actuarial or other assumption used to calculate funding obligations with respect to any Employee Plan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not contracts in the ordinary course of business consistent with past practice with respect to business, including without limitation, any Employee Planacquisition of a material amount of assets or securities, any disposition of a material amount of assets or securities or release or relinquish any material contract rights; (Dv) take any action to accelerate any rights or benefits under any collective bargaining agreement, Employee Plan or Compensatory Plan;
(viii) transfer, lease, licenseassume, guarantee, sellendorse or otherwise become liable or responsible (whether directly, mortgagecontingently, pledge, dispose of, encumber or subject to otherwise) for the obligations of any Lien, any material assets other Person other than entering into contracts with customers in the ordinary course of business consistent with past practice;
(ix) sell, assign, transfer, license or modify or amend any rights to any Company Intellectual Property, except in the ordinary course of business consistent with past practice;
(x) agree to the settlement of any material claim or Litigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xii) except as required by applicable Law or GAAP, make any change in its accounting principles, practices or methods;
(xiii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, other than in respect of indebtedness owing by the Company to any Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) make any loans or advances to any other Person, other than to the Company or to any Subsidiary of the Company;
(A) accelerate the payment, right to payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than as described in Section 3.14(e) of the Company Disclosure Schedule, or, (B) except at Parent’s request in accordance with Section 5.3, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrant;
(xv) pay, discharge or satisfy any liabilities other than the payment, discharge or satisfaction of any liabilities in the ordinary course of business and consistent with past practice;
; (xvivi) delay incur, assume or postpone the payment of accounts payable prepay any indebtedness or other liabilitiesmaterial liabilities other than in the ordinary course of business and consistent with past practices, except that the Company may prepay its legal fees in connection with the Transactions to the extent they do not exceed the amount set forth in Section 9.1(a); (vii) make any loans, advances or capital contributions to, or investments in, any other Person, other than to Subsidiaries; (viii) authorize capital expenditures in excess of the amount currently budgeted therefor; (ix) permit any insurance policy naming the Company or any Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; (x) amend any employee or nonemployee benefit plan or program, employment agreement, license agreement or retirement agreement, or pay any bonus or contingent compensation, except in each case in the ordinary course of business consistent with past practice;
(xvii) modify, amend or terminate any contract which is material practice prior to its business or waive any of its material rights or claims, except in the ordinary course of business consistent with past practice; provided that the waiver of any “standstill provision” shall be deemed, for purposes date of this Agreement, a waiver of a material right not in the ordinary course of business;
(xviii) make any single capital expenditure or commitment in excess of $150,000 or make aggregate capital expenditures or commitments in excess of $250,000;
(xix) merge or consolidate with another Person or purchase a substantial portion of the assets of any Person;
(xx) enter into any joint venture, partnership or other similar arrangement;
(xxi) subject to Section 5.5, take any action to exempt or make any Person (other than Parent) not subject to the provisions of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;
(xxii) subject to Section 5.5, take any action (including encouraging any other Person to take such action), engage in any transaction or enter into any agreement which would reasonably be likely to cause (A) any of the representations or warranties of the Company in this Agreement to be untrue at, or as of any time prior to the earlier of, (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), or (ii) the Effective Time; (B) any of the Tender Offer Conditions to not be satisfied; (C) any of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect on the Company or (E) any impairment of the ability of the Company, Parent, Sub or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation;
(xxiii) sell or release, or agree to develop, sell or release, any product that the Company does not make generally available to its customers; or
(xxivxi) agree, in writing or otherwise, to take any of the foregoing actions; or (xii) agree to the settlement of any litigation;
(c) The Company shall not, and shall not permit any of its Subsidiaries to (i) take any action, engage in any transaction or enter into any agreement which would cause any of the representations or warranties set forth in Article III to be untrue as of the Closing Date, or (ii) purchase or acquire, or offer to purchase or acquire, any shares of capital stock of the Company and the Company shall not sell or pledge or agree to sell or pledge any stock owned by it in any of the Subsidiaries, or allow any Subsidiary to pledge or agree to sell or pledge any stock owned by it in any other Subsidiary.
(d) The Company will use its commercially reasonable best efforts to deliver to EMKT prior to the Closing a consolidated balance sheet as of the end of the fiscal year ended July 31, 1999 and the related consolidated statements of operations, stockholders' equity and cash flows for the fiscal year then ended, prepared in accordance with GAAP and on a basis consistent with that of the statements delivered pursuant to Section 3.5.
Appears in 1 contract
Sources: Stock Purchase and Contribution Agreement (Emarketplace Inc)
Conduct of the Business of the Company Pending the Closing Date. Except The Company agrees that, except as specifically contemplated by this Agreement or as otherwise consented to or approved in writing by Parent, until the earlier of (iA) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3)set forth on Schedule 5.3, (iiB) the termination of expressly required by this Agreement, or (iiiC) required by Law, by a Governmental Entity, or by any Contract to which the Company or any of the Company Subsidiaries is a party, during the period commencing on the date hereof and ending at the earlier of (x) the Effective TimeTime and (y) termination of this Agreement pursuant to Section 8.1:
(a) the Company shall and shall cause each Subsidiary of the Company Subsidiaries to (i) conduct its their respective operations in all material respects only according to its in the ordinary course of business consistent with past practice and shall (ii) use all its commercially reasonable efforts to preserve substantially intact their the business organization of the Company and the Company Subsidiaries and to preserve substantially intact the current relationships of the Company and the Company Subsidiaries with any persons with which the Company or any Company Subsidiary has material business operations, keep available the services of their officers and employees, and maintain satisfactory relationships with lessors, lessees, suppliers, customers, partners and others having business relationships with themrelations; and
(b) without limiting the generality Company shall not and shall cause each Company Subsidiary not to effect any of the foregoingfollowing without the prior written consent of Parent (such consent not to be unreasonably withheld, neither conditioned or delayed; provided, that the consent of Parent shall be deemed to have been given if Parent does not object within three (3) Business Days from the date on which request for such consent is provided by the Company nor any Subsidiary of the Company shall:to Parent):
(i) amend make any change in or amendment to its Certificate certificate of Incorporation incorporation or Byits by-Laws laws, certificate of formation or limited liability company agreement (or comparable organizational governing documents), as applicable;
(ii) except for grants of Company Stock Options to new hires in the ordinary course of business and consistent with past practice (provided that in the aggregate, the Company may not grant options in the aggregate amount exceeding 50,000), issue or sell, or authorize the issuance to issue or sale ofsell, any shares of its capital stock or any other equity securitiesownership interests, as applicable, or issue or sell, or authorize the issuance to issue or sale ofsell, any securities convertible into or exchangeable for, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or create any contract Contract with respect to the issuance or sale of, any shares of its capital stock or any other equity securitiesownership interests, or make any other changes in its capital structureas applicable, except for (1) the issuance and sale by the Company of Shares upon shares of common stock of the exercise Company pursuant to the terms of Company Stock any Options or Company Warrants which are outstanding on the date hereof and other than (2) the issuance by the Company of shares of common stock of the Company pursuant to the Company ESPPCertificate of Incorporation in the Conversion;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entity;
(iv) except for payments of dividends by a Subsidiary of the Company, 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 its other securities, as applicable, except for (x) the acquisition of Options from holders of Options in full or partial payment of the exercise price payable by such holder upon exercise of Options, (y) the Conversion or (z) the acquisition of any capital stock or other equity interests in connection with the Minority Interest Acquisition;
(iv) acquire (including by purchase, merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership or other business organization (or any division or business thereof);
(v) other than in the ordinary course of business consistent with past practice, sell, transfer, abandon or otherwise dispose of or lease, license or otherwise encumber (other than Permitted Liens) any of its properties, rights or assets that are material to the Company or any Company Subsidiaries, taken as a whole;
(vi) other than in the ordinary course of business consistent with past practice, amend in any material respect or terminate or fail to renew any Material Contract or waive, release or assign any material rights or claims thereunder or enter into any contract which (i) if a Contract which, had it been entered into prior to the date of this Agreementhereof, would be have been a Material Company Contract, or (ii) involves payment by the Company and its Subsidiaries in excess of $150,000 or receipts by the Company and its Subsidiaries in excess of $250,000 in any consecutive twelve month period, or, in cases where the Company or a Subsidiary of the Company is the party responsible for such payment, which is not terminable upon thirty days notice;
(vi) except to the extent required under Employee Plans in effect on the date of this Agreement, grant any options to purchase Shares, increase the compensation or fringe benefits of any of its directors, officers or employees, grant any severance or termination pay not currently required to be paid under existing severance plans; enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee;
(vii) except authorize, or make any commitment with respect to, capital expenditures that, individually or taken together, exceed by 10% the aggregate amount of the annual capital expenditures budget of the Company and Company Subsidiaries, taken as specifically set forth herein or as required in order to comply with applicable Law, a whole;
(viii) (A) establishincur any material Indebtedness, enter intoother than short-term Indebtedness or letters of credit incurred in the ordinary course of business or borrowings under existing credit facilities, adopt or amend or terminate any Employee Plan or Compensatory Agreement, (B) change make any actuarial loans, advances, investments or other assumption used to calculate funding obligations with respect to any Employee Plan, (C) change the manner in which capital contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not other Person, other than (1) loans and advances to employees in the ordinary course of business consistent with past practice with respect to any Employee Plan, or and (D2) take any action to accelerate any rights or benefits under any collective bargaining agreement, Employee Plan or Compensatory Plan;
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any Lien, any material assets other than entering into contracts with customers in among the ordinary course of business consistent with past practiceCompany and Company Subsidiaries;
(ix) sellgrant or agree to grant to Company Personnel any material increase in wages or bonus, assignseverance, transferretention, license change in control, profit sharing, retirement, insurance or other compensation or benefits, or establish, adopt or enter into any new compensation or employee benefit plans or arrangements (including any Employee Benefit Plan), or terminate, amend or modify or agree to terminate, amend or modify any rights existing Employee Benefit Plans (including to accelerate the time of payment or vesting, or to trigger any Company Intellectual Propertypayment or funding), except (A) as may be required under applicable Law, (B) pursuant to the Employee Benefit Plans in effect on the date hereof or (C) in the ordinary course of business consistent with past practice;
(x) agree to the settlement of establish, enter into, adopt or amend any material claim collective bargaining agreement or Litigationsimilar labor agreement;
(xi) except pursuant to Section 5.14(b), make, change modify or rescind revoke any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessmentaccounting method (not required by Law to be changed), surrender any right that could be reasonably expected to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing materially increase the Tax liability of the Company or its Subsidiaries any Company Subsidiary in a Post-Closing Tax Period, or file settle or compromise any income material Tax Return or material non-income Tax ReturnLiability;
(xii) except pay, discharge or settle (A) any Action other than payments, discharges and settlements involving not more than $100,000 in the aggregate (net of insurance proceeds) and that do not require any material actions or impose any material restrictions on the business or operations of the Company and Company Subsidiaries, taken as required by applicable Law a whole, or GAAP, make (B) any change in its accounting principles, practices or methodsAction involving any Equityholder;
(xiii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, other than in respect of indebtedness owing by the Company to any Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) make any loans or advances to any other Person, other than to the Company or to any Subsidiary of the Company;
(A) accelerate the payment, right to payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than as described in Section 3.14(e) of the Company Disclosure Schedule, or, (B) except at Parent’s request in accordance with Section 5.3, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrant;
(xv) pay, discharge or satisfy any liabilities other than the payment, discharge or satisfaction of any liabilities in the ordinary course of business and consistent with past practice;
(xvi) delay or postpone the payment of accounts payable or other liabilities, other than in the ordinary course of business consistent with past practicepractices, (A) waive any rights of substantial value or (B) redeem, purchase, prepay, defease, cancel or forgive any Indebtedness owed to the Company or any of the Company Subsidiaries, other than Indebtedness of the Company to a Company Subsidiary or Indebtedness for borrowed money of a Company Subsidiary to the Company to another Company Subsidiary and as required in accordance with its terms;
(xviixiv) modifyexcept as may be required by any Governmental Entity or Law or under GAAP, amend or terminate make any contract which is material to change in its business or waive any methods, principles and practices of its material rights or claims, except in the ordinary course of business consistent with past practicefinancial accounting; provided that the waiver of any “standstill provision” shall be deemed, for purposes of this Agreement, a waiver of a material right not in the ordinary course of business;or
(xviiixv) make authorize any single capital expenditure of, or commitment in excess of $150,000 commit or make aggregate capital expenditures or commitments in excess of $250,000;
(xix) merge or consolidate with another Person or purchase a substantial portion of the assets of any Person;
(xx) enter into any joint venture, partnership or other similar arrangement;
(xxi) subject agree to Section 5.5, take any action to exempt or make any Person (other than Parent) not subject to of, the foregoing actions in respect of which it is restricted by the provisions of this Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;
(xxii) subject to Section 5.5, take any action (including encouraging any other Person to take such action), engage in any transaction or enter into any agreement which would reasonably be likely to cause (A) any of the representations or warranties of the Company 5.3. Notwithstanding anything contained in this Agreement to the contrary, the Company and the Company Subsidiaries shall be untrue at, or as of any time prior permitted to maintain through the earlier of, (i) Closing Date the date upon which Parent’s designees constitute a majority cash management systems of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), or (ii) the Effective Time; (B) any of the Tender Offer Conditions to not be satisfied; (C) any of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect on Company and the Company or Subsidiaries, maintain the cash management procedures as currently conducted by the Company and the Company Subsidiaries, and periodically settle intercompany balances consistent with past practices (E) any impairment of including through dividends and capital contributions among the ability of Company and the Company, Parent, Sub or Company Subsidiaries and all such intercompany balances shall be settled at the holders of Shares to consummate the Offer or the Merger Closing in accordance with the terms hereof or materially delay such consummation;
(xxiii) sell or release, or agree to develop, sell or release, any product that their terms). The Company and the Company does not make generally available Subsidiaries are allowed to its customers; or
(xxiv) agree, in writing or otherwise, to take any dividend all Cash and Cash Equivalents of the foregoing actionsCompany and the Company Subsidiaries to the Equityholders immediately prior to Closing.
Appears in 1 contract
Conduct of the Business of the Company Pending the Closing Date. Except The Company agrees that, except as specifically contemplated set forth on Section 6.3 of the Disclosure Schedule, or as may be required or not otherwise prohibited by this Agreement Agreement, or as otherwise consented required by Law, by a Governmental Entity, or by any Contract to or approved in writing by Parentwhich the Company is a party, until during the period commencing on the date hereof and ending at the earlier of (i) the date upon which Parent’s designees constitute a majority Effective Time and (ii) termination of the Board of Directors (or Parent has failed to designate at least 4 individuals this Agreement pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) the Effective Time8.1:
(a) the Company shall and shall cause each Subsidiary of the Company to conduct its business and its operations in all material respects only according to its in the ordinary course of business consistent with past practice and shall use all reasonable efforts to preserve intact their current business operations, keep available the services of their officers and employees, and maintain satisfactory relationships with lessors, lessees, suppliers, customers, partners and others having business relationships with thempractice; and
(b) without limiting the generality Company shall not effect any of the foregoingfollowing without the prior written consent of Parent (such consent not to be unreasonably withheld, neither conditioned or delayed); provided, that the Company nor any Subsidiary consent of Parent shall be deemed to have been given if Parent does not object within five (5) Business Days from the Company shalldate on which request for such consent is received in writing by Parent:
(i) amend its Certificate of Incorporation make any change in or By-Laws amendment to the Company Charter Documents in a manner that would reasonably be expected to materially delay or comparable organizational documentsimpede the Company’s ability to consummate the Merger;
(ii) except for grants of Company Stock Options to new hires in the ordinary course of business and consistent with past practice (provided that in the aggregate, the Company may not grant options in the aggregate amount exceeding 50,000), issue or sell, or authorize the issuance to issue or sale ofsell, any shares of its capital stock or any other equity securitiesownership interests, as applicable, or issue or sell, or authorize the issuance to issue or sale ofsell, any securities convertible into or exchangeable for, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or create any contract Contract with respect to the issuance or sale of, any shares of its capital stock or any other equity securitiesownership interests, or make any other changes in its capital structure, as applicable except for the issuance and sale by the Company of Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding on the date hereof and other than pursuant to the Company ESPPterms of any currently outstanding Options;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entity;
(iv) except for payments of dividends by a Subsidiary of the Company, 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 its other securities, as applicable, except for the acquisition of Options from Option Holders in full or partial payment of the exercise price payable by such holder upon exercise of Options;
(viv) enter into any contract which (i) if entered into prior to the date of this Agreement, would be a Material Company Contract, or (ii) involves payment by the Company and its Subsidiaries in excess of $150,000 or receipts by the Company and its Subsidiaries in excess of $250,000 in any consecutive twelve month period, or, in cases where the Company or a Subsidiary of the Company is the party responsible for such payment, which is not terminable upon thirty days notice;
(vi) except to the extent required under Employee Plans in effect on the date of this Agreement, grant any options to purchase Shares, increase the compensation or fringe benefits of any of its directors, officers or employees, grant any severance or termination pay not currently required to be paid under existing severance plans; enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee;
(vii) except as specifically set forth herein or as required in order to comply with applicable Law, than (A) establish, enter into, adopt the transfer of Presstek Specific Inventory to Presstek or amend or terminate any Employee Plan or Compensatory Agreement, (B) change any actuarial or other assumption used to calculate funding obligations with respect to any Employee Plan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not in the ordinary course of business consistent with past practice with respect to any Employee Plan, or (D) take any action to accelerate any rights or benefits under any collective bargaining agreement, Employee Plan or Compensatory Plan;
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any Lien, any material assets other than entering into contracts with customers in the ordinary course of business consistent with past practice, sell, lease or otherwise dispose of any of its material properties or assets;
(ixv) sellamend in any respect or terminate any Material Contract or enter into a Contract which, assignhad it been entered into prior to the date hereof, transferwould have been a Material Contract;
(vi) (A) incur any Indebtedness, license or modify or amend any rights to any Company Intellectual Propertyother than short-term Indebtedness, except letters of credit issued in the ordinary course of business consistent with past practice;
(x) agree to the settlement of any material claim or Litigation;
(xi) except pursuant to Section 5.14(b)Intercompany Indebtedness, make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xii) except as required by applicable Law or GAAP, make any change in its accounting principles, practices or methods;
(xiii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, other than in respect of indebtedness owing by the Company to any Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) make any loans or advances to any other Person, other than loans and routine advances to employees consistent with past practice, or (C) incur any material obligations or liabilities (whether accrued, absolute, contingent or otherwise), other than liabilities incurred in the Company or to any Subsidiary ordinary course of the Companybusiness;
(Avii) accelerate send any written communications (including electronic communications) to the paymentemployees of the Company regarding this Agreement or the transactions contemplated hereby;
(viii) make any representations or issue any communications to employees of the Company that are inconsistent with this Agreement or the transactions contemplated thereby, right including any representations regarding Parent’s potential offers of employment to payment the Company’s employees or vesting otherwise;
(ix) grant or agree to grant to any officer of the Company any increase in wages or bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than or establish any new compensation or benefit plans or arrangements, or amend or agree to amend any existing Employee Benefit Plans, except (A) as described in Section 3.14(e) of the Company Disclosure Schedule, ormay be required under applicable Law, (B) except at Parent’s request pursuant to the Employee Benefit Plans or collective bargaining agreements of the Company in accordance with Section 5.3effect on the date hereof, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrant;
(xvC) pay, discharge or satisfy any liabilities other than the payment, discharge or satisfaction of any liabilities in the ordinary course of business and consistent with past practiceor (D) pursuant to employment, retention, change-of-control or similar type agreements existing prior to the date hereof;
(xvix) delay make any Tax election not required by Law that is likely to have a continuing material effect on the Company following the Closing Date, or postpone the payment of accounts payable settle or other liabilities, compromise any material Tax liability other than in the ordinary course of business consistent with past practice;
(xvii) modify, amend or terminate any contract which is material to its business or waive any of its material rights or claims, except in the ordinary course of business consistent with past practice; provided that the waiver of any “standstill provision” shall be deemed, for purposes of this Agreement, a waiver of a material right not in the ordinary course of business;
(xviiixi) make other than in the ordinary course of business (A) waive any single capital expenditure rights of substantial value or commitment in excess of $150,000 (B) cancel or make aggregate capital expenditures or commitments in excess of $250,000forgive any material Indebtedness owed to the Company;
(xixxii) merge except as may be required by any Governmental Entity or consolidate with another Person or purchase a substantial portion under GAAP, make any material change in its methods, principles and practices of the assets of any Personaccounting, including tax accounting policies and procedures;
(xxxiii) enter into any joint ventureagreement to purchase or sell any interest in real property, partnership grant any security interest in any real property, enter into any lease, sublease, license or other similar arrangement;occupancy agreement with respect to any real property or alter, amend, modify, violate or terminate any of the terms of any Real Property Leases; or
(xxixiv) subject authorize any of, or commit or agree to Section 5.5, take any action to exempt or make any Person (other than Parent) not subject to of, the foregoing actions in respect of which it is restricted by the provisions of this Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;6.3.
