Interim Operations. (a) From and after the execution and delivery of this Agreement until the earlier of the Effective Time and the termination of this Agreement and abandonment of the transactions contemplated by this Agreement pursuant to Article IX, except (i) as otherwise required, contemplated or permitted by this Agreement or as required by a Governmental Entity or applicable Law, (ii) as set forth in Section 7.1(a) of the Company Disclosure Schedule or (iii) as Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), the Company (A) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to conduct their respective businesses in the Ordinary Course of Business in all material respects, (B) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to (x) maintain all existing relationships and goodwill with key customers, suppliers and other persons having material business relationships with the Company and its Subsidiaries and (y) keep available the services of the officers and key employees of the Company and its Subsidiaries, and (C) without limiting the generality of the foregoing, shall not, and shall cause its Subsidiaries not to: (i) adopt or propose any change in its Organizational Documents; (ii) merge or consolidate with any other Person, except for any such transactions solely among Wholly Owned Subsidiaries of the Company, (iii) adopt or enter into a plan of restructuring, reorganizing, dissolving, recapitalizing, complete or partial liquidation or similar transaction; (iv) enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses; (v) acquire or agree to acquire by merger, consolidation, acquisition of stock, equity or assets or otherwise, any business, Person, division, properties or assets from any other Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price not in excess of $1 million in any individual transaction or $2 million in the aggregate; (vi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate; (vii) issue, deliver, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber or otherwise enter into any Contract or understanding with respect to the voting of or transfer any shares of capital stock of the Company or capital stock or other equity or equity-based interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than (A) the delivery of any Common Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated on the Preferred Shares) in accordance with the terms of the Preferred Shares or (2) the conversion of the Company Notes in accordance with the Indenture and the exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations (B) the issuance of Preferred Shares in connection with the payment of dividends on the Preferred Shares in accordance with the terms of the Preferred Shares or (B) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (1) by a Wholly Owned Subsidiary of the Company to the Company or another Wholly Owned Subsidiary of the Company, (2) in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans in effect as of the Capitalization Time or (3) pursuant to the ESPP in accordance with its terms and subject to Section 4.3(g)); (viii) make any loans, advances, guarantees or capital contributions to or investments in any Person in excess of $200,000 in the aggregate (other than between the Company and any of its Wholly Owned Subsidiaries in the Ordinary Course of Business); (ix) declare, set aside, establish a record date for accrue, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise with respect to any of its capital stock or other equity interests (and for the avoidance of doubt, excluding the Company Notes) of the Company or its Subsidiaries, except for (A) dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company or (B) dividends payable to the holders of Preferred Shares, payable in cash or Preferred Shares, in accordance with the terms of the Preferred Shares; (x) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire (or offer to do any of the foregoing), directly or indirectly, any of its capital stock, other equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests, other than (A) the withholding of Common Shares to satisfy the payment of the exercise price on the exercise of a Company Option or withholding Tax obligations upon the exercise, vesting or settlement of Company Equity Awards outstanding as of the date of this Agreement, in each case, in accordance with their terms and, as applicable, the Stock Plans as in effect as of the Capitalization Time and (B) pursuant to an exercise of the Capped Call Transactions in accordance with their terms; (xi) incur or assume any indebtedness for borrowed money, guarantee any indebtedness for borrowed money or enter into a “keep well” or similar arrangement in respect of indebtedness for borrowed money except for any such indebtedness not to exceed $2.5 million individually or $5 million in the aggregate; (xii) incur, make or authorize any payment of, or accrual or commitment for, capital expenditures, or any obligations or liabilities in connection therewith except as contemplated by or reasonably related to, and which shall not exceed 107.5% of the aggregate amounts set forth in, the Company’s capital budget set forth in Section 7.1(a)(xii) of the Company Disclosure Schedule; (xiii) enter into, terminate or materially amend any Contract pursuant to which the Company or any of its Subsidiaries purchase from a third party service provider Software (“Third Party IT Contracts”) (other than in the Ordinary Course of Business with respect to any such Contract that involve aggregate annual payments of less than $300,000);
Appears in 3 contracts
Sources: Agreement and Plan of Merger (Benefitfocus, Inc.), Merger Agreement (Benefitfocus, Inc.), Merger Agreement (Benefitfocus, Inc.)
Interim Operations. (a) From The Company covenants and agrees as to itself and its Subsidiaries that, after the execution and delivery of this Agreement until the earlier of the Effective Time and the termination date of this Agreement and abandonment of prior to the transactions contemplated Effective Time (unless Parent shall otherwise approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), and except as otherwise expressly required by this Agreement pursuant Agreement) and except as required by applicable Laws, the Company shall, and shall cause its Subsidiaries to, conduct the business of it and its Subsidiaries in all material respects in the ordinary course of business consistent with past practice and it shall, and shall cause each of its Subsidiaries to, use its respective reasonable best efforts to Article IXpreserve their business organizations intact, maintain their Licenses and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date hereof until the Effective Time, except (iA) as otherwise required, contemplated or permitted expressly required by this Agreement Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), (C) as required by a Governmental Entity applicable Laws or applicable Law, (iiD) as set forth in Section 7.1(a) of the Company Disclosure Schedule or (iii) as Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned)Letter, the Company (A) shall, shall not do any of the following and shall cause its Subsidiaries to, use commercially reasonable efforts to conduct their respective businesses in the Ordinary Course each of Business in all material respects, (B) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to (x) maintain all existing relationships and goodwill with key customers, suppliers and other persons having material business relationships with the Company and its Subsidiaries and (y) keep available the services of the officers and key employees of the Company and its Subsidiaries, and (C) without limiting the generality of the foregoing, shall not, and shall cause its Subsidiaries not toto do any of the following:
(i) adopt or propose to its shareholders any change in its Organizational Documentsarticles of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions solely among Wholly Owned wholly owned Subsidiaries of the Company,Company or restructure, reorganize or completely or partially liquidate;
(iii) adopt or enter into a plan of restructuringacquire (by purchase, reorganizingmerger, dissolvingjoint venture, recapitalizingpartnership, complete or partial liquidation consolidation, dissolution, liquidation, tender offer, exchange offer, recapitalization, reorganization, share exchange, business combination or similar transaction;
(iv) enter into any agreements business or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(v) acquire or agree to acquire by merger, consolidation, acquisition amount of stock, equity or assets or otherwise, any business, Person, division, properties or assets outside of the ordinary course of business consistent with past practice from any other Person, other than purchases (A) acquisitions pursuant to Contracts in effect as of the date hereof and set forth in Section 7.1(a)(iii) of the Company Disclosure Letter and (B) any such acquisition (x) that, individually or acquisitions of assets in the Ordinary Course aggregate, would not reasonably be expected to prevent, delay, impede or otherwise adversely affect the consummation of Business with a fair market the Transactions and (y) pursuant to which the total value or purchase price paid or payable by the Company and its Subsidiaries would not in excess of exceed $1 million in any individual transaction 10,000,000 individually or $2 million in the aggregate;
(vi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(viiiv) issue, deliver, sell, pledge, dispose of, grant, transfer, leaseor subject to any Lien or authorize the issuance, licensedelivery, guaranteesale, Encumber pledge, disposition, grant, transfer or otherwise enter into the subjection to any Contract or understanding with respect to the voting of or transfer Lien any shares of capital stock of the Company or capital stock or other equity or equity-based interests of any of its SubsidiariesSubsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company), or securities convertible or exchangeable into or exercisable for any such shares of such capital stock or other equity interestsstock, or any options, warrants stock appreciation rights, warrants, restricted stock units, restricted stock, “phantom” stock, “phantom” stock rights, stock-based performance units or other rights of any kind to acquire any such shares of such capital stock, other equity interests stock or such convertible or exchangeable securities (other than (A) securities, except for the delivery issuance of any Common Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated on the Preferred Shares) in accordance with the terms of the Preferred Shares or (2) the conversion of the Company Notes in accordance with the Indenture and the exercise of Company Options or the Capped Call Transactions in accordance with the Capped Call Confirmations (B) the issuance of Preferred Shares in connection with the payment of dividends on the Preferred Shares in accordance with the terms of the Preferred Shares vesting or (B) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (1) by a Wholly Owned Subsidiary of the Company to the Company or another Wholly Owned Subsidiary of the Company, (2) in respect settlement of Company Equity Awards RSUs or Company Restricted Stock, in each case, outstanding as of the date of this Agreement in accordance with their terms andand the applicable Stock Plan as in effect on the date of this Agreement, or as applicablemay be granted in accordance with, or otherwise in compliance with, the Stock Plans in effect as terms of the Capitalization Time or (3) pursuant to the ESPP in accordance with its terms and subject to Section 4.3(g))this Agreement;
(viiiv) make any loansloans or advances to, advances, guarantees or any capital contributions to or investments in, any Person, other than (A) solely between or among the Company and/or one or more direct or indirect wholly owned Subsidiaries of the Company in any Person in excess of $200,000 immaterial amounts or made in the aggregate ordinary course of business consistent with past practice or (other than between B) advances in immaterial amounts made in the ordinary course of business consistent with past practice to employees of the Company and any its Subsidiaries for reimbursement of its Wholly Owned Subsidiaries routine travel or immaterial business expenses and in accordance with the Ordinary Course terms of Business)the applicable policy in effect on the date of this Agreement;
(ixvi) (A) declare, set aside, establish a record date for accrue, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiary of the Company to the Company or to any other direct or indirect wholly owned Subsidiary of the Company, in each case in the ordinary course of business consistent with past practice), provided, that the Company may make, declare and pay one regular quarterly cash dividend in each quarter of the year ending December 31, 2015 in an amount per share not to exceed $0.1033 per quarter and with a record date consistent with the record date for each quarterly period of the year ended December 31, 2014, if the Company provides Parent with written notice of each record date it will select at least twenty (20) business days prior to the declaration date in respect of such applicable record date, (B) purchase, redeem or otherwise acquire any shares of capital stock or other securities, or subdivide, reclassify, recapitalize, split, combine or exchange or enter into any similar transaction with respect to any of its capital stock or other equity interests (and for securities or issue or authorize or propose the avoidance issuance of doubt, excluding the Company Notes) of the Company or its Subsidiaries, except for (A) dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company or (B) dividends payable to the holders of Preferred Shares, payable securities in cash or Preferred Sharesrespect of, in accordance with the terms lieu of the Preferred Shares;
(x) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire (or offer to do any of the foregoing), directly or indirectly, any of its capital stock, other equity interests or securities convertible or exchangeable into or exercisable in substitution for any shares of its capital stock or other equity interestssecurities, except for (i) any issuance or authorization or proposal to issue or authorize any securities of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company in the ordinary course of business consistent with past practice, (ii) any split, combination or reclassification of capital stock of any wholly owned Subsidiary of the Company, or (iii) purchases, redemptions or other than acquisitions of capital stock or other securities (Ax) in respect of the exercise of Company Options or for withholding of Common Shares to satisfy the payment Tax withholding obligations in respect of the exercise price on the exercise of a Company Option or withholding Tax obligations upon the exercise, vesting or settlement of Company Equity Awards Options, Company RSUs and Company Restricted Stock, in each case, outstanding as of the date of this Agreement, in each case, Agreement in accordance with their terms and, as applicable, and the applicable Stock Plans Plan as in effect as on the date of this Agreement or (y) required by the Capitalization Time and terms of any plans, arrangements or Contracts existing on the date of this Agreement (B) pursuant to an exercise or entered into after the date of the Capped Call Transactions this Agreement in accordance with their termsthis Section 7.1) between the Company or any of its Subsidiaries and any director or employee of the Company or any of its Subsidiaries (to the extent complete and accurate copies of such plans, arrangements or Contracts have been delivered to Parent prior to the date of this Agreement), or (C) enter into any agreement with respect to the voting of its capital stock;
(xivii) incur or assume any indebtedness for borrowed money, guarantee any indebtedness for borrowed money or assume, guarantee, endorse or otherwise become responsible for any indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, enter into a any “keep well” or similar other Contract to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, other than solely between or among the Company and/or one or more direct or indirect wholly owned Subsidiaries of the Company in respect immaterial amounts or in the ordinary course of business consistent with past practice; provided that the Company and its Subsidiaries may incur indebtedness for borrowed money except for any such indebtedness not to exceed $2.5 million individually money, or $5 million issue or sell debt securities, in each case in the aggregateordinary course of business consistent with past practice, in an amount up to $25,000,000 at any given time; provided further, that all such borrowings pursuant to the preceding proviso shall be repaid within 30 days of the borrowing date (on a rolling basis with respect to each portion of such borrowings);
(xiiviii) incurexcept as set forth in the capital budgets set forth in Section 7.1(a)(viii) of the Company Disclosure Letter and consistent therewith, make or authorize any payment of, or accrual or commitment for, any capital expendituresexpenditure in excess of $10,000,000 in the aggregate;
(ix) make any changes with respect to accounting policies or procedures (other than those required by changes in GAAP or applicable Law or, if applicable with respect to foreign Subsidiaries of the Company, the applicable foreign generally accepted accounting principles);
(x) settle or compromise, or offer or propose to settle or compromise, any obligations threatened or liabilities pending actions, suits, claims, hearings, arbitrations, litigations, investigations or other proceedings before a Governmental Entity (each, a “Proceeding”) or other obligation or liability except in connection therewith except as contemplated by or reasonably related to, and which shall not exceed 107.5% of accordance with the aggregate amounts parameters set forth in, the Company’s capital budget set forth in on Section 7.1(a)(xii7.1(a)(x) of the Company Disclosure ScheduleLetter; provided that no such settlement or compromise, or offer in respect thereof, may involve any injunctive or other non-monetary relief which, in either case, imposes restrictions on the business operations of the Company and its Subsidiaries (or would impose restrictions on the business operations of the Parent and its Subsidiaries, including, for the avoidance of doubt, the Company and its Subsidiaries, after the Closing);
(xi) enter into any Contract that (A) would have been a Material Contract had it been entered into prior to the date of this Agreement (other than any Contract that would constitute a Material Contract solely pursuant to clauses (i), (iv) (only with respect to Material Contracts that are letters of credit or surety bonds in the ordinary course of business consistent with past practice, and as expressly permitted pursuant to Section 7.1(a)(vii)), (vii), subclause (C) of clause (viii) (with respect to wholly owned Subsidiaries only), clause (xii) (with respect to such Material Contracts for which the Company or its Subsidiaries are a beneficiary, to the extent otherwise compliant with Section 7.2) of Section 5.13(a) and teaming agreements entered into in the ordinary course of business consistent with past practice), in each case except, for the avoidance of doubt, Government Contracts and Direct Charge Contracts, or (B) contains a change of control or similar provision that would require a material payment to the other party or parties thereto in connection with the Transactions;
(xii) amend, modify or terminate any Material Contract (other than any Contract that would constitute a Material Contract solely pursuant to clauses (i), (iv) (only with respect to Material Contracts that are letters of credit or surety bonds in the ordinary course of business consistent with past practice, and as expressly permitted pursuant to Section 7.1(a)(vii)), (vii), subclause (C) of clause (viii) (with respect to wholly owned Subsidiaries only), clause (xii) (with respect to such Material Contracts for which the Company or its Subsidiaries are a beneficiary, to the extent otherwise compliant with Section 7.2) of Section 5.13(a) and teaming agreements entered into in the ordinary course of business consistent with past practice), or cancel, release, waive or modify any material debts or waive, release, cancel, transfer, assign or pledge any material claims or rights held by it thereunder, in each case except in the ordinary course of business consistent with past practice, and except for terminations caused by expirations of Material Contracts in accordance with their terms;
(xiii) enter intoexcept as required by Law, terminate (A) make, change, or materially amend rescind any Contract pursuant to which material Tax election, except for any Protective 2014 Distribution Election; (B) file any material amended Tax Return of the Company or any of its Subsidiaries purchase from Subsidiaries; (C) adopt or change any material method or period of Tax accounting; (D) settle or compromise any material claim relating to Taxes; (E) voluntarily surrender any claim for a third party service provider Software refund of material Taxes; (“Third Party IT Contracts”F) enter into any closing agreement relating to Taxes; (G) file any material Tax Return that is inconsistent with past practice; or (H) consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the Ordinary Course ordinary course of Business business consistent with respect past practice);
(xiv) take any action that would reasonably be expected (A) to cause any of the Applicable Distributions not to qualify as transactions under Section 368(a)(1)(D) of the Code or Section 355 of the Code or (B) to cause any stock or securities distributed in the Applicable Distributions not to be treated as “qualified property” for purposes of Section 361(c)(2) of the Code;
(xv) transfer, sell, lease, assign, license, mortgage, subject to Liens, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any or any part of its assets (including material Intellectual Property), licenses, operations, rights, product lines, businesses or interests therein, in each case except (x) in the ordinary course of business consistent with past practice and (y) for transactions involving a de minimis amount of assets in the aggregate;
(xvi) except to the extent required pursuant to the terms of any Benefit Plan or Material Contract (or any “rabbi trusts” relating to any such Contract Benefit Plans) in effect as of the date of this Agreement, or as otherwise required by applicable Law, (A) grant or provide any severance, termination, change in control or retention payments or benefits to any present or former director, officer, or employee of the Company or any of its Subsidiaries, (B) increase in any manner the compensation, bonus or pension, welfare, severance, termination pay, change in control, retention or other benefits to any current or former director, officer, or employee of the Company or any of its Subsidiaries, except for any increase to employees below Band A or Band B that involve aggregate annual payments are not material individually or in the aggregate, (C) pay any bonus to any current or former director, officer, or employee of less the Company or any of its Subsidiaries, (D) grant any equity, equity-based or long-term incentive awards under any Benefit Plan or any arrangement that would have been a Benefit Plan had it been in effect as of the date of this Agreement, (E) become a party to, establish, adopt, commence participation in, amend or terminate any material compensation, employment, equity compensation, severance, termination, change in control, pension, retirement, profit-sharing, deferred compensation, incentive, welfare benefit, or other employee benefit plan or agreement with or for the benefit of any current or former directors, officers, or employees of the Company or its Subsidiaries (or newly hired employees), other than $300,000);amendments that are necessary to avoid adverse tax consequences that do not increase materially costs to the Company, (F) amend or modify the terms of any outstanding equity-based or long-term incentive awards, (G) take any action to amend, waive or accelerate the vesting or payment of compensation or benefits under any Benefit Plan or award made thereunder, in each case to the extent such actions are material individually or in the aggregate, (H) take any action to accelerate the payment, or, in the case of severance or similar benefits or deferred compensation not provided under a plan that is qualified under Section 401(a) of the Code, to fund or in any other way secure the payment of such severance or similar benefits or deferred compensation under any Benefit Plan, (I) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or other agreement with a labor union, works council or similar organization, (J) change any
Appears in 2 contracts
Sources: Merger Agreement (Harris Corp /De/), Merger Agreement (Exelis Inc.)
