Covenants Relating to Conduct of Business Pending the Merger. 6.1 Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, between the date of this Agreement and the Effective Time, except as set forth in Section 6.1 of the Company Disclosure Schedule or as contemplated by any other provision of this Agreement, and unless Parent shall otherwise agree in writing (which agreement shall not be unreasonably withheld), (1) the business of the Company and any of its Subsidiaries shall be conducted only in, and the Company and any such Subsidiaries shall not take any action except in, the Ordinary Course of Business, (2) the Company shall use all reasonable efforts to preserve substantially intact its business organization, to keep available the services of the current officers, employees and consultants of the Company and any of its Subsidiaries and to preserve the current relationships of the Company and such Subsidiaries with customers, suppliers and other persons with which the Company and any of its Subsidiaries has significant business relations, (3) comply with all applicable Laws, (4) prepare and timely file all foreign, Federal, state and local Tax Returns as required by applicable Law, and make timely payment of all applicable Taxes when due, (5) use reasonable efforts to obtain, prior to the Closing Date, all Required Company Consents, (6) take all actions to be in substantial compliance with all Company Permits, (7) make full and timely payment of all amounts required to be contributed under the terms of each Plan and applicable Law or required to be paid as expenses under any such Plan, and (8) the Company will not, and will not permit any Subsidiary to: (a) amend or otherwise change its Articles of Incorporation or Bylaws; (b) issue, sell, pledge, dispose of, grant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of capital stock of the Company or any Subsidiary of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company (except for shares of the Company Common Stock, if any, issuable under agreements currently in effect on the date hereof and described in Section 4.4(a) of the Company Disclosure Schedule), shares of capital stock pursuant to Plans currently in effect as of the date hereof and described in Section 4.21(a) of the Company Disclosure Schedule, and such shares of Company Common Stock as it otherwise deems appropriate, , or (ii) any of the Company’s or any Subsidiaries’ assets, except for sales in the Ordinary Course of Business and in a manner consistent with past practice; (c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock; (d) reclassify, combine, split, divide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock; (e) (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any Person or any division thereof or any assets, other than the acquisition of assets in the Ordinary Course of Business consistent with past practice; (ii) merge with any Person (other than Merger Sub), (iii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans or advances; (iv) enter into any Contract material to the business, results of operations or financial condition of the Company other than in the Ordinary Course of Business, consistent with past practice; (v) authorize any capital expenditure, other than capital expenditures set forth in Section 4.19(a)(ix) of the Company Disclosure Schedule; or (vi) enter into or amend any Contract with respect to any matter set forth in this subsection (e); (i) increase the compensation payable or to become payable to any director, officer or other employee, or grant any bonus, to, or grant any severance or termination pay to, or enter into any employment or severance agreement with any director, officer or other employee of the Company or any Subsidiary or enter into or amend any collective bargaining agreement, or (ii) establish, adopt, enter into or amend any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation or other plan, trust or fund for the benefit of any director, officer or class of employees; (g) settle or compromise any pending or threatened litigation which is material or which relates to the Transactions; (h) grant or convey to any Person any rights, including, but not limited to, by way of sale, license or sub-license, in any of the Company Intellectual Property; (i) make any Tax election, change its method of Tax accounting or settle any claim relating to Taxes; (j) make any change in any of the Company’s or any of its Subsidiaries accounting methods or in the manner of keeping each of their respective books and records or any change in any of their respective current practices with respect to inventory, sales, receivables, payables or accrued expenses; (k) file or cause to be filed any registration statements under the Securities Act or Exchange Act relating to any of its capital stock or other securities; (l) take any action or omit to do any act within its reasonable control which action or omission is reasonably likely to result in any of the conditions to the Merger not being satisfied, except as may be required by applicable Law; (m) take or omit to take any action that would result in the representations and warranties hereunder being rendered untrue in any material respect; or (n) agree to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (Gca I Acquisition Corp), Merger Agreement (Gca I Acquisition Corp)
Covenants Relating to Conduct of Business Pending the Merger. 6.1 8.1 Conduct of Business by the Company ESCT Pending the Merger. The Company covenants Each of TRC and agrees ESCT covenant and agree that, between the date of this Agreement and the Effective Time, except as set forth in Section 6.1 8.1 of the Company ESCT Disclosure Schedule or as contemplated by any other provision of this Agreement, and unless Parent FIND shall otherwise agree in writing (which agreement shall not be unreasonably withheld), (1) the business of the Company ESCT and any of its Subsidiaries shall be conducted only in, and the Company ESCT and any such Subsidiaries shall not take any action except in, the Ordinary Course of Business, (2) the Company it shall use all reasonable efforts to preserve substantially intact its business organization, to keep available the services of the current officers, employees and consultants of the Company ESCT and any of its Subsidiaries and to preserve the current relationships of the Company ESCT and such Subsidiaries with customers, suppliers and other persons with which the Company ESCT and any of its Subsidiaries has significant business relations, (3) it shall comply with all applicable Laws, (4) it shall prepare and timely file all foreign, Federal, state and local Tax Returns as required by applicable Law, and make timely payment of all applicable Taxes when due, (5) it shall use reasonable efforts to obtain, prior to the Closing Date, all Required Company ESCT Consents, (6) it shall take all actions to be in substantial compliance with all Company ESCT Permits, (7) it shall make full and timely payment of all amounts required to be contributed under the terms of each Plan and applicable Law or required to be paid as expenses under any such Plan, and (8) the Company it will not, and will not permit any Subsidiary to:
(a) amend or otherwise change its Articles articles of Incorporation incorporation or Bylawsbylaws;
(b) issue, sell, pledge, dispose of, grant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of capital stock of the Company ESCT or any Subsidiary of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company (ESCT except for shares of the Company ESCT Common Stock, if any, issuable under agreements currently in effect on the date hereof and described in Section 4.4(a5.4(a) of the Company ESCT Disclosure Schedule), shares of capital stock issuable pursuant to any ESCT Benefit Plans currently in effect as of the date hereof and described in Section 4.21(a5.21(a) of the Company ESCT Disclosure Schedule, and such or up to an additional four hundred forty thousand (440,000) shares of Company ESCT Common Stock as it otherwise deems appropriateStock, or securities exchangeable for or convertible into such number of shares of ESCT Common Stock, issuable pre-Closing in exchange for cash reasonably required by ESCT for working capital requirements and effected at a pre-money valuation for ESCT of no less the two million dollars ($2,000,000), or (ii) any of the CompanyESCT’s or any of its Subsidiaries’ assets, except for sales in the Ordinary Course of Business and in a manner consistent with past practice;
(c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock;
(d) reclassify, combine, split, divide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(e) (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any Person or any division thereof or any assets, other than the acquisition of assets in the Ordinary Course of Business consistent with past practice; (ii) merge with any Person (other than Merger Merger-Sub), (iii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans or advances; (iv) enter into any Contract material to the business, results of operations or financial condition of the Company ESCT other than in the Ordinary Course of Business, consistent with past practice; (v) authorize any capital expenditure, other than capital expenditures set forth in Section 4.19(a)(ix5.19(a)(ix) of the Company ESCT Disclosure Schedule; or (vi) enter into or amend any Contract with respect to any matter set forth in this subsection (e);
(i) increase the compensation payable or to become payable to any director, officer or other employee, or grant any bonus, to, or grant any severance or termination pay to, or enter into any employment or severance agreement with any director, officer or other employee of the Company ESCT or any Subsidiary or enter into or amend any collective bargaining agreement, or (ii) establish, adopt, enter into or amend any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation or other plan, trust or fund for the benefit of any director, officer or class of employees;
(g) settle or compromise any pending or threatened litigation which is material or which relates to the Transactions;
(h) grant or convey to any Person any rights, including, but not limited to, by way of sale, license or sub-license, in any of the Company ESCT Intellectual Property;
(i) make any Tax election, change its method of Tax accounting or settle any claim relating to Taxes;
(j) make any change in any of the CompanyESCT’s or any of its Subsidiaries accounting methods or in the manner of keeping each of their respective books and records or any change in any of their respective current practices with respect to inventory, sales, receivables, payables or accrued expenses;
(k) file or cause to be filed any registration statements under the Securities Act or Exchange Act relating to any of its capital stock or other securities;
(l) take any action or omit to do any act within its reasonable control which action or omission is reasonably likely to result in any of the conditions to the Merger not being satisfied, except as may be required by applicable Law;
(m) take or omit to take any action that would result in the its representations and warranties hereunder being rendered untrue in any material respect; or
(n) agree to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Findex Com Inc)
Covenants Relating to Conduct of Business Pending the Merger. 6.1 4.1 Conduct of Business by the Company and Parent Pending the Merger. The Company covenants and agrees that, between the date of this Agreement and .