(xxiic) subject to Section 5.5, take any action (including encouraging any other Person to take such action), engage in any transaction or enter into any agreement which would reasonably be likely to cause (A) any of the representations or warranties of the Company Notwithstanding anything contained in this Agreement to the contrary, Presstek, its Affiliates and the Company shall be untrue atpermitted to: (i) maintain through the Closing Date the cash management system of Presstek, or its Affiliates and the Company; (ii) maintain the cash management procedures as of any time currently conducted by Presstek, its Affiliates and the Company; and (iii) periodically settle intercompany balances consistent with past practices (including through dividends, capital contributions and Intercompany Indebtedness), all such intercompany balances to be settled prior to the earlier of, Closing in accordance with their terms or otherwise. Presstek or its Affiliates are allowed (ix) the date upon which Parent’s designees constitute a majority to withdraw all cash and cash equivalents of the Board of Directors Company; and (or Parent has failed y) shall contribute all Intercompany Indebtedness to designate at least 4 individuals pursuant to Section 1.3), or (ii) the Effective Time; (B) any of the Tender Offer Conditions to not be satisfied; (C) any of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect on the Company or (E) any impairment of the ability capital of the Company, Parent, Sub immediately prior to the Closing.
(d) Except for those Contracts delivered by Presstek or the holders Company pursuant to Section 2.9(b), each Contract between Presstek (or one of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation;
(xxiiiPresstek’s other Subsidiaries) sell or release, or agree to develop, sell or release, any product that and the Company does not make generally available to its customers; or
shall automatically be terminated effective as of the Closing without any further action on the part of Presstek (xxiv) agreeor such other Subsidiary, in writing as the case may be), the Company, Parent or otherwise, to take any of the foregoing actionstheir respective Affiliates.
Appears in 1 contract
Sources: Merger Agreement (Presstek Inc /De/)
Conduct of the Business of the Company Pending the Closing Date. Except (a) The Company agrees that, except as specifically expressly contemplated by this Agreement or as otherwise consented to or approved in writing by Parentand the Ancillary Agreements, until during the earlier of (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) the Effective Time:
(a) the Company shall and shall cause each Subsidiary of the Company to conduct its operations only according to its ordinary course of business consistent with past practice and shall use all reasonable efforts to preserve intact their current business operations, keep available the services of their officers and employees, and maintain satisfactory relationships with lessors, lessees, suppliers, customers, partners and others having business relationships with them; and
(b) without limiting the generality of the foregoing, neither the Company nor any Subsidiary of the Company shall:
(i) amend its Certificate of Incorporation or By-Laws or comparable organizational documents;
(ii) except for grants of Company Stock Options to new hires in the ordinary course of business and consistent with past practice (provided that in the aggregate, the Company may not grant options in the aggregate amount exceeding 50,000), issue or sell, or authorize the issuance or sale of, any shares of its capital stock or any other equity securities, or issue or sell, or authorize the issuance or sale of, any securities convertible into or options, warrants or rights to purchase or subscribe to, or enter into or create any contract with respect to the issuance or sale of, any shares of its capital stock or any other equity securities, or make any other changes in its capital structure, except for the issuance and sale of Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding period commencing on the date hereof and other than pursuant to ending on the Expiration Date, the Company ESPP;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entity;
(iv) except for payments of dividends by a Subsidiary of the Company, 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 shall conduct its capital stock or its other securities;
(v) enter into any contract which (i) if entered into prior to the date of this Agreement, would be a Material Company Contract, or (ii) involves payment by the Company and its Subsidiaries in excess of $150,000 or receipts by the Company and its Subsidiaries in excess of $250,000 in any consecutive twelve month period, or, in cases where the Company or a Subsidiary of the Company is the party responsible for such payment, which is not terminable upon thirty days notice;
(vi) except to the extent required under Employee Plans in effect on the date of this Agreement, grant any options to purchase Shares, increase the compensation or fringe benefits of any of its directors, officers or employees, grant any severance or termination pay not currently required to be paid under existing severance plans; enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee;
(vii) except as specifically set forth herein or as required in order to comply with applicable Law, (A) establish, enter into, adopt or amend or terminate any Employee Plan or Compensatory Agreement, (B) change any actuarial or other assumption used to calculate funding obligations with respect to any Employee Plan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not operations only in the ordinary course of business consistent with past practice and to use its commercially reasonable efforts to preserve intact its respective business organizations, keep available the services of its Employees and maintain satisfactory relationships with respect to licensors, suppliers, distributors, clients and others having business relationships with them.
(b) In furtherance and not in limitation of Section 5.3(a), the Company agrees that during the period commencing on the date hereof and ending on the Expiration Date, the Company shall not effect any Employee Planof the following except with the prior written consent (including email) of Parent (which shall not be unreasonably withheld, conditioned or delayed), except as expressly contemplated by this Agreement and the Ancillary Agreements, and except as set forth on Section 5.3(b) of the Company Disclosure Schedule:
(i) amend or restate any of its Organizational Documents;
(ii) authorize for issuance, issue, grant, sell or deliver (A) any capital stock of, or other equity or voting interest in, the Company, other than issuance of shares of Company Capital Stock upon exercise of Company Stock Options outstanding on the date hereof in accordance with the existing terms of such outstanding Company Stock Options, or (DB) take any action securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire any (1) shares of capital stock of, or other equity or voting interest in, the Company, (2) securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire, any shares of the capital stock of, or other equity or voting interest in, the Company including rights, warrants or options, or (3) phantom stock or similar equity based payment option;
(iii) declare, pay or set aside any dividend or make any distribution (whether in cash, stock or other property) with respect to, or split, combine, redeem, reclassify, purchase or otherwise acquire directly, or indirectly, any shares of capital stock of, or other equity or voting interest in, the Company, or make any other change in the capital structure of the Company or make any other payment to the Company Stockholders;
(iv) establish, adopt, enter into, fund or accelerate payment under, amend or terminate any rights Benefit Plan;
(v) establish, adopt, enter into, fund or benefits under accelerate payment under, amend or terminate any collective bargaining agreement, or arrangement for the benefit of any directors, officers or Employees;
(vi) hire any new Employee Plan or Compensatory Planterminate the employment of any Employee;
(vii) pay or enter into any agreement, or otherwise promise, to pay any bonus, retention or special remuneration to any current or former Employee or increase the compensation payable (including wages, salaries, bonuses, benefits or any other remuneration) or to become payable to any current or former Employee, but other than as required under Contracts existing as of the date hereof;
(viii) transfergrant, leaseaccelerate, license, guarantee, sell, mortgage, pledge, dispose of, encumber amend or subject to any Lien, any material assets other than entering into contracts with customers in change the ordinary course period of business consistent with past practice;
(ix) sell, assign, transfer, license exercisability or modify or amend any rights to vesting of any Company Intellectual Property, except Stock Option or authorize any cash payment in the ordinary course of business consistent with past practice;
(x) agree to the settlement of any material claim or Litigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim exchange for a Tax refund, offset Company Stock Option or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xii) except as required by applicable Law or GAAP, make any change in its accounting principles, practices or methods;
(xiii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, other than in respect of indebtedness owing by the Company to any Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) make any loans or advances to any other Person, other than to the Company or to any Subsidiary equity award of the Company;
(Aix) accelerate enter into, materially amend, become subject to, violate, terminate or otherwise modify or waive any of the payment, right to payment or vesting material terms of any bonusMaterial Contract (including, severancefor the sake of clarity, profit sharingany Contract that would constitute a Material Contract) or any Company Leases, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than as described in Section 3.14(e) except for entering into Contracts for the sale of the Company Disclosure ScheduleProducts in the ordinary course of business, orconsistent with past practice, that (i) are with a value per contract that does not exceed $50,000 and (ii) do not contain any of the restrictions of the sort specified in, or would otherwise qualify as Material Contracts under, Sections 2.13(a)(ii), (Bvii), (xi), (xii) except at Parent’s request in accordance with Section 5.3, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrant(xxi);
(xvx) paymortgage, discharge pledge or satisfy encumber any liabilities assets or otherwise permit any of its properties or assets to be subject to any Lien;
(xi) (i) dispose of, license or transfer to any Person any rights to Company Intellectual Property other than pursuant to non exclusive licenses of binary code in connection with the paymentsale of the Company Products in the ordinary course of business, discharge consistent with past licensing practice, (ii) abandon, permit to lapse or satisfaction otherwise dispose of any liabilities Company Intellectual Property, or (iii) make any material change in any Company Intellectual Property;
(xii) sell, transfer, lease, license or otherwise dispose of any material assets or properties, except for the sale of Company Products in the ordinary course of business and consistent with past practice;
(xiii) acquire any business, line of business or Person by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of related transactions, or enter into any Contract, letter of intent or similar arrangement (whether or not enforceable) with respect to the foregoing;
(xiv) enter into or amend any agreements pursuant to which any other Person is granted exclusive rights of any type or scope with respect to any Company Products;
(xv) make any capital expenditure or commitment therefor or enter into any operating lease in excess of $5,000 individually and $10,000 in the aggregate or otherwise deviate from the Company's short-term budget/forecast attached to Section 5.3(xv) of the Company Disclosure Schedule;
(xvi) delay or postpone (A) take any action reasonably likely to (i) accelerate the payment of customer accounts receivables (including shortening payment terms, providing incentives for early payment or otherwise) or (ii) delay the payment on accounts payable to suppliers, vendors or other liabilitiesothers beyond due dates; (B) make any changes to the cash management policies of the Company, or (C) vary any inventory purchasing practices in any material respect from past practices;
(xvii) terminate or waive any right of the Company of material value;
(xviii) except as required by GAAP, make any change in any method of accounting or auditing method, principle, policy, procedure or practice;
(xix) (A) make any Tax election or settle and/or compromise any Tax liability; (B) prepare any Returns in an inappropriate manner; incur any liability for Taxes, other than in the ordinary course of business and consistent with past practice, or (C) file an amended Return or a claim for refund of Taxes with respect to the income, operations or property of the Company, other than in the ordinary course of business and consistent with past practice;
(xvii) modify, amend or terminate any contract which is material to its business or waive any of its material rights or claims, except in the ordinary course of business consistent with past practice; provided that the waiver of any “standstill provision” shall be deemed, for purposes of this Agreement, a waiver of a material right not in the ordinary course of business;
(xviii) make any single capital expenditure or commitment in excess of $150,000 or make aggregate capital expenditures or commitments in excess of $250,000;
(xix) merge or consolidate with another Person or purchase a substantial portion of the assets of any Person;
(xx) enter into incur, repay, assume, guarantee or modify any joint venture, partnership or other similar arrangementCompany Indebtedness;
(xxi) subject to Section 5.5, take any action to exempt or make any Person (other than Parent) not subject to the provisions of Section 203 of the DGCL loans, advances or capital contributions to, or investments in, any other potentially applicable anti-takeover or similar statute or regulationPerson;
(xxii) subject to Section 5.5, take initiate or settle any action litigation;
(including encouraging any other Person xxiii) agree to take such action), engage in any transaction or enter into any agreement which would reasonably be likely to cause (Ai) any of the representations or warranties of the Company in this Agreement to be untrue at, or as of any time prior to the earlier of, (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3)actions described above, or (ii) any other action that would prevent the Effective Time; (B) Company from performing, or cause the Company not to perform, any of the Tender Offer Conditions to not be satisfied; (C) its covenants and agreements under this Agreement or under any of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect on the Company or (E) any impairment of the ability of the Company, Parent, Sub or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation;
(xxiii) sell or release, or agree to develop, sell or release, any product that the Company does not make generally available to its customers; or
(xxiv) agree, in writing or otherwise, to take any of the foregoing actionsAncillary Agreements.