Interim Operations. (a) From the date hereof and after the execution and delivery of this Agreement until the earlier earliest of the Effective Acceleration Time and the termination of this Agreement and abandonment of the transactions contemplated by this Agreement pursuant to Article IXAgreement, except (i) as otherwise required, contemplated or permitted by this Agreement or as required by a Governmental Entity or applicable Law, (iiw) as set forth in Section 7.1(a) of the Company Disclosure Schedule or Letter, (iiix) as Parent shall otherwise consent expressly contemplated or expressly permitted or required by this Agreement, (y) to the extent consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned)) or (z) as required by applicable Law, the Company (A) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts cause the business of it and its Subsidiaries to conduct their respective businesses be conducted in the Ordinary Course of Business in all material respectsordinary course, (B) shalland the Company shall use reasonable best efforts to, and shall cause each of its Subsidiaries to use reasonable best efforts to, use commercially reasonable efforts to (x) preserve its business organizations intact and maintain all existing relationships relations and goodwill with key Governmental Entities, customers, suppliers suppliers, employees and other persons having material business relationships with the Company and its Subsidiaries and (y) keep available the services of the officers and key employees of the Company and its Subsidiaries, and (C) without limiting associates. Notwithstanding the generality of the foregoing, and subject to the exceptions set forth in clauses (w), (x), (y) and (z) of the immediately preceding sentence, the Company, from the date of this Agreement through earlier of the Acceleration Time and the termination of this Agreement, shall not, and shall cause its Subsidiaries not to:
(i) adopt amend the certificate of incorporation, bylaws or propose comparable governing documents of the Company or any change in of its Organizational DocumentsSubsidiaries;
(ii) merge or consolidate with any other Person, except for any such transactions solely among Wholly Owned Subsidiaries of the Company,
(iii) adopt or enter into a plan of restructuring, reorganizing, dissolving, recapitalizing, complete or partial liquidation or similar transaction;
(iv) enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(v) acquire or agree to acquire by merger, consolidation, acquisition of stock, equity or assets or otherwise, any business, Person, division, properties or assets from any other Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price not in excess of $1 million in any individual transaction or $2 million in the aggregate;
(vi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(vii) issue, deliver, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber transfer or otherwise enter into encumber any Contract or understanding with respect to the voting of or transfer any shares of capital stock of the Company or capital stock or other equity or equity-based interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of capital stock, voting securities, partnership interest, membership interest or similar interest or any option, warrant, right or security convertible, exchangeable or exercisable therefor or other equity interests instrument or such convertible right the value of which is based on any of the foregoing of the Company or exchangeable securities any of its Subsidiaries (including any Company Equity Awards) (collectively, “Equity Interests”), other than (A) issuance of Shares pursuant to Company Stock Options outstanding on date hereof under the delivery of any Common Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated on the Preferred Shares) Company Plans in accordance with the terms of the Preferred Shares or (2) the conversion of the Company Notes in accordance with the Indenture and the exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations thereof, (B) the issuance issuances of Preferred Shares in connection with the payment matching of dividends on contributions under the Preferred Shares (1) Dynegy Midwest Generation, Inc. 401(k) Savings Plan for Employees Covered under a Collective Bargaining Agreement (As Amended and Restated Effective January 1, 2009); (2) Dynegy Midwest Generation, Inc. 401(k) Savings Plan (As Amended and Restated Effective January 1, 2009); (3) Dynegy Inc. 401(k) Savings Plan (As Amended and Restated Effective January 1, 2009); and (4) Dynegy Northeast Generation, Inc. Savings Incentive Plan (As Amended and Restated Effective January 1, 2009), in each case in accordance with the terms of the Preferred Shares or thereof, (BC) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (1) by a Wholly Owned Subsidiary of the Company Top-Up Option Shares pursuant to the Company or another Wholly Owned Subsidiary Top-Up Option and (D) issuances of the Company, (2) in respect of Company Equity Awards outstanding as of the date of this Agreement Interests in accordance with their terms and, as applicable, the Stock Plans in effect as of the Capitalization Time or (3) pursuant to the ESPP in accordance with its terms and subject to Section 4.3(g))Rights Agreement;
(viiiiii) make any loanssplit, advancescombine, guarantees subdivide or capital contributions to or investments in any Person in excess of $200,000 in the aggregate (other than between the Company and reclassify any of its Wholly Owned Subsidiaries in the Ordinary Course of Business)Equity Interests;
(ixiv) declare, set aside, establish a record date for accruefor, make or pay any dividend dividends on or make any other distribution, distributions (whether payable in cash, stock, property or a combination thereof) in respect of any of its Equity Interests, other than any dividends (A) from any wholly owned Subsidiary of the Company to the Company or to another such Subsidiary of the Company and (B) any dividends or distributions issued in accordance with the Rights Agreement;
(v) repurchase, redeem or otherwise acquire any of its Equity Interests, except for (A) mandatory sinking fund obligations existing on the date hereof and disclosed in Section 7.1(a)(v) of the Company Disclosure Letter, (B) redemptions, purchases or acquisitions pursuant to the exercise or settlement of Company Stock Options, employee severance, retention, termination, change of control and other contractual rights existing on the date of this Agreement on the terms in effect on the date of this Agreement, including with respect to Company Restricted Stock and (C) acquisition or exchange of Rights in accordance with Rights Agreement;
(vi) incur, issue, or modify in any material respect the terms of, any Indebtedness, or assume, prepay, defease, cancel, acquire, guarantee or endorse, or otherwise become responsible for (whether directly or indirectly, contingently or otherwise), the Indebtedness of any Person, except for (A) advances of credit incurred under the Company’s existing credit facilities in an aggregate amount not to exceed $2,500,000, (B) letters of credit issued under the Credit Agreement (x) in the ordinary course of business consistent with past practices for non-trading activities but in any event in an aggregate amount not to exceed $25,000,000 or (y) in connection with the sale or purchase of Derivative Products, physical electricity products, or fuel commodities for the Company’s assets in the ordinary course of business consistent with past practices, (C) letters of credit issued under the Credit Agreement to support positions in place as of the date hereof, or (D) Indebtedness owed by any wholly owned Subsidiary of the Company to the Company or any other wholly owned Subsidiary of the Company;
(vii) grant or incur any Lien, other than (A) Permitted Liens, (B) Liens for current Taxes, assessments or other charges of a Governmental Entity not yet due and payable or which is being contested in good faith through appropriate proceedings, (C) pledges or deposits by the Company or any of its capital stock Subsidiaries in the ordinary course of business under workmen’s compensation Laws, unemployment insurance Laws or similar legislation, (D) good faith deposits in connection with Contracts (other equity interests (and than for the avoidance payment of doubt, excluding Indebtedness) or leases to which the Company Notesor one of its Subsidiaries is a party, in each case, in the ordinary course of business consistent with past practice, (E) deposits to secure public or statutory obligations of the Company or one of its Subsidiaries, or to secure surety or appeal bonds to which such entity is a party, or deposits as security for contested Taxes, in each case incurred or made in the ordinary course of business consistent with past practice, (F) licenses granted to third parties in the ordinary course of business consistent with past practice by the Company or its Subsidiaries, except for (AG) dividends paid by any Wholly Owned Subsidiary to Liens required under the Company or to any other Wholly Owned Subsidiary outstanding Indebtedness of the Company and its Subsidiaries as of the date hereof, (H) Liens granted in connection with any Indebtedness permitted under Section 7.1(a)(vi), and (I) Liens granted or (B) dividends payable to the holders of Preferred Shares, payable incurred in cash or Preferred Shares, in accordance connection with the terms sale or purchase of Derivative Products, physical electricity products, or fuel commodities for the Preferred Shares;
(x) reclassify, split, combine, subdivide Company’s assets in the ordinary course of business consistent with past practices or redeem, purchase or otherwise acquire (or offer to do any of the foregoing), directly or indirectly, any of its capital stock, other equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests, other than (A) the withholding of Common Shares to satisfy the payment of the exercise price on the exercise of a Company Option or withholding Tax obligations upon the exercise, vesting or settlement of Company Equity Awards outstanding support positions in place as of the date of this Agreement, in each case, in accordance with their terms and, as applicable, the Stock Plans as in effect as of the Capitalization Time and (B) pursuant to an exercise of the Capped Call Transactions in accordance with their terms;
(xiviii) incur (A) except (1) to the extent required by applicable Law or assume (2) to the extent required by written agreements existing on the date of this Agreement, grant or announce any indebtedness for borrowed moneystock option, guarantee any indebtedness for borrowed money equity or enter into a “keep well” incentive awards or similar arrangement in respect of indebtedness for borrowed money except for any such indebtedness not to exceed $2.5 million individually or $5 million increase in the aggregate;
(xii) incursalaries, make bonuses or authorize any payment of, or accrual or commitment for, capital expenditures, or any obligations or liabilities in connection therewith except as contemplated other compensation and benefits payable by or reasonably related to, and which shall not exceed 107.5% of the aggregate amounts set forth in, the Company’s capital budget set forth in Section 7.1(a)(xii) of the Company Disclosure Schedule;
(xiii) enter into, terminate or materially amend any Contract pursuant to which the Company or any of its Subsidiaries purchase from to any of the employees, officers, directors or other independent contractors who provide services in an individual capacity of the Company or any of its Subsidiaries, (B) except to the extent required by written agreements existing on the date of this Agreement, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other employee benefit not required by any existing Company Plan to any employee, officer, director or other independent contractor who provide services in an individual capacity of the Company or any of its Subsidiaries, whether past or present, or take any action to accelerate vesting of any right to compensation or benefits, (C) except to the extent required by written agreements existing on the date of this Agreement, enter into or amend any Contracts of employment or any consulting, bonus, severance, retention, retirement or similar agreement, (D) 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, (E) change the accrual rate for the Company’s short-term incentive plans used to prepare the Company’s financial statements, (F) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries, or (G) except as required to ensure that any Company Plan is not then out of compliance with applicable Law, enter into or adopt any new or renew, amend or terminate any existing Company Plan or benefit arrangement if such adoption, renewal, amendment or termination would result in a third party service provider Software material cost to the Company or any of its Subsidiaries;
(“Third Party IT Contracts”ix) hire any employee or individual independent contractor with total expected annual base salary, including commissions, in excess of $100,000, other than to fill vacancies arising in the ordinary course of business at annual base salary levels not in excess of 120% of prevailing market rates, or, without consulting with Parent in advance, terminating any such employee or independent contractor;
(x) other than in the Ordinary Course ordinary course of Business business and consistent with past practice, (A) make or change any material Tax election, or change the Company’s or such Subsidiary of the Company’s method of accounting for Tax purposes, (B) file any amended Tax Return involving a material amount of additional Taxes, (C) settle or compromise any material Tax liability, or any claim for a material refund of Taxes or enter into any closing agreement with respect to any such material amount of Tax, or (D) agree to an extension or waiver of the statute of limitations applicable to the assessment or collection of any material Taxes except, in each case, as required by applicable Law;
(xi) except as required by GAAP, the SEC or applicable Law, change any material accounting policies or principles;
(xii) except in the ordinary course of business (A) enter into or assume any Contract that involve would have been a Company Material Contract had it been entered into prior to the date hereof, (B) terminate, materially amend or waive any material rights under any Company Material Contract or any Contract that would have been a Company Material Contract had it been entered into prior to the date hereof excluding any termination upon expiration of a term in accordance with the terms of such Company Material Contract or (C) or waive any material default under, or release, settle or compromise any material claim against the Company or liability or obligation owing to the Company under any Company Material Contract; provided in each case that the Company or any of its Subsidiaries shall be permitted to renew or replace any Company Material Contract with one or more Contracts on substantially similar terms;
(xiii) subject to Section 7.16, waive, release, settle or compromise any pending or threatened action, litigation, claim or arbitration or other proceedings before a Governmental Entity if such waiver, release, settlement or compromise by the Company or any of its Subsidiaries (A) is for an amount in excess of $2,500,000 individually or $5,000,000 in the aggregate, or (B) would entail the incurrence of (1) any obligation or liability of the Company in excess of such amount, including costs or revenue reductions or (2) obligations that would impose any material restrictions on the business or operations of the Company or its Subsidiaries;
(xiv) acquire (including by merger, consolidation, or acquisition of stock or assets) any interest in any Person or any division thereof or any assets thereof, excluding acquisitions of supplies, parts, fuel, materials and other inventory in the ordinary course of business consistent with past practice, or make any loan, advance or capital contribution to, or investment in, any Person or any division thereof, other than (A) any such acquisitions, loans, advances, contributions or investments that are for consideration not in excess of $1,000,000 individually or $5,000,000 for all such transactions by the Company and its Subsidiaries in the aggregate annual payments or (B) loans, advances or capital contributions to or among the Company and wholly owned Subsidiaries of less the Company;
(xv) sell, transfer, lease, license, assign, allow to lapse or otherwise dispose of (including, by merger, consolidation, or sale of stock or assets) any entity, business, assets, rights or properties of the Company or any of its Subsidiaries having a current value in excess of $1,000,000 individually, or $5,000,000 for all such transactions by the Company and its Subsidiaries in the aggregate other than (A) sales, transfers, leases, licenses assignments and other dispositions of inventory, electricity or other commodities or Derivative Products in the ordinary course of business consistent with past practice, (B) dispositions of obsolete or worthless assets or properties in the ordinary course of business consistent with past practice or (C) transactions solely among the Company and/or any of its Subsidiaries;
(xvi) authorize or make any capital expenditure, other than (A) any capital expenditures contemplated by the Company’s current business plan, (B) capital expenditures that are not, in the aggregate, in excess of $300,0005,000,000 above the capital expenditures provided for in such business plan or (C) capital expenditures required by Law or in response to a casualty loss or property damage;
(xvii) 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;
(xviii) merge or consolidate the Company or any of its Subsidiaries with and into any other Person;
(xix) enter into, with respect or related to Dynegy ▇▇▇▇ Landing, LLC, Dynegy Morro Bay, LLC, Dynegy Oakland, LLC and Casco Bay Energy Company, LLC, any Contracts with a term extending beyond December 31, 2013;
(xx) fail to maintain in full force and effect material insurance policies covering the Company and its Subsidiaries and their respective properties, assets and businesses in a form and amount consistent with past practice unless the Company determines in its reasonable commercial judgment that the form or amount of such insurance should be modified;
(xxi) permit any letters of credit to be issued other than letters of credit issued under the Credit Agreement by JPMorgan Chase Bank, N.A., Citibank, N.A, Credit Suisse, Cayman Islands Branch and ABN AMRO BANK N.V.;
(xxii) subject to Section 7.2, take any action which would reasonably be expected to result in any of the Tender Offer Conditions or the conditions to the Merger set forth in Article VIII not being satisfied or delaying the satisfaction of any such conditions, or that would reasonably be expected to prevent, delay, impair or interfere with the ability of Parent to consummate the Offer or of Parent, Merger Sub or the Company to consummate the Merger; or
(xxiii) commit, authorize or agree to take any of the foregoing actions or enter into any letter of intent (binding or non binding) or similar agreement or arrangement with respect to any of the foregoing actions.
(b) Neither Parent nor Merger Sub shall take or permit any of their Affiliates to take any action that is reasonably likely to prevent or delay the consummation of the Offer or the Merger. Prior to making any written communications to the officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are directly affected by the transactions contemplated by this Agreement, the Company shall, to the extent legally permissible, provide Parent with a copy of the intended communication, Parent shall review and comment on the communication promptly (but in any event, Parent shall provide any comments it may have within forty-eight (48) hours after such communication has been provided to Parent for review);, and the Company shall consider in good faith any comments reasonably proposed by Parent.
(c) Nothing contained in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the earlier of the Offer Closing and the Effective Time, and nothing contained in this
Appears in 2 contracts
Sources: Merger Agreement (Icahn Enterprises L.P.), Merger Agreement (Dynegy Inc.)
Interim Operations. (a) From and after the execution and delivery of this Agreement until the earlier of the Effective Time and the termination date of this Agreement and abandonment until the Effective Time or the earlier termination of the transactions contemplated by this Agreement pursuant to Article IXAgreement, except (iv) in connection with the Carveout Transaction, (w) as set forth in Section 6.1(a) of the Company Disclosure Letter, (x) as otherwise required, expressly contemplated or permitted by this Agreement or as required by a Governmental Entity or applicable Law(including Section 6.17), (iiy) as set forth in Section 7.1(a) of to the Company Disclosure Schedule or (iii) as Parent shall otherwise consent extent consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned)) or (z) as required by applicable Law, the Company (A) shall, and shall cause its Subsidiaries to, use commercially reasonable best efforts to conduct their respective businesses cause the business of it and its Subsidiaries to be conducted in the Ordinary Course ordinary course of Business in all material respects, (B) business and it shall, and shall cause its Subsidiaries to, use commercially their respective reasonable best efforts to (x) preserve their business organizations intact and maintain all existing relationships and goodwill relations with key Governmental Entities, customers, suppliers suppliers, distributors, employees and other persons having material business relationships with the Company and its Subsidiaries and (y) keep available the services of the officers and key employees of the Company and its Subsidiaries, and (C) without limiting associates. Notwithstanding the generality of the foregoing, and subject to the exceptions set forth in clauses (w), (x), (y) and (z) of the immediately preceding sentence, the Company shall not, not and shall cause not permit its Subsidiaries not to:
(i) adopt amend the certificate of incorporation, bylaws or propose comparable governing documents of the Company or any change in of its Organizational DocumentsSubsidiaries;
(ii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any property or assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $5 million in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement that have been made available to Parent prior to the date of this Agreement;
(iii) merge or consolidate with any other PersonPerson or restructure, except for reorganize or completely or partially liquidate the Company or any such transactions solely among Wholly Owned Subsidiaries of the Company,
(iii) adopt or enter into a plan of restructuring, reorganizing, dissolving, recapitalizing, complete or partial liquidation or similar transactionits Subsidiaries;
(iv) enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(v) acquire or agree to acquire by merger, consolidation, acquisition of stock, equity or assets or otherwise, any business, Person, division, properties or assets from any other Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price not in excess of $1 million in any individual transaction or $2 million in the aggregate;
(vi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(vii) issue, deliver, sell, pledge, dispose of, grant, transfer, leaseencumber or authorize the issuance, licensesale, guaranteepledge, Encumber disposition, grant, transfer or otherwise enter into any Contract or understanding with respect to the voting of or transfer encumbrance of, any shares of capital stock or securities convertible, exchangeable or exercisable therefor (collectively, “Equity Interests”) of the Company or capital stock or other equity or equity-based interests of any of its SubsidiariesSubsidiaries (including any Company Stock Options, securities convertible Company Restricted Stock, Stock Appreciation Rights, Performance Share Units, Phantom Stock Units, Phantom Stock Appreciation Units, Time Stock Appreciation Rights or exchangeable into Performance Stock Appreciation Rights), except issuances or exercisable for any such shares dispositions of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than (A) the delivery of any Common Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated pursuant to Company Stock Options, Stock Appreciation Rights or Performance Share Units outstanding on the Preferred Shares) in accordance with the terms date of the Preferred Shares or (2) the conversion of this Agreement under the Company Notes in accordance with the Indenture and the exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations Plans, (B) the issuance of Preferred Shares in connection with the payment matching of dividends on contributions under the Preferred Company’s 401(k) Plans, (C) Shares or options or rights to acquire Shares in connection with grants or awards of stock based compensation made in accordance with the terms of the Preferred Shares Section 6.1(a)(ix) hereof or (BD) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (1) by a Wholly Owned Subsidiary of the Company to the Company or another Wholly Owned Subsidiary of the Company, (2) in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans in effect as of the Capitalization Time or (3) Interests pursuant to the ESPP in accordance with its terms and subject to Section 4.3(g))Rights Agreement;
(viii) make any loans, advances, guarantees or capital contributions to or investments in any Person in excess of $200,000 in the aggregate (other than between the Company and any of its Wholly Owned Subsidiaries in the Ordinary Course of Business);
(ixv) declare, set aside, establish a record date for accruefor, make or pay any dividend dividends on or make any other distribution, distributions (whether payable in cash, stock, property or a combination thereof) in respect of any of the capital stock, other than any dividends from any wholly owned Subsidiary of the Company to the Company or to another wholly owned Subsidiary of the Company;
(vi) reclassify, split, combine, subdivide, repurchase, redeem or otherwise acquire, directly or indirectly, any of the Equity Interests, except for (A) redemptions, purchases or acquisitions pursuant to the exercise or settlement of Company Stock Options, Stock Appreciation Rights, Performance Share Units, employee severance, retention, termination, change of control and other contractual rights existing on the date of this Agreement on the terms in effect on the date of this Agreement, including with respect to Company Restricted Stock or (B) pursuant to the Rights Agreement;
(vii) except as contemplated by the terms of this Agreement, including pursuant to Section 6.18, (A) incur, issue or modify in any material respect the terms of any Indebtedness for borrowed money, or assume, prepay, (except as required pursuant to the terms of any Indebtedness currently outstanding), defease, cancel, acquire, guarantee or endorse, or otherwise become responsible for (whether directly or indirectly, contingently or otherwise), the indebtedness of any Person, (B) issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its capital stock Subsidiaries or other equity interests (and C) assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person for borrowed money (in each case, for the avoidance of doubt, excluding trade payables, capitalized lease obligations, or obligations issued or assumed as consideration for services or property, including inventory), except for (1) Indebtedness incurred under the Second Amended and Restated Loan and Guaranty Agreement, dated August 16, 2011, by and among Collective Brands Financial, Inc., the Guarantors signatory thereto, the Lenders signatory thereto, ▇▇▇▇▇ Fargo Retail Finance, LLC and Citigroup Global Markets, Inc. (the “Revolving Credit Facility”), (2) letters of credit issued pursuant to the Revolving Credit Facility or otherwise issued in the ordinary course of business, (3) interest rate and other hedging arrangements on customary commercial terms in the ordinary course of business and (4) Indebtedness owed by any controlled Subsidiary of the Company Notesto the Company; provided that the Company and its Subsidiaries shall not materially increase or decrease any intercompany payables or receivables except at or in connection with the Closing as contemplated by or required to accomplish the Carveout Transaction;
(viii) grant or incur any Lien material to the Company and its Subsidiaries, other than (A) Permitted Encumbrances; (B) pledges or deposits by the Company or any of its Subsidiaries in the ordinary course of business under workmen’s compensation Laws, unemployment insurance Laws or similar Laws; (C) good faith deposits in connection with Contracts (other than for the payment of Indebtedness) to which the Company or one of its Subsidiaries is a party, in each case, in the ordinary course of business; (D) Liens that may be incurred or granted pursuant to or in accordance with the terms of any Indebtedness in effect as of the date hereof, in connection with any Indebtedness permitted pursuant to Section 6.1(a)(vii) or (E) pursuant to licenses or sublicenses of Intellectual Property granted in the ordinary course of business;
(ix) except as required pursuant to agreements in effect prior to the date of this Agreement, or as otherwise required by applicable Law, (A) grant, pay or agree to pay any severance or termination payments or any benefits to any current or former director, officer or employee of the Company or any of its Subsidiaries, except for in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice, (B) increase the compensation or bonus (or grant, pay or agree to pay bonuses) to any current or former director, officer or employee of the Company or any of its Subsidiaries, except in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice, (C) increase pensions or welfare benefits of any current or former director, officer or employee of the Company or any of its Subsidiaries, except in the case of employees who are not executive officers of the Company, in the ordinary course of business, (D) establish, adopt, terminate or materially amend any Company Plan or materially amend the terms of any Equity Awards, or enter into any new, or amend any existing change in control arrangements or retention, retirement or similar agreements with any new, current or former director, officer or employee of the Company or any of its Subsidiaries, (E) accelerate the vesting or payment of or take action to fund, any compensation payable or benefits to become payable or provided to any current or former director, officer or employee of the Company or any of its Subsidiaries, except as otherwise provided in this Agreement, (F) enter into any new, or amend any existing, employment agreements with any new, current or former director, officer or employee of the Company or any of its Subsidiaries except in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice and with an annual base salary and incentive compensation opportunity not to exceed $175,000 or (G) grant or make any equity awards that may be settled in Shares, preferred shares, or any Equity Interest or any other securities of the Company or any of its Subsidiaries, or the value of which is linked directly or indirectly, in whole or in part, to the price or value of any Shares, preferred shares, Equity Interests or other Company securities or Subsidiary securities;
(x) other than in the ordinary course of business, (A) dividends paid make or change any material Tax election, (B) change the Company’s or any Subsidiary of the Company’s method of accounting for Tax purposes, (C) file any material amended Tax Return, (D) settle, concede, compromise or abandon any material Tax claim or assessment, (E) surrender any right to a refund of material Taxes or (F) consent to any extension or waiver of the limitation period applicable to any claim or assessment with respect to material Taxes;
(xi) except as required by GAAP, a Governmental Entity or applicable Law, make any Wholly Owned Subsidiary material changes to accounting policies or principles;
(xii) except in the ordinary course of business, make any loans, advances or capital contributions to, or investments in, any Person, other than (i) to or in the Company or to or in any other Wholly Owned direct or indirect controlled Subsidiary of the Company or (Bii) dividends payable to the holders of Preferred Shares, payable or in cash franchise partners or Preferred Shares, in accordance with the terms of the Preferred Shareswholesale customers;
(xxiii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire (or offer to do any of the foregoing), directly or indirectly, any of its capital stock, other equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests, other than (A) the withholding of Common Shares to satisfy the payment of the exercise price on the exercise of enter into any Contract that would have been a Company Option Material Contract pursuant to subsections (C), (D), (E), (F), (G), (J), (K) or withholding Tax obligations upon (M) of Section 5.1(q)(i) had it been entered into prior to the exercisedate of this Agreement, vesting (B) terminate, materially amend or settlement of waive any material rights under any Company Equity Awards outstanding as of Material Contract or any Contract that would have been a Company Material Contract had it been entered into prior to the date of this Agreement, in each casecase in a manner materially adverse to the Company and its Subsidiaries, excluding any termination upon expiration of a term in accordance with their the terms andof such Company Material Contract, as applicableor (C) except in the ordinary course of business, waive any material default under, or release, settle or compromise any material claim against the Stock Plans as Company or liability or obligation owing to the Company, under any Company Material Contract; provided, in effect as each case, that the Company and its Subsidiaries shall be permitted to renew or replace any Company Material Contract with one or more Contracts on substantially similar terms;
(xiv) transfer, sell, lease, license, assign, mortgage, pledge, divest or otherwise dispose of any entity or material assets, product lines, rights or businesses of the Capitalization Time Company or its Subsidiaries, including capital stock of any of its Subsidiaries, in each case having a current value of $2,000,000 individually or $5,000,000 for all such transactions in the aggregate, other than (A) inventory, supplies and other assets in the ordinary course of business, (B) pursuant to an exercise Contracts in effect prior to the date of this Agreement that have been made available to Parent prior to the Capped Call Transactions date of this Agreement or (C) pursuant to licenses or sublicenses of Intellectual Property granted in accordance with their termsthe ordinary course of business;
(xixv) incur or assume any indebtedness for borrowed money, guarantee any indebtedness for borrowed money or enter into a “keep well” or similar arrangement in respect of indebtedness for borrowed money except for any such indebtedness not the expenditures contemplated by the capital budgets set forth in Section 6.1(a)(xv) of the Company Disclosure Letter or for expenditures required by Law or in response to exceed $2.5 million individually casualty loss or $5 million in the aggregate;
(xii) incurproperty damage, make or authorize any payment of, or accrual or commitment for, capital expenditures, or any obligations or liabilities in connection therewith except as contemplated by or reasonably related to, and which shall not exceed 107.5% of the aggregate amounts set forth in, the Company’s capital budget set forth in Section 7.1(a)(xii) of the Company Disclosure Schedule;
(xiiixvi) enter into, terminate or materially amend any Contract other than pursuant to Section 6.16, waive, release, settle or compromise any pending or threatened litigation, arbitration, claim (excluding ordinary course disputes with vendors in which no litigation or arbitration commences) or action against the Company or any of its Subsidiaries purchase from a third party service provider Software (“Third Party IT Contracts”) (other than settlements or compromises of any litigation, arbitration, claim or action (A) where the amount paid in an individual settlement or compromise by the Company (and not including any amount paid by the Company’s insurance carriers or third parties) does not exceed $1,000,000 individually or $5,000,000 in the Ordinary Course aggregate or (B) that would impose any material restrictions on the business or operations of Business the Company or its Subsidiaries; provided that the foregoing clause (A) will not restrict the Company’s ability to settle any ordinary course claim involving a settlement amount not in excess of $100,000;
(xvii) 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;
(xviii) fail to maintain in full force and effect material insurance policies covering the Company and its Subsidiaries and their respective properties, assets and businesses in a form and amount consistent with past practice, unless the Company determines in its reasonable commercial judgment that the form or amount of such insurance should be modified; or
(xix) agree, authorize or commit to do any of the foregoing actions or enter into any letter of intent (binding or non-binding) or similar agreement or arrangement with respect to any such Contract of the foregoing actions.