(a) Prior to the Effective Time, the Company agrees as to itself and its Subsidiaries that (except to the extent that Parent shall otherwise consent in writing or except as set forth in Section 6.1 or Schedule 4.1(a) of the Company Disclosure Schedule or as otherwise contemplated by any other provision of this Agreement, and unless Parent shall otherwise agree in writing ):
(which agreement shall not be unreasonably withheld), (1i) the business of the The Company and any each of its Subsidiaries shall be carry on its respective businesses in the usual, regular and ordinary course in substantially the same manner as heretofore conducted only in, and the Company and any such Subsidiaries shall not take any action except in, the Ordinary Course of Business, (2) the Company shall use all commercially reasonable efforts to preserve substantially intact its present business organizationorganizations, to keep available the services of the its current officersofficers and employees, employees subject to Section 5.9, and consultants of the Company and any of its Subsidiaries and endeavor to preserve the current its relationships of the Company and such Subsidiaries with customers, suppliers and other persons others having business dealings with which it to the end that its goodwill and ongoing business shall not be impaired in any material respect at the Effective Time.
(ii) Except for transactions solely among the Company and its Subsidiaries, the Company shall not and it shall not permit any of its Subsidiaries has significant business relationsto: (A) declare or pay any dividends on or make other distributions in respect of any of its capital stock or partnership interests; (B) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of the Company's capital stock or otherwise authorize, recommend or propose any material change in its capitalization; or (3C) comply with all applicable Lawsrepurchase, (4) prepare and timely file all foreignredeem or otherwise acquire, Federalor permit any of its Subsidiaries to purchase, state and local Tax Returns redeem or otherwise acquire, any shares of its capital stock, except as required by applicable Lawthe terms of its securities outstanding on the date hereof or as contemplated by any existing employee benefit plan.
(iii) The Company shall not and it shall not permit any of its Subsidiaries to issue, and make timely payment deliver or sell, or authorize or propose to issue, deliver or sell, any shares of all applicable Taxes when dueits capital stock of any class, any Voting Debt or other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, Voting Debt, other voting securities or convertible securities, other than (5A) use reasonable efforts to obtainthe issuance of Company Common Stock upon the exercise of stock options granted under the Company Stock Plans that are outstanding on the date hereof, or in satisfaction of stock grants or stock based awards made prior to the Closing Datedate hereof pursuant to the Company Stock Plans, all Required Company Consents, (6) take all actions or pursuant to be in substantial compliance with all Company Permits, (7) make full and timely payment of all amounts required to be contributed under the terms of each Plan and applicable Law or required to be paid as expenses under any such PlanCompany's 4.75% Senior Convertible Notes due 2021, and (8) B) issuances by a wholly owned Subsidiary of the Company will not, and will not permit any Subsidiary to:of such Subsidiary's capital stock to its parent.
(aiv) The Company shall not amend or otherwise change propose to amend its Articles of Incorporation or Bylaws;.
(bv) issueThe Company shall not, selland it shall not permit any of its Subsidiaries to, pledgeacquire or agree to acquire by merging or consolidating with, dispose or by purchasing any equity interest in or any of the assets of, grantor by any other manner, encumberany business or any corporation, partnership, association or authorize other business organization or division thereof except for the issuance, sale, pledge, disposition, grant acquisition of assets in the ordinary course of business in accordance with the Company Budget.
(vi) Other than: (A) as may be necessary or encumbrance ofrequired by law to consummate the transactions contemplated hereby, (iB) any shares sales, leases, encumbrances or other dispositions in the ordinary course of capital stock of business consistent with past practice that are not material, individually or in the aggregate, to the Company and its Subsidiaries taken as a whole or any Subsidiary of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company (except for shares of the Company Common Stock, if any, issuable C) under agreements currently in effect set forth on the date hereof and described in Section 4.4(a) of the Company Disclosure Schedule), shares of capital stock pursuant to Plans currently in effect as of the date hereof and described in Section 4.21(aSchedule 4.1(a)(vi) of the Company Disclosure Schedule, the Company shall not, and such shares of Company Common Stock as it otherwise deems appropriate, , or (ii) any of the Company’s or any Subsidiaries’ assets, except for sales in the Ordinary Course of Business and in a manner consistent with past practice;
(c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to shall not permit any of its capital stock;
(d) reclassifySubsidiaries to, combinesell, splitlease, divide or redeem, purchase encumber or otherwise acquiredispose of, directly or indirectlyagree to sell, lease (whether such lease is an operating or capital lease), encumber or otherwise dispose of, any of its capital stock;material assets other than hydrocarbons, subject to the limitations in clause (xv) hereof.
(evii) (i) acquire (including, without limitation, Except as otherwise permitted or contemplated by merger, consolidation, or acquisition of stock or assets) any interest in any Person or any division thereof or any assets, other than the acquisition of assets in the Ordinary Course of Business consistent with past practice; (ii) merge with any Person (other than Merger Sub), (iii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible forthis Agreement, the obligations Company shall not authorize, recommend, propose or announce an intention to adopt a plan of any Person, complete or make any loans partial liquidation or advances; (iv) enter into any Contract material to the business, results of operations or financial condition of the Company other than in the Ordinary Course of Business, consistent with past practice; (v) authorize any capital expenditure, other than capital expenditures set forth in Section 4.19(a)(ix) of the Company Disclosure Schedule; or (vi) enter into or amend any Contract with respect to any matter set forth in this subsection (e);
(i) increase the compensation payable or to become payable to any director, officer or other employee, or grant any bonus, to, or grant any severance or termination pay to, or enter into any employment or severance agreement with any director, officer or other employee dissolution of the Company or any Subsidiary of its Significant Subsidiaries.