Appears in 1 contract
Sources: Merger Agreement (Attunity LTD)
Conduct of the Business of the Company Pending the Closing Date. Except The Company agrees that, except as permitted, required or specifically contemplated by by, or otherwise described in, this Agreement or as otherwise consented to or approved in writing by ParentParent (which consent or approval shall not be unreasonably withheld or delayed), until during the earlier of (i) period commencing on the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) hereof until the Effective Time:
(a) the The Company and each of its Subsidiaries shall and shall cause each Subsidiary of the Company to conduct its their respective operations in all material respects only according to its their ordinary and usual course of business consistent with past practice and shall use all their reasonable best efforts to preserve intact their current 42 47 respective business operationsorganizations, keep available the services of their officers and employees, employees and maintain satisfactory relationships with lessors, lesseeslicensors, suppliers, customersdistributors, clients, joint venture partners and others having significant business relationships with them; and;
(b) without limiting the generality Except as set forth in Section 7.3(b) of the foregoingCompany Disclosure Schedule or as expressly contemplated by this Agreement, neither the Company nor any Subsidiary of the Company its Subsidiaries shall:
(i1) amend its make any change in or amendment to the Company's Certificate of Incorporation or its By-Laws or comparable organizational documentsLaws;
(ii2) except for grants of Company Stock Options to new hires in the ordinary course of business and consistent with past practice (provided that in the aggregate, the Company may not grant options in the aggregate amount exceeding 50,000), issue or sell, or authorize the issuance to issue or sale ofsell, any shares of its capital stock or any other equity securities, or issue or sell, or authorize the issuance to issue or sale ofsell, any securities convertible into into, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or create any contract with respect to the issuance or sale of, any shares of its capital stock or any other equity securities, or make any other changes in its capital structure, except for other than (i) the issuance and sale of Shares Company Common Stock upon the exercise of Company Stock Options or Company Warrants which are outstanding on the date hereof and other than pursuant to the Company ESPP;
hereof, in accordance with their present terms, or (iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entity;
(iv) except for payments of dividends issuances by a wholly owned Subsidiary of the Company of capital stock to such Subsidiary's parent, the Company or another wholly owned Subsidiary of the Company, ;
(3) 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 its other securities;
(v) enter into any contract which (i) if entered into prior to the date of this Agreement, would be a Material Company Contract, or (ii) involves payment by the Company and its Subsidiaries in excess of $150,000 or receipts by the Company and its Subsidiaries in excess of $250,000 in any consecutive twelve month period, or, in cases where the Company or a Subsidiary of the Company is the party responsible for such payment, which is not terminable upon thirty days notice;
(vi) except to the extent required under Employee Plans in effect on the date of this Agreement, grant any options to purchase Shares, increase the compensation or fringe benefits of any of its directors, officers or employees, grant any severance or termination pay not currently required to be paid under existing severance plans; enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee;
(vii) except as specifically set forth herein or as required in order to comply with applicable Law, (A) establish, enter into, adopt or amend or terminate any Employee Plan or Compensatory Agreement, (B) change any actuarial or other assumption used to calculate funding obligations with respect to any Employee Plan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not in the ordinary course of business consistent with past practice with respect to any Employee Plan, or (D) take any action to accelerate any rights or benefits under any collective bargaining agreement, Employee Plan or Compensatory Plan;
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any Lien, any material assets other than entering into contracts with customers in the ordinary course of business consistent with past practice;
(ix) sell, assign, transfer, license or modify or amend any rights to any Company Intellectual Property, except in the ordinary course of business consistent with past practice;
(x) agree to the settlement of any material claim or Litigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xii) except as required by applicable Law or GAAP, make any change in its accounting principles, practices or methods;
(xiii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, other than in respect of indebtedness owing dividends payable by the Company to any Subsidiary of the Company or in respect of indebtedness owing by any a wholly owned Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) make any loans or advances to any other Person, other than to the Company or to any wholly owned Subsidiary of the Company;
(4) incur any capital expenditures or any obligations or liabilities in respect thereof, except for those (A) accelerate contemplated by the payment, right to payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than as described in Section 3.14(e) of capital expenditure budget for the Company Disclosure Schedule, orand its Subsidiaries made available to Parent, (B) except at Parent’s request in accordance with Section 5.3, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrant;
(xv) pay, discharge or satisfy any liabilities other than the payment, discharge or satisfaction of any liabilities incurred in the ordinary course of business of the Company and consistent with past practiceits Subsidiaries and set forth in Schedule 7.3(b) of the Company Disclosure Schedule (the "CAPITAL BUDGET") or (C) not otherwise described in clauses (A) and (B) which, in the aggregate, do not exceed U.S.$1.0 million;
(xvi5) delay acquire or postpone the payment of accounts payable agree to acquire (A) by merging or other liabilitiesconsolidating with, other than in the ordinary course of business consistent with past practice;
(xvii) modify, amend or terminate any contract which is material to its business or waive any of its material rights or claims, except in the ordinary course of business consistent with past practice; provided that the waiver of any “standstill provision” shall be deemed, for purposes of this Agreement, a waiver of a material right not in the ordinary course of business;
(xviii) make any single capital expenditure or commitment in excess of $150,000 or make aggregate capital expenditures or commitments in excess of $250,000;
(xix) merge or consolidate with another Person or purchase by purchasing a substantial portion of the assets of of, or by any Person;
(xx) enter into other manner, any business or any corporation, partnership, joint venture, partnership association or other similar arrangement;
(xxi) subject to Section 5.5, take any action to exempt or make any Person (other than Parent) not subject to the provisions business organization of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;
(xxii) subject to Section 5.5, take any action division thereof (including encouraging any other Person to take such action), engage in any transaction or enter into any agreement which would reasonably be likely to cause (A) any of the representations Company's Subsidiaries) or warranties of the Company in this Agreement to be untrue at, or as of any time prior to the earlier of, (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), or (ii) the Effective Time; (B) any assets, including real estate, except (x) purchases of the Tender Offer Conditions to not be satisfied; (C) any of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect on the Company or (E) any impairment of the ability of the Companyinventory, Parentequipment, Sub or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation;
(xxiii) sell or release, or agree to develop, sell or release, any product that the Company does not make generally available to its customers; or
(xxiv) agree, in writing or otherwise, to take any of the foregoing actions.other non-material
Appears in 1 contract
Conduct of the Business of the Company Pending the Closing Date. Except as specifically contemplated set forth in the corresponding subsections of Section 5.2(b) of the Company Disclosure Letter, the Company agrees that, except as expressly permitted or required by this Agreement or as otherwise consented to or approved in writing by with the prior written consent of Parent, until during the period commencing on the date hereof and ending at the earlier of (ix) the date upon which Parent’s designees constitute a majority Effective Time and (y) termination of the Board of Directors (or Parent has failed to designate at least 4 individuals this Agreement pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) the Effective Time7.1:
(a) the Company and each of its Subsidiaries shall and shall cause each Subsidiary of the Company to conduct its their respective operations only according to its their ordinary and usual course of business consistent with past practice and shall use all their commercially reasonable efforts to preserve intact their current respective business operationsorganization, keep available the services of their officers and employeesemployees who are employed by the Company on the date hereof, and maintain satisfactory relationships with lessors, lesseeslicensors, suppliers, customersdistributors, partners clients, customers and others having significant business relationships with them; and, maintain their Intellectual Property, and preserve and keep confidential their trade secrets;
(b) without limiting the generality of the foregoing, neither the Company nor any Subsidiary of the Company its Subsidiaries shall:
(i) amend make any change in or amendment to its Certificate of Incorporation or its By-Laws laws (or comparable organizational governing documents);
(ii) except for grants of Company Stock Options to new hires in the ordinary course of business and consistent with past practice (provided that in the aggregate, the Company may not grant options in the aggregate amount exceeding 50,000), issue or sell, or authorize the issuance to issue or sale ofsell, any shares of its capital stock or any other equity securities, or issue or sell, or authorize the issuance to issue or sale ofsell, any securities convertible into or exchangeable for, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or create any contract with respect to the issuance or sale of, any shares of its capital stock or any other equity securities, or make any other changes in its capital structure, except for the issuance and sale of Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding on the date hereof and other than pursuant to the Company ESPP;
(iii) sell sell, pledge or pledge dispose of or agree to sell sell, pledge or pledge dispose of any stock or other equity interest owned by it in any other entityPerson;
(iv) except for payments of dividends by a Subsidiary of the Company, 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 its other securities;
(v) enter into any contract which (i) if entered into prior or commitment with respect to the date of this Agreement, would be capital expenditures with a Material Company Contractvalue in excess of, or (ii) involves payment requiring expenditures by the Company and its Subsidiaries in excess of of, $150,000 50,000, individually, or receipts enter into contracts or commitments with respect to capital expenditures with a value in excess of, or requiring expenditures by the Company and its Subsidiaries in excess of of, $250,000 in any consecutive twelve month period, or50,000, in cases where the Company or a Subsidiary of the Company is the party responsible for such payment, which is not terminable upon thirty days noticeaggregate;
(vi) acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any business or any Person, or otherwise acquire any assets of any Person (other than the purchase of assets in the ordinary course of business and consistent with past practice);
(vii) except to the extent required under Employee Plans existing employee and director benefit plans, agreements or arrangements in effect on the date of this Agreement, grant any options to purchase SharesAgreement and set forth in Section 5.2(b)(vii) of the Company Disclosure Letter, increase the compensation or fringe benefits of any of its directors, officers or employees, or grant any severance or termination pay not currently required to be paid under existing severance plans; as part of the COC Incentive Payments, or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee;
(vii) employee of the Company or any of its Subsidiaries, or, except as specifically set forth herein or as required in order to comply with this Agreement, applicable Lawlaw or Section 280G of the Code, (A) establish, adopt, enter into, adopt into or amend or terminate any Employee Plan or Compensatory Agreementcollective bargaining, (B) change any actuarial bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other assumption used to calculate funding obligations with respect to any Employee Planplan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not in the ordinary course of business consistent with past practice with respect to any Employee Plan, or (D) take any action to accelerate any rights or benefits under any collective bargaining agreement, Employee Plan trust, fund, policy or Compensatory Planarrangement for the benefit of any directors, officers or employees;
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any Lien, any material assets Lien (other than entering into contracts with customers a Lien permitted hereby) or otherwise encumber any assets, or incur or modify any Indebtedness or other liability, other than in the ordinary course of business consistent with past practice, 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;
(ix) sellother than in the ordinary course of business, assign, transfer, enter into any agreement for the acquisition by or license to the Company or modify any of Subsidiaries of any software or amend technology of any rights third-party;
(x) except with regard to any Company Intellectual Property, except customer account receivable settled in the ordinary course of business consistent with past practice;
(x) but in no event in excess of $20,000), agree to the settlement of or waive any material claim or Litigationlitigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xii) except as required by applicable Law law or GAAP, make any change in its accounting principlesmethod of accounting;
(xii) adopt or enter into a plan of complete or partial liquidation, practices dissolution, merger, consolidation, restructuring, recapitalization or methodsother reorganization of the Company or any of its Subsidiaries (other than the Merger);
(xiii) (Ax) incur incur, assume or prepay any indebtedness for borrowed money Indebtedness or guarantee any such indebtedness Indebtedness of another Person, other than in respect intercompany indebtedness or guarantees of intercompany indebtedness owing by among the Company to and any direct or indirect wholly-owned Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another Subsidiary of the Company Company, or (By) make any loans loans, extensions of credit or advances to any other Person, other than to the Company or to any direct or indirect wholly-owned Subsidiary of the Company;
(Axiv) other than pursuant to arrangements in effect on the date hereof and as set forth in Section 5.2(b)(xiv) of the Company Disclosure Letter, accelerate the payment, right to payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than as described in Section 3.14(e) of the Company Disclosure Schedule, or, (B) except at Parent’s request in accordance with Section 5.3, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrant;
(xv) pay, discharge or satisfy any material claims, liabilities other than the paymentor obligations (absolute, discharge accrued, asserted or satisfaction of any liabilities in the ordinary course of business and consistent with past practiceunasserted, contingent or otherwise);
(xvi) delay or postpone the payment of accounts payable or other liabilitiesenter into, other than in the ordinary course of business consistent with past practice;
(xvii) materially modify, amend or terminate any contract which is material to its business Material Contract or waive any of its material rights or claims;
(xvii) enter into any agreement or arrangement that materially limits or otherwise restricts the Company, except any of its Subsidiaries, or any successor thereto, or that would, after the Effective Time, limit or restrict the Surviving Corporation and its affiliates (including Parent) or any successor thereto, from engaging or competing in the ordinary course any line of business consistent with past practiceor in any geographic area; provided that the waiver of any “standstill provision” shall be deemed, for purposes of this Agreement, a waiver of a material right not in the ordinary course of business;or
(xviii) make other than pursuant to arrangements set forth in Section 5.2(b)(xviii) of the Company Disclosure Letter, plan, announce, implement or effect any single capital expenditure reduction in force, lay-off, early retirement program, severance program or commitment in excess other program or effort concerning the termination of $150,000 employment of employees of the Company or make aggregate capital expenditures or commitments in excess of $250,000its Subsidiaries;
(xix) merge or consolidate with another Person or purchase a substantial portion of the assets of any Person;
(xx) enter into any joint venture, partnership or other similar arrangement;
(xxi) subject to Section 5.5, take any action to exempt or make any Person (other than Parent) not subject to the provisions of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;
(xxii) subject to Section 5.5, take any action (including encouraging any other Person to take such action), engage in any transaction or enter into any agreement which would reasonably be likely to cause (A) any of the representations or warranties of the Company in this Agreement to be untrue at, or as of any time prior to the earlier of, (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), or (ii) the Effective Time; (B) any of the Tender Offer Conditions to not be satisfied; (C) any of the conditions set forth in Article VI to not be satisfied; (D) 3 that are subject to, or qualified by, a “Material Adverse Effect Effect,” “material adverse change” or other materiality qualification to be untrue as of the Effective Time, or any such representations and warranties that are not so qualified to be untrue in any material respect;
(xx) other than pursuant to arrangements set forth in Section 5.2(b)(xx) of the Company Disclosure Letter, purchase or acquire, or offer to purchase or acquire, any shares of Company Stock;
(xxi) take any action, including the adoption of any stockholder-rights plan or amendments to its Certificate of Incorporation or By-laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to vote or otherwise to exercise the rights and receive the benefits of a stockholder with respect to securities of the Company that may be acquired or controlled by Parent or Sub, or which would permit any stockholder to acquire securities of the Company on a basis not available to Parent or Sub in the event that Parent or Sub were to acquire any shares of Company Stock;
(xxii) (v) file or cause to be filed any amended Returns or claims for refund of Taxes, (w) prepare any Return in a manner which is inconsistent with the past practices of the Company or a Subsidiary, as the case may be, with respect to the treatment of items on such Returns; (Ex) make any impairment Tax election in a manner which is inconsistent with the past practices of the ability Company or a Subsidiary; (y) incur any liability for Taxes other than in the ordinary course of the Company, Parent, Sub business or the holders of Shares to consummate the Offer as required by this Agreement; (z) enter into any settlement or the Merger in accordance closing agreement with the terms hereof or materially delay such consummationa taxing authority;
(xxiii) sell or release, or agree fail to develop, sell or release, any product that the Company does not make generally available to maintain with financially responsible insurance companies insurance on its customerstangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice; or
(xxiv) agree, in writing or otherwise, or commit to take any of the foregoing actions.
Appears in 1 contract
Conduct of the Business of the Company Pending the Closing Date. Except The Company agrees that, except as specifically contemplated set forth in Section 5.3 of the Company Disclosure Letter or as expressly permitted or required by this Agreement or as otherwise consented to or approved in writing by ParentAgreement, until during the period commencing on the date hereof and ending at the earlier of (ix) the date upon which Parent’s designees constitute a majority Effective Time and (y) termination of the Board of Directors (or Parent has failed to designate at least 4 individuals this Agreement pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) the Effective Time7.1:
(a) the Company shall and shall cause each Subsidiary of the Company to Subsidiaries shall conduct its their respective operations in all material respects only according to its in the ordinary course of business consistent with past practice and shall and, to the extent consistent therewith, use all their commercially reasonable efforts to preserve intact their current respective business operationsorganizations, keep available the services of their current officers and employees, senior management and maintain satisfactory preserve its present relationships with lessors, lessees, suppliers, customers, partners and others any Person having significant business relationships with themthe Company or any such Company Subsidiary; and
(b) without limiting the generality of the foregoing, neither the Company nor any Subsidiary of the Company shall:Subsidiaries shall effect any of the following without the prior written consent of Parent (such consent not to be unreasonably withheld, conditioned or delayed):
(i) amend make any change in or amendment to its Certificate certificate of Incorporation incorporation or Byits by-Laws laws (or comparable organizational governing documents);
(ii) except for grants of Company Stock Options to new hires in the ordinary course of business and consistent with past practice (provided that in the aggregate, the Company may not grant options in the aggregate amount exceeding 50,000), issue or sell, or authorize the issuance to issue or sale ofsell, any shares of its capital stock or any other equity securitiesownership interests, or issue or sell, or authorize the issuance to issue or sale ofsell, any securities convertible into or exchangeable for, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or create any contract Contract with respect to the issuance or sale of, any shares of its capital stock or any other equity securities, or make any other changes in its capital structure, ownership interests except for the issuance and sale by the Company of Common Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding on the date hereof and other than Preferred Shares, as applicable, pursuant to the Company ESPPterms of any Options or Warrants, and except as contemplated by Section 5.21;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entity;
(iv) except for payments of dividends by a Subsidiary of the Company, 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 its other securities, except for the acquisition of Options or Warrants from holders of Options or Warrants in connection with a “cashless exercise” thereof;
(iv) sell, lease or otherwise dispose of any of its properties or assets that are material to its business other than Inventory in the ordinary course of business;
(v) amend in any material respect or terminate (other than in accordance with its terms) any Material Contract or enter into any contract which (i) if a Contract which, had it been entered into prior to the date of this Agreementhereof, would be have been a Material Company Contract, or (ii) involves payment by the Company and its Subsidiaries in excess of $150,000 or receipts by the Company and its Subsidiaries in excess of $250,000 in any consecutive twelve month period, or, in cases where the Company or a Subsidiary of the Company is the party responsible for such payment, which is not terminable upon thirty days notice;
(vi) except to the extent required under Employee Plans in effect on the date of this Agreement, grant any options to purchase Shares, increase the compensation or fringe benefits of any of its directors, officers or employees, grant any severance or termination pay not currently required to be paid under existing severance plans; enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee;
(vii) except as specifically set forth herein or as required in order to comply with applicable Law, (A) establishincur any Indebtedness, enter into, adopt other than short-term Indebtedness or amend or terminate any Employee Plan or Compensatory Agreement, (B) change any actuarial or other assumption used to calculate funding obligations with respect to any Employee Plan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not letters of credit incurred in the ordinary course of business consistent with past practice with respect to any Employee Plan, or (D) take any action to accelerate any rights or benefits borrowings under any collective bargaining agreement, Employee Plan or Compensatory Plan;
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any Lien, any material assets other than entering into contracts with customers existing credit facilities set forth in the ordinary course of business consistent with past practice;
(ix) sell, assign, transfer, license or modify or amend any rights to any Company Intellectual Property, except in the ordinary course of business consistent with past practice;
(x) agree to the settlement of any material claim or Litigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability 3.15 of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xii) except as required by applicable Law or GAAP, make any change in its accounting principles, practices or methods;
(xiii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, other than in respect of indebtedness owing by the Company to any Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another Subsidiary of the Company Disclosure Letter or (B) make any loans or advances to any other Person, other than routine advances to employees consistent with past practice;
(vii) grant or agree to grant to any officer of the Company or to any Subsidiary of the Company;
(A) accelerate the payment, right to payment Company Subsidiaries any increase in wages or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than or establish any new compensation or benefit plans or arrangements, or amend or agree to amend any existing Employee Benefit Plans, except (A) as described in Section 3.14(e) of the Company Disclosure Schedule, ormay be required under applicable Law, (B) except at Parent’s request pursuant to the Employee Benefit Plans or collective bargaining agreements of the Company or any of the Company Subsidiaries in accordance with Section 5.3effect on the date hereof or (C) pursuant to employment, accelerate retention, change-of-control or similar type agreements existing as of the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrantdate hereof;
(xvviii) pay, discharge make any material tax election not required by Law or satisfy settle or compromise any liabilities other than the payment, discharge or satisfaction of any liabilities in the ordinary course of business and consistent with past practicematerial Tax liability;
(xviA) delay waive any rights of substantial value or postpone (B) cancel or forgive any material Indebtedness owed to the payment Company or any of accounts payable or other liabilitiesthe Company Subsidiaries, other than in Indebtedness of the ordinary course Company to a wholly owned Subsidiary of business consistent with past practicethe Company or Indebtedness for borrowed money of a wholly owned Subsidiary of the Company to the Company or to another wholly owned Subsidiary of the Company;
(xviix) modifyexcept as may be required by any Governmental Entity or under GAAP, amend or terminate make any contract which is material to change in its business or waive any methods, principles and practices of its material rights or claimsaccounting, except in the ordinary course of business consistent with past practice; provided that the waiver of any “standstill provision” shall be deemed, for purposes of this Agreement, a waiver of a material right not in the ordinary course of businessincluding tax accounting policies and procedures;
(xviiixi) sell, transfer, assign, license, dispose of, or abandon, or fail to take commercially reasonable steps to maintain or prosecute, any Intellectual Property of the Company or any Company Subsidiary or any registration or pending application therefor;
(xii) incur or commit to any capital expenditures which are not part of the capital expenditure budget of the Company for the 2006 fiscal year in any amount greater than $50,000 in respect of any individual capital expenditure or $150,000 in the aggregate;
(xiii) make any single capital expenditure dividend or commitment in excess of $150,000 or make aggregate capital expenditures or commitments in excess of $250,000;
(xix) merge or consolidate with another Person or purchase a substantial portion of the assets other distribution to any Equity Holder of any Person;
(xx) enter into any joint venture, partnership amounts received by or other similar arrangement;
(xxi) subject to Section 5.5, take any action to exempt or make any Person (other than Parent) not subject payable to the provisions of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;
(xxii) subject Company pursuant to Section 5.5, take any action (including encouraging any other Person to take such action), engage in any transaction or enter into any agreement which would reasonably be likely to cause (A) any of the representations or warranties of the Company in this Agreement to be untrue at, or as of any time prior to the earlier of, (i) the date upon which Parent’s designees constitute a majority Sections 3.4 or 3.5 of the Board Asset Purchase Agreement, dated as of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3)March 3, or 2006, among C▇▇▇▇▇▇ Wire & Cable Corporation, B▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, the Company, CSC and C▇▇▇▇▇▇ and/or (ii) the Effective Time; (B) any Section 2.4 of the Tender Offer Conditions to not be satisfied; (C) any Stock Purchase Agreement, dated as of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect on the Company or (E) any impairment of the ability of May 5, 2006, among the Company, ParentRiver Associates Investments, Sub or LLC, Liberty and each of the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation;
(xxiii) sell or release, or agree to develop, sell or release, any product that the Company does not make generally available to its customersother parties thereto; or
(xxivxiv) agreeauthorize any of, in writing or otherwise, commit or agree to take any of of, the foregoing actionsactions in respect of which it is restricted by the provisions of this Section 5.3.
(c) Notwithstanding anything to the contrary contained herein, the Company and the Company Subsidiaries shall, at or prior to the Closing, cash-out, settle, unwind or otherwise terminate any interest rate swap, cap or collar agreement or similar agreement or arrangement designed to alter the risks arising from fluctuations in interest rates.
Appears in 1 contract
Conduct of the Business of the Company Pending the Closing Date. Except as specifically contemplated by this Agreement or as otherwise consented to or approved in writing by Parent, until the earlier of (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) the Effective Time:
(a) The Company agrees that during the period commencing on the date hereof and ending on the Expiration Date, the Company shall shall, and shall cause each Subsidiary of the Company to its Subsidiaries to, conduct its respective operations only according to its in the ordinary course of business consistent with past practice and shall to use all their commercially reasonable efforts to preserve intact their current respective business operationsorganizations, keep available the services of their officers and employees, Employees and maintain satisfactory relationships with lessors, lesseeslicensors, suppliers, customersdistributors, partners clients and others having business relationships with them; and.