(b) Neither Parent nor Merger Sub shall knowingly take or permit any of their Affiliates to take any action that involve aggregate annual payments could reasonably be expected to prevent or materially impede the consummation of less than $300,000);the Merger, the Carveout Transaction or the other transactions contemplated by this Agreement and the Carveout Transaction Agreement.
(c) Nothing contained in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time, and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Affiliates’ operations. Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
Appears in 2 contracts
Sources: Merger Agreement (Wolverine World Wide Inc /De/), Merger Agreement (Collective Brands, Inc.)
Interim Operations. (a) From and after the execution and delivery of this Agreement until the earlier of the Effective Time and the termination of this Agreement and abandonment of the transactions contemplated by this Agreement pursuant to Article IX, except (i) as otherwise required, contemplated or permitted by this Agreement or as required by a Governmental Entity or applicable Law, (ii) as set forth in Section 7.1(a) of the Company Disclosure Schedule or (iii) as Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), the Company (A) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to conduct their respective businesses in the Ordinary Course of Business in all material respects, (B) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to (x) maintain all existing relationships and goodwill with key customers, suppliers and other persons having material business relationships with the Company and its Subsidiaries and (y) keep available the services of the officers and key employees of the Company and its Subsidiaries, and (C) without limiting the generality of the foregoing, shall not, and shall cause its Subsidiaries not to:
(i) adopt or propose any change in its Organizational Documents;
(ii) merge or consolidate with any other Person, except for any such transactions solely among Wholly Owned Subsidiaries of the Company,
(iii) adopt or enter into a plan of restructuring, reorganizing, dissolving, recapitalizing, complete or partial liquidation or similar transaction;
(iv) enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(v) acquire or agree to acquire by merger, consolidation, acquisition of stock, equity or assets or otherwise, any business, Person, division, properties or assets from any other Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price not in excess of $1 million in any individual transaction or $2 million in the aggregate;
(vi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a -50- fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(vii) issue, deliver, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber or otherwise enter into any Contract or understanding with respect to the voting of or transfer any shares of capital stock of the Company or capital stock or other equity or equity-based interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than (A) the delivery of any Common Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated on the Preferred Shares) in accordance with the terms of the Preferred Shares or (2) the conversion of the Company Notes in accordance with the Indenture and the exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations (B) the issuance of Preferred Shares in connection with the payment of dividends on the Preferred Shares in accordance with the terms of the Preferred Shares or (B) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (1) by a Wholly Owned Subsidiary of the Company to the Company or another Wholly Owned Subsidiary of the Company, (2) in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans in effect as of the Capitalization Time or (3) pursuant to the ESPP in accordance with its terms and subject to Section 4.3(g));
(viii) make any loans, advances, guarantees or capital contributions to or investments in any Person in excess of $200,000 in the aggregate (other than between the Company and any of its Wholly Owned Subsidiaries in the Ordinary Course of Business);
(ix) declare, set aside, establish a record date for accrue, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise with respect to any of its capital stock or other equity interests (and for the avoidance of doubt, excluding the Company Notes) of the Company or its Subsidiaries, except for (A) dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company or (B) dividends payable to the holders of Preferred Shares, payable in cash or Preferred Shares, in accordance with the terms of the Preferred Shares;
(x) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire (or offer to do any of the foregoing), directly or indirectly, any of its capital stock, other equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests, other than (A) the withholding of Common Shares to satisfy the payment of the exercise price on the exercise of a Company Option or withholding Tax obligations upon the exercise, vesting or settlement of Company Equity Awards outstanding as of the date of this Agreement, in each case, in accordance with their terms and, as applicable, the Stock Plans as in effect as of the Capitalization Time and (B) pursuant to an exercise of the Capped Call Transactions in accordance with their terms;
(xi) incur or assume any indebtedness for borrowed money, guarantee any indebtedness for borrowed money or enter into a “keep well” or similar arrangement in respect of indebtedness for borrowed money except for any such indebtedness not to exceed $2.5 million individually or $5 million in the aggregate;
(xii) incur, make or authorize any payment of, or accrual or commitment for, capital expenditures, or any obligations or liabilities in connection therewith -51- except as contemplated by or reasonably related to, and which shall not exceed 107.5% of the aggregate amounts set forth in, the Company’s capital budget set forth in Section 7.1(a)(xii) of the Company Disclosure Schedule;
(xiii) enter into, terminate or materially amend any Contract pursuant to which the Company or any of its Subsidiaries purchase from a third party service provider Software (“Third Party IT Contracts”) (other than in the Ordinary Course of Business with respect to any such Contract that involve aggregate annual payments of less than $300,000);
Appears in 2 contracts
Sources: Merger Agreement (Voya Financial, Inc.), Merger Agreement (Voya Financial, Inc.)
Interim Operations. (a) From the date of this Agreement and after until the execution Effective Time or the earlier termination of this Agreement, except as (w) otherwise expressly contemplated by this Agreement, (x) required by applicable Laws (y) set forth in Section 6.1 of the Company Disclosure Letter or (z) consented to in writing by Parent (which consent will not be unreasonably withheld, conditioned or delayed), the Company will, and delivery will cause each of its Subsidiaries to, conduct its business in the ordinary course of business consistent with past practice and in compliance with all applicable Laws, and will, and will cause each of its Subsidiaries to, use its reasonable best efforts to preserve intact its present business organization, maintain in effect all of its Permits, keep available the services of its directors, officers and employees and maintain existing relations and goodwill with Governmental Entities, customers, distributors, lenders, partners, suppliers and others having material business associations with it or its Subsidiaries. Without limiting the generality of the foregoing and subject to the exceptions set forth in the foregoing clauses (w), (x), (y) and (z), from the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement and abandonment of the transactions contemplated by this Agreement pursuant to Article IX, except (i) as otherwise required, contemplated or permitted by this Agreement or as required by a Governmental Entity or applicable Law, (ii) as set forth in Section 7.1(a) of the Company Disclosure Schedule or (iii) as Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned)Time, the Company (A) shall, will not and shall cause will not permit its Subsidiaries to, use commercially reasonable efforts to conduct their respective businesses in the Ordinary Course of Business in all material respects, (B) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to (x) maintain all existing relationships and goodwill with key customers, suppliers and other persons having material business relationships with the Company and its Subsidiaries and (y) keep available the services do any of the officers and key employees of the Company and its Subsidiaries, and (C) without limiting the generality of the foregoing, shall not, and shall cause its Subsidiaries not tofollowing:
(i) adopt or propose any change in its Organizational Documentsarticles of incorporation or bylaws or such other similar applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions solely among Wholly Owned Subsidiaries of the Company,or restructure, reorganize or completely or partially liquidate;
(iii) adopt other than capital expenditures covered by clause (x) below, acquire assets (whether by merger, tender offer, consolidation, purchase of property or enter into otherwise) outside of the ordinary course of business from any other Person with a plan value or purchase price in the aggregate in excess of restructuring, reorganizing, dissolving, recapitalizing, complete $10,000,000 in any transaction or partial liquidation or similar transactionseries of related transactions;
(iv) enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(v) acquire or agree to acquire by merger, consolidation, acquisition of stock, equity or assets or otherwise, any business, Person, division, properties or assets from any other Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price not in excess of $1 million in any individual transaction or $2 million in the aggregate;
(vi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(vii) issue, deliver, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guaranteeguarantee or encumbrance of, Encumber or otherwise enter into any Contract or understanding with respect to the voting of or transfer any shares of capital stock of the Company or capital stock or other equity or equity-based interests of any of its SubsidiariesSubsidiaries including Shares and/or Class B Shares (other than the issuance, sale, pledge, disposition, grant, transfer, lease, license, guaranty or encumbrance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary) or securities convertible or exchangeable into or exercisable for any such shares of such capital stock or other equity interestsstock, or any options, warrants or other rights of any kind to acquire any such shares of such capital stock, other equity interests stock or such convertible or exchangeable securities (other than (A) the delivery of any Common Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated on the Preferred Shares) in accordance with the terms of the Preferred Shares or (2) the conversion of the Company Notes in accordance with the Indenture and the exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations (B) securities, except for the issuance of Preferred Shares in connection with the payment of dividends on the Preferred Shares in accordance with the terms of the Preferred Shares pursuant to awards or (B) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (1) by a Wholly Owned Subsidiary of the Company to the Company or another Wholly Owned Subsidiary of the Company, (2) in respect of Company Equity Awards rights outstanding as of the date of this Agreement in accordance with their the terms andof the Stock Plans, or as applicablemay be granted in accordance with, or otherwise in compliance with, the Stock Plans in effect as terms of the Capitalization Time or (3) pursuant to the ESPP in accordance with its terms and subject to Section 4.3(g))this Agreement;
(viiiv) create or incur any material Lien on any of the assets including any material Owned Intellectual Property, other than Permitted Liens;
(vi) make any loans, advances, guarantees advances or capital contributions to to, guarantees of or investments in any Person in excess of $200,000 in the aggregate (other than (1) between or among the Company and/or one or more direct or indirect wholly owned Subsidiary of the Company or (2) advances made in the ordinary course of business consistent with past practice to employees of the Company and any its Subsidiaries for reimbursement of its Wholly Owned Subsidiaries routine travel or business expenses in accordance with the Ordinary Course terms of Businessthe applicable policy in effect on the date of this Agreement);
(ixvii) declare, set aside, establish a record date for accrue, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise otherwise, with respect to any of its capital stock or other equity interests (and for the avoidance of doubt, excluding the Company Notes) of the Company or its Subsidiaries, except for (A) dividends paid by any Wholly Owned wholly owned Subsidiary to the Company or to any other Wholly Owned wholly owned Subsidiary or any dividends required to be paid under any credit facility filed as an exhibit in the Company Reports filed with the SEC since June 28, 2014); provided, that the Company may make, declare and pay one regular quarterly cash dividend in each quarter of the Company or fiscal year with a record date consistent with the record date for each quarterly period for the fiscal year ended June 27, 2015; provided, further, that such dividend per share shall not exceed (A) $0.39 per quarter for dividends with respect to fiscal year 2017 and (B) $0.41 per quarter for dividends payable with respect to the holders of Preferred Shares, payable in cash or Preferred Shares, in accordance with the terms of the Preferred Sharesfiscal year 2018;
(xviii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire (or offer to do any of the foregoing)acquire, directly or indirectly, any of its capital stock, other equity interests stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock of the Company or any of its Subsidiaries;
(ix) incur any Indebtedness, or issue or sell any debt securities or warrants or other equity interestsrights to acquire any debt security of the Company or any of its Subsidiaries, except for Indebtedness (A) that is to be paid off in full and without penalty at or prior to the Effective Time and (i) incurred in the ordinary course of business consistent with past practice pursuant to existing Contracts, or (ii) incurred to replace, renew, extend, refinance or refund any existing Indebtedness of the Company or any of its Subsidiaries, (B) incurred as intercompany Indebtedness solely among the Company and its direct or indirect wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries or (C) Indebtedness not to exceed $10,000,000 in aggregate principal amount outstanding at any time incurred by the Company or any of its Subsidiaries that is to be paid off in full and without penalty at or prior to the Effective Time other than in accordance with clauses (A) through (B);
(x) make or authorize any capital expenditures or series of related capital expenditures that are not in the ordinary course of business consistent with past practice;
(xi) (A) except as required by Law (including the legal obligation under the National Labor Relations Act or similar national and provincial Canadian laws to bargain in good faith to reach a labor contract with a labor organization that has been certified as the bargaining agent for the designated employee group) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend or modify in a material manner or terminate any Material Contract, or cancel, modify in a material manner or waive any debts, rights, or claims thereunder (other than as permitted pursuant to Section 6.1(a)(ix));
(xii) make any changes with respect to accounting policies or procedures, except as required by changes in applicable GAAP;
(xiii) (A) waive, release, settle or compromise any pending Action against the Company or any of its Subsidiaries other than settlements or compromises of any Action (1) in which the amount paid by or on behalf of the Company or any of its Subsidiaries in settlement or compromise does not exceed $1,000,000 individually or $3,000,000 in the aggregate and (2) that would not impose any material restrictions on the business or operations of the Company or its Subsidiaries or (B) commence, join or appeal in any Action, other than in the ordinary course of business;
(xiv) (A) make or change any material Tax election, (B) change the withholding Company’s or any of Common Shares its Subsidiaries’ method of accounting for Tax purposes, (C) file any material amended Tax Return, (D) settle, concede, compromise or abandon any material Tax claim or assessment, (E) surrender any right to satisfy the payment a refund of material Taxes or (F) consent to any extension or waiver of the exercise price on limitation period applicable to any claim or assessment with respect to material Taxes;
(xv) fail to use commercially reasonable efforts to maintain in full force and effect the exercise Insurance Policies covering the Company and its Subsidiaries and their respective properties, assets and businesses in a form and amount consistent with past practice;
(xvi) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material assets (including any material Owned Intellectual Property), licenses, operations, product lines, businesses or interests of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, in each case except (1) in the ordinary course of business consistent with past practice, (2) for sales of obsolete assets or (3) for transactions involving a de minimis amount of assets in the aggregate;
(xvii) except as required pursuant to existing written Benefit Plans in effect prior to the date of this Agreement or as otherwise required by applicable Law and except as contemplated by this Agreement, (A) pay, grant or provide any severance or termination payments or benefits to any director, officer, contractor or employee of the Company Option or withholding Tax obligations upon any of its Subsidiaries; (B) increase the exercisecompensation, bonus or pension, welfare, severance or other benefits of, pay any bonus, incentive or retention payments to, or make any equity awards to any director, officer, contractor or employee of the Company or any of its Subsidiaries, except for increases in base salary in the ordinary course of business consistent with past practice for employees who are not officers; (C) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards; (D) take any action to accelerate the vesting or settlement payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan; (E) change in any material respect any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit 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; (F) forgive any loans to directors, officers or employees of the Company Equity Awards outstanding or any of its Subsidiaries; or (G) hire or terminate without cause any executive officer or any employee with a target annual compensation opportunity in excess of $200,000, other than any such hire that is a replacement hire to fill a position in existence as of the date of this Agreement, in each case, in accordance with their terms and, as applicable, the Stock Plans as in effect as of the Capitalization Time and (B) pursuant to an exercise of the Capped Call Transactions in accordance with their terms;
(xixviii) incur other than in compliance with Section 6.2, take any action or assume omit to take any indebtedness for borrowed moneyaction that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xix) communicate with the directors, guarantee officers, employees or consultants of the Company regarding the compensation, benefits or other treatment they will receive in connection with the Merger or after the Closing, other than communications that are not inconsistent with (a) the terms of this Agreement or (b) previous public announcements or communications; or
(xx) agree, authorize or commit to do any indebtedness for borrowed money of the foregoing actions or enter into a “keep well” or similar arrangement in any Contracts with respect to any of indebtedness for borrowed money except for any such indebtedness not to exceed $2.5 million individually or $5 million in the aggregate;foregoing actions.
(xiib) incur, make Nothing contained in this Agreement is intended to give Parent or authorize any payment of, Merger Sub the right to control or accrual or commitment for, capital expenditures, or any obligations or liabilities in connection therewith except as contemplated by or reasonably related to, and which shall not exceed 107.5% of the aggregate amounts set forth in, direct the Company’s capital budget set forth in Section 7.1(a)(xii) or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, each of Parent and the Company Disclosure Schedule;will exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective operations.
(xiiic) enter intoFrom and after the date of this Agreement, terminate the Company will notify Parent promptly of any notice or materially amend any Contract pursuant to which other communication received by the Company or any of its Subsidiaries purchase from a third party service provider Software (“Third Party IT Contracts”) (the PBGC regarding any defined benefit pension plan of the Company or any of its Subsidiaries other than routine notices in the Ordinary Course ordinary course of Business business. In the event of any such notice or communication, the Company will consult with Parent with respect to any such Contract that involve aggregate annual payments communications with the PBGC or its representatives and will act in accordance with Section 6.1(c) of less than $300,000);the Company Disclosure Letter.
Appears in 2 contracts
Sources: Merger Agreement (G&k Services Inc), Merger Agreement (Cintas Corp)
Interim Operations. (a) From During the period commencing on the date hereof and after the execution and delivery of this Agreement running until the earlier of the Effective Time and or the termination of this Agreement and abandonment of in accordance with ARTICLE VIII (the transactions contemplated by this Agreement pursuant to Article IX“Pre-Closing Period”), except (i) as otherwise requiredexpressly contemplated, contemplated required or permitted by this Agreement or as required by a Governmental Entity or applicable LawAgreement, (ii) as set forth in Section 7.1(a) of the Company Disclosure Schedule or required by applicable Law, (iii) as Parent shall otherwise consent approved in writing by Parent (which consent shall such approval not to be unreasonably withheld, delayed or conditioned), or (iv) as set forth on Section 6.1 of the Company (A) shallDisclosure Schedule, the Company will, and shall will cause its Subsidiaries to, use commercially reasonable efforts to conduct its and their respective businesses in the Ordinary Course of Business in all material respects, (B) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to (xA) maintain conduct their businesses in the ordinary course of business consistent with past practice, and (B) preserve intact in all existing material respects their respective assets, properties, business organizations and relationships and goodwill with key partners, customers, suppliers clients, suppliers, distributors, licensors, licensees, employees, contractors and other persons having Persons with which it has material business relationships with dealings.