(viii) The Company shall not, nor shall the Company permit any of its Subsidiaries to, make any changes in their accounting methods which would be required to be disclosed under the rules and regulations of the SEC, except as required by law, rule, regulation or enter into or amend GAAP.
(ix) The Company shall not, nor shall the Company permit any collective bargaining agreement, or (ii) establish, adoptof its Subsidiaries to, enter into any agreement or amend arrangement with any bonusof their respective Affiliates (as such term is defined in Rule 405 under the Securities Act, profit sharingan "Affiliate"), thriftother than with wholly owned Subsidiaries of the Company, compensationon terms less favorable to the Company or such Subsidiary, stock optionas the case may be, restricted stockthan could be reasonably expected to have been obtained with an unaffiliated third party on an arm's-length basis.
(x) The Company shall, pensionand shall cause its Subsidiaries to, retirementuse commercially reasonable efforts to maintain with financially responsible insurance companies insurance in such amounts and against such risks and losses as are customary for companies of similar size engaged in their respective businesses.
(xi) The Company shall not (A) make, deferred compensation change or rescind any material express or deemed election relating to Taxes unless it is reasonably expected that such action will not materially and adversely affect the Company or Parent, including elections for any and all joint ventures, partnerships, limited liability companies, working interests or other plan, trust or fund for investments where the benefit of any director, officer or class of employees;
Company has the capacity to make such binding election; (gB) settle or compromise any pending material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or threatened litigation which is material or which relates to the Transactions;
(h) grant or convey to any Person any rights, including, but not limited to, by way of sale, license or sub-license, in any of the Company Intellectual Property;
(i) make any Tax election, change its method of Tax accounting or settle any claim controversy relating to Taxes;
, except where such settlement or compromise will not materially and adversely affect the Company or Parent; or (jC) make any change in any of the Company’s or material respect any of its Subsidiaries accounting methods of reporting income or deductions for federal income tax purposes from those employed in the manner of keeping each of their respective books and records or any change in any of their respective current practices with respect to inventory, sales, receivables, payables or accrued expenses;
(k) file or cause to be filed any registration statements under the Securities Act or Exchange Act relating to any preparation of its capital stock or other securities;
(l) take any action or omit to do any act within its reasonable control which action or omission is reasonably likely to result in any of the conditions to the Merger not being satisfiedfederal income Tax Returns that have been filed for prior taxable years, except as may be required by applicable Law;law or except for changes that are reasonably expected not to materially and adversely affect the Company or Parent.
(mxii) take The Company shall not and it shall not permit any of its Subsidiaries to: (A) grant any increases in the compensation of any of its directors, officers or omit employees, except increases to employees who are not directors or officers made in the ordinary course of business and in accordance with past practice; (B) pay or agree to pay any material pension, retirement allowance or other employee benefit not required or contemplated by any of the existing Company Employee Benefit Plans or pension plans, in each case as in effect on the date hereof to any such director, officer or employee, whether past or present; (C) amend or modify in any material respect or receive any assets from pension plans or Company Employee Benefits Plans; (D) enter into any new, or amend any existing, material employment or severance or termination agreement with any director, officer or employee; (E) grant any options or other awards under the Company Stock Plans; or (F) become obligated under any new Company Employee Benefit Plan or pension plan, which was not in existence or approved by the Board of Directors of the Company prior to the date hereof, or amend any such plan or arrangement in existence on the date hereof if such amendment would have the effect of materially enhancing any benefits thereunder.
(xiii) The Company shall not, nor shall the Company permit any of its Subsidiaries to (A) modify the terms of any existing indebtedness for borrowed money or security issued by the Company or any Subsidiaries of the Company, (B) incur any indebtedness for borrowed money (except (x) to finance any transactions or capital or other expenditures permitted by this Agreement) and regular borrowings under credit facilities made in the ordinary course of the Company's cash management practices, (y) refinancings of existing debt and (z) immaterial borrowings that, in each such case, permit prepayment of such debt without penalty (other than LIBOR breakage costs)) or guarantee, assume or otherwise become liable for any such indebtedness or issue or sell any debt securities or warrants or rights to acquire any debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others; (C) except in the ordinary course of business, enter into any material lease (whether such lease is an operating or capital lease) or create any material mortgages, liens, security interests or other encumbrances on the property of the Company or any of its Subsidiaries in connection with any indebtedness thereof; or (D) make or commit to make aggregate capital expenditures in excess of an amount equal to the sum of capital expenditures budgeted by the Company for the fiscal year ending December 31, 2004 as provided in the capital expenditure budget set forth on Schedule 4.1(a)(xiii) of the Company Disclosure Schedule (the "Company Budget"), less any budgeted capital expenditures expended prior to the date of this Agreement.
(xiv) The Company shall not, nor shall the Company permit any of its Subsidiaries to, settle, compromise or otherwise resolve any litigation or other legal proceedings involving a payment of more than $200,000 in any one case by or to the Company or any of its Subsidiaries.
(xv) The Company shall not enter into new contracts to sell hydrocarbons other than in the ordinary course of business at market pricing, but in no event having a duration of longer than three months.
(xvi) The Company shall not, nor shall the Company permit any of its Subsidiaries to, write off any accounts or notes receivable, except in the ordinary course of business consistent with past practice or as may be required by GAAP.
(xvii) The Company shall not, nor shall the Company permit any of its Subsidiaries to, enter into any agreement, arrangement or commitment that limits or otherwise restricts the Company or any Subsidiary of the Company, or that would reasonably be expected to, after the Effective Time, limit or restrict Parent, the Surviving Corporation or any of Parent's other Subsidiaries or any of their respective affiliates or any successor thereto, from engaging or competing in any line of business in which it is currently engaged or in any geographic area material to the business or operations of (A) the Company or any of its Subsidiaries or (B) Parent, the Surviving Corporation or any of Parent's other Subsidiaries.
(xviii) Except in the ordinary course consistent with past practice, the Company shall not, and shall not permit any of its Subsidiaries to, (A) terminate any existing gas purchase, exchange or transportation contract, or (B) enter into any new contract for the supply, transportation, storage or exchange of gas or renew or extend or negotiate any existing contract providing for the same where such contract is not terminable within 30 days without penalty.
(xix) The Company shall not make or assume any ▇▇▇▇▇▇ except as set forth in Section 5.23.
(xx) The Company shall not, nor shall the Company permit any of its Subsidiaries to, agree in writing or otherwise to take any action that would result in the representations and warranties hereunder being rendered untrue in any material respect; or
(n) agree to do inconsistent with any of the foregoing.
(b) Prior to the Effective Time, Parent agrees as to itself and its Subsidiaries that (except to the extent that the Company shall otherwise consent in writing):
(i) Parent shall not adopt or propose to adopt any amendments to its charter documents that would have a material adverse impact on the consummation of the transactions contemplated by this Agreement or alter the terms of the Parent Common Stock.
(ii) Parent shall not declare or pay any dividends or make other distributions in respect of any of its capital stock, except for the declaration and payment of regular cash dividends with usual record and payment dates in accordance with past practice and dividends from a Subsidiary of Parent to Parent or to another Subsidiary of Parent.
(iii) Parent shall not adopt a plan of complete or partial liquidation or dissolution of Parent.