(b) without limiting In furtherance and not in limitation of Section 5.3(a), the generality Company agrees that during the period commencing on the date hereof and ending on the Expiration Date, the Company shall not, and shall cause each of its Subsidiaries not to, effect any of the foregoingfollowing except (i) as specifically contemplated by this Agreement, neither or (ii) with the Company nor any Subsidiary prior written consent of the Company shall:Parent (which shall not be unreasonably withheld):
(i) amend or restate any of its Certificate of Incorporation Organizational Documents or By-Laws or comparable organizational documentsform any Subsidiary;
(ii) except authorize for grants issuance, issue, sell or deliver (A) any capital stock of, or other equity or voting interest in, the Company or any of its Subsidiaries, other than issuance of shares of Capital Stock of the Company upon exercise of Company Stock Options outstanding on the date hereof in accordance with the existing terms of such outstanding Company Stock Options, or (B) any securities convertible into, exchangeable for, or evidencing the right to new hires subscribe for or acquire any (1) shares of capital stock of, or other equity or voting interest in, the Company or any of its Subsidiaries, (2) securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire, any shares of the capital stock of, or other equity or voting interest in, the Company or any of its Subsidiaries including rights, warrants or options, or (3) phantom stock or similar equity based payment option;
(iii) declare, pay or set aside any dividend or make any distribution (whether in cash, stock or other property) with respect to, or split, combine, redeem, reclassify, purchase or otherwise acquire directly, or indirectly, any shares of capital stock of, or other equity or voting interest in, the Company or any of its Subsidiaries, or make any other change in the capital structure of the Company or any of its Subsidiaries;
(iv) establish, adopt, enter into, fund or accelerate payment under, amend or terminate any Benefit Plan;
(v) establish, adopt, enter into, fund or accelerate payment under, amend or terminate any agreement, or arrangement for the benefit of any directors, officers or Employees; other than in the ordinary course of business and consistent with past practice (provided that in the aggregate, the Company may not grant options in the aggregate amount exceeding 50,000), issue or sell, or authorize the issuance or sale of, any shares of its capital stock or any other equity securities, or issue or sell, or authorize the issuance or sale of, any securities convertible into or options, warrants or rights to purchase or subscribe to, or enter into or create any contract with respect to the issuance or sale of, any shares of its capital stock or any other equity securities, or make any other changes in its capital structure, except for the issuance and sale of Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding on the date hereof and other than pursuant to the Company ESPP;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entity;
(iv) except for payments of dividends by a Subsidiary of the Company, 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 its other securities;
(v) enter into any contract which (i) if entered into prior to the date of this Agreement, would be a Material Company Contract, or (ii) involves payment by the Company and its Subsidiaries in excess of $150,000 or receipts by the Company and its Subsidiaries in excess of $250,000 in any consecutive twelve month period, or, in cases where the Company or a Subsidiary of the Company is the party responsible for such payment, which is not terminable upon thirty days notice;
(vi) except to the extent required under Employee Plans in effect on the date of this Agreement, grant any options to purchase Shares, increase the compensation or fringe benefits of any of its directors, officers or employees, grant any severance or termination pay not currently required to be paid under existing severance plans; enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee;
(vii) except as specifically set forth herein or as required in order to comply with applicable Law, (A) establish, enter into, adopt or amend or terminate any Employee Plan or Compensatory Agreement, (B) change any actuarial or other assumption used to calculate funding obligations with respect to any Employee Plan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not in the ordinary course of business consistent with past practice with respect to any Employee Plan, or (D) take any action to accelerate any rights or benefits under any collective bargaining agreement, Employee Plan or Compensatory Plan;
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any Lien, any material assets other than entering into contracts with customers in the ordinary course of business consistent with past practice;
(ix) sell, assign, transfer, license or modify or amend any rights to any Company Intellectual Property, except in the ordinary course of business consistent with past practice;
(x) agree to the settlement of any material claim or Litigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xii) except as required by applicable Law or GAAP, make any change in its accounting principles, practices or methods;
(xiii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, other than in respect of indebtedness owing by the Company to any Subsidiary of the Company Employees who are not officers or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) make any loans or advances to any other Person, other than to the Company or to any Subsidiary of the CompanyDesignated Employees;
(A) accelerate hire any new Employee or terminate the payment, right to payment or vesting employment of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than as described in Section 3.14(e) of the Company Disclosure Schedule, or, (B) except at Parent’s request in accordance with Section 5.3, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrant;
(xv) pay, discharge or satisfy any liabilities other than the payment, discharge or satisfaction of any liabilities in the ordinary course of business and consistent with past practice;
(xvi) delay or postpone the payment of accounts payable or other liabilities, other than in the ordinary course of business consistent with past practice;
(xvii) modify, amend or terminate any contract which is material to its business or waive any of its material rights or claimsEmployee, except in the ordinary course of business consistent with past practice; provided that (B) hire any new Employee for a position which replaces any officer or Designated Employee; or (C) terminate the waiver employment of any “standstill provision” shall be deemedofficer or Designated Employee;
(vii) pay or enter into any agreement, for purposes or otherwise promise, to pay any bonus, retention or special remuneration to any current or former Employee or increase the compensation payable (including wages, salaries, bonuses, benefits or any other remuneration) or to become payable to any current or former Employee, but other than as required under Contracts existing as of the date hereof;
(viii) accelerate, amend or change the period of exercisability or vesting of any Company Stock Option (except as required under Contracts existing as of the date hereof or unless determined within the scope of this AgreementAgreement or the Merger) or authorize any cash payment in exchange for a Company Stock Option or other equity award of the Company;
(ix) enter into, materially amend, become subject to, violate, terminate or otherwise modify or waive any of the material terms of any Material Contract or any Company Leases, except for entering into Contracts for the sale of the Company Products in the ordinary course of business, consistent with past practice with a waiver value per contract that does not exceed $50,000;
(x) mortgage, pledge or encumber any assets or otherwise permit any of its properties or assets to be subject to any Lien;
(xi) (i) dispose of, license or transfer to any Person any rights to Company Intellectual Property other than pursuant to non exclusive licenses of binary code in connection with the sale of the Company Products in the ordinary course of business, consistent with past licensing practice, (ii) abandon, permit to lapse or otherwise dispose of any Company Intellectual Property, or (iii) make any material change in any Company Intellectual Property;
(xii) sell, transfer, lease, license or otherwise dispose of any material assets or properties, except for the sale of Company Products in the ordinary course and consistent with past practice;
(xiii) acquire any business, line of business or Person by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of related transactions, or enter into any Contract, letter of intent or similar arrangement (whether or not enforceable) with respect to the foregoing;
(xiv) enter into or amend any agreements pursuant to which any other Person is granted exclusive rights of any type or scope with respect to any Company Products;
(xv) make any capital expenditure or commitment therefor or enter into any operating lease in excess of $10,000 individually and $20,000 in the aggregate or otherwise deviate from the Company's short-term budget/forecast attached in Section 5.3(xv) to the Company Disclosure Schedule;
(xvi) (A) take any action reasonably likely to (i) accelerate the payment of customer accounts receivables (including shortening payment terms, providing incentives for early payment or otherwise) or (ii) delay the payment on accounts payable to suppliers, vendors or others beyond due dates; (B) make any changes to the cash management policies of the Company or any of its Subsidiaries, or (C) vary any inventory purchasing practices in any material respect from past practices;
(xvii) terminate or waive any right not of the Company or any Company Subsidiary of material value;
(xviii) except as required by GAAP, make any change in any method of accounting or auditing method, principle, policy, procedure or practice;
(xix) make any material Tax election or settle and/or compromise any material Tax liability; prepare any Returns in an inappropriate manner; incur any material liability for Taxes, other than in the ordinary course of business, or file an amended Return or a claim for refund of Taxes with respect to the income, operations or property of the Company or its Subsidiaries, other than in the ordinary course of business;
(xviii) make any single capital expenditure or commitment in excess of $150,000 or make aggregate capital expenditures or commitments in excess of $250,000;
(xix) merge or consolidate with another Person or purchase a substantial portion of the assets of any Person;
(xx) enter into incur, repay, assume, guarantee or modify any joint venture, partnership or other similar arrangementCompany Indebtedness;
(xxi) subject to Section 5.5, take any action to exempt or make any loans, advances or capital contributions to, or investments in, any other Person (other than Parent) not subject loans, advances or capital contributions by the Company or any of its Subsidiaries to the provisions of Section 203 any direct or indirect wholly owned Subsidiary of the DGCL or any other potentially applicable anti-takeover or similar statute or regulationCompany;
(xxii) subject to Section 5.5, take initiate or settle any action litigation;
(including encouraging any other Person xxiii) agree to take such action), engage in any transaction or enter into any agreement which would reasonably be likely to cause (Ai) any of the representations or warranties of the Company actions described in this Agreement to be untrue at, or as of any time prior to the earlier of, Sections 5.3(b)(i) through (ixxii) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3)above, or (ii) any other action that would prevent the Effective Time; (B) Company from performing, or cause the Company not to perform, any of the Tender Offer Conditions to not be satisfied; (C) its covenants and agreements under this Agreement or under any of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect on the Company or (E) any impairment of the ability of the Company, Parent, Sub or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation;
(xxiii) sell or release, or agree to develop, sell or release, any product that the Company does not make generally available to its customers; or
(xxiv) agree, in writing or otherwise, to take any of the foregoing actionsAncillary Agreements.
Appears in 1 contract
Sources: Merger Agreement (Attunity LTD)
Conduct of the Business of the Company Pending the Closing Date. Except The Company agrees that, except as permitted, required or specifically contemplated by by, or otherwise described in, this Agreement or as otherwise consented to or approved in writing by ParentEMKT, until during the earlier of (i) period commencing on the date upon which Parent’s designees constitute a majority of hereof and ending on the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) the Effective TimeClosing Date:
(a) the The Company shall and shall cause each Subsidiary of the Company to its Subsidiaries will conduct its their respective operations only according to its their ordinary and usual course of business consistent with past practice and shall will use all reasonable their best efforts to preserve intact their current respective business operationsorganization, keep available the services of their officers and employees, employees and maintain satisfactory relationships with lessors, lesseeslicensers, suppliers, customersdistributors, partners clients and others having business relationships with them; and;
(b) without limiting the generality of the foregoing, neither Neither the Company nor any Subsidiary of the Company shall:
its Subsidiaries shall (i) amend make any change in or amendment to its Certificate Articles of Incorporation or By-Laws (or comparable organizational governing documents;
); (ii) except for grants of Company Stock Options to new hires in the ordinary course of business and consistent with past practice (provided that in the aggregate, the Company may not grant options in the aggregate amount exceeding 50,000), issue or sell, or authorize the issuance or sale of, sell any shares of its capital stock (other than in connection with the exercise of Company Options outstanding on the date hereof) or any of its other equity securities, or issue or sell, or authorize the issuance or sale of, any securities convertible into into, or options, warrants or rights to purchase or subscribe to, or enter into any arrangement or create any contract with respect to the issuance or sale of, any shares of its capital stock or any of its other equity securities, or make any other changes in its capital structure, except for the issuance and sale of Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding on the date hereof and other than pursuant to the Company ESPP;
; (iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entity;
(iv) except for payments of dividends by a Subsidiary of the Company, declare, pay or set aside make 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 its other securities;
stock; (viv) enter into any contract which (i) if entered into prior to the date of this Agreementor commitment, would be a Material Company Contract, or (ii) involves payment by the Company and its Subsidiaries in excess of $150,000 or receipts by the Company and its Subsidiaries in excess of $250,000 in any consecutive twelve month period, or, in cases where the Company or a Subsidiary of the Company is the party responsible except for such payment, which is not terminable upon thirty days notice;
(vi) except to the extent required under Employee Plans in effect on the date of this Agreement, grant any options to purchase Shares, increase the compensation or fringe benefits of any of its directors, officers or employees, grant any severance or termination pay not currently required to be paid under existing severance plans; enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee;
(vii) except as specifically set forth herein or as required in order to comply with applicable Law, (A) establish, enter into, adopt or amend or terminate any Employee Plan or Compensatory Agreement, (B) change any actuarial or other assumption used to calculate funding obligations with respect to any Employee Plan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not contracts in the ordinary course of business consistent with past practice with respect to business, including without limitation, any Employee Planacquisition of a material amount of assets or securities, any disposition of a material amount of assets or securities or release or relinquish any material contract rights; (Dv) take any action to accelerate any rights or benefits under any collective bargaining agreement, Employee Plan or Compensatory Plan;
(viii) transfer, lease, licenseassume, guarantee, sellendorse or otherwise become liable or responsible (whether directly, mortgagecontingently, pledge, dispose of, encumber or subject to otherwise) for the obligations of any Lien, any material assets other Person other than entering into contracts with customers in the ordinary course of business consistent with past practice;
(ix) sell, assign, transfer, license or modify or amend any rights to any Company Intellectual Property, except in the ordinary course of business consistent with past practice;
(x) agree to the settlement of any material claim or Litigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xii) except as required by applicable Law or GAAP, make any change in its accounting principles, practices or methods;
(xiii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, other than in respect of indebtedness owing by the Company to any Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) make any loans or advances to any other Person, other than to the Company or to any Subsidiary of the Company;
(A) accelerate the payment, right to payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than as described in Section 3.14(e) of the Company Disclosure Schedule, or, (B) except at Parent’s request in accordance with Section 5.3, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrant;
(xv) pay, discharge or satisfy any liabilities other than the payment, discharge or satisfaction of any liabilities in the ordinary course of business and consistent with past practice;
; (xvivi) delay incur, assume or postpone the payment of accounts payable prepay any indebtedness or other liabilitiesmaterial liabilities other than in the ordinary course of business and consistent with past practices; (vii) make any loans, advances or capital contributions to, or investments in, any other Person, other than to Subsidiaries; (viii) authorize capital expenditures in excess of the amount currently budgeted therefor; (ix) permit any insurance policy naming the Company or any Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; (x) amend any employee or nonemployee benefit plan or program, employment agreement, license agreement or retirement agreement, or pay any bonus or contingent compensation, except in each case in the ordinary course of business consistent with past practice;
(xvii) modify, amend or terminate any contract which is material practice prior to its business or waive any of its material rights or claims, except in the ordinary course of business consistent with past practice; provided that the waiver of any “standstill provision” shall be deemed, for purposes date of this Agreement, a waiver of a material right not in the ordinary course of business;
(xviii) make any single capital expenditure or commitment in excess of $150,000 or make aggregate capital expenditures or commitments in excess of $250,000;
(xix) merge or consolidate with another Person or purchase a substantial portion of the assets of any Person;
(xx) enter into any joint venture, partnership or other similar arrangement;
(xxi) subject to Section 5.5, take any action to exempt or make any Person (other than Parent) not subject to the provisions of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;
(xxii) subject to Section 5.5, take any action (including encouraging any other Person to take such action), engage in any transaction or enter into any agreement which would reasonably be likely to cause (A) any of the representations or warranties of the Company in this Agreement to be untrue at, or as of any time prior to the earlier of, (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), or (ii) the Effective Time; (B) any of the Tender Offer Conditions to not be satisfied; (C) any of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect on the Company or (E) any impairment of the ability of the Company, Parent, Sub or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation;
(xxiii) sell or release, or agree to develop, sell or release, any product that the Company does not make generally available to its customers; or
(xxivxi) agree, in writing or otherwise, to take any of the foregoing actions; or (xii) agree to the settlement of any litigation;
(c) The Company shall not, and shall not permit any of its Subsidiaries to (i) take any action, engage in any transaction or enter into any agreement which would cause any of the representations or warranties set forth in Article III to be untrue as of the Closing Date, or (ii) purchase or acquire, or offer to purchase or acquire, any shares of capital stock of the Company and the Company shall not sell or pledge or agree to sell or pledge any stock owned by it in any of the Subsidiaries, or allow any Subsidiary to pledge or agree to sell or pledge any stock owned by it in any other Subsidiary.
(d) The Company will use its commercially reasonable best efforts to deliver to EMKT prior to the Closing a consolidated balance sheet as of the end of the fiscal year ended July 31, 1999 and the related consolidated statements of operations, stockholders' equity and cash flows for the fiscal year then ended, prepared in accordance with GAAP and on a basis consistent with that of the statements delivered pursuant to Section 3.5.
Appears in 1 contract
Sources: Stock Purchase and Contribution Agreement (Emarketplace Inc)
Conduct of the Business of the Company Pending the Closing Date. Except as specifically contemplated by this Agreement or as otherwise consented to or approved in writing by Parent, until the earlier of (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) the Effective Time:
(a) The Company agrees that during the Company shall and shall cause each Subsidiary of the Company to conduct its operations only according to its ordinary course of business consistent with past practice and shall use all reasonable efforts to preserve intact their current business operations, keep available the services of their officers and employees, and maintain satisfactory relationships with lessors, lessees, suppliers, customers, partners and others having business relationships with them; and
(b) without limiting the generality of the foregoing, neither the Company nor any Subsidiary of the Company shall:
(i) amend its Certificate of Incorporation or By-Laws or comparable organizational documents;
(ii) except for grants of Company Stock Options to new hires in the ordinary course of business and consistent with past practice (provided that in the aggregate, the Company may not grant options in the aggregate amount exceeding 50,000), issue or sell, or authorize the issuance or sale of, any shares of its capital stock or any other equity securities, or issue or sell, or authorize the issuance or sale of, any securities convertible into or options, warrants or rights to purchase or subscribe to, or enter into or create any contract with respect to the issuance or sale of, any shares of its capital stock or any other equity securities, or make any other changes in its capital structure, except for the issuance and sale of Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding period commencing on the date hereof and other than pursuant to ending on the Expiration Date, the Company ESPP;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entity;
(iv) except for payments of dividends by a Subsidiary of the Company, 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 shall conduct its capital stock or its other securities;
(v) enter into any contract which (i) if entered into prior to the date of this Agreement, would be a Material Company Contract, or (ii) involves payment by the Company and its Subsidiaries in excess of $150,000 or receipts by the Company and its Subsidiaries in excess of $250,000 in any consecutive twelve month period, or, in cases where the Company or a Subsidiary of the Company is the party responsible for such payment, which is not terminable upon thirty days notice;
(vi) except to the extent required under Employee Plans in effect on the date of this Agreement, grant any options to purchase Shares, increase the compensation or fringe benefits of any of its directors, officers or employees, grant any severance or termination pay not currently required to be paid under existing severance plans; enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee;
(vii) except as specifically set forth herein or as required in order to comply with applicable Law, (A) establish, enter into, adopt or amend or terminate any Employee Plan or Compensatory Agreement, (B) change any actuarial or other assumption used to calculate funding obligations with respect to any Employee Plan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not operations only in the ordinary course of business consistent with past practice and to use its commercially reasonable efforts to preserve intact its business organization, keep available the services of its Employees and maintain satisfactory relationships with respect to licensors, suppliers, distributors, clients and others having business relationships with them.