(b) During the Company and its Subsidiaries and Pre-Closing Period, except (y1) keep available the services of the officers and key employees as expressly contemplated, required or permitted by this Agreement, (2) as required by applicable Law, (3) as approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned), or (4) as set forth on Section 6.1 of the Company and its SubsidiariesDisclosure Schedule, and (C) without limiting the generality of the foregoing, shall Company will not, and shall will cause its Subsidiaries not to:
(i) (x) adopt or propose any change in its Organizational Documentsthe certificate of incorporation or bylaws of the Company or (y) adopt any change in the comparable organizational documents of any of the Company’s Subsidiaries;
(ii) (A) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for or (B) restructure, reorganize, recapitalize or completely or partially liquidate or dissolve or otherwise enter into any such transactions solely among Wholly Owned Subsidiaries agreement or arrangement imposing restrictions on the assets, operations or business of the Company,Company or any of its Subsidiaries, other than recapitalization, liquidation or dissolution of any wholly owned Subsidiary of the Company that are immaterial to the Company and its Subsidiaries, taken as a whole, and to the extent such actions are not expected to be adverse to Parent (provided that this Section 6.1(b)(ii) shall not prevent the structuring of a transaction specifically permitted by Section 6.1(b)(xiii) in the form of a merger or consolidation (provided, further, that (x) the use of such structure is consistent with past practice and (y) the Company is not merging or consolidating with any other Person));
(iii) adopt or enter into a plan of restructuring, reorganizing, dissolving, recapitalizing, complete or partial liquidation or similar transaction;
(iv) enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(v) acquire or agree to acquire by merger, consolidation, acquisition of stock, equity or assets or otherwise, any business, Person, division, properties or assets from any other Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price not in excess of $1 million in any individual transaction or $2 million in the aggregate;
(vi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(vii) issue, deliver, sell, pledge, encumber, dispose of or grant, or authorize the issuance, sale, pledge, encumbrance, disposition or grant of, grant, transfer, lease, license, guarantee, Encumber or otherwise enter into any Contract or understanding with respect to the voting of or transfer any shares of capital stock or other equity interests of the Company or capital stock or other equity or equity-based interests of any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any such shares of such capital stock or other equity interests, or any options, warrants warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or other rights of any kind to acquire any such shares of such capital stock, stock or other equity interests or such convertible or exchangeable securities or the value of which is otherwise derived from any shares of such capital stock or other equity interests or such convertible or exchangeable securities (collectively, “Company Securities”), in each case, other than (A) the delivery of any Common Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated on the Preferred Shares) in accordance with the terms of the Preferred Shares or (2) the conversion of such transaction solely among the Company Notes in accordance with and its wholly-owned Subsidiaries or solely among the Indenture and the exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations (B) the issuance of Preferred Shares in connection with the payment of dividends on the Preferred Shares in accordance with the terms of the Preferred Shares Company’s wholly-owned Subsidiaries, or (B) the any grant or issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities Common Stock (1) by a Wholly Owned Subsidiary in respect of the any exercise of Company to the Company or another Wholly Owned Subsidiary of the CompanyOptions, (2) in respect of any exercise of Company Equity Awards Warrants, or (3) pursuant to vesting or settlement of any Company Restricted Shares, in each case, solely to the extent such Company Options, Company Warrants or Company Restricted Shares, as applicable, are outstanding as of the date of this Agreement or granted after the date hereof in accordance with their this Agreement and solely in accordance with the terms andof the underlying agreement pursuant to which such Company Options, Company Warrants, or Company Restricted Shares, as applicable, were issued and, in the Stock Plans in effect as case of Company Equity Awards, the Capitalization Time or (3) pursuant to the ESPP in accordance with its terms and subject to Section 4.3(g))applicable Company Equity Plan;
(viiiiv) make any loans, advances, guarantees advances or capital contributions to or investments in any Person in excess of $200,000 in the aggregate (other than between to the Company or any of its wholly-owned Subsidiaries), other than (A) any delayed collection of trade payables in the ordinary course of business consistent with past practice and (B) any such transaction solely among the Company and any of its Wholly Owned wholly-owned Subsidiaries in or solely among the Ordinary Course of Business)Company’s wholly-owned Subsidiaries;
(ixv) declare, set aside, establish a record date for accrue, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise with respect to any of its capital stock Company Securities, except for dividends or other equity interests (and for the avoidance of doubt, excluding the Company Notes) distributions paid by any wholly-owned Subsidiary of the Company or its Subsidiaries, except for (A) dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned wholly-owned Subsidiary of the Company or (B) dividends payable to the holders of Preferred Shares, payable in cash or Preferred Shares, in accordance with the terms of the Preferred SharesCompany;
(xvi) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire (or offer to do any of the foregoing)acquire, directly or indirectly, any of its capital stock, other equity interests or securities convertible or exchangeable into or exercisable Company Securities except for any shares of its capital stock or other equity interests, other than (A) any such transaction solely among any of the withholding Company’s wholly-owned Subsidiaries, or (B) acquisitions of shares of Common Shares to satisfy the payment Stock in satisfaction of withholding obligations in respect of the settlement or exercise price on the exercise of a Company Option or withholding Tax obligations upon the exercise, vesting or settlement of Company Equity Awards that are outstanding as of the date of this Agreement, in each case, Agreement or granted after the date hereof in accordance with their terms andthis Agreement;
(vii) create, as applicableincur, the Stock Plans as in effect as assume or guarantee any Indebtedness or issue any debt securities or guarantees of the Capitalization Time same or any other Indebtedness, except for borrowings in the ordinary course of business for working capital purposes under the Existing Credit Facility; guarantees or credit support provided by the Company or any of its Subsidiaries of the obligations of the Company or any of its Subsidiaries in the ordinary course of business consistent with past practice to the extent such Indebtedness is in existence on the date of this Agreement or incurred in compliance with clause (A) of this Section 6.1(b)(vii), and any Indebtedness solely among the Company and its wholly-owned Subsidiaries or solely among the Company’s wholly-owned Subsidiaries;
(viii) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement, or (B) amend, modify or waive in any material respect in a manner adverse to the Company or any of its Subsidiaries or terminate any Material Contract (other than (x) amendments, modifications or waivers in the ordinary course of business consistent with past practice or (y) expirations of any such Contract in accordance with its terms);
(ix) make any material changes with respect to financial accounting policies or procedures, except as required by Law or by U.S. GAAP or official interpretations with respect thereto or by any Governmental Authority (including the Financial Accounting Standards Board or any similar organization);
(x) settle or compromise any Action, except for any settlement or comprise that (A) does not require payments from the Company or its Subsidiaries exceeding $50,000 individually (for any single claim or of related claims) or $100,000 in the aggregate (for all such settlements or compromises from and after the date hereof), after taking into account any insurance coverage amounts with respect thereto under the policies maintained by the Company or any of its Subsidiaries, and (B) pursuant to an exercise does not (x) impose any non-de minimis restriction on the business or operations of the Capped Call Transactions in accordance with Company or any of its Subsidiaries (or any restriction on Parent or any of its Subsidiaries other than the Company and its Subsidiaries after the Closing) or (y) include any non-de minimis non-monetary or injunctive relief, or the admission of any wrongdoing, by the Company or any of its Subsidiaries or any of their termsrespective employees, officers or directors;
(xi) incur assign, transfer, sell, lease, license, sublicense, encumber (other than Permitted Liens), abandon, permit to lapse, or assume otherwise surrender, relinquish or dispose of any indebtedness material assets or property (including any material Owned IP) except transactions solely among the Company and its wholly-owned Subsidiaries or solely among the Company’s wholly-owned Subsidiaries; provided, that, for borrowed moneythe avoidance of doubt, guarantee any indebtedness for borrowed money the loss of a customer or enter into a “keep well” or similar arrangement in respect of indebtedness for borrowed money except for any such indebtedness not to exceed $2.5 million individually or $5 million client in the aggregateordinary course of business shall not be covered by this Section 6.1(b)(xi);
(xii) incurexcept for such actions (i) required by Benefit Plans in existence as of the date hereof, make (ii) required by applicable laws, (iii) otherwise reasonably necessary to renew Benefits Plans in the ordinary course of business consistent with past practice (in a manner that does not materially increase benefits or authorize any payment ofresult in a material increase in administrative costs except in either case from changes in costs in the market), or accrual or commitment for, capital expenditures, or any obligations or liabilities in connection therewith except as (iv) otherwise expressly contemplated by the terms of this Agreement: (A) increase the compensation or reasonably related toother benefits payable or provided to any Service Provider; (B) increase or accelerate or commit to increase or accelerate the funding, and which shall not exceed 107.5% payment or vesting of the aggregate amounts set forth inany benefits provided under any Benefit Plan; (C) grant or promise to grant any cash or equity or equity-based incentive awards, the Company’s capital budget set forth in Section 7.1(a)(xiibonus, change of control, severance or retention award to any Service Provider, (D) of the Company Disclosure Schedule;
(xiii) establish, adopt, enter into, terminate or materially amend any Contract pursuant to which material Benefit Plan (including any Benefit Plans and arrangements described in Section 5.1(i)(iv)), or (E) terminate the employment of (other than for cause) or hire or promote any Service Provider that receives or would receive annual base compensation in excess of $150,000;
(xiii) acquire any business, assets or capital stock or other equity interests of any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation or otherwise), other than the acquisition of assets from vendors or suppliers of the Company or any of its Subsidiaries purchase from in the ordinary course of business;
(xiv) other than where such action is required by Law, (A) make (inconsistent with past practice), change or revoke any material Tax election; (B) change any annual Tax accounting period or material method of Tax accounting, (C) file any material amended Tax Return, (D) settle or compromise any material claim related to Taxes for an amount materially in excess of amounts reserved, (E) enter into any material closing agreement with respect to Taxes, (F) surrender any right to claim a third party service provider Software material Tax refund for an amount materially in excess of amounts reserved, or (“Third Party IT Contracts”G) file any material Tax Return (except consistent with past practice) (it being agreed and understood that, notwithstanding any other provision, including Section 6.1(b)(ix) (insofar as it relates to Taxes), no other subsection of this Section 6.1(b) shall apply to Tax compliance matters);
(xv) other than in accordance with the Company’s capital expenditure budget set forth in Section 6.1(b)(xv) of the Company Disclosure Schedule, incur or commit to any capital expenditure or expenditures, except capital expenditures of less than $50,000 individually or $100,000 in the aggregate;
(xvi) implement or announce any employee layoffs, plant closings, reductions in force, furloughs, temporary layoffs, material salary or wage reductions, or material work schedule changes, other than individual employment terminations in the ordinary course of business;
(xvii) become a party to, establish, adopt, materially amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization;
(xviii) apply for, seek or obtain any Company Permit that (A) would prevent, materially delay or materially impede the transactions contemplated hereby, or (B) would require Parent to make any filing or notice with or disclosure to any Governmental Authority;
(xix) terminate, cancel or allow to lapse any material insurance coverage maintained by the Company or any of its Subsidiaries without replacing such coverage with a comparable amount of insurance coverage, other than in the Ordinary Course ordinary course of Business business;
(xx) enter into a new line of business or abandon or discontinue any existing line of business; or
(xxi) agree, authorize or commit to do any of the foregoing.
(c) Nothing contained in this Agreement is intended to give Parent or Merger Sub or any of their Affiliates, directly or indirectly, the right to control or direct the operations of the Company and its Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with respect to any such Contract that involve aggregate annual payments the terms and conditions of less than $300,000);this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
Appears in 2 contracts
Sources: Merger Agreement (Streamline Health Solutions Inc.), Merger Agreement (Streamline Health Solutions Inc.)
Interim Operations. (a) From and after During the execution and delivery of this Agreement until the earlier of the Effective Time and the termination of this Agreement and abandonment of the transactions contemplated by this Agreement pursuant to Article IXPre-Closing Period, except (i) as otherwise required, contemplated or permitted by this Agreement or as required by a Governmental Entity or applicable LawAgreement, (ii) as set forth in Section 7.1(a5.2(a) of the Company Seller Disclosure Schedule or Schedule, (iii) as Parent Purchaser shall otherwise consent agree in writing in advance (which consent shall not be unreasonably withheld, delayed or conditioned), (iv) as required by any Contract or Permit which has been disclosed to Purchaser prior to the Company date of this Agreement, (Av) shallas required by applicable Law or GAAP or (vi) as required by the COVID-19 Measures, Seller Parent (x) shall conduct, and shall cause its Subsidiaries toto conduct, use the Business in the Ordinary Course, (y) to the extent consistent with clause (x), shall use, and cause its Affiliates to use, commercially reasonable efforts to conduct their respective businesses in maintain and preserve intact the Ordinary Course of Business in all current organization, material respectsassets, Permits (Bother than Shared Permits) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to (x) maintain all existing relationships and goodwill with of key Business Employees, customers, suppliers suppliers, regulators and other persons others having material business relationships with the Company and its Subsidiaries Business and (y) keep available the services of the officers and key employees of the Company and its Subsidiaries, and (Cz) without limiting the generality of the foregoing, shall not, and shall cause each of its Subsidiaries not to, in each case in relation to the conduct of the Business:
(i) adopt or propose any change in its Organizational Documents;
(ii) merge or consolidate with any other Person, except for any such transactions solely among Wholly Owned Subsidiaries of the Company,
(iii) adopt or enter into a plan of restructuring, reorganizing, dissolving, recapitalizing, complete or partial liquidation or similar transaction;
(iv) enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(v) acquire or agree to acquire by merger, consolidation, acquisition of stock, equity or assets or otherwise, any business, Person, division, properties or assets from any other Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price not in excess of $1 million in any individual transaction or $2 million in the aggregate;
(vi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(vii) issue, deliver, sell, pledge, dispose of, grant, transfer, encumber or authorize the issuance, sale, pledge, disposition, grant, transfer, encumbrance or exercise of any Sold Securities;
(ii) sell, lease, license, guaranteetransfer or dispose of any (A) Transferred Assets other than Business IP or inventory sold in the Ordinary Course; (B) material Business IP or, Encumber or otherwise enter into any Contract or understanding with respect to within the voting of or transfer any shares of capital stock scope of the Company Business, any licensed Business IP, other than non-exclusive licenses granted in the Ordinary Course or capital abandonment or lapse of Registered Business IP in the Ordinary Course; or (C) Owned Real Property or Leased Real Property;
(iii) acquire any material assets or material business of another Person (whether by merger, consolidation, acquisition of stock or other equity assets or equity-based interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (otherwise) other than (A) in the delivery of any Common Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated on the Preferred Shares) in accordance with the terms of the Preferred Shares or (2) the conversion of the Company Notes in accordance with the Indenture and the exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations (B) the issuance of Preferred Shares in connection with the payment of dividends on the Preferred Shares in accordance with the terms of the Preferred Shares Ordinary Course or (B) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (1) by a Wholly Owned Subsidiary of the Company pursuant to the Company or another Wholly Owned Subsidiary of the Company, (2) existing Contracts in respect of Company Equity Awards outstanding as of existence on the date of this Agreement and provided to Purchaser;
(iv) (A) amend or propose to amend the Organizational Documents of the Sold Company or (B) cause the Sold Company to declare, set aside or pay any dividend or distribution to any Person (except any such cash dividends or distributions in amounts reasonably necessary to facilitate the elimination of Intercompany Accounts as contemplated by this Agreement);
(v) grant or permit any Encumbrance (other than Permitted Encumbrances) on any Transferred Asset or incur any indebtedness for borrowed money outstanding or any guarantee for such indebtedness of another Person or issue or sell or have outstanding any debt securities or warrants or other rights to acquire any debt security of the Sold Company, in each case, that would be an Assumed Liability, except for, in each case, (A) Intercompany Accounts among the Seller and the Sold Company to be eliminated in accordance with their Section 5.20, (B) Indebtedness for borrowed money incurred in the Ordinary Course, (C) indebtedness in replacement of existing indebtedness for borrowed money on terms and, substantially consistent with or more beneficial than the indebtedness being replaced or (D) indebtedness that will be repaid or extinguished at or prior to the Closing;
(vi) except (A) as applicable, required by the Stock Plans in effect as terms of the Capitalization Time Benefit Plans currently in effect, or (B) as otherwise required by applicable Law, (y) materially increase the compensation or consulting fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any Business Employee, or (z) amend in any material respect any Assumed Plan, in each case, other than (1) changes to Benefit Plans that are not Assumed Plans that are not targeted at Business Employees, (2) changes in connection with any annual renewal or reenrollment of health and welfare plans and (3) pursuant annual salary (and corresponding bonus) increases not to exceed 3% in the ESPP aggregate for the U.S. (or the applicable country salary increase budget as determined by Seller Parent), individual market-competitive salary adjustments to retain critical talent, and job level promotions due to changes in accordance with its terms and subject individual job responsibilities;
(vii) other than as contemplated by Section 6.1(a), transfer any Business Employee into or out of the Sold Company, or transfer the employment of any employee to Section 4.3(g))a position in which such employee would no longer be a Business Employee;
(viii) make settle any loans, advances, guarantees or capital contributions to or investments in any Person in excess of $200,000 in material Proceeding principally affecting the aggregate (Business other than between if the Company Damages resulting from such waiver, release, assignment settlement or compromise involves solely the payment of cash and any of its Wholly Owned Subsidiaries in such amount is paid prior to the Ordinary Course of Business)Closing;
(ix) declare, set aside, establish a record date for accrue, make any change in any method of accounting or pay any dividend accounting practice or auditing practice applicable to the Business other distribution, payable in cash, stock, property or otherwise than changes (A) as may be initiated by Seller Parent with respect to any of its capital stock or other equity interests (and for the avoidance of doubt, excluding the Company Notes) of the Company or its Subsidiaries, except for (A) dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company business generally or (B) dividends payable as may be appropriate to the holders of Preferred Shares, payable in cash conform to GAAP or Preferred Shares, in accordance with the terms of the Preferred Sharesapplicable Law;
(x) reclassifyeither (i) accelerate collection of any account receivable relating to the Business in advance of its due date, splitor (ii) delay payment of any account payable relating to the Business beyond its due date, combinein each case, subdivide with the primary purpose of affecting the calculation of the Estimated Purchase Price to be set forth in the Estimated Closing Statement;
(xi) adopt any partial or redeemcomplete plan of liquidation, purchase dissolution or winding down with respect to the Sold Company or Seller;
(xii) except as required by applicable Law or as contemplated by this Agreement, make or change any material Tax election, adopt or change any method of Tax accounting, amend any Tax Returns or settle any Tax claim, in each case, to the extent such action would both (A) be outside of the Ordinary Course and (B) reasonably be expected to have the effect of increasing the Tax liability of Purchaser for any period ending after the Closing Date;
(xiii) in each case other than in the Ordinary Course, enter into, amend or modify in any material respect or terminate any Material Contract (or any Contract that would be a Material Contract if entered into prior to the date hereof) or Transferred Lease, or otherwise acquire waive, release or assign any material rights, claims or benefits thereto; or
(xiv) authorize or offer enter into any agreement or obligation to do undertake any of the foregoing).
(b) Nothing contained in this Agreement shall give either Party, directly or indirectly, any of its capital stock, the right to control or direct the other equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests, other than (A) Party’s operations prior to the withholding of Common Shares to satisfy the payment of the exercise price on the exercise of a Company Option or withholding Tax obligations upon the exercise, vesting or settlement of Company Equity Awards outstanding as of the date of this Agreement, in each case, in accordance with their terms and, as applicable, the Stock Plans as in effect as of the Capitalization Time and (B) pursuant to an exercise of the Capped Call Transactions in accordance with their terms;
(xi) incur or assume any indebtedness for borrowed money, guarantee any indebtedness for borrowed money or enter into a “keep well” or similar arrangement in respect of indebtedness for borrowed money except for any such indebtedness not to exceed $2.5 million individually or $5 million in the aggregate;
(xii) incur, make or authorize any payment of, or accrual or commitment for, capital expenditures, or any obligations or liabilities in connection therewith except as contemplated by or reasonably related to, and which shall not exceed 107.5% of the aggregate amounts set forth in, the Company’s capital budget set forth in Section 7.1(a)(xii) of the Company Disclosure Schedule;
(xiii) enter into, terminate or materially amend any Contract pursuant to which the Company or any of its Subsidiaries purchase from a third party service provider Software (“Third Party IT Contracts”) (other than in the Ordinary Course of Business with respect to any such Contract that involve aggregate annual payments of less than $300,000);Closing Date.