(iv) Other than any acquisition as to which the purchase price is not in excess of $200 million, Parent shall not, and shall not permit any of its Subsidiaries to, acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any business or any corporation, limited liability company, partnership, association of other business organization or division thereof the principal business of which is not related to the exploration, development or production of oil or natural gas or other minerals.
(v) Parent shall not acquire, by merging or consolidating with, or by purchasing an equity interest in or the assets of or by any other manner, any business or corporation, partnership or other business organization or division thereof, or otherwise acquire any assets of any other entity (other than the purchase of assets from suppliers, clients or vendors in the ordinary course of business and consistent with past practice) if such transactions would prevent or materially delay the stockholders' meeting of Parent contemplated by this Agreement or the consummation of the transactions contemplated by this Agreement.
(vi) Parent shall not, nor shall Parent permit any of its Subsidiaries to, agree in writing or otherwise to take any action inconsistent with any of the foregoing.
Appears in 1 contract
Covenants Relating to Conduct of Business Pending the Merger. 6.1 Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, between the date of this Agreement and the Effective Time, except as set forth in Section 6.1 of the Company Disclosure Schedule or as contemplated by any other provision of this Agreement, and unless Parent shall otherwise agree in writing (which agreement shall not be unreasonably withheld)writing, (1) the business of the Company and any of its Subsidiaries shall be conducted only in, and the Company and any such Subsidiaries shall not take any action except in, the Ordinary Course of Business, (2) the Company shall use all reasonable efforts to preserve substantially intact its business organization, to keep available the services of the current officers, employees and consultants of the Company and any of its Subsidiaries and to preserve the current relationships of the Company and such Subsidiaries with customers, suppliers and other persons with which the Company and any of its Subsidiaries has significant business relations, (3) comply with all applicable Laws, (4) prepare and timely file all foreign, Federal, state and local Tax Returns as required by applicable Law, and make timely payment of all applicable Taxes when due, (5) use reasonable efforts to obtain, prior to the Closing Date, all Required Company Consents, (6) take all actions to be in substantial compliance with all Company Permits, (7) make full and timely payment of all amounts required to be contributed under the terms of each Plan and applicable Law or required to be paid as expenses under any such Plan, and (8) the Company will not, and will not permit any Subsidiary to:
(a) amend or otherwise change its Articles of Incorporation or Bylaws;
(b) issue, sell, pledge, dispose of, grant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of capital stock of the Company or any Subsidiary of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company (except for shares of the Company Common Stock, if any, issuable under agreements currently in effect on the date hereof and described in Section 4.4(a) of the Company Disclosure Schedule), shares of capital stock pursuant to Plans currently in effect as of the date hereof and described in Section 4.21(a) of the Company Disclosure Schedule, and such shares of Company Common Stock as it otherwise deems appropriate, , or (ii) any of the Company’s or any Subsidiaries’ assets, except for sales in the Ordinary Course of Business and in a manner consistent with past practice;
(c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock;
(d) reclassify, combine, split, divide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(e) (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any Person or any division thereof or any assets, other than the acquisition of assets in the Ordinary Course of Business consistent with past practice; (ii) merge with any Person (other than Merger Sub), (iii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans or advances; (iv) enter into any Contract material to the business, results of operations or financial condition of the Company other than in the Ordinary Course of Business, consistent with past practice; (v) authorize any capital expenditure, other than capital expenditures set forth in Section 4.19(a)(ix) of the Company Disclosure Schedule; or (vi) enter into or amend any Contract with respect to any matter set forth in this subsection (e);
(i) increase the compensation payable or to become payable to any director, officer or other employee, or grant any bonus, to, or grant any severance or termination pay to, or enter into any employment or severance agreement with any director, officer or other employee of the Company or any Subsidiary or enter into or amend any collective bargaining agreement, or (ii) establish, adopt, enter into or amend any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation or other plan, trust or fund for the benefit of any director, officer or class of employees;
(g) settle or compromise any pending or threatened litigation which is material or which relates to the Transactions;
(h) grant or convey to any Person any rights, including, but not limited to, by way of sale, license or sub-license, in any of the Company Intellectual Property;
(i) make any Tax election, change its method of Tax accounting or settle any claim relating to Taxes;
(j) make any change in any of the Company’s or any of its Subsidiaries accounting methods or in the manner of keeping each of their respective books and records or any change in any of their respective current practices with respect to inventory, sales, receivables, payables or accrued expenses;
(k) file or cause to be filed any registration statements under the Securities Act or Exchange Act relating to any of its capital stock or other securities;
(l) take any action or omit to do any act within its reasonable control which action or omission is reasonably likely to result in any of the conditions to the Merger not being satisfied, except as may be required by applicable Law;
(m) take or omit to take any action that would result in the representations and warranties hereunder being rendered untrue in any material respect; or
or (n) agree to do any of the foregoing.
Appears in 1 contract
Covenants Relating to Conduct of Business Pending the Merger. 6.1 Section 5.1 Conduct of Business by the Company Pending the MergerClosing. The Company covenants and agrees that, that between the date of this Agreement and the Effective TimeTime or the date, if any, on which this Agreement is terminated pursuant to Section 8.1, except (1) as set forth in Section 6.1 5.1 of the Company Disclosure Schedule or Letter, (2) as specifically contemplated by any other provision of this Agreement, and unless Parent shall otherwise agree (3) as required by Law or Order or (4) as consented to in writing by Parent (which agreement consent shall not be unreasonably withheld, delayed or conditioned), (1) the business of the Company (i) shall and any shall cause each Company Subsidiary to, conduct its business, in all material respects, in the ordinary course of its Subsidiaries shall be conducted only inbusiness consistent with past practice, and including, to the Company and any such Subsidiaries shall not take any action except inextent consistent therewith, the Ordinary Course of Business, (2) the Company shall use all using commercially reasonable efforts to preserve substantially intact its and their present business organization, to keep available the services of the current officers, employees and consultants of the Company and any of its Subsidiaries organizations and to preserve the current its and their present relationships of the Company and such Subsidiaries with customers, suppliers and other persons Persons with which the Company whom it and they have material business relations; provided, however, that no action that is specifically permitted by any of its Subsidiaries has significant business relations, clauses (3a) comply with all applicable Laws, through (4w) prepare and timely file all foreign, Federal, state and local Tax Returns as required by applicable Law, and make timely payment of all applicable Taxes when due, this Section 5.1 shall be deemed a breach of this clause (5) use reasonable efforts to obtain, prior to the Closing Date, all Required Company Consents, (6) take all actions to be in substantial compliance with all Company Permits, (7) make full and timely payment of all amounts required to be contributed under the terms of each Plan and applicable Law or required to be paid as expenses under any such Plani), and (8) the Company will ii) shall not, and will shall not permit any Company Subsidiary to:
(a) amend declare or otherwise change pay any dividends on or make any distribution with respect to its Articles outstanding shares of Incorporation capital stock (whether in cash, assets, shares or Bylawsother securities of the Company or any Company Subsidiary), except dividends and distributions by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary;