(b) In furtherance and not in limitation of Section 5.3(a), the Company agrees that during the period commencing on the date hereof and ending on the Expiration Date, the Company shall not effect any Employee Planof the following except with the prior written consent of Buyer (which shall not be unreasonably withheld):
(i) amend or restate any of its Organizational Documents or form any Subsidiary;
(ii) authorize for issuance, issue, sell or deliver (A) any share stock of, or other equity or voting interest in the Company, or (DB) take any action securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire any (1) shares of capital stock of, or other equity or voting interest in the Company, (2) securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire, any shares of the share capital of, or other equity or voting interest in the Company including rights, warrants or options, or (3) phantom stock or similar equity based payment option;
(iii) declare, pay or set aside any dividend or make any distribution (whether in cash, stock or other property) with respect to, or split, combine, redeem, reclassify, purchase or otherwise acquire directly, or indirectly, any shares of share capital of, or other equity or voting interest in the Company or make any other change in the capital structure of the Company or make any other payment to the Sellers or their Affiliates (other than as set forth, if any, in Section 5.3(b)(iii) of the Company Disclosure Schedule);
(iv) establish, adopt, enter into, fund or accelerate payment under, amend or terminate any rights Benefit Plan;
(v) establish, adopt, enter into, fund or benefits under accelerate payment under, amend or terminate any collective bargaining agreement, or arrangement for the benefit of any directors, officers or Employees;
(vi) hire any new Employee Plan or Compensatory Planterminate the employment of any Employee;
(vii) pay or enter into any agreement, or otherwise promise, to pay any bonus, retention or special remuneration to any current or former Employee or increase the compensation payable (including wages, salaries, bonuses, benefits or any other remuneration) or to become payable to any current or former Employee, but other than as required under Contracts existing as of the date hereof;
(viii) transfergrant, leaseaccelerate, license, guarantee, sell, mortgage, pledge, dispose of, encumber amend or subject to any Lien, any material assets other than entering into contracts with customers in change the ordinary course period of business consistent with past practice;
(ix) sell, assign, transfer, license exercisability or modify or amend any rights to any Company Intellectual Property, except in the ordinary course of business consistent with past practice;
(x) agree to the settlement vesting of any material claim or Litigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver equity award of the limitations period applicable to Company, or authorize any Tax claim or assessment or take or omit to take cash payment in exchange for any other action, if any such action or omission would have the effect of increasing the Tax liability of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xii) except as required by applicable Law or GAAP, make any change in its accounting principles, practices or methods;
(xiii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, other than in respect of indebtedness owing by the Company to any Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) make any loans or advances to any other Person, other than to the Company or to any Subsidiary equity award of the Company;
(Aix) accelerate enter into, materially amend, become subject to, violate, terminate or otherwise modify or waive any of the payment, right to payment or vesting material terms of any bonusMaterial Contract (including, severancefor the sake of clarity, profit sharingany Contract that would constitute a Material Contract) or any Company Leases, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than as described in Section 3.14(e) except for entering into Contracts for the sale of the Company Disclosure ScheduleProducts in the ordinary course of business, or, (B) except at Parent’s request in accordance consistent with Section 5.3, accelerate the payment, right to payment or vesting, redeem or exercise past practice with a right to redeem, any Company Warrantvalue per contract that does not exceed $50,000;
(xvx) paymortgage, discharge pledge or satisfy encumber any liabilities assets or otherwise permit any of its properties or assets to be subject to any Lien;
(xi) (i) dispose of, license or transfer to any Person any rights to Company Intellectual Property other than pursuant to non exclusive licenses of binary code in connection with the paymentsale of the Company Products in the ordinary course of business, discharge consistent with past licensing practice, (ii) abandon, permit to lapse or satisfaction otherwise dispose of any liabilities Company Intellectual Property, or (iii) make any material change in any Company Intellectual Property;
(xii) sell, transfer, lease, license or otherwise dispose of any material assets or properties, except for the sale of Company Products in the ordinary course of business and consistent with past practice;
(xiii) acquire any business, line of business or Person by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of related transactions, or enter into any Contract, letter of intent or similar arrangement (whether or not enforceable) with respect to the foregoing;
(xiv) enter into or amend any agreements pursuant to which any other Person is granted exclusive rights of any type or scope with respect to any Company Products;
(xv) make any capital expenditure or commitment therefor or enter into any operating lease in excess of $10,000 individually and $20,000 in the aggregate or otherwise deviate from the Company's short-term budget/forecast attached in Section 5.3(xv) to the Company Disclosure Schedule;
(xvi) delay or postpone (A) take any action reasonably likely to (i) accelerate the payment of customer accounts receivables (including shortening payment terms, providing incentives for early payment or otherwise) or (ii) delay the payment on accounts payable to suppliers, vendors or other liabilitiesothers beyond due dates; (B) make any changes to the cash management policies of the Company; or (C) vary any inventory purchasing practices in any material respect from past practices;
(xvii) terminate or waive any right of the Company of material value;
(xviii) except as required by GAAP, make any change in any method of accounting or auditing method, principle, policy, procedure or practice;
(xix) (A) make any Tax election or settle and/or compromise any Tax liability; (B) prepare any Returns in an inappropriate manner; incur any liability for Taxes, other than in the ordinary course of business consistent with past practice;
; or (xviiC) modifyfile an amended Return or a claim for refund of Taxes with respect to the income, amend operations or terminate any contract which is material to its business or waive any property of its material rights or claimsthe Company, except in the ordinary course of business consistent with past practice; provided that the waiver of any “standstill provision” shall be deemed, for purposes of this Agreement, a waiver of a material right not other than in the ordinary course of business;
(xviii) make any single capital expenditure or commitment in excess of $150,000 or make aggregate capital expenditures or commitments in excess of $250,000;
(xix) merge or consolidate with another Person or purchase a substantial portion of the assets of any Person;
(xx) enter into incur, repay, assume, guarantee or modify any joint venture, partnership or other similar arrangementCompany Indebtedness;
(xxi) subject to Section 5.5, take any action to exempt or make any Person (other than Parent) not subject to the provisions of Section 203 of the DGCL loans, advances or capital contributions to, or investments in, any other potentially applicable anti-takeover or similar statute or regulationPerson;
(xxii) subject to Section 5.5, take initiate or settle any action litigation;
(including encouraging any other Person xxiii) agree to take such action), engage in any transaction or enter into any agreement which would reasonably be likely to cause (Ai) any of the representations or warranties of the Company in this Agreement to be untrue at, or as of any time prior to the earlier of, (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3)actions described above, or (ii) any other action that would prevent the Effective Time; (B) Company from performing, or cause the Company not to perform, any of the Tender Offer Conditions to not be satisfied; (C) its covenants and agreements under this Agreement or under any of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect on the Company or (E) any impairment of the ability of the Company, Parent, Sub or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation;
(xxiii) sell or release, or agree to develop, sell or release, any product that the Company does not make generally available to its customers; or
(xxiv) agree, in writing or otherwise, to take any of the foregoing actionsAncillary Agreements.
Appears in 1 contract
Conduct of the Business of the Company Pending the Closing Date. (a) Sellers shall cause the Company not to take any actions outside the ordinary course of business that would affect Closing Working Capital from the amount thereof as of 12:01 A.M. on the Closing Date to the time of the Closing.
(b) Except as specifically contemplated (x) set forth on Section 6.4(b) of the Company Disclosure Letter, (y) may be required by this Agreement or as otherwise consented (z) required by any Law, any Governmental Entity or any Contract to or approved in writing by Parent, until the earlier of (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) the Effective Time:
(a) the Company shall and shall cause each Subsidiary of is a party, during the Company to conduct its operations only according to its ordinary course of business consistent with past practice and shall use all reasonable efforts to preserve intact their current business operationsPre-Closing Period, keep available the services of their officers and employees, and maintain satisfactory relationships with lessors, lessees, suppliers, customers, partners and others having business relationships with them; and
(b) without limiting the generality of the foregoing, neither the Company nor any Subsidiary of the Company shall:
(i) amend conduct its Certificate of Incorporation or By-Laws or comparable organizational documents;
(ii) except for grants of Company Stock Options to new hires operations in the ordinary course of business and consistent with past practice practice;
(provided ii) comply in all material respects with all applicable Law and the requirements of all Contracts;
(iii) use commercially reasonable efforts to maintain and preserve intact its business organization, keep available the services of its officers and employees and maintain satisfactory relationships with licensors, suppliers, distributors, clients and others having business relationships with the Company, in each case, such that its goodwill and ongoing business shall be unimpaired at the Closing; and
(iv) use commercially reasonable efforts to keep in full force and effect all material Policies maintained by the Company, other than changes to such policies made in the aggregateordinary course of business.
(c) Except as (x) set forth on Section 6.4(c) of the Company Disclosure Letter, (y) may be required by this Agreement or (z) required by any Law, any Governmental Entity or any Contract to which the Company is a party, during the Pre-Closing Period, the Company may shall not grant options take any of the following actions without the prior written consent of Buyer (which consent shall not be unreasonably withheld, conditioned or delayed):
(i) other than in the aggregate amount exceeding 50,000)ordinary course of business consistent with past practice, declare, set aside or pay any dividend or other distribution with respect to the capital stock of the Company, or any direct or indirect redemption, purchase or other acquisition by the Company of any such capital stock or any option with respect to the Company;
(ii) make any change in, or amendment to, the Company’s or any of its Subsidiaries’ Organizational Documents;
(iii) issue or sell, grant, or authorize the any issuance or sale of, pledge or otherwise encumber any shares of its capital stock or any other equity securitiesownership interests, as applicable, or issue or sell, or authorize the any issuance or sale of, any securities convertible into or exchangeable for, or options, warrants or rights to purchase or subscribe tofor, or enter into or create any contract Contract with respect to the issuance or sale of, any shares of its capital stock or any other equity securitiesownership interests, or make any other changes in its capital structure, except for the issuance and sale of Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding on the date hereof and other than pursuant to the Company ESPP;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entityas applicable;
(iv) except for payments of dividends by a Subsidiary of the Company, 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 its other securities, as applicable;
(v) enter into any contract which (i) if entered into prior to the date of this Agreement, would be a Material Company Contract, or (ii) involves payment by the Company and its Subsidiaries in excess of $150,000 or receipts by the Company and its Subsidiaries in excess of $250,000 in any consecutive twelve month period, or, in cases where the Company or a Subsidiary of the Company is the party responsible for such payment, which is not terminable upon thirty days notice;
(vi) except to the extent required under Employee Plans in effect on the date of this Agreement, grant any options to purchase Shares, increase the compensation or fringe benefits of any of its directors, officers or employees, grant any severance or termination pay not currently required to be paid under existing severance plans; enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee;
(vii) except as specifically set forth herein or as required in order to comply with applicable Law, (A) establish, enter into, adopt or amend or terminate any Employee Plan or Compensatory Agreement, (B) change any actuarial or other assumption used to calculate funding obligations with respect to any Employee Plan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not in the ordinary course of business consistent with past practice with respect to any Employee Plan, or (D) take any action to accelerate any rights or benefits under any collective bargaining agreement, Employee Plan or Compensatory Plan;
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any Lien, any material assets other than entering into contracts with customers in the ordinary course of business consistent with past practice, acquire, assign, license, transfer, sell, lease or otherwise dispose of any of its properties or assets that are material to the business of the Company;
(ixvi) sell, assign, transfer, license or modify or amend any rights to any Company Intellectual Property, except other than in the ordinary course of business consistent with past practice, amend, terminate or enter into any Contract that provides for aggregate annual payments by or to the Company in excess of $100,000; provided, however, that the Company may renegotiate the terms of, or otherwise extend, any Material Contract that has expired in accordance with its terms prior to the date hereof or is scheduled to expire in accordance with its terms within six (6) months after the date hereof;
(x) agree to the settlement of any material claim or Litigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xii) except as required by applicable Law or GAAP, make any change in its accounting principles, practices or methods;
(xiiivii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another PersonIndebtedness, other than short-term Indebtedness or letters of credit incurred in respect the ordinary course of indebtedness owing by the Company to any Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another Subsidiary of the Company business or (B) make any loans or advances to any other Person, other than loans and advances to the Company employees or to any Subsidiary of the Company;
(A) accelerate the paymentintercompany loans, right to payment or vesting of any bonusin each case, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than as described in Section 3.14(e) of the Company Disclosure Schedule, or, (B) except at Parent’s request in accordance with Section 5.3, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrant;
(xv) pay, discharge or satisfy any liabilities other than the payment, discharge or satisfaction of any liabilities in the ordinary course of business and consistent with past practice;
(xviviii) delay cancel or postpone discharge, or waive any right of the payment Company with respect to, any material Indebtedness;
(ix) mortgage, pledge or subject to any material Lien any of accounts payable the Company’s properties or other liabilitiesassets, other than except for Permitted Liens and Liens incurred in the ordinary course of business consistent with past practice;
(xviix) modify(A) increase the compensation or fringe benefits of any present or former director, officer, employee or consultant of the Company or any of its Subsidiaries, (B) grant any new right to severance or termination pay to any present or former director, officer, employee or consultant of the Company or any of its Subsidiaries, (C) loan or advance any money or other property to any present or former director, officer, employee or consultant of the Company or any of its Subsidiaries, (D) establish, adopt, enter into, amend or terminate any contract which is Company Plan or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Plan if it were in existence as of the date of this Agreement, (E) grant any equity or equity-based awards or (F) hire, promote or change the classification or status in respect of any employee, consultant or individual;
(xi) change any material annual Tax accounting period, adopt or change any material method of Tax accounting, make or change any material Tax election, enter into any Tax closing agreement, prepare any Tax Returns in a manner inconsistent with the Company’s or any such Subsidiary’s past practice (including tax positions claimed therein), file a Tax Return in new jurisdictions, surrender any right to its claim a refund of Taxes, request or obtain any Tax ruling, file any income or other material Tax Return, or settle any Tax claim, audit or assessment in excess of $100,000, incur any material Liability for Taxes outside the ordinary course of business or waive fail to pay any material Tax that becomes due and payable (including any estimated Taxes);
(xii) except as may be required under GAAP, make any change in its methods, principles and practices of its material rights financial accounting;
(xiii) adopt a plan or claimsagreement of complete or partial liquidation, dissolution, restructuring, recapitalization, merger, consolidation or other reorganization;
(xiv) settle any legal proceedings other than a settlement agreement providing solely for the payment of monetary damages in an amount not to exceed $100,000 individually or $250,000 in the aggregate;
(xv) make or agree to make any capital expenditure, except in the ordinary course of business consistent with past practice; provided and in an amount for capital expenditures that do not exceed $100,000 in the waiver aggregate for the Company taken as a whole during any consecutive three month period;
(xvi) directly or indirectly acquire any interest in any corporation, association, joint venture, partnership, limited liability company or other business entity or division thereof;
(xvii) make any investment (by contribution to capital, property transfers, purchase of securities or otherwise) in, or loan or advance (other than travel and similar advances to its employees in the ordinary course of business) to, any “standstill provision” shall be deemed, for purposes of this Agreement, a waiver of a material right not Person other than in the ordinary course of business;
(xviii) (A) enter into, terminate or amend any Material Contract, or make any single capital expenditure proposal to enter into, terminate, or commitment amend any Material Contract, or, other than in excess the ordinary course of $150,000 business, any other Contract that is material to the Company, (B) enter into any Contract that would be breached by, or make aggregate capital expenditures require the consent of any third party in order to continue in full force and effect following consummation of the Transactions, or commitments (C) release any Person from, or modify or waive any provision of, any confidentiality, standstill or similar agreement or fail to take all action necessary to enforce each such confidentiality, standstill and similar agreement (in excess of $250,000each case, other than any such agreement with Buyer);
(xix) merge sell, assign, transfer, convey, license, sublicense, covenant not to assert, abandon, allow to lapse, lease or consolidate otherwise dispose of any Company Intellectual Property, other than in the ordinary course of business and other than with another Person or purchase a substantial portion respect to any Intellectual Property that, in the good faith belief of the assets of any PersonCompany, is useless or obsolete;
(xx) enter into any joint venture, partnership or other similar arrangement;make an “investment” (as defined in subsection 212.3(1)(10) of the ITA) in a “foreign affiliate” (for purposes of section 212.3 of the ITA) of the Company; or
(xxi) subject authorize, commit or agree to take, any of the foregoing actions to the extent restricted by the provisions of this Section 5.5, 6.4(c) or take any action to exempt or make any Person (other than Parent) not subject to the provisions of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;
(xxii) subject to Section 5.5, take any action (including encouraging any other Person to take such action), engage in any transaction or enter into any agreement which would reasonably be likely to cause (A) any of the representations or warranties of the Company in this Agreement to be untrue at, or as of any time prior to the earlier of, (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), or (ii) the Effective Time; (B) any of the Tender Offer Conditions to not be satisfied; (C) any of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect on the Company or (E) any impairment of the ability of the Company, Parent, Sub or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation;
(xxiii) sell or release, or agree to develop, sell or release, any product that the Company does not make generally available to its customers; or
(xxiv) agree, in writing or otherwise, to take any action which would (A) cause any of the foregoing actionsrepresentations or warranties of the Company set forth in this Agreement to be untrue in any material respect or (B) in any material respect impede or delay the ability of the parties to satisfy any of the conditions to the Transactions set forth in this Agreement.
(d) Nothing contained in this Agreement shall be construed to give to Buyer, directly or indirectly, rights to control or direct the Company’s operations prior to the Closing. Prior to the Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its operations.