Appears in 1 contract
Interim Operations. (a) From The Company shall, and shall cause each of its Subsidiaries to, from and after the execution and delivery date of this Agreement until the earlier of the Effective Time and the termination of this Agreement and abandonment of the transactions contemplated by this Agreement pursuant to Article IX, except (i) as otherwise required, contemplated or permitted by this Agreement or as required by a Governmental Entity or applicable Law, (ii) as set forth in Section 7.1(a) of the Company Disclosure Schedule or (iii) as unless Parent shall otherwise consent approve in writing (which consent approval shall not be unreasonably withheld, delayed conditioned or conditioneddelayed) or as otherwise required by applicable Law), and except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.1(a) of the Company (A) shallDisclosure Letter, and shall cause conduct its Subsidiaries to, use commercially reasonable efforts to conduct their respective businesses business in the Ordinary Course ordinary course of Business business and in accordance with applicable Law in all material respects, (B) shallin each case consistent with past practice, and shall cause its Subsidiaries toas applicable, use commercially reasonable efforts to (x) maintain all existing relationships and goodwill the extent consistent with key customers, suppliers and other persons having material business relationships with the Company and its Subsidiaries and (y) keep available the services of the officers and key employees of the Company and its Subsidiaries, and (C) without limiting the generality of the foregoing, shall notuse and cause each of its Subsidiaries to use their respective reasonable best efforts to comply with and maintain its Material Contracts and maintain its and its Subsidiaries’ relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, lessors employees and agents, except as otherwise expressly contemplated by this Agreement. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as Parent may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), (B) as expressly contemplated by this Agreement, (C) as required by applicable Law or (D) as set forth in the corresponding subsection of Section 6.1(a) of the Company Disclosure Letter, the Company shall not and shall cause its Subsidiaries not to:
(i) adopt or propose any change in its Organizational Documents;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other PersonPerson or restructure, except for any such transactions solely among Wholly Owned Subsidiaries of the Company,reorganize, recapitalize or completely or partially liquidate or dissolve;
(iii) adopt acquire any Person or enter into any assets constituting a plan of restructuring, reorganizing, dissolving, recapitalizing, complete business unit or partial liquidation or similar transaction;
(iv) enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(v) acquire or agree to acquire by merger, consolidation, acquisition of stock, equity or assets or otherwise, any business, Person, division, properties whether directly or assets indirectly and by any manner, from any other Person, other than purchases or acquisitions otherwise make any investments, including as related to research and development, or capital expenditures, in each case with or for a total volume of assets in the Ordinary Course of Business with funds deployed, a fair market value or purchase price not in excess of $1 million 500,000 in any individual transaction or series of related transactions or $2 million 1,000,000 in the aggregate, other than (A) as set forth in the line items of the Company’s capital budget set forth in Section 6.1(a)(iii) of the Company Disclosure Letter, (B) in accordance with the Company’s clinical development plans previously delivered to Parent and as set forth in Section 6.1(a)(iii)(B) of the Company Disclosure Letter and (C) for acquisitions of inventory or other goods in the ordinary course of business and transactions among the Company and its Subsidiaries or among the Company’s Subsidiaries;
(viiv) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel cancel, abandon, license or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon upon, any properties or assets (excluding other than Intellectual Property Rights) material to , which are addressed in Section 6.1(a)(v)), product lines or businesses of the CompanyCompany or any of its Subsidiaries, including capital stock of any of its Subsidiaries, except in connection with (A) in the ordinary course of business (including sales of obsolete assets or Company Products) and (B) sales, leases, licenses or other dispositions of assets, in each case assets (not including services) with a fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or series of related transactions or $1 million 1,000,000 in the aggregateaggregate other than pursuant to the express terms of any Material Contracts in effect prior to the date of this Agreement, or entered into after the date of this Agreement in accordance with this Agreement;
(v) transfer, sell, lease, divest, assign, license, sublicense, grant a covenant not to sue with respect to, incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) on, or otherwise abandon, cancel, let lapse or dispose of, any Company Intellectual Property, except non-exclusive licenses granted in the ordinary course of business;
(vi) fail to make any filing, pay any fee, or take any other commercially reasonable action necessary to prosecute and maintain in full force and effect any material Registered Company IP for which the Company or any of its Subsidiaries controls prosecution and maintenance thereof;
(vii) issue, deliver, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber encumber, or otherwise enter into any Contract or understanding other agreement or arrangement with respect to the voting of or transfer of, any shares of capital stock of the Company (including, for the avoidance of doubt, Shares) or capital stock or other equity or equity-based interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interestsstock, or any options, warrants or other rights of any kind to acquire any such shares of capital stock, other equity interests stock or such convertible or exchangeable securities (other than (A) the delivery of any Common Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated proxies or voting agreements solicited by or on the Preferred Shares) in accordance with the terms of the Preferred Shares or (2) the conversion behalf of the Company Notes in accordance with order to obtain the Indenture and the exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations (B) the issuance of Preferred Shares in connection with the payment of dividends on the Preferred Shares in accordance with the terms of the Preferred Shares Requisite Company Vote or (B) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities stock (1) by a Wholly Owned Subsidiary of the Company to the Company or another Wholly Owned Subsidiary of the Company, Company or (2) in respect of Company Equity Awards outstanding as of the date of this Agreement or granted after the date of this Agreement not in violation of this Agreement in accordance with their terms and, as applicable, the Stock Plans Plan in effect as on the date of the Capitalization Time or (3) pursuant to the ESPP in accordance with its terms and subject to Section 4.3(g)this Agreement);
(viii) make any loans, advances, guarantees or capital contributions to or investments in any Person in excess of $200,000 in the aggregate (other than between to or from the Company and any of its Wholly Owned Subsidiaries Subsidiaries) outside the ordinary course of business in excess of $500,000 individually or $1,000,000 in the Ordinary Course of Business)aggregate;
(ix) declare, set aside, establish a record date for accrue, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise otherwise, with respect to any of its capital stock or other equity interests (and including with respect to the Company, for the avoidance of doubt, excluding the Company Notes) of the Company or its SubsidiariesShares), except for (A) dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company or (B) dividends payable to the holders of Preferred Shares, payable in cash or Preferred Shares, in accordance with the terms of the Preferred SharesCompany;
(x) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire (or offer to do any of the foregoing)redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, other equity interests stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests(including with respect to the Company, other than (A) for the withholding avoidance of Common Shares to satisfy the payment of the exercise price on the exercise of a Company Option or withholding Tax obligations upon the exercisedoubt, vesting or settlement of Company Equity Awards outstanding as of the date of this Agreement, in each case, in accordance with their terms and, as applicable, the Stock Plans as in effect as of the Capitalization Time and (B) pursuant to an exercise of the Capped Call Transactions in accordance with their termsShares);
(xi) assume, guarantee, issue or incur any Indebtedness (including the issuance of any debt securities, warrants or assume other rights to acquire any indebtedness debt security), or enter into any hedging agreements, except for borrowed money, guarantee any indebtedness (A) Indebtedness in replacement of existing Indebtedness for borrowed money on terms substantially consistent with or enter more favorable to the Company than the Indebtedness being replaced up to $500,000, (B) guarantees of Indebtedness of its Wholly Owned Subsidiaries otherwise incurred in compliance with this Section 6.1(a), (C) interest, exchange rate and commodity swaps, options, futures, forward contracts and similar derivatives or other hedging Contracts entered into a “keep well” in the ordinary course of business and not for speculative purposes, (D) Indebtedness incurred pursuant to letters of credit, performance bonds or other similar arrangement arrangements in respect the ordinary course of indebtedness for borrowed money except for any such indebtedness business or (E) Indebtedness not to exceed in excess of $2.5 million individually or $5 million 1,000,000 in the aggregate;
(xii) incur; provided, make that any Indebtedness assumed, guaranteed, issued or authorize any payment of, or accrual or commitment for, capital expenditures, incurred by the Company or any obligations of its Subsidiaries or liabilities in connection therewith except as contemplated by or reasonably related to, and which shall not exceed 107.5% of the aggregate amounts set forth in, the Company’s capital budget set forth in Section 7.1(a)(xii) of the Company Disclosure Schedule;
(xiii) enter into, terminate or materially amend any Contract pursuant to for which the Company or any of its Subsidiaries purchase from otherwise becomes liable under this Section 6.1(a)(xi) shall permit prepayment at any time without penalty of any kind;
(xii) enter into any Contract that would have been a third party service provider Software Material Contract had it been entered into prior to the date of this Agreement;
(“Third Party IT Contracts”xiii) other than with respect to Material Contracts related to Indebtedness, which shall be governed by Section 6.1(a)(xi), (A) terminate or fail to use commercially reasonable efforts to renew any Material Contract or (B) amend, modify, supplement or waive, or assign, convey, encumber or otherwise transfer rights or interests under any Material Contract, except for, in each case, (x) expiration or non-renewals of any such Contract, (y) ministerial actions or (z) grants of non-exclusive licenses under Company Intellectual Property, in each case of (x), (y) and (z), in the ordinary course of business;
(xiv) terminate, fail to renew, fail to maintain, fail to comply with or perform its obligations under, amend, modify, supplement, or waive, or assign, convey, encumber or otherwise transfer rights or interests under, any Contract set forth on Section 6.1(a)(xiv) of the Company Disclosure Letter;
(xv) cancel, modify or waive any debts or claims held by or owed to the Company or any of its Subsidiaries having in each case a value in excess of $500,000 individually or $1,000,000 in the aggregate;
(xvi) for the avoidance of doubt, except as expressly provided for by Section 6.12(a), adversely amend, modify, terminate, cancel or let lapse any material Insurance Policy, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by reputable insurance carriers are in full force and effect, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed Insurance Policies for substantially similar premiums, as applicable, as in effect as of the date of this Agreement;
(xvii) commence any Proceeding (other than counterclaims) for an amount in excess of $1,000,000 individually or $1,000,000 in the Ordinary Course aggregate during any calendar year and/or settle or compromise any Proceeding for an amount in excess of Business $1,000,000 individually or $1,000,000 in the aggregate during any calendar year, or which would reasonably be expected to (A) prevent, materially delay or materially impair the consummation of the transactions contemplated by this Agreement, (B) have a materially negative impact on or impose any material restriction on the operations of the Company and its Subsidiaries or (C) involve any criminal liability, any admission of material wrongdoing or any material wrongful conduct by the Company or any of its Subsidiaries;
(xviii) make any material changes with respect to accounting policies, procedures, methods, principals or practices, except as required by changes in GAAP;
(xix) make any material Tax election (unless consistent with past practices) or, change or revoke any material Tax election, change an annual Tax accounting period, adopt or change any material Tax accounting method, file any amended material Tax Return, 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 Taxes, settle, compromise or otherwise resolve any material Tax claim, audit, assessment, dispute or Proceeding in respect of any Tax liabilities, surrender any right to claim a material Tax refund, withdraw any material Tax refund claim or agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of any material Tax;
(xx) except as required pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement and set forth on Section 4.14(a) of the Company Disclosure Letter, (A) increase in any manner the compensation or consulting fees, bonus, welfare, fringe or other benefits, severance or termination pay of any Company Employee, (B) become a party to, establish, adopt, materially amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to the date of this Agreement, (C) grant any new awards, or amend or modify the terms of any outstanding awards, under any Company Benefit Plan, (D) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, (E) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable Law to be funded or change the manner in which contributions to such Contract plans are made or the basis on which such contributions are determined, except as may be required by GAAP, (F) forgive any loans or issue any loans to any Company Employee (other than routine travel advances issued in the ordinary course of business), (G) hire, promote or terminate (other than for cause) the employment of any employee of the Company or any of its Subsidiaries at the level of Senior Director or above, (H) engage or terminate the services of any independent contractor (who is a natural person) with an annual consulting fee in excess of $50,000, (I) hire or engage the services of, in the aggregate, more than fifteen additional employees or independent contractors (who are natural persons) of the Company or any of its Subsidiaries (taken together) excluding any employee hired for a vacant position directly resulting from a prior termination or (J) terminate (other than for cause) more than five Company Employees who are members of the Company’s medical affairs or sales force departments;
(xxi) (A) terminate any Clinical Trials in respect of any drug, combination product, compound, device, or product candidate (including for purposes of or in connection with diagnostics) being developed, tested, labeled, manufactured, or stored by the Company and/or its Subsidiaries (“Product Candidate”) that involve are ongoing as of the date of the Agreement, other than as required by a Governmental Entity, Institutional Review Board, or equivalent, duly constituted under applicable local law(s) (provided, that the Company promptly notifies Parent of any such requirement), or as recommended by a safety monitoring committee to address a safety concern, or (B) initiate or commit to initiate (alone or with any third party) any new Clinical Trial in respect of any material Product Candidate other than (x) the Clinical Trials set forth in the Company Disclosure Letter or (y) any Clinical Trial that would not result in aggregate annual payments expenditures (including clinical research organization fees, regulatory filing fees, study drug or materials, investigator fees, trial site costs and other outside expenses of less such trials) over the course of such Clinical Trial of more than $300,0002,000,000;
(xxii) (A) other than with respect to a Company PAP, create, implement, operate, participate in or offer any patient assistance or patient support program that offers, provides or intends to provide free drug product (including any Product Candidate) or any cost-sharing assistance, such as co-pay coupons or co-pay cards in relation to a drug product, to any patient, including any federal healthcare program beneficiaries (each, a “Patient Assistance Program”), (B) make any material changes to, including, for the avoidance of doubt, any material expansion of, any Patient Assistance Program provided by the Company as of the date of this Agreement and set forth on Section 6.1(a)(xxii) of the Company Disclosure Letter (each, a “Company PAP”) or (C) fail to operate the Company PAPs;
(xxiii) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other Contract with a labor union, labor organization, works council or similar organization;
(xxiv) amend, terminate or allow to lapse any material Licenses held by the Company or any of its Subsidiaries in a manner that materially and adversely impacts the ability of the Company and its Subsidiaries to conduct their respective businesses;
(xxv) amend or modify the engagement letter of the Company’s financial advisors (or grant any discretionary fee or any comparable additional fee thereunder) in a manner that increases the fee or commission payable by the Company or any of its Subsidiaries;
(xxvi) pay any discretionary fees to its advisors in connection with the Merger; or
(xxvii) agree, authorize or commit to do any of the foregoing.
(b) Nothing set forth in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Co
Appears in 1 contract
Interim Operations. (a) From The Company covenants and agrees as to itself and its Subsidiaries that, after the execution date hereof and delivery of this Agreement until the earlier of prior to the Effective Time and the termination of this Agreement and abandonment of the transactions contemplated by this Agreement pursuant to Article IX, except (i) as otherwise required, contemplated or permitted by this Agreement or as required by a Governmental Entity or applicable Law, (ii) as set forth in Section 7.1(a) of the Company Disclosure Schedule or (iii) as unless Parent shall otherwise consent approve in writing (writing, which consent approval shall not be unreasonably withheld, delayed or conditioned)and except as otherwise expressly contemplated by this Agreement):
(a) its business and the business of its Subsidiaries (including, the Company (A) shallwithout limitation, research and development, establishment and maintenance of marketing and sales programs, and customer support) shall cause be conducted in the ordinary and usual course consistent in all material respects with past practices and, to the extent consistent therewith, it and its Subsidiaries to, shall use commercially reasonable efforts to conduct their respective businesses in the Ordinary Course of Business in all material respects, (B) shall, preserve its business organization intact and shall cause maintain its Subsidiaries to, use commercially reasonable efforts to (x) maintain all existing relationships relations and goodwill with key customers, suppliers suppliers, distributors, creditors, lessors, employees and other persons having material business relationships with the Company and its Subsidiaries and associates;
(yb) keep available the services of the officers and key employees of the Company and its Subsidiaries, and (C) without limiting the generality of the foregoing, it shall not, and shall cause its Subsidiaries not to:
(i) adopt issue, sell otherwise dispose of or propose subject to Lien (other than Permitted Liens) any change in of its Organizational Documents;
Subsidiaries' Capital Stock owned by it, (ii) merge or consolidate with any other Personamend its articles of organization, by-laws or, except for any such transactions solely among Wholly Owned Subsidiaries of amendment which will not hinder, delay or make more costly to Parent the Company,
Merger, the Rights Agreement other than that amendment contemplated hereby, (iii) split, combine or reclassify its outstanding shares of Capital Stock, (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any Capital Stock other than the issuance of Rights in connection with the issuance of Capital Stock upon the exercise of Company Options, (v) repurchase, redeem or otherwise acquire or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its Capital Stock or any securities convertible into or exchangeable or exercisable for any shares of its Capital Stock or (vi) adopt or enter into a plan of restructuring, reorganizing, dissolving, recapitalizing, complete or partial liquidation or similar transactiondissolution, merger or otherwise restructure or recapitalize or consolidate with any Person other than Merger Sub or another wholly owned Subsidiary of Parent;
(ivc) enter into neither it nor any agreements of its Subsidiaries shall (i) except as provided in ANNEX A, authorize for issuance or arrangements imposing material changes or restrictions on its propertiesissue, assets, operations or businesses;
(v) acquire or agree to acquire by merger, consolidation, acquisition of stock, equity or assets or otherwise, any business, Person, division, properties or assets from any other Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price not in excess of $1 million in any individual transaction or $2 million in the aggregate;
(vi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel sell or otherwise dispose of or subject to any Lien (other than Permitted Liens) any shares of, or incursecurities convertible into or exchangeable or exercisable for, permit or suffer to exist the creation options, warrants, calls, commitments or rights of any Encumbrance kind to acquire, Capital Stock of any class (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material Shares issuable pursuant to Company Options outstanding on the date hereof, Shares that may be issuable under the Company's 1994 Employee Stock Purchase Plan as of January 31, except in connection with 1999, and automatic grants of director stock options that may be mandated by the Director Stock Option Plans) or any Voting Debt (Aii) other than for sales of obsolete assets or (B) sales, leases, products and licenses or other dispositions of assets, in each case with a fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million software in the aggregate;
(vii) issue, deliver, sell, pledge, dispose of, grantordinary and usual course of business consistent with past practices and as set forth on Schedule 5.1(c), transfer, lease, license, guarantee, Encumber sell or otherwise enter into any Contract or understanding with respect to the voting dispose of or transfer subject to any shares Lien (other than Permitted Liens) any other property or assets, (iii) other than in the ordinary and usual course of capital stock business consistent with past practices, incur or modify any indebtedness or other material liability (except for borrowings in the ordinary course under lines of credit in existence on the date hereof), (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except in the ordinary course of business consistent with past practices and except for obligations of Subsidiaries of the Company incurred in the ordinary course of business, (v) make any loans to any other Person (other than to Subsidiaries of the Company or capital stock reasonable and customary loans or other equity or equity-based interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any options, warrants or other rights of any kind advances to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than (A) the delivery of any Common Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated on the Preferred Shares) in accordance with the terms of the Preferred Shares or (2) the conversion of the Company Notes in accordance with the Indenture and the exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations (B) the issuance of Preferred Shares employees in connection with business-related travel in the payment ordinary course of dividends on the Preferred Shares in accordance business consistent with the terms of the Preferred Shares past practices) or (B) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (1) by a Wholly Owned Subsidiary of the Company to the Company or another Wholly Owned Subsidiary of the Company, (2) in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans in effect as of the Capitalization Time or (3) pursuant to the ESPP in accordance with its terms and subject to Section 4.3(g));
(viiivi) make any loans, advances, guarantees or capital contributions to or investments in any Person in excess of $200,000 in the aggregate (other than between the Company and any of its Wholly Owned Subsidiaries in the Ordinary Course of Business);
(ix) declare, set aside, establish a record date for accrue, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise with respect to any of its capital stock or other equity interests (and for the avoidance of doubt, excluding the Company Notes) of the Company or its Subsidiaries, except for (A) dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company or (B) dividends payable to the holders of Preferred Shares, payable in cash or Preferred Shares, in accordance with the terms of the Preferred Shares;
(x) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire (or offer to do any of the foregoing), directly or indirectly, any of its capital stock, other equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests, other than (A) the withholding of Common Shares to satisfy the payment of the exercise price on the exercise of a Company Option or withholding Tax obligations upon the exercise, vesting or settlement of Company Equity Awards outstanding as of the date of this Agreement, in each case, in accordance with their terms and, as applicable, the Stock Plans as in effect as of the Capitalization Time and (B) pursuant to an exercise of the Capped Call Transactions in accordance with their terms;
(xi) incur or assume any indebtedness for borrowed money, guarantee any indebtedness for borrowed money or enter into a “keep well” or similar arrangement in respect of indebtedness for borrowed money except for any such indebtedness not to exceed $2.5 million individually or $5 million in the aggregate;
(xii) incurcommitments for, make or authorize any payment capital or prepaid expenditures other than in amounts less than $150,000 individually and $3,000,000 in the aggregate or, by any means, make any acquisition of, or accrual or commitment for, capital expenditures, or any obligations or liabilities in connection therewith except as contemplated by or reasonably related to, and which shall not exceed 107.5% of the aggregate amounts set forth investment in, the Company’s capital budget set forth in Section 7.1(a)(xii) assets or stock of the Company Disclosure Scheduleany other Person;
(xiiid) enter into, terminate or materially amend any Contract pursuant to which the Company or neither it nor any of its Subsidiaries purchase from shall, except as may be required as a third party service provider Software result of a change in law or in GAAP, change any of the accounting principles or practices used by it;
(“Third Party IT Contracts”e) (other than neither it nor any of its Subsidiaries shall revalue in any respect any of its material assets, including writing down the value of inventory or writing-off notes or accounts receivable except in the Ordinary Course ordinary course of Business business consistent with respect to any such Contract that involve aggregate annual payments past practices, except as may be required as a result of less than $300,000)a change in law or in GAAP;
(f) except as set forth on Schedule 5.1
Appears in 1 contract
Sources: Merger Agreement (Shiva Corp)
Interim Operations. (a) From the date hereof and after the execution and delivery of this Agreement until the earlier of the Effective Time and the or earlier termination of this Agreement and abandonment of the transactions contemplated by this Agreement pursuant to Article IXAgreement, except (i) as otherwise required, contemplated or permitted by this Agreement or as required by a Governmental Entity or applicable Law, (iiw) as set forth in Section 7.1(a6.1(a) of the Company Disclosure Schedule or Letter, (iiix) as Parent shall otherwise consent expressly contemplated or permitted by this Agreement, (y) to the extent consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned; provided, however, that Parent shall have the right to withhold its consent for any reason or no reason if its consent is sought for purposes of clauses (i), (ii), (iii), (iv), (v), (xi), (xii), (xiii), (xv) or (xvi) or clause (xviii) (but only as it relates to any of the foregoing clauses) or (z) as required by applicable Law, the Company (A) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts cause the business of it and its Subsidiaries to conduct their respective businesses be conducted in the Ordinary Course of Business in all material respects, (B) ordinary course and it shall, and shall cause its Subsidiaries toSubsidiaries, to use their respective commercially reasonable efforts to (x) preserve their business organizations and real property intact and maintain all existing relationships relations and goodwill with key Governmental Entities, customers, suppliers suppliers, distributors, employees and other persons having material business relationships associates (it being understood and agreed that adverse changes in the Company’s business, real property and existing relations and goodwill that result from or are caused by the announcement of the transaction, the identity of Parent or its affiliates and the plans of Parent with respect to operating the Company and its Subsidiaries and (y) keep available that have been disclosed to the services of the officers and key employees public or to employees, suppliers, customers, distributors or business associates of the Company and shall not constitute, or be taken into account in determining whether there has been, a breach by the Company of its Subsidiaries, and (C) without limiting obligation under this Section 6.1). Notwithstanding the generality of the foregoing, and subject to the exceptions set forth in clauses (w), (x), (y) and (z) of the immediately preceding sentence, the Company shall not, and shall cause its Subsidiaries not to:
(i) adopt amend the certificate of incorporation, bylaws or propose comparable governing documents of the Company or any change in of its Organizational DocumentsSubsidiaries;
(ii) merge or consolidate with any other Person, except for any such transactions solely among Wholly Owned Subsidiaries of the Company,
(iii) adopt or enter into a plan of restructuring, reorganizing, dissolving, recapitalizing, complete or partial liquidation or similar transaction;
(iv) enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(v) acquire or agree to acquire by merger, consolidation, acquisition of stock, equity or assets or otherwise, any business, Person, division, properties or assets from any other Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price not in excess of $1 million in any individual transaction or $2 million in the aggregate;