(b) issuesplit, sellcombine, pledgereduce or reclassify any of its capital stock, dispose of, grant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, except for any such transaction by a wholly owned Company Subsidiary that remains a wholly owned Company Subsidiary after consummation of such transaction; Table of Contents
(c) except as required by any Company Plan:
(i) terminate any shares of capital stock of the Company or any Subsidiary of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, its present executive officers or any other ownership interest employee whose base annual compensation exceeds $300,000, unless the termination is for cause, based on the Company’s reasonable determination of the individual’s material misconduct or poor performance;
(ii) grant or provide any retention or change in control bonus payments or benefits to any employee or consultant, except pursuant to those arrangements existing and disclosed as of the date of this Agreement;
(iii) grant or provide any severance payments or benefits to any employee or consultant, except pursuant to those arrangements existing and disclosed as of the date of this Agreement (including, without limitationwith respect to employees, severance pursuant to the Company’s generally applicable severance policies or practices as of the date of this Agreement);
(iv) increase the cash and equity compensation payable or to become payable to any phantom interestof its employees or individual independent contractors, other than (A) increases in annual base salaries or base wage rates and target incentive cash compensation in amounts that are in the ordinary course of business consistent with past practice (it being understood that payment of bonuses and other incentive compensation pursuant to the terms of arrangements or policies existing on the date of this Agreement shall not be considered to be an increase in compensation or benefits payable), but in no event shall the aggregate increase for all employees exceed four and one-half percent (4.5%), and (B) the grant of Company Equity Awards or other equity-based awards in amounts that are in the ordinary course of business consistent with past practice and provided that (i) no Company PSUs or Company Options shall be issued (provided, that the Company shall be permitted to grant Company PSUs in the ordinary course in connection with its annual focal process in May 2019 which provide that such awards shall be assumed by Parent and converted, in the event the Closing occurs, into a Parent One Yen Option based on target performance pursuant to Section 2.4(b)(ii)), (ii) the Company shall take all actions as may be required to ensure that any Company Equity Awards that are granted after the date of this Agreement will have a time-based vesting schedule of four (4) years, without acceleration of vesting due to the closing of the Company Transaction, (except for iii) the aggregate number of shares of Company Common Stock subject to Company Equity Awards so granted shall not exceed (A) 750,000 shares of Company Common Stock for purposes of new hire, promotion and similar awards and (B) if the Effective Time has not occurred prior to May 15, 2019, 2.6 million shares of Company Common Stock in connection with the Company’s annual focal process (which, in the case of Company PSUs, shall be calculated based on target performance), and (iv) this Section 5.1(c)(iv)(B) provides the exclusive means by which the Company Common Stockcan grant Company Equity Awards or any other equity-based awards between the date of this Agreement and the Effective Time or the date, if any, issuable under agreements currently on which this Agreement is terminated pursuant to Section 8.1; Table of Contents
(v) establish, adopt, enter into, materially amend or terminate any collective bargaining agreement;
(vi) establish, adopt, enter into, or materially amend any material Company Plan (or any arrangement that would be a material Company Plan if in effect on the date hereof and described in Section 4.4(a) of the Company Disclosure Schedulehereof), shares other than ordinary course annual renewals of capital stock pursuant or modifications to Company Plans currently in effect as of the date hereof and described in Section 4.21(a) of the Company Disclosure Schedule, and such shares of Company Common Stock as it otherwise deems appropriate, , or (ii) any of the Company’s or any Subsidiaries’ assets, except for sales in the Ordinary Course of Business and in a manner consistent with past practice;
(cvii) declare, set aside, make take any action to accelerate the vesting or pay payment date of any dividend Company Equity Awards or other distributionequity-based awards or accelerate any material payment or benefit, or the funding of any material payment or benefit, payable in cashor to become payable under a Company Plan; or
(viii) hire or retain any person for employment or to be a consultant with the Company or any Company Subsidiary at the level of vice president or above, stockprovided, property or otherwisethat, with respect written approval from Parent, not to be unreasonably withheld or delayed, the Company and the Company Subsidiaries may hire any person for employment (including by means of its capital stock;internal promotion) at the level of vice president or above to fill any currently existing vice president or higher position that is vacant as of the date of this Agreement or that becomes vacant after the date of this Agreement, and, notwithstanding anything to the contrary in this Section 5.1(c), provide such person with compensation and benefits and other terms for such position consistent with past practice.
(d) reclassify, combine, split, divide make any material change in its financial accounting policies or redeem, purchase procedures or otherwise acquire, directly or indirectly, any of its capital stockmethods of reporting income, deductions or other material items for financial accounting purposes, except as required by Law, GAAP or SEC policy;
(e) enter into an agreement providing for the acquisition, directly or indirectly (i) acquire (including, without limitation, including by merger, consolidation, or acquisition of stock or assetsassets or any other business combination) of any interest in any Person corporation, partnership, other business organization or any division thereof that would be material to the Company and the Company Subsidiaries, taken as a whole, except for transactions between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries;
(f) amend the Company Governing Documents or permit any Company Subsidiary to adopt any amendments to its governing documents;
(g) except as permitted by Section 5.1(c), issue, deliver, grant, sell, pledge, dispose of or encumber, or subject to any Lien (other than Permitted Liens) any shares in its capital stock or voting securities of the Company or any assetsCompany Subsidiary or any securities convertible into or exchangeable for any such shares or voting securities, or any rights, warrants or options to acquire any such shares in its capital stock or voting securities or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units, other than (i) issuances of Company Shares in respect of the acquisition exercise of assets purchase rights under the Company ESPP in accordance with Section 2.4(a), upon exercise of Company Options, or the Ordinary Course vesting and settlement of Business consistent Company RSUs and Company PSUs in accordance with past practicetheir respective terms and the terms of this Agreement; (ii) merge transactions between the Company and a wholly owned Company Subsidiary 37 Table of Contents or between wholly owned Company Subsidiaries; (iii) in connection with the conversion, settlement or repurchase of the Company Convertible Notes; and (iv) in connection with any Person determination, adjustment, cancellation, termination, exercise, settlement or computation in connection with the Company Warrants or the Company Convertible Note Hedge Obligations;
(h) directly or indirectly, purchase, redeem or otherwise acquire any shares in its capital or any rights, warrants or options to acquire any such shares in its capital, except for (i) acquisitions of Company Shares tendered by holders of Company Equity Awards in order to satisfy obligations to pay the exercise price and/or Tax withholding obligations with respect thereto, (ii) the acquisition by the Company of Company Equity Awards in connection with the forfeiture or cancellation of such awards and (iii) transactions between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries;