Appears in 1 contract
Conduct of the Business of the Company Pending the Closing Date. Except (a) The Company agrees that, except as specifically contemplated (i) set forth in Section 5.3 of the Company Disclosure Letter, or (ii) required by Law or by any Contract listed in the Company Disclosure Letter to which the Company or any of the Company Subsidiaries is a party as of the date of this Agreement or as otherwise consented to or approved in writing by ParentAgreement, until during the period commencing on the date hereof and ending at the earlier of (iA) the date upon which Parent’s designees constitute a majority Effective Time and (B) termination of the Board of Directors (or Parent has failed to designate at least 4 individuals this Agreement pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) the Effective Time7.1:
(a1) the Company shall and shall cause each Subsidiary of the Company Subsidiaries to conduct its their respective operations only according to its in the ordinary course of business consistent with past practice practice, including by:
(I) maintaining all of its material properties in customary repair, order and shall use condition, reasonable wear and tear excepted;
(II) complying in all material respects with all applicable Laws;
(III) using its commercially reasonable efforts to preserve intact the goodwill and organization of the Company’s and the Company Subsidiaries’ businesses and their current business operations, keep available the services of their officers and employees, and maintain satisfactory relationships with lessors, lesseesits customers, suppliers, customers, partners and others having business relationships with thememployees; and
(b2) without limiting the generality The Company shall not, and shall cause each Company Subsidiary not to, effect any of the foregoing, neither following without the Company nor any Subsidiary prior written consent of the Company shallParent:
(iI) amend make any change in or amendment to its Certificate certificate of Incorporation incorporation or Byits by-Laws laws (or comparable organizational governing documents);
(iiII) except for grants of Company Stock Options to new hires in the ordinary course of business and consistent with past practice (provided that in the aggregate, the Company may not grant options in the aggregate amount exceeding 50,000), issue or sell, or authorize the issuance to issue or sale ofsell, any shares of its capital stock or any other equity securitiesownership interests, as applicable, or issue or sell, or authorize the issuance to issue or sale ofsell, any securities convertible into or exchangeable for, or options, warrants or rights to purchase or subscribe tofor, or enter into or create any contract Contract with respect to the issuance or sale of, any shares of its capital stock or any other equity securitiesownership interests, or make any other changes in its capital structureas applicable, except for the issuance and sale by the Company of Common Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding on the date hereof and other than pursuant to the Company ESPPterms of any Options;
(iiiIII) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entity;
(iv) except for payments of dividends by a Subsidiary of the Company, 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 its other securities, as applicable, except for the acquisition of Options from holders of Options in full or partial payment of the exercise price payable by such holder upon exercise of Options;
(vIV) enter into any contract which (i) if entered into prior to the date of this Agreement, would be a Material Company Contract, or (ii) involves payment by the Company and its Subsidiaries in excess of $150,000 or receipts by the Company and its Subsidiaries in excess of $250,000 in any consecutive twelve month period, or, in cases where the Company or a Subsidiary of the Company is the party responsible for such payment, which is not terminable upon thirty days notice;
(vi) except to the extent required under Employee Plans in effect on the date of this Agreement, grant any options to purchase Shares, increase the compensation or fringe benefits of any of its directors, officers or employees, grant any severance or termination pay not currently required to be paid under existing severance plans; enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee;
(vii) except as specifically set forth herein or as required in order to comply with applicable Law, (A) establish, enter into, adopt or amend or terminate any Employee Plan or Compensatory Agreement, (B) change any actuarial or other assumption used to calculate funding obligations with respect to any Employee Plan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not in the ordinary course of business consistent with past practice with respect to any Employee Plan, or (D) take any action to accelerate any rights or benefits under any collective bargaining agreement, Employee Plan or Compensatory Plan;
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any Lien, any material assets other than entering into contracts with customers in the ordinary course of business consistent with past practice, acquire, sell, lease, license or otherwise dispose of any of its properties or assets (including any shares or other equity interests in or securities of any Company Subsidiary);
(ixV) sell, assign, transfer, license amend or modify or amend terminate any rights to any Company Intellectual Property, except in the ordinary course of business consistent with past practice;
(x) agree to the settlement of any material claim or Litigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax ReturnMaterial Contract, enter into any closing agreementa Contract which, settle any material Tax claim or assessmenthad it been entered into prior to the date hereof, surrender any right to claim would have been a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment Material Contract or take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any Material Contract;
(VI) (1) incur any Indebtedness, other action, if any such action than short-term Indebtedness or omission would have letters of credit incurred in the effect ordinary course of increasing the Tax liability business or borrowings under existing credit facilities set forth on Section 3.15 of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
Disclosure Letter (xii) except as required by applicable Law or GAAPall of which shall constitute Closing Indebtedness), make any change in its accounting principles, practices or methods;
(xiii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, other than in respect of indebtedness owing by the Company to any Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another Subsidiary of the Company or (B2) make any loans or advances to any other Person, other than loans and advances to employees consistent with past practice or (3) or make any capital contributions to, or investments in, any other Person (other than a Company Subsidiary);
(VII) hire any new officers or (except in the ordinary course of business) any new employees, modify the employment terms of its officers or employees, generally or individually, or grant or agree to grant to any officer or employee of the Company or to any Subsidiary of the Company;
(A) accelerate the payment, right to payment Company Subsidiaries any increase in wages or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than or establish any new compensation or benefit plans or arrangements, or amend or agree to amend any existing Employee Benefit Plans, except (1) as described in Section 3.14(emay be required under applicable Law, (2) pursuant to the Employee Benefit Plans of the Company Disclosure Schedule, oror any of the Company Subsidiaries in effect on the date hereof, (B3) except at Parent’s request in accordance with Section 5.3, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrant;
(xv) pay, discharge or satisfy any liabilities other than the payment, discharge or satisfaction of any liabilities in the ordinary course case of business and consistent with past practice;
(xvi) delay or postpone the payment of accounts payable or other liabilities, other than in the ordinary course of business consistent with past practice;
(xvii) modify, amend or terminate any contract which is material to its business or waive any of its material rights or claims, except in the ordinary course of business consistent with past practice; provided that the waiver of any “standstill provision” shall be deemedemployees who are not Affiliates, for purposes of this Agreement, a waiver of a material right not normal increases in wages in the ordinary course of business, or (4) pursuant to the terms of any employment, retention, change-of-control or similar type Contract existing as of the date hereof and listed in the Company Disclosure Letter;
(xviiiVIII) make or change any single capital expenditure Tax election not required by Law, change an annual accounting period, file any amended Tax Return, enter into any closing agreement, waive or commitment in excess extend any statute of $150,000 limitations with respect to Taxes, surrender any right to claim a refund of Taxes, settle or make aggregate capital expenditures compromise any Tax liability, claim or commitments in excess assessment, or take any other similar action relating to the filing of $250,000any Tax Return or the payment of any Tax;
(xixIX) merge waive any rights of substantial value or consolidate with cancel or forgive any material Indebtedness owed to the Company or any of the Company Subsidiaries, other than Indebtedness of the Company owed to a Subsidiary of the Company or Indebtedness of a Subsidiary of the Company owed to the Company or another Person Subsidiary of the Company;
(X) except as may be required by Law or purchase a substantial portion under GAAP, make any change in its methods, principles and practices of accounting, including tax accounting policies and procedures;
(XI) acquire any capital stock or other equity interest, or all or substantially all of the assets of any Person;
(xxXII) enter into declare, set aside or pay any joint venture, partnership dividend or other similar arrangementdistribution (other than a dividend payable solely in cash) in respect of its capital stock;
(xxiXIII) mortgage or pledge any of its property or assets or subject any such property or assets to Section 5.5, any Lien (other than a Permitted Lien);
(XIV) make or commit to make any capital expenditure in excess of $50,000;
(XV) institute or settle any legal proceeding;
(XVI) take any action or fail to exempt or make any Person (other than Parent) not subject to the provisions of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;
(xxii) subject to Section 5.5, take any action (including encouraging any other Person permitted by this Agreement with the Knowledge that such action or failure to take such action), engage action would result in any transaction or enter into any agreement which would reasonably be likely to cause (Ai) any of the representations or and warranties of the Company set forth in this Agreement to be becoming untrue at, or as of any time prior to the earlier of, (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), or (ii) the Effective Time; (B) any of the Tender Offer Conditions to not be satisfied; (C) any of the conditions to the Merger set forth in Article VI to not be being satisfied; (D) a Material Adverse Effect on the Company or (E) any impairment of the ability of the Company, Parent, Sub or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation;
(xxiii) sell or release, or agree to develop, sell or release, any product that the Company does not make generally available to its customers; or
(xxivXVII) agreeauthorize any of, in writing or otherwise, commit or agree to take any of, the foregoing actions in respect of which it is restricted by the provisions of this Section 5.3.
(b) The Company and the Company Subsidiaries shall be permitted to maintain through the Closing Date the cash management systems of the foregoing actionsCompany and the Company Subsidiaries, maintain the cash management procedures as currently conducted by the Company and the Company Subsidiaries, and periodically settle intercompany balances consistent with past practices (including through dividends and capital contributions and all such intercompany balances shall be settled at the Closing in accordance with their terms). The Company and the Company Subsidiaries are allowed to dividend all or any portion of Cash and Cash Equivalents of the Company and the Company Subsidiaries to Preferred Stockholders immediately prior to Closing.
Appears in 1 contract
Sources: Merger Agreement (Bottomline Technologies Inc /De/)
Conduct of the Business of the Company Pending the Closing Date. Except as permitted, required or specifically contemplated by by, or otherwise described in, this Agreement or as otherwise consented to or approved in writing by Parent, until which consent or approval shall not be unreasonably withheld, conditioned or delayed in the earlier case of clauses 8.2(b)(4) or (i) 12), and except as set forth in Section 8.2 of the Company Disclosure Schedule, during the period commencing on the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) hereof until the Effective Time:
(a) the The Company and each of its Subsidiaries shall and shall cause each Subsidiary of the Company to conduct its their respective operations only according to its their ordinary and usual course of business consistent with past practice and shall use all their reasonable best efforts to preserve intact their current respective business operationsorganizations, keep available the services of their officers and employees, employees and maintain satisfactory relationships with lessors, lessees, suppliers, customers, partners and others those Persons having significant business relationships with them; and;
(b) without limiting the generality of the foregoing, neither Neither the Company nor any Subsidiary of the Company its Subsidiaries shall:
(i1) amend make any change in or amendment to its Certificate certificate or articles of Incorporation incorporation or Byits by-Laws laws or comparable similar organizational 36 of 56 documents;
(ii2) except for grants of Company Stock Options to new hires in the ordinary course of business and consistent with past practice (provided that in the aggregate, the Company may not grant options in the aggregate amount exceeding 50,000), issue or sell, or authorize the issuance to issue or sale ofsell, any shares of its capital stock stock, Voting Debt or any other equity securities, or issue or sell, or authorize the issuance to issue or sale ofsell, any securities convertible into into, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or create any contract with respect to the issuance or sale of, any shares of its capital stock stock, Voting Debt or any other equity securities, or make any other changes in its capital structure, except for the issuance and sale of Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding on the date hereof and other than pursuant to the Company ESPP;
(iii3) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entity;
(iv) except for payments of dividends by a Subsidiary of the Company, 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 its other securities;
, other than (vA) enter into any contract which (i) if entered into prior to normal quarterly cash dividends not in excess of U.S. $0.19 per share declared and paid in accordance with the date Company's past dividend policy, provided that the timing of this Agreementthe declaration, would record and payment dates, shall be a Material Company Contract, or (ii) involves payment the same dates as were used by the Company and its Subsidiaries in excess of $150,000 or receipts by the Company and its Subsidiaries in excess of $250,000 in any consecutive twelve month periodlast calendar year, or, in cases where if any such date shall not be a Business Day, the Company next succeeding Business Day, and provided further, that no such cash dividends shall be declared after Consummation of the Offer or (B) dividends payable by a wholly owned Subsidiary of the Company is to the party responsible for such payment, which is not terminable upon thirty days noticeCompany or another wholly owned Subsidiary of the Company;
(vi4) incur any capital expenditures or any obligations or liabilities in respect thereof, except (A) with respect to expansion projects, for expenditures for such projects which are consistent with the budget for the Company set forth in Section 8.2(b) of the Company Disclosure Schedule (the "COMPANY BUDGET"), (B) those required for maintenance and replacement in the ordinary course of business not to exceed the amounts provided for maintenance and replacement in the Company Budget and (C) capital expenditures outside the scope of the Company Budget that do not exceed U.S. $250,000 in the aggregate.
(5) acquire or agree to acquire (A) by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof (excluding any of the Company's Subsidiaries) or (B) any assets, including real estate, except purchases of inventory, equipment, or other non-material assets in the ordinary course of business consistent with the Company Budget;
(6) (A) except to the extent required under Employee existing Company Benefit Plans as in effect on the date of this Agreement, grant any options to purchase Shares, increase the compensation or fringe benefits of any of its directors, officers or employees, employees or grant any severance or termination pay not currently required to be paid under existing severance plans; (B) enter into any employment, employment or consulting or severance agreement or arrangement with any present or former directordirector or officer of the Company or any of its Subsidiaries, officer or any employment or consulting agreement with any other employee;
(vii) except as specifically set forth herein employee of the Company or as required in order to comply with applicable Law, (A) establish, enter into, adopt any of its Subsidiaries; or amend or terminate any Employee Plan or Compensatory Agreement, (B) change any actuarial or other assumption used to calculate funding obligations with respect to any Employee Plan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not except in the ordinary course of business consistent with past practice with respect and to any Employee Planthe extent necessary to fill vacancies, hire or agree to hire, or (D) take enter into any action to accelerate written employment agreement with, any rights new or benefits under any collective bargaining agreementadditional employee or officer having an annual base salary of U.S. $40,000 or more or, Employee Plan in the aggregate, annual base salaries of U.S. $500,000 or Compensatory Planmore;
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any Lien, any material assets other than entering into contracts with customers in the ordinary course of business consistent with past practice;
(ix) sell, assign, transfer, license or modify or amend any rights to any Company Intellectual Property, except in the ordinary course of business consistent with past practice;
(x) agree to the settlement of any material claim or Litigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xii7) except as required by to comply with applicable Law or GAAPexpressly provided in this Agreement, make any change in its accounting principles, practices or methods;
(xiii) (A) incur adopt, enter into, terminate or amend any indebtedness Company Benefit Plan, collective bargaining agreement or other arrangement for borrowed money the current or guarantee future benefit or welfare of any such indebtedness of another Persondirector, other than in respect of indebtedness owing by the Company to any Subsidiary of the Company officer or in respect of indebtedness owing by any Subsidiary of the Company to the Company current or another Subsidiary of the Company or former employee, (B) make pay any loans or advances to benefit not required under any other PersonCompany Benefit Plan, other than to the Company or to any Subsidiary of the Company;
(A) accelerate the payment, right to of payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, (C) grant any awards under any bonus, incentive, performance or other than as described compensation plan or arrangement or Company Benefit Plan (including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in Section 3.14(eany Company Benefit Plans or agreements or awards made thereunder) of the Company Disclosure Schedule, or, or (BD) except at Parent’s request as required by the current terms thereof take any action to fund or in accordance with Section 5.3any other way secure the payment of compensation or benefits under any employee plan, accelerate the paymentagreement, right to payment contract or vesting, redeem arrangement or exercise a right to redeem, any Company WarrantBenefit Plan;
(xv) pay8) transfer, discharge lease (as lessor), license, sell, mortgage, pledge, dispose of, encumber or satisfy subject to any liabilities Lien, any assets, other than the payment, discharge or satisfaction of any liabilities in the ordinary course of business and consistent with past practice, except as provided for in Section 8.2(b)(11) or in an amount in the aggregate not to exceed U.S. $250,000;
(xvi9) delay except as required by applicable Law or postpone the payment GAAP, make any change in its methods of accounts payable or other liabilities, other than in the ordinary course of business consistent with past practiceaccounting;
(xvii10) modifyadopt or enter into a plan of complete or partial liquidation, amend dissolution, merger, consolidation, restructuring, recapitalization or terminate any contract which is material to its business other reorganization of the Company or waive any of its material rights or claimsSubsidiaries (other than the Merger), except as provided for in Section 8.5;
(A) Incur any long-term indebtedness (other than under existing revolving credit facilities, as may be amended as contemplated hereby) or, except in the ordinary course of business consistent with past practice, any short-term indebtedness; provided that (B) modify any material indebtedness or other liability; (C) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the waiver obligations or indebtedness of any “standstill provision” shall be deemed, for purposes of this Agreement, a waiver of a material right not in the ordinary course of business;
other Person; (xviiiD) make any single loans, advances or capital expenditure contributions to, or commitment in excess of $150,000 or make aggregate capital expenditures or commitments in excess of $250,000;
(xix) merge or consolidate with another Person or purchase a substantial portion of the assets of investments in, any Person;
(xx) enter into any joint venture, partnership or other similar arrangement;
(xxi) subject to Section 5.5, take any action to exempt or make any Person (other than Parent) not subject in or to the provisions of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;
(xxii) subject to Section 5.5, take any action (including encouraging any other Person to take such action), engage in any transaction or enter into any agreement which would reasonably be likely to cause (A) any of the representations or warranties of the Company in this Agreement to be untrue at, or as of any time prior to the earlier of, (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), or (ii) the Effective Time; (B) any of the Tender Offer Conditions to not be satisfied; (C) any of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect on the Company or (E) any impairment of the ability wholly owned Subsidiaries of the Company, Parent, Sub or by wholly owned Subsidiaries to the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation;
(xxiii) sell or releaseCompany, or agree customary loans or advances to developemployees); (E) other than with respect to the settlement of any claim that is completely covered (other than with respect to deductibles to the Company's insurance policies) by the Company's insurance carrier, sell or release, settle any product that claims against the Company does not make generally available to or any of its customersSubsidiaries where the amounts payable by the Company and its Subsidiaries would exceed U.S. $25,000 individually or U.S. $250,000 in the aggregate, in each such case without admission of liability; or
(xxiv) agree, in writing or otherwise, to take any of the foregoing actions.
Appears in 1 contract
Sources: Merger Agreement (Cemex Sa De Cv)
Conduct of the Business of the Company Pending the Closing Date. (a) Sellers shall cause the Company not to take any actions outside the ordinary course of business that would affect Closing Cash, Closing Indebtedness or Closing Working Capital from the respective amounts thereof as of 11:59 P.M. on the Business Day immediately prior to the Closing Date to the time of the Closing.
(b) Except as specifically contemplated (x) set forth on Schedule 6.3(b) of the Company Disclosure Letter, (y) may be required or not otherwise prohibited by this Agreement or as otherwise consented (z) required by any Law, any Order, any Governmental Entity or any Contract to or approved in writing by Parent, until the earlier of (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) the Effective Time:
(a) the Company shall and shall cause each Subsidiary of is a party, during the Company to conduct its operations only according to its ordinary course of business consistent with past practice and shall use all reasonable efforts to preserve intact their current business operations, keep available the services of their officers and employees, and maintain satisfactory relationships with lessors, lessees, suppliers, customers, partners and others having business relationships with them; and
(b) without limiting the generality of the foregoing, neither the Company nor any Subsidiary of Pre-Closing Period the Company shall:
(i) amend conduct its Certificate of Incorporation or By-Laws or comparable organizational documents;
(ii) except for grants of Company Stock Options to new hires operations in the ordinary course of business and consistent with past practice practice;
(provided ii) comply in all material respects with all applicable Law and the requirements of all Material Contracts;
(iii) use commercially reasonable efforts to maintain and preserve intact its business organization, keep available the services of its officers and employees and maintain satisfactory relationships with licensors, suppliers, distributors, clients and others having business relationships with the Company, in each case, to the end that its goodwill and ongoing business shall be unimpaired at the Closing; and
(iv) keep in full force and effect all material Policies maintained by the Company, other than changes to such Policies made in the aggregateordinary course of business.