(vi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(vii) issue, deliver, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber or otherwise enter into any Contract or understanding with respect to the voting of or transfer encumber any shares of capital stock of the Company or capital stock or other equity or equity-based interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of capital stock, voting securities, partnership interest, membership interest or similar interest or any option, warrant, right or security convertible, exchangeable or exercisable therefor or other equity interests instrument or such convertible right the value of which is based on any of the foregoing (collectively, “Equity Interests”) of the Company or exchangeable securities any of its Subsidiaries (including any Company Stock Options or Company Restricted Stock), other than (A) the delivery issuance of any Common Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated pursuant to Company Stock Options outstanding on the Preferred Shares) in accordance with the terms of the Preferred Shares or (2) the conversion of date hereof under the Company Notes in accordance with the Indenture and the exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations Plans, (B) the issuance or disposition of Preferred Shares in connection with the payment any Equity Interest of dividends on the Preferred Shares in accordance with the terms any of the Preferred Shares or (B) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (1) by a Wholly Owned Subsidiary of the Company Company’s Subsidiaries to the Company or another Wholly Owned Subsidiary any other of the Companyits Subsidiaries, or (2C) issuances of securities in respect connection with grants or awards of Company Equity Awards outstanding as of the date of this Agreement stock-based compensation made in accordance with their terms and, as applicable, the Stock Plans in effect as of the Capitalization Time or (3Section 6.1(a)(vii) pursuant to the ESPP in accordance with its terms and subject to Section 4.3(g))hereof;
(viiiiii) make any loanssplit, advancescombine, guarantees subdivide or capital contributions to or investments in any Person in excess of $200,000 in the aggregate (other than between the Company and reclassify any of its Wholly Owned Subsidiaries in the Ordinary Course of Business)Equity Interests;
(ixiv) declare, set aside, establish a record date for accruefor, make or pay any dividend dividends on or make any other distribution, distributions (whether payable in cash, stock, property or otherwise with a combination thereof) in respect to of any of its capital stock Equity Interests, other than any dividends or other equity interests (and for the avoidance of doubt, excluding the Company Notes) distributions from any wholly-owned Subsidiary of the Company or its Subsidiaries, except for (A) dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned another such Subsidiary of the Company or (B) dividends payable to the holders of Preferred Shares, payable in cash or Preferred Shares, in accordance with the terms of the Preferred SharesCompany;
(xv) reclassifyrepurchase, split, combine, subdivide or redeem, purchase redeem or otherwise acquire (or offer to do any of the foregoing), directly or indirectly, any of its capital stock, other equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock Equity Interests, except for redemptions, purchases or other equity interests, other than (A) the withholding of Common Shares acquisitions pursuant to satisfy the payment of the exercise price on the exercise of a Company Option or withholding Tax obligations upon the exercise, vesting or settlement of Company Equity Awards outstanding as Stock Options, the vesting of Company Restricted Stock, employee severance, retention, termination, change of control and other contractual rights existing on the date of this Agreement, in each case, in accordance with their hereof on the terms and, as applicable, the Stock Plans as in effect as of on the Capitalization Time and (B) pursuant date hereof, including with respect to an exercise of the Capped Call Transactions in accordance with their termsCompany Restricted Stock;
(xivi) incur or assume any indebtedness for borrowed moneymodify in material respects the terms of, guarantee any indebtedness for borrowed money or enter into a “keep well” issue any debt securities or similar arrangement in respect assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person for borrowed money, except for (i) indebtedness for borrowed money except for any such indebtedness in a principal amount not to exceed $2.5 million individually or $5 million 250,000, (ii) letters of credit issued in the aggregateordinary course of business, or (iii) indebtedness owed by any wholly-owned Subsidiary of the Company to the Company or any other wholly-owned Subsidiary of the Company;
(xiivii) incur(i) except (A) to the extent required by applicable Law, make (B) to the extent permitted by written agreements existing on the date of this Agreement that have been disclosed or authorize any payment ofmade available to Parent, or accrual or commitment for, capital expenditures, or any obligations or liabilities in connection therewith except and/or (C) as contemplated by or reasonably related to, and which shall not exceed 107.5% of the aggregate amounts set forth in, the Company’s capital budget set forth listed in Section 7.1(a)(xii6.1(a)(vii) of the Company Disclosure Schedule;
(xiii) enter intoLetter, terminate grant or materially amend announce any Contract pursuant to which stock option, equity or incentive awards or increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries purchase from a third party to any of the employees, officers, directors or other service providers of the Company or any of its Subsidiaries, (ii) hire any new employees (other than clerical employees), (iii) except to the extent required by applicable Law or required by written agreements existing on the date of this Agreement that have been disclosed or made available to Parent, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other employee benefit not required by any existing Company Plan or other agreement or arrangement in effect on the date of this Agreement to any employee, officer, director or other service provider Software of the Company or any of its Subsidiaries, whether past or present, or take any action to accelerate vesting of any right to compensation or benefits, (“Third Party IT Contracts”iv) except to the extent required by applicable Law or permitted by written agreements existing on the date of this Agreement that have been disclosed or made available to Parent, enter into or amend any Contracts of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees and retirement agreements entered into in the ordinary course of business, or (v) except as required to ensure that any Company Plan is not then out of compliance with applicable Law, enter into or adopt any new or renew, amend or terminate any existing Company Plan or benefit arrangement if such adoption, renewal, amendment or termination would result in a material cost to the Company or any of its Subsidiaries;
(viii) other than in the Ordinary Course ordinary course of Business business (so long as any action taken in the ordinary course of business is consistent with past practice and would not have the effect of materially increasing the Tax liability of the Company or any of its Subsidiaries or materially decreasing any Tax attribute of the Company or any of its Subsidiaries), make or change any material Tax election, adopt or change the Company’s or such Subsidiary of the Company’s method of accounting for Tax purposes, file any material amended Tax Return, enter into any material closing agreement, settle any material Tax claim or assessment relating to the Company or any of its Subsidiaries, surrender any right to claim a material refund of Taxes, consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action relating to the filing of any Tax Return or the payment of any Tax;
(ix) except as required by GAAP, the SEC or applicable Law, change any material accounting policies, principles or practices;
(x) except as contemplated or permitted by this Section 6.1, (i) enter into or assume any Contract that would have been a Company Material Contract had it been entered into prior to the date hereof, or (ii) terminate, materially amend or waive any material rights under any Company Material Contract or any Contract that would have been a Company Material Contract had it been entered into prior to the date hereof excluding any termination upon expiration of a term in accordance with the terms of such Company Material Contract; provided in each case that the Company and any of its Subsidiaries shall be permitted to renew or replace any Company Material Contract with one or more Contracts on substantially similar or better terms;
(xi) (A) settle or compromise any action, litigation, claim or arbitration, or (B) implement any settlement or compromise of any action, litigation, claim or arbitration other than in accordance with the expressed terms of such settlement or compromise as in effect as of the date hereof; provided, however, that the Company shall not breach any material term of any settlement or compromise and shall not make any material discretionary decisions or take any material discretionary actions relating to the implementation of such settlement or compromise;
(xii) acquire (including by merger, consolidation, or acquisition of stock or assets) any interest in any Person or any division thereof or any assets thereof, excluding acquisitions of supplies, parts, fuel, materials and other inventory in the ordinary course of business consistent with past practice, or make any loan, advance or capital contribution to, or investment in, any Person or any division thereof, other than (i) any such acquisitions, loans, advances, contributions or investments that are for consideration not in excess of $100,000 individually or $250,000 for all such transactions by the Company and its Subsidiaries in the aggregate, (ii) any such acquisitions, loans, advances, contributions or investments made pursuant to any Contract entered into after the date hereof in accordance with this Section 6.1 or (iii) loans, advances or capital contributions to or among the Company and wholly-owned Company Subsidiaries;
(xiii) sell, transfer, lease, license, assign, abandon, fail to maintain or otherwise dispose of (including, by merger, consolidation, or sale of stock or assets) any entity, business, assets (including material Intellectual Property), rights or properties of the Company or any of its Subsidiaries having a current value in excess of $100,000 individually, or $250,000 for all such transactions by the Company and its Subsidiaries in the aggregate, or otherwise material to the business of the Company or any of its Subsidiaries, other than (i) sales, transfers, leases, licenses assignments and other dispositions of inventory or other assets, including real property, in the ordinary course of business consistent with past practice, (ii) pursuant to Contracts entered into after the date hereof in accordance with this Section 6.1, (iii) dispositions of obsolete or worthless assets or properties or (iv) transactions solely among the Company and/or any Company Subsidiaries;
(xiv) authorize or make any capital expenditure, other than (A) any capital expenditure contemplated by the Company’s business plan set forth on Section 6.1(a)(xiv) of the Company Disclosure Letter or (B) capital expenditures that are not, in the aggregate, in excess of $250,000 above the capital expenditures provided for in such business plan;
(xv) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of such party or any Company Subsidiaries;
(xvi) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Offer set forth in Exhibit A not being satisfied;
(xvii) enter into any Contract that restricts the ability of the Company or any or its Subsidiaries, taken as a whole, to compete, in any material respects, with any business or in any geographic area, or to solicit customers, except for use or radius restrictions that may be contained in Contracts entered into in the ordinary course of business; or
(xviii) knowingly commit, authorize or agree to take any of the foregoing actions or enter into any letter of intent (binding or non binding) or similar agreement or arrangement with respect to any such Contract of the foregoing actions.
(b) Neither Parent nor Merger Sub shall knowingly take or permit any of their affiliates to take any action that involve aggregate annual payments is reasonably likely to prevent or delay the consummation of less than $300,000);the Offer, the Merger or the other transactions contemplated by this Agreement.
(c) Nothing contained in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time, and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations. Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
(d) The Company shall promptly give Parent written notice upon obtaining Knowledge of any material event, development or occurrence that would reasonably be expected to give rise to a failure of the condition precedent set forth in clause (A) of paragraph (iii) of Exhibit A.
Appears in 1 contract
Interim Operations. (a) From The Company covenants and after agrees that, from the execution and delivery of this Agreement until the earlier of the Effective Time (unless Parent shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed)), and the termination of this Agreement and abandonment of the transactions contemplated by this Agreement pursuant to Article IX, except (ix) as otherwise expressly required, contemplated or permitted by this Agreement or as required by a Governmental Entity or applicable LawAgreement, (iiy) as set forth in Section 7.1(a) of the Company Disclosure Schedule Letter or (iiiz) as required by applicable Laws (including any Law issued in response to the COVID-19 (or SARS-CoV-2) virus), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct its business in the ordinary course of business consistent with past practice in all material respects and, to the extent consistent therewith, it shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to preserve its business organizations substantially intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, production companies, distributors, licensees, licensors, creditors, lessors, employees and business associates and others having material business dealings with it and keep available the services of its present employees and agents. Without limiting, and in furtherance of, the foregoing, from the execution of this Agreement until the Effective Time, except (1) as otherwise expressly required, contemplated or permitted by this Agreement, (2) as set forth in Section 7.1(a) of the Company Disclosure Letter or (3) as required by applicable Laws (including any Law issued in response to the COVID-19 (or SARS-CoV-2) virus), the Company shall not, and shall cause each of its Subsidiaries not to (unless Parent shall otherwise consent in writing (which such consent shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed), the Company (A) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to conduct their respective businesses in the Ordinary Course of Business in all material respects, (B) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to (x) maintain all existing relationships and goodwill with key customers, suppliers and other persons having material business relationships with the Company and its Subsidiaries and (y) keep available the services of the officers and key employees of the Company and its Subsidiaries, and (C) without limiting the generality of the foregoing, shall not, and shall cause its Subsidiaries not to:):
(i) adopt or propose any change in its Organizational Documentscertificate of incorporation or bylaws or comparable organizational documents;
(ii) merge or consolidate with any other Person, except for any such transactions solely among Wholly Owned Subsidiaries of the Company,;
(iii) adopt or enter into a plan of restructuring, reorganizing, dissolving, recapitalizing, complete or partial liquidation or similar transaction;
(iv) enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(v) acquire or agree to acquire by merger, consolidation, acquisition of stock, equity or assets or otherwise, any business, Person, division, properties or assets from any other Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price not in excess of $1 million in any individual transaction or $2 million in the aggregate;
(vi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(vii) issue, deliver, sell, pledge, dispose of, grant, transfertransfer or encumber, leaseor authorize the issuance, licensesale, guaranteepledge, Encumber disposition, grant, transfer or otherwise enter into encumbrance of, any Contract Company Shares or understanding with respect to the voting of or transfer any shares of other capital stock or other securities of the Company or capital stock such Subsidiary or other equity or equity-based interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of Company Shares or other capital stock or other equity interests, or any options, warrants or other rights securities of any kind to acquire any such shares of capital stock, other equity interests the Company or such convertible or exchangeable securities (Subsidiary, other than (Ax) the delivery issuances of any Common Company Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated on the Preferred Shares) in accordance with the terms of the Preferred Shares exercise, vesting or (2) the conversion of the Company Notes in accordance with the Indenture and the exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations (B) the issuance of Preferred Shares in connection with the payment of dividends on the Preferred Shares in accordance with the terms of the Preferred Shares or (B) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (1) by a Wholly Owned Subsidiary of the Company to the Company or another Wholly Owned Subsidiary of the Company, (2) in respect settlement of Company Equity Awards and/or the Company Warrant outstanding as of the date of this Agreement hereof in accordance with their terms and, as applicable, the Stock Plans in effect as on the date hereof and (y) grants of Company Equity Awards in respect of up to 11,000,000 Company Shares, in the Capitalization Time or (3) pursuant to the ESPP in accordance with its terms and subject to Section 4.3(g))aggregate;
(viii) make any loans, advances, guarantees or capital contributions to or investments in any Person in excess of $200,000 in the aggregate (other than between the Company and any of its Wholly Owned Subsidiaries in the Ordinary Course of Business);
(ixiv) declare, set aside, establish a record date for accrue, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise otherwise, with respect to any of its capital stock or other equity interests (and for the avoidance of doubt, excluding the Company Notes) Shares or securities of the Company or its Subsidiaries, except for (A) dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company or (B) dividends payable to the holders of Preferred Shares, payable in cash or Preferred Shares, in accordance with the terms of the Preferred Sharessuch Subsidiary;
(xv) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire (or offer to do any of the foregoing)redeem, repurchase or otherwise acquire, directly or indirectly, any of its capital stock, other equity interests Parent Shares or securities convertible or exchangeable into or exercisable for Company Shares (other than the withholding of shares to satisfy withholding Tax obligations or the exercise price in connection with the exercise, vesting or settlement of outstanding Company Equity Awards and/or the Company Warrant) or securities of such Subsidiary;
(vi) incur any shares Indebtedness with an aggregate principal amount in excess of $40,000,000 or guarantee the Indebtedness of any other Person, or make any loans, capital contributions or advances to any Person other than to any wholly owned Subsidiary;
(vii) amend, modify, terminate or cancel a material insurance policy covering the Company or any of its capital stock Subsidiaries in effect as of the date hereof;
(viii) make any material changes in financial accounting methods, principles or practices except as may be required by GAAP or by any Governmental Entity or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(A) make (other equity intereststhan consistent with past practice), change or revoke any material Tax election, (B) file any amended Tax Return with respect to any material Tax, (C) adopt (other than consistent with past practice) or change any method of Tax accounting or Tax accounting period, or (D) enter into any closing agreement relating to any material Tax;
(x) other than Transaction Litigation which is governed by Section 7.13(b), settle or compromise any pending or threatened Proceeding involving the Company or any of its Subsidiaries, other than (A) for an amount not to exceed $10,000,000 in the withholding of Common Shares to satisfy aggregate and (B) that do not impose any material restrictions on the payment operations or businesses of the exercise price on Company or any of its Subsidiaries, or any equitable relief on, or the exercise admission of a wrongdoing by, the Company Option or withholding Tax obligations any of its Subsidiaries; or
(xi) agree, commit, arrange, authorize, resolve or enter into any understanding to do any of the foregoing.
(b) Parent covenants and agrees that, from the execution of this Agreement until the Effective Time (unless the Company shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed)), and except (x) as otherwise expressly required, contemplated or permitted by this Agreement, (y) as set forth in Section 7.1(b) of the Parent Disclosure Letter or (z) as required by applicable Laws (including any Law issued in response to the COVID-19 (or SARS-CoV-2) virus), Parent shall, and shall cause each of its Subsidiaries to, use its and their reasonable best efforts to conduct its business in the ordinary course of business consistent with past practice in all material respects and, to the extent consistent therewith, Parent shall, and shall cause each of its Subsidiaries to, use its and their reasonable best efforts to preserve its business organizations substantially intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, production companies, distributors, licensees, licensors, creditors, lessors, employees and business associates and others having material business dealings with it and keep available the services of its present employees and agents. Without limiting, and in furtherance of, the foregoing, from the execution of this Agreement until the Effective Time, except (1) as otherwise expressly required, contemplated or permitted by this Agreement, (2) as set forth in Section 7.1(b) of the Parent Disclosure Letter or (3) as required by applicable Laws (including any Law issued in response to the COVID-19 (or SARS-CoV-2) virus), Parent shall not, and shall cause each of its Subsidiaries not to (unless the Company shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed)):
(i) adopt or propose any change in its certificate of incorporation or bylaws or comparable organizational documents;
(ii) merge or consolidate with any other Person;
(iii) issue, sell, pledge, dispose of, grant, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any Parent Shares or other capital stock or other securities of Parent or such Subsidiary or securities convertible or exchangeable into or exercisable for Parent Shares or other capital stock or securities of Parent or such Subsidiary, other than issuances of Parent Shares upon the exercise, vesting or settlement of Company Parent Equity Awards outstanding as of the date of this Agreement, in each case, hereof in accordance with their terms andas in effect on the date hereof;
(iv) declare, as applicableset aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of the Stock Plans as Parent Shares or securities of such Subsidiary;
(v) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire, directly or indirectly, any Parent Shares or securities convertible or exchangeable into or exercisable for Parent Shares (other than the withholding of shares to satisfy withholding Tax obligations or the exercise price in connection with the exercise, vesting or settlement of outstanding Parent Equity Awards) or securities of such Subsidiary;
(vi) incur any Indebtedness with an aggregate principal amount in excess of $40,000,000 or guarantee the Indebtedness of any other Person, or make any loans, capital contributions or advances to any Person other than to any wholly owned Subsidiary;
(vii) amend, modify, terminate or cancel a material insurance policy covering Parent or any of its Subsidiaries in effect as of the Capitalization Time date hereof;
(viii) make any material changes in financial accounting methods, principles or practices except as may be required by GAAP or by any Governmental Entity or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(ix) (A) make (other than consistent with past practice), change or revoke any material Tax election, (B) file any amended Tax Return with respect to any material Tax, (C) adopt (other than consistent with past practice) or change any method of Tax accounting or Tax accounting period, or (D) enter into any closing agreement relating to any material Tax;
(x) other than Transaction Litigation which is governed by Section 7.13(b), settle or compromise any pending or threatened proceeding involving Parent or any of its Subsidiaries, other than (A) for an amount not to exceed $10,000,000 in the aggregate and (B) pursuant to an exercise that do not impose any material restrictions on the operations or businesses of Parent or any of its Subsidiaries, or any equitable relief on, or the Capped Call Transactions in accordance with their terms;admission of wrongdoing by, Parent or any of its Subsidiaries; or
(xi) incur or assume any indebtedness for borrowed moneyagree, guarantee any indebtedness for borrowed money commit, arrange, authorize, resolve or enter into a “keep well” or similar arrangement in respect any understanding to do any of indebtedness for borrowed money except for any such indebtedness not to exceed $2.5 million individually or $5 million in the aggregate;foregoing.
(xiic) incurNothing contained in this Agreement is intended to give Parent, make directly or authorize any payment of, or accrual or commitment for, capital expenditures, or any obligations or liabilities in connection therewith except as contemplated by or reasonably related to, and which shall not exceed 107.5% of the aggregate amounts set forth inindirectly, the Company’s capital budget set forth in Section 7.1(a)(xii) right to control or direct the operations of the Company Disclosure Schedule;
(xiii) enter into, terminate or materially amend any Contract pursuant to which the Company or any of its Subsidiaries purchase from a third party service provider Software (“Third Party IT Contracts”) (other than prior to the Effective Time, and nothing contained in this Agreement is intended to give the Ordinary Course Company, directly or indirectly, the right to control or direct the operations of Business with respect to Parent or any such Contract that involve aggregate annual payments of less than $300,000);its Subsidiaries.
Appears in 1 contract
Sources: Merger Agreement (NantKwest, Inc.)
Interim Operations. (a) From and after the execution and delivery of this Agreement until the earlier of the Effective Time and the termination of this Agreement and abandonment of the transactions contemplated by this Agreement pursuant to Article IX, except (i) as otherwise required, contemplated or permitted by this Agreement or as required by a Governmental Entity or applicable Law, (ii) as set forth in Section 7.1(a) of the Company Disclosure Schedule or (iii) as Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), the Company (A) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to conduct their respective businesses in the Ordinary Course of Business in all material respects, (B) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to (x) maintain all existing relationships and goodwill with key customers, suppliers and other persons having material business relationships with the Company and its Subsidiaries and (y) keep available the services of the officers and key employees of the Company and its Subsidiaries, and (C) without limiting the generality of the foregoing, shall not, and shall cause its Subsidiaries not to:
(i) adopt or propose any change in its Organizational Documents;
(ii) merge or consolidate with any other Person, except for any such transactions solely among Wholly Owned Subsidiaries of the Company,
(iii) adopt or enter into a plan of restructuring, reorganizing, dissolving, recapitalizing, complete or partial liquidation or similar transaction;
(iv) enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(v) acquire or agree to acquire by merger, consolidation, acquisition of stock, equity or assets or otherwise, any business, Person, division, properties or assets from any -52- other Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price not in excess of $1 million in any individual transaction or $2 million in the aggregate;
(vi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(vii) issue, deliver, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber or otherwise enter into any Contract or understanding with respect to the voting of or transfer any shares of capital stock of the Company or capital stock or other equity or equity-based interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than (A) the delivery of any Common Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated on the Preferred Shares) in accordance with the terms of the Preferred Shares or (2) the conversion of the Company Notes in accordance with the Indenture and the exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations (B) the issuance of Preferred Shares in connection with the payment of dividends on the Preferred Shares in accordance with the terms of the Preferred Shares or (B) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (1) by a Wholly Owned Subsidiary of the Company to the Company or another Wholly Owned Subsidiary of the Company, (2) in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans in effect as of the Capitalization Time or (3) pursuant to the ESPP in accordance with its terms and subject to Section 4.3(g));
(viii) make any loans, advances, guarantees or capital contributions to or investments in any Person in excess of $200,000 in the aggregate (other than between the Company and any of its Wholly Owned Subsidiaries in the Ordinary Course of Business);
(ix) declare, set aside, establish a record date for accrue, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise with respect to any of its capital stock or other equity interests (and for the avoidance of doubt, excluding the Company Notes) of the Company or its Subsidiaries, except for (A) dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company or (B) dividends payable to the holders of Preferred Shares, payable in cash or Preferred Shares, in accordance with the terms of the Preferred Shares;
(x) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire (or offer to do any of the foregoing), directly or indirectly, any of its capital stock, other equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests, other than (A) the withholding of Common Shares to satisfy the payment of the exercise price on the exercise of a Company Option or withholding Tax obligations upon the exercise, vesting or settlement of Company Equity Awards outstanding as of the date of this Agreement, in each case, in accordance with their terms and, as -53- applicable, the Stock Plans as in effect as of the Capitalization Time and (B) pursuant to an exercise of the Capped Call Transactions in accordance with their terms;
(xi) incur or assume any indebtedness for borrowed money, guarantee any indebtedness for borrowed money or enter into a “keep well” or similar arrangement in respect of indebtedness for borrowed money except for any such indebtedness not to exceed $2.5 million individually or $5 million in the aggregate;
(xii) incur, make or authorize any payment of, or accrual or commitment for, capital expenditures, or any obligations or liabilities in connection therewith except as contemplated by or reasonably related to, and which shall not exceed 107.5% of the aggregate amounts set forth in, the Company’s capital budget set forth in Section 7.1(a)(xii) of the Company Disclosure Schedule;
(xiii) enter into, terminate or materially amend any Contract pursuant to which the Company or any of its Subsidiaries purchase from a third party service provider Software (“Third Party IT Contracts”) (other than in the Ordinary Course of Business with respect to any such Contract that involve aggregate annual payments of less than $300,000);
Appears in 1 contract
Sources: Agreement and Plan of Merger (Voya Financial, Inc.)