(i) redeem, repurchase, prepay (other than Merger Subprepayments of revolving loans), defease, incur, assume, endorse, guarantee or otherwise become liable for or modify in any material respects the terms of any Indebtedness for borrowed money or issue or sell any debt securities or calls, options, warrants or other rights to acquire any debt securities (directly, contingently or otherwise), except for (i) any Indebtedness among the Company and its wholly owned Company Subsidiaries or among wholly owned Company Subsidiaries, (ii) guarantees by the Company of Indebtedness of Company Subsidiaries or guarantees by Company Subsidiaries of Indebtedness of the Company or any Company Subsidiary, which Indebtedness is incurred in compliance with this clause (ii), (iii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, borrowings under the obligations of any Person, or make any loans or advances; Credit Agreement and (iv) enter into in connection with the refinancing of any Contract material to outstanding Indebtedness at or in anticipation of its maturity, (v) in connection with the businessconversion, results of operations settlement or financial condition repurchase of the Company other than in the Ordinary Course of BusinessConvertible Notes, consistent with past practice; (v) authorize any capital expenditure, other than capital expenditures set forth in Section 4.19(a)(ix) of the Company Disclosure Schedule; or (vi) enter into or amend any Contract with respect to any matter set forth in this subsection (e);
(i) increase the compensation payable or to become payable to any director, officer or other employee, or grant any bonus, to, or grant any severance or termination pay to, or enter into any employment or severance agreement connection with any directordetermination, officer adjustment, cancellation, termination, exercise, settlement or other employee of computation in connection with the Company Warrants or any Subsidiary or enter into or amend any collective bargaining agreement, or (ii) establish, adopt, enter into or amend any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation or other plan, trust or fund for the benefit of any director, officer or class of employees;
(g) settle or compromise any pending or threatened litigation which is material or which relates to the Transactions;
(h) grant or convey to any Person any rights, including, but not limited to, by way of sale, license or sub-license, in any of the Company Intellectual Property;
Convertible Note Hedge Obligations and (ivii) make any Tax election, change its method of Tax accounting or settle any claim relating other Indebtedness in an amount not to Taxesexceed $10,000,000 in aggregate principal amount;
(j) make any loans, advances or capital contributions, except for (i) loans or advances to employees or independent contractors for indemnification, attorneys’ fees, travel and other business expenses in the ordinary course of business consistent with past practice, (ii) loans or capital contributions among the Company and its wholly owned Company Subsidiaries or among the Company’s wholly owned Company Subsidiaries and (iii) extended payment terms for customers in the ordinary course of business;
(k) sell, lease, license, transfer, exchange, swap or otherwise dispose of, or subject to any Lien (other than Permitted Liens), any of its properties or assets, except for (i) sales of inventory or Company Products, or dispositions of obsolete or worthless equipment, in the ordinary course of business, (ii) non-exclusive licenses of Intellectual Property in the ordinary course of business, (iii) transactions among the Company and its wholly owned Company Subsidiaries or among wholly owned Company Subsidiaries and (iv) transactions with respect to assets (other than any corporation, partnership other business organization or any division thereof or any other business) that, in the aggregate, are not material to the Company and the Company Subsidiaries, taken as a whole; Table of Contents
(l) settle, pay, discharge or satisfy any material Actions other than (i) the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities reflected or reserved against in the Most Recent Company Balance Sheet, or (ii) those that do not (A) impose any material injunctive relief on the Company or any Company Subsidiary and (B) involve the payment of money greater than the applicable amount set forth on Section 5.1(l) of the Company Disclosure Letter in excess of existing insurance coverage;
(m) commence any Actions seeking monetary damages in excess of $5,000,000 in the aggregate against any Person other than (i) for the routine collection of accounts receivable, (ii) in such cases where it in good faith determines that failure to commence suit could result in the impairment of a valuable aspect of its business, or (iii) for claims to enforce any rights under this Agreement, or otherwise in connection with the Transactions; provided, however, that for purposes of this Section 5.1(m) the filing of any counterclaim in an Action either in existence as of the date of this Agreement or brought thereafter by any Person will not be deemed to be a commencement of an Action;
(n) make (except for elections made in the ordinary course of business consistent with past practice) or change any material Tax election; change any Tax accounting period with respect to a material Tax or material method of Tax accounting; file any material amended Tax Return; settle or compromise any audit or proceeding relating to a material Tax or a material amount of Taxes; except in the ordinary course of business consistent with past practice agree to an extension or waiver of the statute of limitations with respect to a material amount of Taxes; enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local, or non-U.S. Law) with respect to any material Tax or surrender any right to claim a material Tax refund;
(o) except in the ordinary course of business, make any new capital expenditure or expenditures in excess of the capital expenditure amount set forth on Section 5.1(o) of the Company Disclosure Letter, or commit to do so;
(p) except in the ordinary course of business and unless otherwise prohibited by any other subclause of this Section 5.1(p), (i) enter into any Contract that would have been a Company Material Contract had it been entered into prior to the date hereof, or (ii) amend, modify or waive, in any material respect, or terminate (except for termination upon the expiration thereof in accordance with its terms) any Company Material Contract or Contract that would have been a Company Material Contract had it been entered into prior to the date hereof (for purposes of this Section 5.1(p), “Company Material Contracts” shall include purchase order(s) providing for payments to, or receipts by, the Company or any Company Subsidiary in excess of $10 million on an aggregate basis);
(q) enter into any Contract that limits or purports to limit the ability of the Company or any Company Subsidiary, or, upon the consummation of the Merger, Parent or any Parent Subsidiary, to compete with any Person, in any line of business or sell, supply or distribute any product or service, in each case, in any geographic area or during any period of time (in each case, excluding Contracts with respect to customized ASIC products); Table of Contents (r) enter into any Contract that contains any provision that requires the purchase of all or a given portion of the Company’s or any of its Subsidiaries accounting methods Company Subsidiary’s requirements for products or in the manner of keeping each of their respective books and records services from a given third party, or any change in any of their respective current practices with respect to inventoryother similar provision, sales, receivables, payables or accrued expensesexcluding Contracts where such requirements are shorter than three years;
(k) file or cause to be filed any registration statements under the Securities Act or Exchange Act relating to any of its capital stock or other securities;
(l) take any action or omit to do any act within its reasonable control which action or omission is reasonably likely to result in any of the conditions to the Merger not being satisfied, except as may be required by applicable Law;
(m) take or omit to take any action that would result in the representations and warranties hereunder being rendered untrue in any material respect; or
(n) agree to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement
Covenants Relating to Conduct of Business Pending the Merger. 6.1 Section 5.1. Conduct of Business by the Company Pending the MergerClosing. The Company covenants and agrees that, that between the date hereof and the earlier of the Effective Time or the date, if any, on which this Agreement and the Effective Timeis validly terminated pursuant to Section 8.1, except as set forth in Section 6.1 5.1 of the Company Disclosure Schedule Letter, as specifically permitted or as contemplated required by any other provision of this Agreement, and unless Parent shall otherwise agree as required by applicable Law or as consented to in writing by Parent (which agreement consent shall not be unreasonably withheld, conditioned or delayed), (1) the business of the Company (a) shall, and shall cause each Company Subsidiary to, use reasonable best efforts to conduct its business in all material respects in the ordinary course of business, preserve intact its and their present business organizations, goodwill and ongoing businesses and preserve its and their relationships with material customers, suppliers, vendors, licensors and licensees (provided, that any of its Subsidiaries shall be conducted only action or inaction addressed in, and the Company and any such Subsidiaries permitted by, Section 5.1(b), shall not take any action except in, the Ordinary Course constitute a breach of Business, (2) the Company shall use all reasonable efforts to preserve substantially intact its business organization, to keep available the services of the current officers, employees and consultants of the Company and any of its Subsidiaries and to preserve the current relationships of the Company and such Subsidiaries with customers, suppliers and other persons with which the Company and any of its Subsidiaries has significant business relations, (3) comply with all applicable Laws, (4) prepare and timely file all foreign, Federal, state and local Tax Returns as required by applicable Law, and make timely payment of all applicable Taxes when due, (5) use reasonable efforts to obtain, prior to the Closing Date, all Required Company Consents, (6) take all actions to be in substantial compliance with all Company Permits, (7) make full and timely payment of all amounts required to be contributed under the terms of each Plan and applicable Law or required to be paid as expenses under any such Plan, this Section 5.1(a)); and (8) the Company will b) shall not, and will shall cause each Company Subsidiary not permit any Subsidiary to, directly or indirectly:
(ai) amend amend, modify, waive, rescind, change or otherwise change its Articles of Incorporation or Bylaws;
(b) issue, sell, pledge, dispose of, grant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, restate (i) any shares of capital stock of the Company or any Subsidiary of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company (except for shares of the Company Common Stock, if any, issuable under agreements currently in effect on the date hereof and described in Section 4.4(a) of the Company Disclosure Schedule), shares of capital stock pursuant to Plans currently in effect as of the date hereof and described in Section 4.21(a) of the Company Disclosure Schedule, and such shares of Company Common Stock as it otherwise deems appropriate, , Company’s or (ii) any Company Subsidiary’s certificate of the Company’s incorporation, bylaws or any Subsidiaries’ assetsequivalent organizational documents, except for sales in the Ordinary Course case of Business and this clause (ii), in a manner consistent with past practicethat would reasonably be expected to be material to the Company or any Company Subsidiary, respectively;
(cii) authorize, declare, set aside, make or pay any dividend dividends on or make any distribution with respect to its outstanding ordinary shares or other distribution, payable equity interests (whether in cash, stockassets, property shares or otherwiseother securities of the Company or any Company Subsidiary) (other than dividends or distributions made by any wholly owned Company Subsidiary to the Company or any wholly owned Company Subsidiary), or enter into any agreement and arrangement with respect to voting or registration, or file any registration statement (other than any Form S-8 or Form S-3) with the SEC with respect to any, of its ordinary shares or other equity interests or securities;
(iii) split, combine, subdivide, reduce or reclassify any of its capital stock;
(d) reclassifyordinary shares, combineother equity interests or securities convertible or exchangeable into, splitor exercisable for, divide any of its ordinary shares or other equity interests, or redeem, purchase or otherwise acquireacquire any of its ordinary shares, directly other equity interests or indirectlysecurities convertible or exchangeable into, or exercisable for, any of its capital stockordinary shares or other equity interests, or issue or authorize the issuance of any of its ordinary shares, other equity interests, securities convertible or exchangeable into, or exercisable for, any of its ordinary shares or other equity interests or any other securities in respect of, in lieu of or in substitution for, any of its ordinary shares or other equity interests or securities convertible or exchangeable into, or exercisable for, any of its ordinary shares or other equity interests, except for (A) the acceptance of Company Ordinary Shares as payment of the exercise price of Company Options or for withholding Taxes in respect of Company Equity Awards or (B) any such transaction involving only wholly owned Company Subsidiaries;
(eiv) (i) acquire (includingissue, without limitationdeliver, by mergergrant, consolidationsell, pledge, dispose of or encumber, or acquisition of stock authorize the issuance, delivery, grant, sale, pledge, disposition or assets) encumbrance of, any shares, voting securities or other equity interest in any Person the Company or any division thereof Company Subsidiary or any assetssecurities convertible into or exchangeable or exercisable for any such shares, voting securities or equity interest, or any rights, warrants or options to acquire any such shares, voting securities or equity interest or any “phantom” shares, “phantom” share rights, share appreciation rights or share based performance units, including without limitation any Company Equity Award under any existing Company Equity Plan (except as otherwise provided by the terms of the Company Equity Award), other than the acquisition (A) issuances of assets Company Ordinary Shares in the Ordinary Course respect of Business consistent any exercise, vesting or settlement, as applicable, of Company Equity Awards in accordance with past practice; (ii) merge with any Person (other than Merger Sub)their respective terms, (iiiB) incur any indebtedness withholding or sales of Company Ordinary Shares pursuant to the exercise of Company Options or pursuant to the settlement of Company Equity Awards in order to satisfy payment of the exercise price of Company Options or for borrowed money or issue any debt securities or assume, guarantee or endorsewithholding Taxes, or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans or advances; (ivC) enter into any Contract material to the business, results of operations or financial condition of transactions solely between the Company other than in the Ordinary Course of Business, consistent with past practice; (v) authorize any capital expenditure, other than capital expenditures set forth in Section 4.19(a)(ix) of the and a wholly owned Company Disclosure Schedule; Subsidiary or solely between wholly owned Company Subsidiaries or (viD) enter into or amend any Contract with respect as expressly permitted pursuant to any matter set forth in this subsection (eSection 5.1(b)(v);
(iv) except as required by any Company Benefit Plan as in existence as of the date hereof or any collective bargaining agreement or other agreement with a Union, (A) increase the compensation or benefits payable or to become payable to any directorcurrent or former directors, officer individual consultants who are natural persons or other employee, or grant any bonus, to, or grant any severance or termination pay to, or enter into any employment or severance agreement with any director, officer or other employee employees of the Company or any Subsidiary Company Subsidiary, other than increases in annual base compensation (whether salary, wage rates or fees) in the ordinary course of business consistent with past practice for individuals who are not Specified Employees, provided that the aggregate budgeted amount of such increases shall not increase by more than four percent (4%) of the aggregate budgeted amount of such compensation as in effect as of the date hereof with respect to such employees, (B) enter into or amend any collective bargaining agreementagreement or other contract with a Union, or recognize any Union or other employee representative group or labor organization as the representative of any of the employees of the Company or any of the Company Subsidiaries, (iiC) establish, adopt, enter into into, materially amend or amend terminate any bonusCompany Benefit Plan or any plan or arrangement which would be a Company Benefit Plan if in effect as of the date hereof (including any employment, profit sharingseverance, thriftincentive, compensationchange in control or retention arrangement), stock optionother than any such actions that are in the ordinary course of business consistent with past practice, restricted stockand, pensionwith respect to Company Benefit Plans providing health, retirementdental, deferred compensation vision or other planmedical benefits, would not increase costs to the Company or any of the Company Subsidiaries under such existing Company Benefit Plans by more than four percent (4%) of the aggregate costs of providing benefits under such Company Benefit Plans in effect as of the date hereof to the Company and the Company Subsidiaries (and, for the avoidance of doubt, excluding any increases in costs resulting from ordinary course market rate increase or healthcare cost trends in the applicable jurisdictions), (D) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding of any Company Equity Award or under any Company Benefit Plan, (E) terminate the employment of any Specified Employee, other than for cause, (F) hire any new employee who would be a Specified Employee, (G) provide any funding for any rabbi trust or fund for the benefit similar arrangement, or (H) expressly waive any confidentiality, non-compete, non-solicit or other material restrictive covenant agreement of any directorcurrent or former directors, officer individual consultants or class employees of employeesthe Company or any Company Subsidiary;