(c) Except as (x) set forth on Schedule 6.3(c) of the Company Disclosure Letter, (y) may be required or not otherwise prohibited by this Agreement or (z) required by any Law, any Order, any Governmental Entity or any Contract to which the Company is a party, during the Pre-Closing Period, the Company may shall not grant options in take any of the aggregate amount exceeding 50,000)following actions without the prior written consent of Buyer:
(i) make any change in, or amendment to, its Organizational Documents;
(ii) issue or sell, grant, or authorize the any issuance or sale of, pledge or otherwise encumber any shares of its capital stock or any other equity securitiesownership interests, as applicable, or issue or sell, or authorize the any issuance or sale of, any securities convertible into or exchangeable for, or options, warrants or rights to purchase or subscribe tofor, or enter into or create any contract Contract with respect to the issuance or sale of, any shares of its capital stock or any other equity securitiesownership interests, or make any other changes in its capital structure, except for the issuance and sale of Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding on the date hereof and other than pursuant to the Company ESPPas applicable;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entity;
(iv) except for payments of dividends by a Subsidiary of the Company, 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 its other securities, as applicable;
(viv) enter into any contract which (i) if entered into prior to the date of this Agreement, would be a Material Company Contract, or (ii) involves payment by the Company and its Subsidiaries in excess of $150,000 or receipts by the Company and its Subsidiaries in excess of $250,000 in any consecutive twelve month period, or, in cases where the Company or a Subsidiary of the Company is the party responsible for such payment, which is not terminable upon thirty days notice;
(vi) except to the extent required under Employee Plans in effect on the date of this Agreement, grant any options to purchase Shares, increase the compensation or fringe benefits of any of its directors, officers or employees, grant any severance or termination pay not currently required to be paid under existing severance plans; enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee;
(vii) except as specifically set forth herein or as required in order to comply with applicable Law, (A) establish, enter into, adopt or amend or terminate any Employee Plan or Compensatory Agreement, (B) change any actuarial or other assumption used to calculate funding obligations with respect to any Employee Plan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not in the ordinary course of business consistent with past practice with respect to any Employee Plan, or (D) take any action to accelerate any rights or benefits under any collective bargaining agreement, Employee Plan or Compensatory Plan;
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any Lien, any material assets other than entering into contracts with customers in the ordinary course of business consistent with past practice, acquire, assign, license, transfer, sell, lease or otherwise dispose of any of its properties or assets that are material to the business of the Company;
(ixv) sellenter into, assign, transfer, license or modify or amend terminate any rights labor or collective bargaining agreement of the Company or, through negotiation or otherwise, make any commitment or incur any liability to any Company Intellectual Propertylabor organization with respect to the Company;
(vi) (A) incur or guarantee any Indebtedness, except other than (1) short-term Indebtedness or letters of credit incurred in the ordinary course of business consistent with past practice;
or (x2) agree to borrowings under the settlement of any material claim or Litigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xii) except as required by applicable Law or GAAP, make any change in its accounting principles, practices or methods;
(xiii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, other than in respect of indebtedness owing by the Company to any Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another Subsidiary of the Company Credit Agreement or (B) make any loans or advances to any other Person, other than loans and advances to the Company employees or to any Subsidiary of the Companyintercompany loans, in each case, consistent with past practice;
(Avii) accelerate grant or agree to grant to any officer or employee of the payment, right to payment Company any increase in wages or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than as described or establish any new compensation or benefit plans or arrangements, or amend or agree to amend any existing employee benefit plans or hire or terminate any officer or employee, except (A) pursuant to the employee benefit plans or collective bargaining agreements of the Company in Section 3.14(eeffect on the date hereof that are disclosed on Schedule 4.10(a) of the Company Disclosure Schedule, orLetter, (B) except at Parent’s request in accordance with Section 5.3, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrant;
(xv) pay, discharge or satisfy any liabilities other than the payment, discharge or satisfaction of any liabilities in the ordinary course of business and consistent with past practice;
(xvi) delay or postpone the payment of accounts payable or other liabilities, other than in the ordinary course of business consistent with past practicepractice with respect to any non-officer employee, (C) as required in order to comply with the requirements of the Code, ERISA or other Law, or (D) any other one-time bonus payments not to exceed $50,000 in the aggregate to all such Persons;
(xviiviii) modifychange any material annual Tax accounting period except as required by applicable Law, amend adopt or terminate change any contract which is material method of Tax accounting except as required by applicable Law, make or change any material Tax election except as required by applicable Law, enter into any Tax closing agreement, surrender any right to claim a refund of Taxes, request or obtain any Tax ruling, file any income or other material Tax Return unless such Tax Return was prepared consistent with past practice (except as required by applicable Law), or settle any Tax claim, audit or assessment in excess of $100,000;
(ix) except as may be required under GAAP, make any change in its methods, principles and practices of financial accounting;
(x) adopt a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization, merger, consolidation or other reorganization;
(xi) settle any legal proceedings other than a settlement agreement providing solely for the payment of monetary damages in an amount not to exceed $100,000 individually or $250,000 in the aggregate;
(xii) issue any broadly distributed communication of a general nature to employees (including general communications relating to benefits and compensation) or customers or clients without the prior written approval of Buyer, except for communications in the ordinary course of business that do not relate to the Transactions and do not provide to any Person any information regarding the Company that might be considered material non-public information (within the meaning of Regulation FD under the Exchange Act) if the Company’s securities were registered under Section 12(b) of the Exchange Act;
(xiii) make or waive agree to make any of its material rights or claimscapital expenditure, except in the ordinary course of business consistent with past practiceand in an amount for capital expenditures that do not exceed $100,000 in the aggregate for the Company taken as a whole during any three consecutive month period;
(xiv) directly or indirectly acquire any interest in any corporation, association, joint venture, partnership, limited liability company or other business entity or division thereof; provided that no such acquisition in the waiver ordinary course of business of any “standstill provision” assets that, individually, have a purchase price in excess of $10,000 or any group of related assets that, in the aggregate, have a purchase price in excess of $50,000, shall be deemedmade without reasonable prior notice to Buyer and shall not be made without Buyer’s prior written consent;
(xv) make any investment (by contribution to capital, for purposes property transfers, purchase of this Agreementsecurities or otherwise) in, a waiver or loan or advance (other than travel and similar advances to its employees in the ordinary course of a material right not business) to, any Person other than in the ordinary course of business;
(xviiixvi) (i) enter into, terminate or amend any Material Contract, or make any single capital expenditure proposal to enter into, terminate, or commitment amend any Material Contract, or, other than in excess the ordinary course of $150,000 or make aggregate capital expenditures or commitments in excess of $250,000;
business, any other Contract that is material to the Company, (xix) merge or consolidate with another Person or purchase a substantial portion of the assets of any Person;
(xxii) enter into any joint ventureContract that would be breached by, partnership or other similar arrangement;
(xxi) subject require the consent of any third party in order to Section 5.5, take any action to exempt or make any Person (other than Parent) not subject to the provisions of Section 203 continue in full force and effect following consummation of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;
(xxii) subject to Section 5.5, take any action (including encouraging any other Person to take such action), engage in any transaction or enter into any agreement which would reasonably be likely to cause (A) any of the representations or warranties of the Company in this Agreement to be untrue at, or as of any time prior to the earlier of, (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3)Transactions, or (iiiii) the Effective Time; (B) release any of the Tender Offer Conditions to not be satisfied; (C) any of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect on the Company or (E) any impairment of the ability of the Company, Parent, Sub or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation;
(xxiii) sell or releasePerson from, or agree to develop, sell modify or releasewaive any provision of, any product that the Company does not make generally available confidentiality, standstill or similar agreement or fail to its customerstake all action necessary to enforce each such confidentiality, standstill and similar agreement (in each case, other than any such agreement with Buyer); or
(xxivxvii) authorize, commit or agree to take, any of the foregoing actions to the extent restricted by the provisions of this Section 6.3(c) or take any action or agree, in writing or otherwise, to take any action which would (i) cause any of the foregoing actionsrepresentations or warranties of the Company set forth in this Agreement to be untrue in any material respect or (ii) in any material respect impede or delay the ability of the parties to satisfy any of the conditions to the Transactions set forth in this Agreement.
(d) Notwithstanding anything to the contrary contained in this Agreement, the Company shall be permitted to maintain through the Closing Date the cash management systems of the Company, maintain the cash management procedures as currently conducted by the Company, and periodically settle intercompany balances consistent with past practices (including through dividends and capital contributions and all such intercompany balances shall be settled at the Closing in accordance with their terms).
Appears in 1 contract
Conduct of the Business of the Company Pending the Closing Date. Except (a) The Company agrees that, except as permitted, required or specifically contemplated by by, or otherwise described in, this Agreement or as otherwise consented to or approved in writing by ParentEMKT, until during the earlier of period commencing on the date hereof and ending on the Closing Date:
(i) the date upon which Parent’s designees constitute a majority The Company and each of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) the Effective Time:
(a) the Company shall and shall cause each Subsidiary of the Company to its Subsidiaries will conduct its their respective operations only according to its their ordinary and usual course of business consistent with past practice and shall will use all their commercially reasonable best efforts to preserve intact their current respective business operationsorganization, keep available the services of their officers and employees, employees and maintain satisfactory relationships with lessors, lesseeslicensers, suppliers, customersdistributors, partners clients and others having business relationships with them; and
(b) without limiting the generality of the foregoing, neither the Company nor any Subsidiary of the Company shall:
(i) amend its Certificate of Incorporation or By-Laws or comparable organizational documents;
(ii) except for grants of Company Stock Options to new hires in the ordinary course of business and consistent with past practice (provided that in the aggregate, Neither the Company nor any of its Subsidiaries shall, except as may not grant options be necessary to effect the Transactions, (A) make any change in or amendment to the aggregate amount exceeding 50,000Company Articles or the By-Laws of the Company (or comparable governing documents of any Subsidiary), ; (B) issue or sell, or authorize the issuance or sale of, sell any shares of its capital stock (other than in connection with the exercise of Company Options outstanding on the date hereof) or any of its other equity securities, or issue or sell, or authorize the issuance or sale of, any securities convertible into into, or options, warrants or rights to purchase or subscribe to, or enter into any arrangement or create any contract with respect to the issuance or sale of, any shares of its capital stock or any of its other equity securities, or make any other changes in its capital structure, except for the issuance and sale of Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding on the date hereof and other than pursuant to the Company ESPP;
; (iiiC) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entity;
(iv) except for payments of dividends by a Subsidiary of the Company, declare, pay or set aside make 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 its other securities;
stock; (vD) enter into any contract which (i) if entered into prior to the date of this Agreementor commitment, would be a Material Company Contract, or (ii) involves payment by the Company and its Subsidiaries in excess of $150,000 or receipts by the Company and its Subsidiaries in excess of $250,000 in any consecutive twelve month period, or, in cases where the Company or a Subsidiary of the Company is the party responsible except for such payment, which is not terminable upon thirty days notice;
(vi) except to the extent required under Employee Plans in effect on the date of this Agreement, grant any options to purchase Shares, increase the compensation or fringe benefits of any of its directors, officers or employees, grant any severance or termination pay not currently required to be paid under existing severance plans; enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee;
(vii) except as specifically set forth herein or as required in order to comply with applicable Law, (A) establish, enter into, adopt or amend or terminate any Employee Plan or Compensatory Agreement, (B) change any actuarial or other assumption used to calculate funding obligations with respect to any Employee Plan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not contracts in the ordinary course of business consistent with past practice with respect to business, including without limitation, any Employee Planacquisition of a material amount of assets or securities, any disposition of a material amount of assets or securities or release or relinquish any material contract rights; (DE) take any action to accelerate any rights or benefits under any collective bargaining agreement, Employee Plan or Compensatory Plan;
(viii) transfer, lease, licenseassume, guarantee, sellendorse or otherwise become liable or responsible (whether directly, mortgagecontingently, pledge, dispose of, encumber or subject to otherwise) for the obligations of any Lien, any material assets other Person other than entering into contracts with customers in the ordinary course of business consistent with past practice;
(ix) sell, assign, transfer, license or modify or amend any rights to any Company Intellectual Property, except in the ordinary course of business consistent with past practice;
(x) agree to the settlement of any material claim or Litigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xii) except as required by applicable Law or GAAP, make any change in its accounting principles, practices or methods;
(xiii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, other than in respect of indebtedness owing by the Company to any Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) make any loans or advances to any other Person, other than to the Company or to any Subsidiary of the Company;
(A) accelerate the payment, right to payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than as described in Section 3.14(e) of the Company Disclosure Schedule, or, (B) except at Parent’s request in accordance with Section 5.3, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrant;
(xv) pay, discharge or satisfy any liabilities other than the payment, discharge or satisfaction of any liabilities in the ordinary course of business and consistent with past practice;
; (xviF) delay incur, assume or postpone the payment of accounts payable prepay any indebtedness or other liabilitiesmaterial liabilities other than in the ordinary course of business and consistent with past practices; (G) make any loans, advances or capital contributions to, or investments in, any other Person, other than to Subsidiaries and employees in the ordinary course of business and not to exceed $25,000 in the aggregate outstanding at any time; (H) authorize capital expenditures in excess of the amount currently budgeted therefor; (I) permit any insurance policy naming the Company or any Subsidiary as a beneficiary or a loss payee to be canceled or terminated other than in the ordinary course of business; (J) amend any employee or nonemployee benefit plan or program, employment agreement, license agreement or retirement agreement, or pay any bonus or contingent compensation, except in each case in the ordinary course of business consistent with past practice;
(xvii) modify, amend or terminate any contract which is material practice prior to its business or waive any of its material rights or claims, except in the ordinary course of business consistent with past practice; provided that the waiver of any “standstill provision” shall be deemed, for purposes date of this Agreement, a waiver of a material right not in the ordinary course of business;
(xviii) make any single capital expenditure or commitment in excess of $150,000 or make aggregate capital expenditures or commitments in excess of $250,000;
(xix) merge or consolidate with another Person or purchase a substantial portion of the assets of any Person;
(xx) enter into any joint venture, partnership or other similar arrangement;
(xxi) subject to Section 5.5, take any action to exempt or make any Person (other than Parent) not subject to the provisions of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;
(xxii) subject to Section 5.5, take any action (including encouraging any other Person to take such action), engage in any transaction or enter into any agreement which would reasonably be likely to cause (A) any of the representations or warranties of the Company in this Agreement to be untrue at, or as of any time prior to the earlier of, (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), or (ii) the Effective Time; (B) any of the Tender Offer Conditions to not be satisfied; (C) any of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect on the Company or (E) any impairment of the ability of the Company, Parent, Sub or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation;
(xxiii) sell or release, or agree to develop, sell or release, any product that the Company does not make generally available to its customers; or
(xxivK) agree, in writing or otherwise, to take any of the foregoing actions; or (L) agree to the settlement of any litigation.
(b) The Company shall not, and shall not permit any of its Subsidiaries to (i) take any action, engage in any transaction or enter into any agreement which would cause any of the representations or warranties set forth in Article III to be untrue as of the Closing Date, or (ii) purchase or acquire, or offer to purchase or acquire, any shares of capital stock of the Company and the Company shall not sell or pledge or agree to sell or pledge any stock owned by it in any of the Subsidiaries, or allow any Subsidiary to pledge or agree to sell or pledge any stock owned by it in any other Subsidiary;
(c) The Company shall use reasonable efforts to operate its business in a manner consistent with prior practice and maintain the goodwill of its employees and other persons with which it has commercial dealings. In addition, the Company agrees that: (i) effective as of January 1, 2000, there will no increases in salary or other payments, disbursements or distributions in any manner or form to shareholders, directors, officers, or employees (or related parties thereto) of the Company or affiliated or related entities, or changes in the cash or cash equivalent account of the Company, other than normal and necessary transactions in the ordinary course of business; (ii) revenues and accounts receivable will be maintained on a normal basis and there will no changes in its methods or procedures for billing, collection or recording of customer accounts receivable or reserves for doubtful accounts; (iii) inventories will be maintained on a normal basis, purchases of inventory items will be made in accordance with past practices and no changes will be made in other normal inventory procedures; (iv) property, plant, and equipment will be maintained and serviced in accordance with normal policies, and repairs, maintenance to such plant and equipment will be made as necessary in the normal course of business (v) accounts payable and accrued expenses of the Company will be maintained on a current basis; (vi) all normal and recurring installment payments of bank debt, leases, contractual obligations and other amounts due third parties, if any, will be made by the Company as they become due, except to the extent suspended, withheld or terminated by the Company due to a bona fide dispute; (vii) the Company shall not incur any new blank debt, leases, loans, encumbrances, liens, attachments, contractual obligations or other indebtedness, except those incurred in the ordinary course of business; (viii) all federal, state, municipal and other tax returns, reports and declarations required to be filed, and all taxes, interest, penalties, fines or assessments related thereto will be satisfied by with respect to periods of time prior to the closing of the Transaction, except to the extent suspended, withheld or terminated by the Company due to a bona fide dispute.
Appears in 1 contract
Sources: Merger Agreement (Emarketplace Inc)
Conduct of the Business of the Company Pending the Closing Date. Except as permitted, required or specifically contemplated by by, or otherwise described in, this Agreement or as otherwise consented to or approved in writing by Parent, until which consent or approval shall not be unreasonably withheld, conditioned or delayed in the earlier case of clauses 8.2(b)(4) or (i) 12), and except as set forth in Section 8.2 of the Company Disclosure Schedule, during the period commencing on the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) hereof until the Effective Time:
(a) the The Company and each of its Subsidiaries shall and shall cause each Subsidiary of the Company to conduct its their respective operations only according to its their ordinary and usual course of business consistent with past practice and shall use all their reasonable best efforts to preserve intact their current respective business operationsorganizations, keep available the services of their officers and employees, employees and maintain satisfactory relationships with lessors, lessees, suppliers, customers, partners and others those Persons having significant business relationships with them; and;
(b) without limiting the generality of the foregoing, neither Neither the Company nor any Subsidiary of the Company its Subsidiaries shall:
(i1) amend make any change in or amendment to its Certificate certificate or articles of Incorporation incorporation or Byits by-Laws laws or comparable similar organizational documents;
(ii2) except for grants of Company Stock Options to new hires in the ordinary course of business and consistent with past practice (provided that in the aggregate, the Company may not grant options in the aggregate amount exceeding 50,000), issue or sell, or authorize the issuance to issue or sale ofsell, any shares of its capital stock stock, Voting Debt or any other equity securities, or issue or sell, or authorize the issuance to issue or sale ofsell, any securities convertible into into, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or create any contract with respect to the issuance or sale of, any shares of its capital stock stock, Voting Debt or any other equity securities, or make any other changes in its capital structure, except for the issuance and sale of Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding on the date hereof and other than pursuant to the Company ESPP;
(iii3) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entity;
(iv) except for payments of dividends by a Subsidiary of the Company, 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 its other securities;
, other than (vA) enter into any contract which (i) if entered into prior to normal quarterly cash dividends not in excess of U.S. $0.19 per share declared and paid in accordance with the date Company's past dividend policy, provided that the timing of this Agreementthe declaration, would record and payment dates, shall be a Material Company Contract, or (ii) involves payment the same dates as were used by the Company and its Subsidiaries in excess of $150,000 or receipts by the Company and its Subsidiaries in excess of $250,000 in any consecutive twelve month periodlast calendar year, or, in cases where if any such date shall not be a Business Day, the Company next succeeding Business Day, and provided further, that no such cash dividends shall be declared after Consummation of the Offer or (B) dividends payable by a wholly owned Subsidiary of the Company is to the party responsible for such payment, which is not terminable upon thirty days noticeCompany or another wholly owned Subsidiary of the Company;
(vi4) incur any capital expenditures or any obligations or liabilities in respect thereof, except (A) with respect to expansion projects, for expenditures for such projects which are consistent with the budget for the Company set forth in Section 8.2(b) of the Company Disclosure Schedule (the "COMPANY BUDGET"), (B) those required for maintenance and replacement in the ordinary course of business not to exceed the amounts provided for maintenance and replacement in the Company Budget and (C) capital expenditures outside the scope of the Company Budget that do not exceed U.S. $250,000 in the aggregate.