Interim Operations. (a) From The Company covenants and after agrees that, from the execution and delivery of this Agreement until the earlier of the Effective Time (unless Parent shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed)), and the termination of this Agreement and abandonment of the transactions contemplated by this Agreement pursuant to Article IX, except (ix) as otherwise expressly required, contemplated or permitted by this Agreement or as required by a Governmental Entity or applicable LawAgreement, (iiy) as set forth in Section 7.1(a) of the Company Disclosure Schedule Letter or (iiiz) as required by applicable Laws (including any Law issued in response to the COVID-19 (or SARS-CoV-2) virus), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct its business in the ordinary course of business consistent with past practice in all material respects and, to the extent consistent therewith, it shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to preserve its business organizations substantially intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, production companies, distributors, licensees, licensors, creditors, lessors, employees and business associates and others having material business dealings with it and keep available the services of its present employees and agents. Without limiting, and in furtherance of, the foregoing, from the execution of this Agreement until the Effective Time, except (1) as otherwise expressly required, contemplated or permitted by this Agreement, (2) as set forth in Section 7.1(a) of the Company Disclosure Letter or (3) as required by applicable Laws (including any Law issued in response to the COVID-19 (or SARS-CoV-2) virus), the Company shall not, and shall cause each of its Subsidiaries not to (unless Parent shall otherwise consent in writing (which such consent shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed), the Company (A) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to conduct their respective businesses in the Ordinary Course of Business in all material respects, (B) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to (x) maintain all existing relationships and goodwill with key customers, suppliers and other persons having material business relationships with the Company and its Subsidiaries and (y) keep available the services of the officers and key employees of the Company and its Subsidiaries, and (C) without limiting the generality of the foregoing, shall not, and shall cause its Subsidiaries not to:):
(i) adopt or propose any change in its Organizational Documentscertificate of incorporation or bylaws or comparable organizational documents;
(ii) merge or consolidate with any other Person, except for any such transactions solely among Wholly Owned Subsidiaries of the Company,;
(iii) adopt or enter into a plan of restructuring, reorganizing, dissolving, recapitalizing, complete or partial liquidation or similar transaction;
(iv) enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(v) acquire or agree to acquire by merger, consolidation, acquisition of stock, equity or assets or otherwise, any business, Person, division, properties or assets from any other Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price not in excess of $1 million in any individual transaction or $2 million in the aggregate;
(vi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(vii) issue, deliver, sell, pledge, dispose of, grant, transfertransfer or encumber, leaseor authorize the issuance, licensesale, guaranteepledge, Encumber disposition, grant, transfer or otherwise enter into encumbrance of, any Contract Company Shares or understanding with respect to the voting of or transfer any shares of other capital stock or other securities of the Company or capital stock such Subsidiary or other equity or equity-based interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of Company Shares or other capital stock or other equity interests, or any options, warrants or other rights securities of any kind to acquire any such shares of capital stock, other equity interests the Company or such convertible or exchangeable securities (Subsidiary, other than (Ax) the delivery issuances of any Common Company Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated on the Preferred Shares) in accordance with the terms of the Preferred Shares exercise, vesting or (2) the conversion of the Company Notes in accordance with the Indenture and the exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations (B) the issuance of Preferred Shares in connection with the payment of dividends on the Preferred Shares in accordance with the terms of the Preferred Shares or (B) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (1) by a Wholly Owned Subsidiary of the Company to the Company or another Wholly Owned Subsidiary of the Company, (2) in respect settlement of Company Equity Awards and/or the Company Warrant outstanding as of the date of this Agreement hereof in accordance with their terms and, as applicable, the Stock Plans in effect as on the date hereof and (y) grants of Company Equity Awards in respect of up to 11,000,000 Company Shares, in the Capitalization Time or (3) pursuant to the ESPP in accordance with its terms and subject to Section 4.3(g))aggregate;
(viii) make any loans, advances, guarantees or capital contributions to or investments in any Person in excess of $200,000 in the aggregate (other than between the Company and any of its Wholly Owned Subsidiaries in the Ordinary Course of Business);
(ixiv) declare, set aside, establish a record date for accrue, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise otherwise, with respect to any of its capital stock or other equity interests (and for the avoidance of doubt, excluding the Company Notes) Shares or securities of the Company or its Subsidiaries, except for (A) dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company or (B) dividends payable to the holders of Preferred Shares, payable in cash or Preferred Shares, in accordance with the terms of the Preferred Sharessuch Subsidiary;
(xv) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire (or offer to do any of the foregoing)redeem, repurchase or otherwise acquire, directly or indirectly, any of its capital stock, other equity interests Parent Shares or securities convertible or exchangeable into or exercisable for Company Shares (other than the withholding of shares to satisfy withholding Tax obligations or the exercise price in connection with the exercise, vesting or settlement of outstanding Company Equity Awards and/or the Company Warrant) or securities of such Subsidiary;
(vi) incur any shares Indebtedness with an aggregate principal amount in excess of $40,000,000 or guarantee the Indebtedness of any other Person, or make any loans, capital contributions or advances to any Person other than to any wholly owned Subsidiary;
(vii) amend, modify, terminate or cancel a material insurance policy covering the Company or any of its capital stock Subsidiaries in effect as of the date hereof;
(viii) make any material changes in financial accounting methods, principles or practices except as may be required by GAAP or by any Governmental Entity or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(ix) (A) make (other equity intereststhan consistent with past practice), change or revoke any material Tax election, (B) file any amended Tax Return with respect to any material Tax, (C) adopt (other than consistent with past practice) or change any method of Tax accounting or Tax accounting period, or (D) enter into any closing agreement relating to any material Tax; (x) other than Transaction Litigation which is governed by Section 7.13(b), settle or compromise any pending or threatened Proceeding involving the Company or any of its Subsidiaries, other than (A) for an amount not to exceed $10,000,000 in the withholding of Common Shares to satisfy aggregate and (B) that do not impose any material restrictions on the payment operations or businesses of the exercise price on Company or any of its Subsidiaries, or any equitable relief on, or the exercise admission of a wrongdoing by, the Company Option or withholding Tax obligations any of its Subsidiaries; or
(xi) agree, commit, arrange, authorize, resolve or enter into any understanding to do any of the foregoing.
(b) Parent covenants and agrees that, from the execution of this Agreement until the Effective Time (unless the Company shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed)), and except (x) as otherwise expressly required, contemplated or permitted by this Agreement, (y) as set forth in Section 7.1(b) of the Parent Disclosure Letter or (z) as required by applicable Laws (including any Law issued in response to the COVID-19 (or SARS-CoV-2) virus), Parent shall, and shall cause each of its Subsidiaries to, use its and their reasonable best efforts to conduct its business in the ordinary course of business consistent with past practice in all material respects and, to the extent consistent therewith, Parent shall, and shall cause each of its Subsidiaries to, use its and their reasonable best efforts to preserve its business organizations substantially intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, production companies, distributors, licensees, licensors, creditors, lessors, employees and business associates and others having material business dealings with it and keep available the services of its present employees and agents. Without limiting, and in furtherance of, the foregoing, from the execution of this Agreement until the Effective Time, except (1) as otherwise expressly required, contemplated or permitted by this Agreement, (2) as set forth in Section 7.1(b) of the Parent Disclosure Letter or (3) as required by applicable Laws (including any Law issued in response to the COVID-19 (or SARS-CoV-2) virus), Parent shall not, and shall cause each of its Subsidiaries not to (unless the Company shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed)):
(i) adopt or propose any change in its certificate of incorporation or bylaws or comparable organizational documents;
(ii) merge or consolidate with any other Person;
(iii) issue, sell, pledge, dispose of, grant, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any Parent Shares or other capital stock or other securities of Parent or such Subsidiary or securities convertible or exchangeable into or exercisable for Parent Shares or other capital stock or securities of Parent or such Subsidiary, other than issuances of Parent Shares upon the exercise, vesting or settlement of Company Parent Equity Awards outstanding as of the date of this Agreement, in each case, hereof in accordance with their terms andas in effect on the date hereof;
(iv) declare, as applicableset aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of the Stock Plans as Parent Shares or securities of such Subsidiary;
(v) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire, directly or indirectly, any Parent Shares or securities convertible or exchangeable into or exercisable for Parent Shares (other than the withholding of shares to satisfy withholding Tax obligations or the exercise price in connection with the exercise, vesting or settlement of outstanding Parent Equity Awards) or securities of such Subsidiary;
(vi) incur any Indebtedness with an aggregate principal amount in excess of $40,000,000 or guarantee the Indebtedness of any other Person, or make any loans, capital contributions or advances to any Person other than to any wholly owned Subsidiary;
(vii) amend, modify, terminate or cancel a material insurance policy covering Parent or any of its Subsidiaries in effect as of the Capitalization Time date hereof;
(viii) make any material changes in financial accounting methods, principles or practices except as may be required by GAAP or by any Governmental Entity or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(ix) (A) make (other than consistent with past practice), change or revoke any material Tax election, (B) file any amended Tax Return with respect to any material Tax, (C) adopt (other than consistent with past practice) or change any method of Tax accounting or Tax accounting period, or (D) enter into any closing agreement relating to any material Tax;
(x) other than Transaction Litigation which is governed by Section 7.13(b), settle or compromise any pending or threatened proceeding involving Parent or any of its Subsidiaries, other than (A) for an amount not to exceed $10,000,000 in the aggregate and (B) pursuant to an exercise that do not impose any material restrictions on the operations or businesses of Parent or any of its Subsidiaries, or any equitable relief on, or the Capped Call Transactions in accordance with their terms;admission of wrongdoing by, Parent or any of its Subsidiaries; or
(xi) incur or assume any indebtedness for borrowed moneyagree, guarantee any indebtedness for borrowed money commit, arrange, authorize, resolve or enter into a “keep well” or similar arrangement in respect any understanding to do any of indebtedness for borrowed money except for any such indebtedness not to exceed $2.5 million individually or $5 million in the aggregate;foregoing.
(xiic) incurNothing contained in this Agreement is intended to give Parent, make directly or authorize any payment of, or accrual or commitment for, capital expenditures, or any obligations or liabilities in connection therewith except as contemplated by or reasonably related to, and which shall not exceed 107.5% of the aggregate amounts set forth inindirectly, the Company’s capital budget set forth in Section 7.1(a)(xii) right to control or direct the operations of the Company Disclosure Schedule;
(xiii) enter into, terminate or materially amend any Contract pursuant to which the Company or any of its Subsidiaries purchase from a third party service provider Software (“Third Party IT Contracts”) (other than prior to the Effective Time, and nothing contained in this Agreement is intended to give the Ordinary Course Company, directly or indirectly, the right to control or direct the operations of Business with respect to Parent or any such Contract that involve aggregate annual payments of less than $300,000);its Subsidiaries.
Appears in 1 contract
Interim Operations. (a) From The Company covenants and agrees as to itself and its Subsidiaries that, after the execution date of this Agreement and delivery prior to the Effective Time (unless Parent shall otherwise approve in writing), the business of it and its Subsidiaries shall be conducted in the ordinary course of business and, to the extent consistent therewith, it and its Subsidiaries shall consistent with past practice preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, and lessors, and, shall not terminate without cause any of its and its Subsidiaries’ present officers, employees and agents, except as otherwise expressly contemplated by this -40- Agreement or as required by applicable Law. Without limiting the generality of and in furtherance of the foregoing, from the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement and abandonment of the transactions Time, except as otherwise expressly (A) required or contemplated by this Agreement pursuant to Article IXAgreement, except (iB) as otherwise required, contemplated or permitted by this Agreement or as required by a Governmental Entity or applicable Law, (iiC) as approved in writing by Parent (such approval not to be unreasonably withheld, conditioned or delayed) or (D) set forth in on Section 7.1(a) 6.1. of the Company Disclosure Schedule or (iii) as Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned)Letter, the Company (A) shall, will not and shall cause its Subsidiaries to, use commercially reasonable efforts to conduct their respective businesses in the Ordinary Course of Business in all material respects, (B) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to (x) maintain all existing relationships and goodwill with key customers, suppliers and other persons having material business relationships with the Company and its Subsidiaries and (y) keep available the services of the officers and key employees of the Company and its Subsidiaries, and (C) without limiting the generality of the foregoing, shall not, and shall will cause its Subsidiaries not to:
(i) adopt or propose any change in its Organizational Documentscertificate of incorporation or bylaws or comparable governing documents or, solely with respect to the Company, change its jurisdiction of incorporation or enter into a reorganization where it becomes a wholly-owned Subsidiary of an entity incorporated in a different jurisdiction;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person, except for any such transactions solely among Wholly Owned Subsidiaries of the Company,
(iii) adopt its wholly owned Subsidiaries, or enter into a plan of restructuringrestructure, reorganizing, dissolving, recapitalizing, complete reorganize or partial liquidation completely or similar transaction;
(iv) partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(viii) acquire or agree to acquire by merger, consolidation, acquisition assets outside of stock, equity or assets or otherwise, any business, Person, division, properties or assets the ordinary course of business from any other Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price not in excess of $1 million in any individual transaction or $2 million in the aggregate;
(vi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(viiiv) issue, deliver, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guaranteeguarantee or Encumbrance of, Encumber or otherwise enter into any Contract or understanding with respect to the voting of or transfer of, any shares of capital stock of the Company or its capital stock or other equity or equity-based interests of any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any such shares of such capital stock or other equity interestsstock, or any options, warrants or other rights of any kind to acquire any such shares of such capital stock, other equity interests stock or such convertible or exchangeable securities (other than (A) the delivery of any Common Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated on the Preferred Shares) in accordance with the terms of the Preferred Shares or (2) the conversion of the Company Notes in accordance with the Indenture and the exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations (B) the issuance of Preferred Shares in connection with the payment of dividends on the Preferred Shares in accordance with the terms of the Preferred Shares or (B) except for the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (1) by a Wholly Owned Subsidiary of the Company to the Company or another Wholly Owned Subsidiary of the Company, (2) in respect of Company Equity Awards Options outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans Plan as in effect as of the Capitalization Time or (3) pursuant to the ESPP in accordance with its terms and subject to Section 4.3(g)date of this Agreement);
(viiiv) make any loans, advances, guarantees or capital contributions to or investments in any Person in excess of $200,000 in the aggregate (other than between to or from the Company and any of its Wholly Owned Subsidiaries wholly owned Subsidiaries) in excess of $125,000 in the Ordinary Course of Business)aggregate;
(ixvi) declare, set aside, establish a record date for accrue, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise otherwise, with respect to any of its capital stock or other equity interests (and for the avoidance of doubt, excluding the Company Notes) of the Company or its Subsidiaries, except for (A) dividends paid by any Wholly Owned direct or indirect wholly owned Subsidiary to the Company it or to any other Wholly Owned Subsidiary of direct or indirect wholly owned Subsidiary, declared and paid at such times and in such amounts as is consistent with historical practice over the Company or (B) dividends payable 12 month period prior to the holders date of Preferred Shares, payable in cash or Preferred Shares, in accordance with the terms of the Preferred Sharesthis Agreement);
(xvii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire (or offer to do any of the foregoing)acquire, directly or indirectly, any of its capital stock, other equity interests stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests, (other than (A) the withholding of Common Shares shares to satisfy the payment of the exercise price on the exercise of a Company Option or withholding Tax obligations upon the exercise, vesting or settlement in respect of Company Equity Awards Options outstanding as of the date of this Agreement, in each case, Agreement in accordance with their terms and, as applicable, the Stock Plans as Plan);
(viii) incur any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security), except for (A) Indebtedness in effect as replacement of existing Indebtedness for borrowed money on terms substantially consistent with or more favorable to the Capitalization Time and Company than the Indebtedness being replaced or (B) pursuant to an exercise guarantees of the Capped Call Transactions Indebtedness of its wholly owned Subsidiaries otherwise incurred in accordance compliance with their terms;this
(xiix) incur or assume any indebtedness for borrowed money, guarantee any indebtedness for borrowed money or enter into a “keep well” or similar arrangement in respect of indebtedness for borrowed money except for any such indebtedness not to exceed $2.5 million individually or $5 million in the aggregate;
(xii) incur, make or authorize any payment of, or accrual or commitment for, capital expenditures, or any obligations or liabilities expenditures other than capital expenditures made in connection therewith except as contemplated by or reasonably related to, and which shall not exceed 107.5% of the aggregate amounts set forth in, with the Company’s capital budget set forth Irish grant project, in Section 7.1(a)(xii) of the Company Disclosure Schedulean amount not to exceed €400,000;
(xiiix) other than in the ordinary course of business, enter into, terminate or materially amend into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or amend, modify, supplement, waive, terminate, assign, convey, encumber or otherwise transfer, in whole or in part, rights or interest pursuant to which or in any Material Contract, other than expirations of any such Contract in the ordinary course of business in accordance with the terms of such Contract, or cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value in excess of $125,000 in the aggregate;
(xi) settle any action, suit, claim, hearing, arbitration, investigation or other proceedings for an amount in excess of $125,000 in the aggregate or any obligation or liability of it in excess of such amount or on a basis that would result in the imposition of any writ, judgment, decree, settlement, award, injunction or similar order of any Governmental Entity that would restrict the future activity or conduct of the Company or any of its Subsidiaries purchase from or a third party service provider Software finding or admission of a violation of Law or violation of the rights of any Person or that is brought by any current, former or purported holders of any capital stock or debt securities of the Company or any of its Subsidiaries relating to the Merger or the other transactions contemplated by this Agreement;
(“Third Party IT Contracts”xii) (other than in the Ordinary Course of Business make any changes with respect to accounting policies or procedures, except as required by changes in GAAP or IFRS;
(xiii) enter into any line of business in any geographic area other than the existing lines of business of the Company and its Subsidiaries and lines of products and services reasonably ancillary to any existing line of business, in any geographic area for which a Permit (if one is required) authorizing the conduct of such Contract business, product or service in such geographic area is held by it or any of its Subsidiaries or, except as currently conducted, engage in the conduct of any business in any jurisdiction that involve would require the receipt or transfer of any Permit issued by any Governmental Entity that would reasonably be expected to prevent, impair or materially delay the ability of the Company to consummate the Merger and the other transactions contemplated by this Agreement;
(xiv) make, change or revoke any Tax election, change an annual Tax accounting period, adopt or change any Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle any Tax claim, audit, assessment or dispute, surrender any right to claim a refund of a material amount of Taxes, take any action that is reasonably likely to result in an increase in the Tax liability of the Company or its -42- Subsidiaries or, in respect of any taxable period (or portion thereof) ending after the Closing Date, the Tax liability of Parent or its Affiliates;
(xv) transfer, sell, lease, divest, cancel or otherwise dispose of, or permit or suffer to exist the creation of any Encumbrance upon, any assets, product lines or businesses of it or any of its Subsidiaries, including capital stock of any of its Subsidiaries, except in connection with services provided in the ordinary course of business and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets (not including services) with a fair market value not in excess of $125,000 in the aggregate;
(xvi) (A) sell, assign, transfer or otherwise dispose of any Intellectual Property Rights to any Person, (B) grant any license, covenant not to ▇▇▇, release, waiver or other right under any Company Intellectual Property to any Person, (C) cancel, abandon or allow to lapse or expire any Registered IP or (D) omit to take any action which adversely affects or could adversely affect any Company Intellectual Property;
(xvii) except as required pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement, or as otherwise required by applicable Law,
(A) increase in any manner the compensation or consulting fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any Company Employee, except for
(1) employees who are not officers, increases in annual salary or wage rate in the ordinary course of business that do not exceed 10% individually or 5% in the aggregate and (2) the payment of annual payments bonuses for completed periods based on actual performance in the ordinary course of less than $300,000);business, (B) become a party to, establish, adopt, amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to this Agreement, (C) grant any new awards, or amend or modify the terms of any outstanding awards, under any Company Benefit Plan,
Appears in 1 contract
Sources: Merger Agreement
Interim Operations. (a) From and after the execution and delivery of this Agreement until date hereof, the earlier of the Effective Time and the termination of this Agreement and abandonment of the transactions contemplated by this Agreement pursuant to Article IX, except (i) as otherwise required, contemplated or permitted by this Agreement or as required by a Governmental Entity or applicable Law, (ii) as set forth in Section 7.1(a) of Seller shall cause the Company Disclosure Schedule or (iii) as Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), the Company (A) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to conduct their respective businesses in the Ordinary Course of Business ordinary course consistent with past practice (including but not limited to in all material respects, (Brelation to sale practices and accounting practices) shall, and shall cause its Subsidiaries to, use their commercially reasonable efforts to (x) maintain all existing preserve intact the assets, properties and relationships with Employees and goodwill with key customers, suppliers and other persons third parties having material business relationships dealings with the Company and its Subsidiaries and (y) keep available the services of the officers and key employees of the Company and its Subsidiaries, and (C) without . Without limiting the generality of the foregoing, except (a) as otherwise required by this Agreement, (b) for actions approved in writing by the Purchaser (which approval shall notnot be unreasonably withheld, conditioned or delayed), (c) as required to comply with applicable Law or (d) as described in the Disclosure Letter, from and after the date hereof, the Seller shall cause the Company and its Subsidiaries not toto take any of the following actions:
(i) adopt or propose any change in its Organizational Documentsconstitution;
(ii) merge adopt a plan or consolidate with any agreement of complete or partial liquidation, dissolution, restructuring, merger, consolidation, restructuring, recapitalization or other Person, except for any such transactions solely among Wholly Owned Subsidiaries of the Company,reorganization;
(iii) adopt (A) issue, sell, transfer, pledge, dispose of or enter into a plan of restructuring, reorganizing, dissolving, recapitalizing, complete encumber the Shares or partial liquidation any other equity or similar transactioninterests of the Company or any of its Subsidiaries or (B) grant any option, warrant or other right to purchase or obtain, or otherwise dispose of or encumber, the Shares or any other equity or similar interests of the Company or any of its Subsidiaries;
(iv) enter into or consummate any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(v) acquire or agree to acquire by merger, consolidation, transaction involving the acquisition of the business, stock, equity or assets or otherwise, any business, Person, division, other properties or assets from of any other Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price not Person for consideration in excess of $1 million in any individual transaction 100,000 individually, or $2 million 1,000,000 in the aggregate;
(viv) transfer, sell, lease, sublease, license, pledgetransfer, mortgageexchange or swap, assign, divest, cancel mortgage or otherwise dispose ofencumber, or incur, permit or suffer subject to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon or otherwise dispose of any material portion of its material properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a fair market value (as reasonably determined by or purchase price in the Company) not aggregate in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(vii) issue, deliver, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber or otherwise enter into any Contract or understanding with respect to the voting of or transfer any shares of capital stock of the Company or capital stock or other equity or equity-based interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than (A) in the delivery ordinary course of any Common Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated on the Preferred Shares) in accordance with the terms of the Preferred Shares or (2) the conversion of the Company Notes in accordance with the Indenture and the exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations business, (B) pursuant to existing agreements in effect prior to the issuance of Preferred Shares date hereof, (C) as may be required by applicable Law or any Governmental Authority in connection with order to permit or facilitate the payment of dividends on the Preferred Shares in accordance with the terms consummation of the Preferred Shares transactions contemplated by this Agreement, (D) dispositions of obsolete or worthless assets or (BE) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (1) by a Wholly Owned Subsidiary of transactions among the Company to the Company or another Wholly Owned Subsidiary and/or any of the Company, (2) in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans in effect as of the Capitalization Time or (3) pursuant to the ESPP in accordance with its terms and subject to Section 4.3(g))Subsidiaries;
(viiivi) make any loansincur, advancesassume, guarantees or capital contributions to or investments in any Person in excess of $200,000 in the aggregate (other than between the Company and any of its Wholly Owned Subsidiaries in the Ordinary Course of Business);
(ix) declareguarantee, set aside, establish a record date for accrue, make or pay any dividend or other distribution, payable in cash, stock, property prepay or otherwise with respect to any of its capital stock or other equity interests (and for the avoidance of doubt, excluding the Company Notes) of the Company or its Subsidiaries, except for (A) dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company or (B) dividends payable to the holders of Preferred Shares, payable in cash or Preferred Shares, in accordance with the terms of the Preferred Shares;
(x) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire (or offer to do any of the foregoing), directly or indirectly, any of its capital stock, other equity interests or securities convertible or exchangeable into or exercisable become liable for any shares of its capital stock or other equity interestsIndebtedness, other than (A) in the withholding ordinary course of Common Shares business, (B) any Indebtedness among the Company and/or any of its Subsidiaries, (C) guarantees by the Company of Indebtedness of its Subsidiaries, and (D) Indebtedness incurred pursuant to satisfy agreements in effect prior to the payment of the exercise price on the exercise of a Company Option or withholding Tax obligations upon the exercise, vesting or settlement of Company Equity Awards outstanding as of the date execution of this Agreement, in each case, in accordance with their terms and, as applicable, the Stock Plans as in effect as of the Capitalization Time and (B) pursuant to an exercise of the Capped Call Transactions in accordance with their terms;
(xi) incur or assume any indebtedness for borrowed money, guarantee any indebtedness for borrowed money or enter into a “keep well” or similar arrangement in respect of indebtedness for borrowed money except for any such indebtedness not to exceed $2.5 million individually or $5 million in the aggregate;
(xii) incur, make or authorize any payment of, or accrual or commitment for, capital expenditures, or any obligations or liabilities in connection therewith except as contemplated by or reasonably related to, and which shall not exceed 107.5% of the aggregate amounts set forth in, the Company’s capital budget set forth in Section 7.1(a)(xii) of the Company Disclosure Schedule;
(xiiivii) enter into, terminate or materially amend any Contract pursuant to which the Company or any of its Subsidiaries purchase from will be liable to pay amounts in excess of $100,000 or receive amounts in excess of $250,000 individually within a third party service provider Software 12-month period;
(“Third Party IT Contracts”viii) (enter into, renew, amend or modify in any material respect, or terminate any Material Contract, other than in the Ordinary Course ordinary course of Business business; provided, however, that nothing in this Agreement shall prevent the Company or its Subsidiaries from entering into employment agreements or severance agreements, in each case, with respect employees in the ordinary course of business;
(ix) incur or commit to any such Contract that involve aggregate annual payments capital expenditures other than capital expenditures incurred or committed in the ordinary course of less than $300,000)business, or enter into any new line of business;
(x) (A) make, change or revoke any material Tax election, (B) file any material amended Tax Return or (C) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes;
(xi) materially change its financial accounting policies or procedures or any of its methods of reporting income, deductions or other material items for financial accounting purposes, except as required by the Australian Financial Reporting Standards or applicable Law; or
(xii) authorize, or agree or commit to do, whether in writing or otherwise, any of the foregoing.