(gvi) acquire (including by merger, consolidation or acquisition of shares or assets or any other means) or authorize or enter into any Contracts providing for any acquisitions of, any equity interests in or assets, real property, personal property or equipment of any Person or any business or division thereof, or otherwise engage in any mergers, consolidations or business combinations, except for (A) transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries, (B) acquisitions of assets, personal property or equipment in the ordinary course of business or (C) acquisitions that are not in excess of $2,000,000 individually or $10,000,000 in the aggregate;
(vii) liquidate (completely or partially), dissolve, restructure, recapitalize or effect any other reorganization (excluding any restructuring, recapitalization or reorganization solely between or among any of the Company and/or the Company Subsidiaries), or adopt any plan or resolution providing for any of the foregoing, excluding the liquidation or dissolving of any inactive or de minimis Company Subsidiaries;
(viii) make any loans, advances or capital contributions to, or investments in, any other Person, except for (A) any such transactions solely among the Company and its wholly owned Company Subsidiaries or solely among the Company’s wholly owned Company Subsidiaries, (B) advances for reimbursable employee expenses in the ordinary course of business or (C) loans, advances, capital contributions or investments that are not in excess of $2,000,000 individually or $10,000,000 in the aggregate;
(ix) other than in accordance with Contracts in effect on the date hereof, sell, lease, assign, abandon, permit to lapse, transfer, exchange, swap or otherwise dispose of, or subject to any Lien (other than Permitted Liens), any of its properties, rights or assets (including shares in the capital of the Company or the Company Subsidiaries) having a value in excess of $2,000,000 individually or $10,000,000 in the aggregate to any Person (provided that such values shall not apply to assets constituting Intellectual Property, provided further that this Section 5.1(b)(ix) shall apply only to Intellectual Property that is material to the business of the Company and the Company Subsidiaries), except (A) dispositions of obsolete, expired or worthless equipment, properties, rights or assets in the ordinary course of business, (B) licenses of Company Intellectual Property entered into in the ordinary course of business consistent with past practice, (C) pursuant to transactions solely among the Company and its wholly owned Company Subsidiaries or solely among wholly owned Company Subsidiaries, (D) sales and transfers and other dispositions of products and services in the ordinary course of business, (E) Company Leases or subleases entered into in the ordinary course of business (provided, that this exception shall not apply to any Company Lease or sublease involving an annual payment of more than $5,000,000), including guarantees in connection with any Company Leases, and (F) dispositions of Company Registered Intellectual Property constituting applications in the ordinary course of prosecution;
(x) enter into any Contract that would, if entered into prior to the date hereof, be a Material Contract, or modify in a manner materially adverse to the Company, amend in a manner materially adverse to the Company or voluntarily terminate any Material Contract (or waive, release or assign any material rights or material claims thereunder), in each case, other than in connection with (A) any action expressly permitted another provision of this Section 5.1(b) or (B) any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local or non-U.S. Law) (which shall solely be governed by clause (xv));
(xi) except in accordance with the Company’s capital budget provided to Parent on Section 5.1(b) (xi) of the Company Disclosure Letter, make any capital expenditure or expenditures, enter into agreements or arrangements providing for capital expenditure or expenditures or otherwise commit to do so, except for variations of up to ten percent (10)% of such budget in the aggregate during any specified period;
(xii) commence (other than in the ordinary course of business), waive, release, assign, compromise or settle any claim, litigation, investigation or proceeding (for the avoidance of doubt, including with respect to matters in which the Company or any Company Subsidiary is a plaintiff, or in which any of their officers or directors in their capacities as such are parties), other than the compromise or settlement of any Tax audit, claim or other proceeding (which shall solely be governed by clause (xv)) or any claim, litigation or proceeding that is not brought by Governmental Entities and that: (A) is for an amount not to exceed, for any such compromise or settlement, $1,000,000, individually, or $5,000,000, in the aggregate (in either case, in excess of any amounts covered by insurance) and (B) does not impose any injunctive relief on the Company and the Company Subsidiaries and does not involve the admission of wrongdoing by the Company, any Company Subsidiary or any of their respective officers or directors;
(xiii) make any material change in financial accounting policies, practices, principles or procedures or any of its methods of reporting income, deductions or other material items for financial accounting purposes, except as required by GAAP or applicable Law;
(xiv) amend or modify in any material respect any Privacy Statement of the Company or any Company Subsidiary other than in the ordinary course of business consistent with past practice or as reasonably necessary to comply with an applicable Data Privacy Obligation;
(xv) (A) change or revoke any material Tax election or adopt or change any material Tax accounting period or material method of Tax accounting, in the case of this clause (A), other than in the ordinary course of business or in a manner consistent with past practice (provided that it is agreed and understood that an entity classification election pursuant to Treasury Regulation Section 301.7701-3 shall be treated as not being made in the ordinary course of business or in a manner consistent with past practice), (B) settle or compromise any pending material liability for Taxes or threatened litigation which is any Tax audit, claim or other proceeding relating to a material amount of Taxes for an amount materially in excess of the amount reserved for the Taxes subject to such proceeding on the financial statements of the Company, (C) enter into any “closing agreement” within the meaning of Section 7121 of the Code (or which relates any similar provision of state, local or non-U.S. Law) with respect to material Taxes, (D) amend any material Tax Returns (other than any amendments that would not reasonably be expected to result in a material increase to the Transactions;
Tax liability of the Company, the Company Subsidiaries or Parent or its affiliates) or file any material Tax Return that is materially inconsistent with past practice, if any, with respect to filing Tax Returns of the same type for a prior taxable period, (hE) grant surrender any right to claim a material refund of Taxes other than in the ordinary course of business, or convey (F) with respect to any Person any rightsCompany Subsidiary (I) that is treated as a foreign corporation for U.S. federal income Tax purposes and (II) equity interests (meeting the requirements of Section 1504(a)(2) of the Code) of which are owned, including, but not limited tofor U.S. federal income Tax purposes, by way one or more of sale, license or sub-license, in any of the Company Intellectual Property;
and the Company Subsidiaries that are part of an “Affiliated Group” within the meaning of Section 338(h)(5) of the Code (a “Section 338(g) Company Subsidiary”), cause (x) such Section 338(g) Company Subsidiary not to be a Section 338(g) Company Subsidiary or (y) any “United States person” within the meaning of Section 7701(a)(30) of the Code (excluding any shareholder of the Company) to own (within the meaning of Section 958(a) of the Code), or to be considered as owning by applying the rules of ownership of Section 958(b) of the Code, equity interests (or additional equity interests, as relevant) of such Section 338(g) Company Subsidiary (it being agreed and understood that none of clauses (i) make any Tax election, change its method of Tax accounting or settle any claim relating to Taxes;
(j) make any change in any of the Company’s or any of its Subsidiaries accounting methods or in the manner of keeping each of their respective books and records or any change in any of their respective current practices with respect to inventory, sales, receivables, payables or accrued expenses;
(k) file or cause to be filed any registration statements under the Securities Act or Exchange Act relating to any of its capital stock or other securities;
(l) take any action or omit to do any act within its reasonable control which action or omission is reasonably likely to result in any of the conditions to the Merger not being satisfied, except as may be required by applicable Law;
(m) take or omit to take any action that would result in the representations and warranties hereunder being rendered untrue in any material respect; or
(n) agree to do any of the foregoing.through
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Sources: Merger Agreement