(5) acquire or agree to acquire (A) by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof (excluding any of the Company's Subsidiaries) or (B) any assets, including real estate, except purchases of inventory, equipment, or other non-material assets in the ordinary course of business consistent with the Company Budget;
(6) (A) except to the extent required under Employee existing Company Benefit Plans as in effect on the date of this Agreement, grant any options to purchase Shares, increase the compensation or fringe benefits of any of its directors, officers or employees, employees or grant any severance or termination pay not currently required to be paid under existing severance plans; (B) enter into any employment, employment or consulting or severance agreement or arrangement with any present or former directordirector or officer of the Company or any of its Subsidiaries, officer or any employment or consulting agreement with any other employee;
(vii) except as specifically set forth herein employee of the Company or as required in order to comply with applicable Law, (A) establish, enter into, adopt any of its Subsidiaries; or amend or terminate any Employee Plan or Compensatory Agreement, (B) change any actuarial or other assumption used to calculate funding obligations with respect to any Employee Plan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not except in the ordinary course of business consistent with past practice with respect and to any Employee Planthe extent necessary to fill vacancies, hire or agree to hire, or (D) take enter into any action to accelerate written employment agreement with, any rights new or benefits under any collective bargaining agreementadditional employee or officer having an annual base salary of U.S. $40,000 or more or, Employee Plan in the aggregate, annual base salaries of U.S. $500,000 or Compensatory Planmore;
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any Lien, any material assets other than entering into contracts with customers in the ordinary course of business consistent with past practice;
(ix) sell, assign, transfer, license or modify or amend any rights to any Company Intellectual Property, except in the ordinary course of business consistent with past practice;
(x) agree to the settlement of any material claim or Litigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xii7) except as required by to comply with applicable Law or GAAPexpressly provided in this Agreement, make any change in its accounting principles, practices or methods;
(xiii) (A) incur adopt, enter into, terminate or amend any indebtedness Company Benefit Plan, collective bargaining agreement or other arrangement for borrowed money the current or guarantee future benefit or welfare of any such indebtedness of another Persondirector, other than in respect of indebtedness owing by the Company to any Subsidiary of the Company officer or in respect of indebtedness owing by any Subsidiary of the Company to the Company current or another Subsidiary of the Company or former employee, (B) make pay any loans or advances to benefit not required under any other PersonCompany Benefit Plan, other than to the Company or to any Subsidiary of the Company;
(A) accelerate the payment, right to of payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, (C) grant any awards under any bonus, incentive, performance or other than as described compensation plan or arrangement or Company Benefit Plan (including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in Section 3.14(eany Company Benefit Plans or agreements or awards made thereunder) of the Company Disclosure Schedule, or, or (BD) except at Parent’s request as required by the current terms thereof take any action to fund or in accordance with Section 5.3any other way secure the payment of compensation or benefits under any employee plan, accelerate the paymentagreement, right to payment contract or vesting, redeem arrangement or exercise a right to redeem, any Company WarrantBenefit Plan;
(xv) pay8) transfer, discharge lease (as lessor), license, sell, mortgage, pledge, dispose of, encumber or satisfy subject to any liabilities Lien, any assets, other than the payment, discharge or satisfaction of any liabilities in the ordinary course of business and consistent with past practice, except as provided for in Section 8.2(b)(11) or in an amount in the aggregate not to exceed U.S. $250,000;
(xvi9) delay except as required by applicable Law or postpone the payment GAAP, make any change in its methods of accounts payable or other liabilities, other than in the ordinary course of business consistent with past practiceaccounting;
(xvii10) modifyadopt or enter into a plan of complete or partial liquidation, amend dissolution, merger, consolidation, restructuring, recapitalization or terminate any contract which is material to its business other reorganization of the Company or waive any of its material rights or claimsSubsidiaries (other than the Merger), except as provided for in Section 8.5;
(A) Incur any long-term indebtedness (other than under existing revolving credit facilities, as may be amended as contemplated hereby) or, except in the ordinary course of business consistent with past practice, any short-term indebtedness; provided that (B) modify any material indebtedness or other liability; (C) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the waiver obligations or indebtedness of any “standstill provision” shall be deemed, for purposes of this Agreement, a waiver of a material right not in the ordinary course of business;
other Person; (xviiiD) make any single loans, advances or capital expenditure contributions to, or commitment in excess of $150,000 or make aggregate capital expenditures or commitments in excess of $250,000;
(xix) merge or consolidate with another Person or purchase a substantial portion of the assets of investments in, any Person;
(xx) enter into any joint venture, partnership or other similar arrangement;
(xxi) subject to Section 5.5, take any action to exempt or make any Person (other than Parent) not subject in or to the provisions of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;
(xxii) subject to Section 5.5, take any action (including encouraging any other Person to take such action), engage in any transaction or enter into any agreement which would reasonably be likely to cause (A) any of the representations or warranties of the Company in this Agreement to be untrue at, or as of any time prior to the earlier of, (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), or (ii) the Effective Time; (B) any of the Tender Offer Conditions to not be satisfied; (C) any of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect on the Company or (E) any impairment of the ability wholly owned Subsidiaries of the Company, Parent, Sub or by wholly owned Subsidiaries to the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation;
(xxiii) sell or releaseCompany, or agree customary loans or advances to developemployees); (E) other than with respect to the settlement of any claim that is completely covered (other than with respect to deductibles to the Company's insurance policies) by the Company's insurance carrier, sell or release, settle any product that claims against the Company does not make generally available to or any of its customersSubsidiaries where the amounts payable by the Company and its Subsidiaries would exceed U.S. $25,000 individually or U.S. $250,000 in the aggregate, in each such case without admission of liability; or
(xxiv) agree, in writing or otherwise, to take any of the foregoing actions.
Appears in 1 contract
Sources: Merger Agreement (Cemex Sa De Cv)
Conduct of the Business of the Company Pending the Closing Date. Except as specifically contemplated by this Agreement or as otherwise consented to or approved in writing by Parent, until the earlier of (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), (ii) the termination of this Agreement, or (iii) the Effective Time:
(a) The Sellers agree that during the Company shall and shall cause each Subsidiary of the Company to conduct its operations only according to its ordinary course of business consistent with past practice and shall use all reasonable efforts to preserve intact their current business operations, keep available the services of their officers and employees, and maintain satisfactory relationships with lessors, lessees, suppliers, customers, partners and others having business relationships with them; and
(b) without limiting the generality of the foregoing, neither the Company nor any Subsidiary of the Company shall:
(i) amend its Certificate of Incorporation or By-Laws or comparable organizational documents;
(ii) except for grants of Company Stock Options to new hires in the ordinary course of business and consistent with past practice (provided that in the aggregate, the Company may not grant options in the aggregate amount exceeding 50,000), issue or sell, or authorize the issuance or sale of, any shares of its capital stock or any other equity securities, or issue or sell, or authorize the issuance or sale of, any securities convertible into or options, warrants or rights to purchase or subscribe to, or enter into or create any contract with respect to the issuance or sale of, any shares of its capital stock or any other equity securities, or make any other changes in its capital structure, except for the issuance and sale of Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding period commencing on the date hereof and other than pursuant to ending on the Company ESPP;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other entity;
(iv) except for payments of dividends by a Subsidiary of the CompanyClosing Date or, declareif earlier, 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 its other securities;
(v) enter into any contract which (i) if entered into prior to the date of the termination of this AgreementAgreement (the “Interim Period”), would be a Material Company Contract, or (ii) involves payment by the Company shall conduct its respective operations (including their respective working capital and its Subsidiaries in excess of $150,000 or receipts by the Company and its Subsidiaries in excess of $250,000 in any consecutive twelve month period, or, in cases where the Company or a Subsidiary of the Company is the party responsible for such payment, which is not terminable upon thirty days notice;
(vicash management practices) except to the extent required under Employee Plans in effect on the date of this Agreement, grant any options to purchase Shares, increase the compensation or fringe benefits of any of its directors, officers or employees, grant any severance or termination pay not currently required to be paid under existing severance plans; enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee;
(vii) except as specifically set forth herein or as required in order to comply with applicable Law, (A) establish, enter into, adopt or amend or terminate any Employee Plan or Compensatory Agreement, (B) change any actuarial or other assumption used to calculate funding obligations with respect to any Employee Plan, (C) change the manner in which contributions to any Employee Plan are made or the formula by which such contributions are determined or make any material determinations not in the ordinary course of business consistent with past practice and to use their commercially reasonable efforts to preserve intact their respective business organizations, keep available the services of their officers and employees and maintain satisfactory relationships with respect licensors, suppliers, distributors, clients and others having business relationships with them.
(b) In furtherance and not in limitation of Section 5.03(a) hereof, the Sellers agree that during the Interim Period the Company shall not effect any of the following without the prior written consent of the Purchaser (such consent not to be unreasonably withheld, conditioned or delayed):
(i) amend or restate its articles of incorporation or bylaws or other equivalent charter documents in any Employee Planmaterial respect;
(ii) authorize for issuance, issue, sell or deliver (A) any capital stock of, or other equity or voting interest in, the Company or any of its Subsidiaries or (B) any securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire any (1) shares of capital stock of, or other equity or voting interest in, the Company, (2) securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire, any shares of the capital stock of, or other equity or voting interest in, the Company including rights, warrants or options, or (D3) phantom stock or similar equity‑based payment option;
(iii) declare, pay or set aside any dividend or make any non-cash distribution with respect to, or split, combine, redeem, reclassify, purchase or otherwise acquire directly, or indirectly, any shares of capital stock of, or other equity or voting interest in, the Company, or make any other change in the capital structure of the Company;
(iv) except as set forth in Section 5.03(b) of the Seller Disclosure Letter, in furtherance of and as provided in the Company’s 2021 budget set forth in Section 5.03(b) of the Seller Disclosure Letter or as reflected on the Financial Statements, or as otherwise required by applicable Law, (i) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company, (ii) pay any bonus to any of the current or former directors, officers, employees or consultants of the Company, (iii) adopt, enter into, establish, amend, modify or terminate any Company Plan or any employment, consulting, bonus or other incentive compensation, health or other welfare, pension, retirement, severance, deferred compensation or other compensation or benefit plan with, for or in respect of any shareholder, director, officer, other employee or consultant that would constitute a Company Plan had it been in effect as of the date of this Agreement, (iv) promote any employee who is an officer to a position more senior than such employee’s position as of the date of this Agreement, or promote a non-officer employee to an officer position, (v) grant any new awards under any Company Plan, (vi) amend or modify any outstanding award under any Company Plan, (vii) take any action to amend, waive or accelerate the vesting criteria or vesting requirements of payment of any compensation or benefit under any Company Plan or remove any existing restrictions in any Company Plans or awards made thereunder, (viii) take any action to accelerate the payment, or to fund or in any rights other way secure the payment, of compensation or benefits under any Company Plan, to the extent not already provided in any such Company Plan, (ix) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or applicable Laws, (x) forgive any loans, or issue any loans (other than routine travel advances issued in the ordinary course of business), to directors, officers, contractors or employees of the Company, (xi) enter into, amend or terminate any collective bargaining agreementagreement or other agreement with a labor union, Employee Plan works council or Compensatory Plansimilar organization, or (xii) plan, announce, implement or effect any reduction in force, lay-off, early retirement program, severance program or other program or effort concerning the termination of employment of employees of the Company (other than routine employee terminations for cause in the ordinary course of business consistent with past practice and in compliance with applicable Law;
(v) except in furtherance of and as provided in the Company’s 2021 budget set forth in Section 5.03(b) of the Seller Disclosure Letter or as reflected on the Financial Statements, hire any employee or engage any independent contractor (who is a natural person) other than as disclosed in the Company’s hiring plan as set forth in Section 5.03(b) of the Seller Disclosure Letter, or terminate the employment or engagement, other than for cause, of any employee or independent contractor; provided, however, that the compensation and benefits granted to any such newly hired employee or newly engaged independent contractor shall be consistent with, and be no more favorable in the aggregate than the compensation and benefits (excluding equity awards) provided as of the date of this Agreement to the Company’s similarly situated employees or independent contractors;
(vi) communicate with the directors, officers, employees or consultants of the Company regarding the compensation, benefits or other treatment they will receive in connection with the transactions contemplated hereby, unless any such communications are consistent with prior directives or documentation provided to the Company by the Parent (in which case, the Company shall provide the Parent with prior notice of and the opportunity to review and comment upon any such communications);
(vii) enter into any Contract which, if entered into prior to the date hereof would be required to be set forth in Section 3.18 of the Seller Disclosure Schedule or commit or agree (whether or not such Contract, commitment or agreement is legally binding) to enter into such Contract, or materially amend or terminate any Material Contract or any Real Property Lease, in each case outside of the ordinary course of business consistent with past practice;
(viii) permit any of its properties or assets to be subject to any Lien not already disclosed in Section 3.18 of the Seller Disclosure Letter (other than Permitted Liens);
(A) sell, assign, transfer, lease, license, guaranteesublicense, sellcovenant not to assert, abandon, permit to lapse, cancel or otherwise dispose of (1) any tangible assets or properties except for (a) sales of inventory in the ordinary course of business consistent with past practice and (b) non-exclusive leases or licenses entered into in the ordinary course of business consistent with past practice or (2) any of its material Owned IP (other than non-exclusive licenses of Owned IP granted to customers or service providers in the ordinary course of business consistent with past practice) or mortgage, pledge, dispose of, encumber pledge or subject any of the foregoing to any additional Lien, except for Permitted Liens; or (B) disclose any material Trade Secrets to any Person (except pursuant to sufficiently protective non-disclosure agreements); or (C) subject any Proprietary Software to Copyleft Terms;
(x) acquire any business, line of business or Person by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of related transactions, or enter into any Contract, letter of intent or similar arrangement (whether or not enforceable) with respect to the foregoing;
(xi) except in furtherance of and as provided in the Company’s 2021 budget set forth in Section 5.03(b) of the Seller Disclosure Letter or as reflected on the Financial Statements, make any capital expenditure or commitment therefor or enter into any operating lease or otherwise acquire any assets or properties (other than entering inventory in the ordinary course of business consistent with practice) or enter into contracts any Contract, letter of intent or similar arrangement (whether or not enforceable) with customers respect to the foregoing;
(xii) form any Subsidiary;
(xiii) write off as uncollectible any notes or accounts receivable, except write‑offs in the ordinary course of business consistent with past practice;
(ixxiv) sellexcept as required by GAAP, assignmake any material change in any method of accounting practice;
(xv) make any material Tax election or settle and/or compromise any Tax liability; prepare and file any Returns in a manner which is inconsistent with the past practices of the Company, transferas applicable, license with respect to the treatment of items on such Returns; incur any material liability for Taxes other than in the ordinary course of business, enter into any closing agreement, extend the statute of limitations period for the assessment or collection of any material amount of Tax, or file an amended Return or a claim for refund of Taxes with respect to the income, operations or property of the Company;
(xvi) pay, discharge, settle or satisfy any actions, Liabilities, including with respect to any of the matters set forth in Section 3.12 of the Seller Disclosure Letter;
(xvii) incur, assume, guarantee or modify or amend any rights to any Company Intellectual PropertyIndebtedness, except Indebtedness incurred pursuant to existing credit agreements disclosed in Section 3.18 of the Seller Disclosure Letter, or in the ordinary course of business consistent with past practice;
(x) agree practice and which such incurrences of Indebtedness, individually and in the aggregate, does not have and would not reasonably be expected to be, individually or in the aggregate, material to the settlement of any material claim or Litigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xii) except as required by applicable Law or GAAP, make any change in its accounting principles, practices or methods;
(xiii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, other than in respect of indebtedness owing by the Company to any Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) make any loans or advances to any other Person, other than to the Company or to any Subsidiary of the Company;
(A) accelerate the payment, right to payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than as described in Section 3.14(e) of the Company Disclosure Schedule, or, (B) except at Parent’s request in accordance with Section 5.3, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrant;
(xv) pay, discharge or satisfy any liabilities other than the payment, discharge or satisfaction of any liabilities in the ordinary course of business and consistent with past practice;
(xvi) delay or postpone the payment of accounts payable or other liabilities, other than in the ordinary course of business consistent with past practice;
(xvii) modify, amend or terminate any contract which is material to its business or waive any of its material rights or claims, except in the ordinary course of business consistent with past practice; provided that the waiver of any “standstill provision” shall be deemed, for purposes of this Agreement, a waiver of a material right not in the ordinary course of business;
(xviii) make any single loans, advances or capital expenditure contributions to, or commitment in excess of $150,000 or make aggregate capital expenditures or commitments in excess of $250,000;investments in, any other Person; or
(xix) merge or consolidate with another Person or purchase a substantial portion of the assets of any Person;
(xx) enter into any joint ventureContract or commit or agree (whether or not such Contract, partnership commitment or other similar arrangement;
(xxiagreement is legally binding) subject to Section 5.5, take any action to exempt or make any Person (other than Parent) not subject to the provisions of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;
(xxii) subject to Section 5.5, take any action (including encouraging any other Person to take such action), engage in any transaction or enter into any agreement which would reasonably be likely to cause (A) do any of the representations foregoing.
(c) During the Interim Period, the Sellers shall keep, or warranties of cause the Company in this Agreement to be untrue atkeep, all insurance policies currently maintained with respect to the Company and its respective assets and properties, or as of any time prior to the earlier of, (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (suitable replacements or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), or (ii) the Effective Time; (B) any of the Tender Offer Conditions to not be satisfied; (C) any of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect on the Company or (E) any impairment of the ability of the Company, Parent, Sub or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation;
(xxiii) sell or release, or agree to develop, sell or release, any product that the Company does not make generally available to its customers; or
(xxiv) agreerenewals, in writing or otherwisethe Sellers’ Representatives sole discretion, to take any of the foregoing actionsin full force and effect.
Appears in 1 contract