Appears in 1 contract
Sources: Equity Purchase Agreement (Primus Telecommunications Group Inc)
Interim Operations. (a) From and after the execution and delivery date of this Agreement and until the earlier of the Effective Time and or the earlier termination of this Agreement and abandonment of the transactions contemplated by this Agreement pursuant to Article IXin accordance with its terms, except (i) as otherwise required, contemplated or permitted by this Agreement or as required by a Governmental Entity or applicable Law, (iiw) as set forth in Section 7.1(a4.1(a) of the Company Disclosure Schedule or Letter, (iiix) as Parent shall otherwise consent expressly contemplated or permitted by this Agreement, (y) to the extent consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned)) or (z) as required by applicable Law or by a Governmental Entity or by any Company Material Contract in effect as of the date of this Agreement, the Company (A) shall use reasonable best efforts to cause the business of it and its Subsidiaries to be conducted in the ordinary course of business and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries to, use commercially their respective reasonable best efforts to conduct preserve their respective businesses in the Ordinary Course of Business in all material respects, (B) shall, business organizations intact and shall cause its Subsidiaries to, use commercially reasonable efforts to (x) maintain all their existing relationships and goodwill with key Governmental Entities, customers, suppliers suppliers, distributors and other persons having material business relationships with the Company and its Subsidiaries and (y) keep available the services of the officers and key employees of the Company and its Subsidiaries, and (C) without limiting employees. Notwithstanding the generality of the foregoing, and subject to the exceptions set forth in clauses (w), (x), (y) and (z) of the immediately preceding sentence, the Company shall not, not and shall cause not permit its Subsidiaries not to:
(i) adopt other than in connection with the Intermediate Merger, amend the Operating Agreement or propose the certificate of incorporation, bylaws or comparable formation or governing documents of the Company or any change in its Organizational Documentsof the Company’s Subsidiaries;
(ii) acquire (whether by merger, consolidation or acquisition of stock or assets or any other business combination)
(A) any Person or any division thereof or equity outside the ordinary course of business from any other Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) or (B) any assets (other than in the ordinary course of business and consistent with past practice), in the case of (B) with a value or purchase price in excess of $250,000 individually;
(iii) other than in connection with the Intermediate Merger, merge or consolidate with any other PersonPerson or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries, except for any such transactions solely among Wholly Owned wholly-owned Subsidiaries of the Company,
(iii) adopt or enter into a plan of restructuring, reorganizing, dissolving, recapitalizing, complete or partial liquidation or similar transaction;
(iv) enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(v) acquire or agree to acquire by merger, consolidation, acquisition of stock, equity or assets or otherwise, any business, Person, division, properties or assets from any other Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price not in excess of $1 million in any individual transaction or $2 million in the aggregate;
(vi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(vii) issue, deliver, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber or otherwise enter into any Contract or understanding with respect to the voting of or transfer encumber any shares of capital stock limited liability company interests or equity interests or options, warrants or other securities, commitments or rights convertible, exchangeable or exercisable therefor (collectively, “Equity Interests”) of the Company or capital stock or other equity or equity-based interests of any of its Subsidiaries, securities convertible except issuances or exchangeable into or exercisable for any such shares dispositions of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than (A) the delivery of any Common Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated Units pursuant to Company Options outstanding on the Preferred Shares) in accordance with the terms date of the Preferred Shares this Agreement (or (2) the conversion of the Company Notes in accordance with the Indenture and the exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations (B) the issuance of Preferred Shares in connection with the payment of dividends on the Preferred Shares in accordance with the terms of the Preferred Shares or (B) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (1) by a Wholly Owned Subsidiary of the Company to the Company or another Wholly Owned Subsidiary of the Company, (2) in respect of Company Equity Awards which become outstanding as of after the date of this Agreement in accordance with their terms andthis Section 4.1(a)) under the Management Equity Plan, as applicable, the Stock Plans in effect as (B) any capital stock of any of the Capitalization Time Company’s Subsidiaries to the Company or any other of its direct or indirect wholly-owned Subsidiaries, (C) Units, Restricted Units, Phantom Units, Residual Units, Company Options and/or rights to acquire Units in connection with grants or awards of stock-based compensation made in compliance with Section 4.1(a)(x) hereof or (3D) pursuant to Units as required by the ESPP in accordance with its terms and subject to Section 4.3(g))Plan of Reorganization;
(viiiv) make any loanssplit, advancescombine, guarantees subdivide or capital contributions to or investments in any Person in excess of $200,000 in the aggregate (other than between the Company and reclassify any of its Wholly Owned Subsidiaries in the Ordinary Course Equity Interests of Business)the Company;
(ixvi) declare, set aside, establish a record date for accruefor, make or pay any dividend dividends on or make any other distribution, distributions (whether payable in cash, stock, property or otherwise with a combination thereof) in respect to of any of the Equity Interests of the Company or its capital stock Subsidiaries, other than any dividends from any wholly-owned Subsidiary of the Company to the Company or to another wholly-owned Subsidiary of the Company;
(vii) repurchase, redeem or otherwise acquire any of the Equity Interests of the Company, except for redemptions, purchases or acquisitions pursuant to the exercise or settlement of Company Options, Restricted Units, Phantom Units, employee severance, retention, termination, change of control and other equity interests contractual rights existing on the date of this Agreement on the terms in effect on the date of this Agreement (and excluding, for the avoidance of doubt, the Call Option under the PBGC Call Agreement);
(viii) incur, or modify in any material respect the terms of, any material Indebtedness or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person (other than the Subsidiaries of the Company) (in each case, for the avoidance of doubt, excluding the Company Notes) of the Company trade payables, capitalized lease obligations, or its Subsidiariesobligations issued or assumed as consideration for services or property, including inventory), except for (A) dividends paid by any Wholly Owned Subsidiary to Indebtedness incurred under the Company or to any other Wholly Owned Subsidiary Credit Facilities) in the ordinary course of the Company or business for working capital purposes, (B) dividends payable letters of credit issued pursuant to (or guarantees permitted by) the holders Credit Facilities or otherwise issued in the ordinary course of Preferred Sharesbusiness, payable in cash or Preferred Shares, (C) draws on the ABL Revolver in accordance with the terms thereof, or (D) interest rate and other hedging arrangements on customary commercial terms in the ordinary course of business;
(ix) grant any Lien on any assets that are material to the Preferred SharesCompany and its Subsidiaries taken as a whole, other than Permitted Liens;
(x) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire (or offer except as required pursuant to do any of the foregoing), directly or indirectly, any of its capital stock, other equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests, other than (A) the withholding of Common Shares Company Plans in effect prior to satisfy the payment of the exercise price on the exercise of a Company Option or withholding Tax obligations upon the exercise, vesting or settlement of Company Equity Awards outstanding as of the date of this Agreement, in each caseor as otherwise required by applicable Law or this Agreement, (A) grant any severance or termination payments or benefits to any Employee of the Company or any of its Subsidiaries, except, in accordance with their terms andthe case of employees who are not executive officers, as applicablein the ordinary course of business, the Stock Plans as in effect as of the Capitalization Time and (B) pursuant to an exercise materially increase the compensation, bonus or pensions or welfare benefits of any employee, except, in the case of employees who are not executive officers of the Capped Call Transactions in accordance with their terms;
(xi) incur or assume any indebtedness for borrowed moneyCompany, guarantee any indebtedness for borrowed money or enter into a “keep well” or similar arrangement in respect of indebtedness for borrowed money except for any such indebtedness not to exceed $2.5 million individually or $5 million in the aggregate;
ordinary course of business, (xiiC) incur, make or authorize any payment of, or accrual or commitment for, capital expenditures, or new equity awards to any obligations or liabilities in connection therewith except as contemplated by or reasonably related to, and which shall not exceed 107.5% of the aggregate amounts set forth in, the Company’s capital budget set forth in Section 7.1(a)(xii) Employee of the Company Disclosure Schedule;
or any of its Subsidiaries, other than (xiii1) enter intogrants of Residual Units, terminate (2) new equity awards made in the ordinary course of business to any Employee hired or materially amend any Contract pursuant to which engaged by the Company or any of its Subsidiaries purchase from after the date hereof and (3) to the extent set forth in Section 4.1(a)(x) of the Company Disclosure Letter, annual 2014 grants of Phantom Units, Restricted Units and Company Options to directors as required by the Director Equity Plan or the Management Equity Plan, as applicable, or (D) terminate or materially amend any Company Plan or establish or adopt any plan that would have been a third party service provider Software Company Plan if it had been in effect as of the date hereof;
(“Third Party IT Contracts”xi) except as required by GAAP, a Governmental Entity or applicable Law, make any material changes to accounting policies or principles;
(xii) other than (A) in the ordinary course of business and consistent with past practice, or (B) as otherwise contemplated or permitted by this Section 4.1, (1) enter into any Contract that would have been a Company Material Contract had it been entered into prior to the date of this Agreement or (2) terminate, consent to the termination of, materially amend or waive any material rights under any Company Material Contract in a manner materially adverse to the Company and its Subsidiaries excluding any termination due to expiration of such Company Material Contract in accordance with the terms of such Company Material Contract; provided in each case that the Company and its Subsidiaries shall be permitted to renew or replace any Company Material Contract with one or more Contracts on substantially similar terms;
(xiii) transfer, sell, lease, license, assign or otherwise dispose of any material assets or businesses of the Company and its Subsidiaries taken as a whole, including Equity Interests of any of its Subsidiaries, other than (A) as may be permitted pursuant to this Section 4.1(a), (B) in the ordinary course of business and in a manner consistent with past practice, (C) pursuant to Contracts in effect prior to the date of this Agreement, true and complete copies of which have been provided to Parent (except to the extent such agreements are subject to confidentiality restrictions), (D) pursuant to transactions solely among the Company and/or any of its Subsidiaries or (E) pursuant to licenses or sublicenses of Intellectual Property granted in the ordinary course of business;
(xiv) except for the expenditures contemplated by the five-year plan set forth in Section 4.1(a)(xiv) of the Company Disclosure Letter, make or authorize any binding capital expenditures in excess of $5,000,000 in the aggregate;
(xv) compromise, settle or agree to settle any claims (A) involving amounts in excess of $1,000,000 individually or $3,000,000 in the aggregate that are not covered by insurance, or (B) that would impose any material non-monetary obligations on the Company or its Subsidiaries that would continue after the Effective Time;
(xvi) enter into any new line of business material to the Company and its Subsidiaries, taken as a whole;
(xvii) make, revoke, adopt, file or change any Tax election, any annual Tax accounting period, any method of Tax accounting, any income Tax Returns, surrender any claims for Tax refunds, amend any Tax Returns, enter into, revoke or amend a closing agreement, settle any Tax claim, audit or assessment, extend any statute of limitations with respect to Tax matters or any right to claim a refund, or surrender any offset or other reduction in Tax liability;
(xviii) propose, 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, except in accordance with the Plan of Reorganization;
(xix) fail to maintain insurance in at least such amounts and against at least such risks and losses as are consistent in all material respects with the Company’s and its Subsidiaries’ past practice in the ordinary course of business;
(xx) make any capital investment in or loan to any Person (other than in the Ordinary Course Company or any of Business with respect to its Subsidiaries);
(xxi) pay any such Contract that involve aggregate annual management, monitoring or other shareholder fees or payments of less a similar nature to or for the benefit of any Member or any Affiliate of any Member (other than $300,000the Company or any of its Subsidiaries);; or
(xxii) announce an intention to enter into any agreement, or otherwise make a commitment, to do any of the foregoing prohibited actions.
(b) Nothing contained in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time, and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations. Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its respective Subsidiaries’ respective operations.
Appears in 1 contract
Sources: Merger Agreement (Textron Inc)
Interim Operations. (a) From Between the Signing Date and after the execution and delivery of this Agreement until Closing Date or the earlier of the Effective Time and the termination of this Agreement and abandonment of the transactions contemplated by this Agreement pursuant to in accordance with Article IX, except as (ia) as otherwise required, contemplated or permitted by this Agreement or as may be required by a Governmental Entity or applicable Law, (iib) as set forth in Section 7.1(a) of the Company Disclosure Schedule or (iii) as Parent shall otherwise consent may be consented to in writing by Buyer (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), (c) is expressly required or expressly permitted pursuant to this Agreement or (d) set forth in Schedule 7.1 of the Company Disclosure Schedules, (Ax) shall, Seller and the Company shall cause its Subsidiaries to, use their respective commercially reasonable efforts to conduct their respective businesses the business of the Group Companies in the Ordinary Course of Business consistent with past practice and, with respect to matters pertaining to the Acquired Business, Seller and the Company shall use their commercially reasonable efforts to preserve intact the Acquired Business in all material respects, (B) shallincluding the business organization, ongoing business, material assets and shall cause its Subsidiaries to, use commercially reasonable efforts to (x) maintain all existing relationships and goodwill with key customers, suppliers and other persons having material significant business relationships with the Company and its Subsidiaries and third parties; (y) keep available the services Company shall not, and Seller shall not permit any of the officers and key employees Group Companies to, incur any Liabilities in respect of the Company and its Subsidiaries, Excluded Business and (Cz) without limiting the generality of the foregoing, Seller shall not, and shall cause its Subsidiaries to not to:
(i) adopt or propose any change in its Organizational Documents;
(ii) merge or consolidate with any other Person, except for any such transactions solely among Wholly Owned Subsidiaries of the Company,
(iii) adopt or enter into a plan of restructuring, reorganizing, dissolving, recapitalizing, complete or partial liquidation or similar transaction;
(iv) enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(v) acquire or agree to acquire by merger, consolidation, acquisition of stock, equity or assets or otherwise, any business, Person, division, properties or assets from any other Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price not in excess of $1 million in any individual transaction or $2 million in the aggregate;
(vi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(vii) issue, deliver, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber or otherwise enter into any Contract or understanding with respect to the voting Acquired Business) to, and the Group Companies shall not:
(a) (i) sell, transfer, license, assign or otherwise dispose of any material property or assets of or transfer used by the Acquired Business, (ii) other than Permitted Liens or other Liens that do not impede, impair or restrict the operation of the Acquired Business by any shares of capital stock Group Company in any material respect, mortgage, encumber or subject to any Lien any property or assets of the Company or capital stock or other equity or equity-based interests of any of and its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than (A) the delivery of any Common Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated on the Preferred Shares) in accordance with the terms of the Preferred Shares or (2) the conversion of the Company Notes in accordance with the Indenture New LLC and the exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations (B) the issuance of Preferred Shares in connection with the payment of dividends on the Preferred Shares in accordance with the terms of the Preferred Shares or (B) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (1) by a Wholly Owned Subsidiary of the Company TaxSmart that is material to the Company and its Subsidiaries, New LLC and TaxSmart (taken as a whole) or another Wholly Owned Subsidiary of the Company, (2) in respect of Company Equity Awards outstanding that will not be released as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans in effect as of the Capitalization Time Closing or (3iii) pursuant to the ESPP in accordance with its terms and subject to Section 4.3(g));
(viii) make cancel any loans, advances, guarantees or capital contributions material debts owed to or investments in any Person in excess of $200,000 in the aggregate (other than between the Company and any of its Wholly Owned Subsidiaries in the Ordinary Course of Business);
(ix) declare, set aside, establish a record date for accrue, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise with respect to any of its capital stock or other equity interests (and for the avoidance of doubt, excluding the Company Notes) of the Company or its Subsidiaries, except for (A) dividends paid material claims held by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company or (B) dividends payable to the holders of Preferred Shares, payable in cash or Preferred Shares, in accordance with the terms of the Preferred Shares;
(x) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire (or offer to do any of the foregoing), directly or indirectly, any of its capital stock, other equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests, other than (A) the withholding of Common Shares to satisfy the payment of the exercise price on the exercise of a Company Option or withholding Tax obligations upon the exercise, vesting or settlement of Company Equity Awards outstanding as of the date of this Agreement, in each case, in accordance with their terms and, as applicable, the Stock Plans as in effect as of the Capitalization Time and (B) pursuant to an exercise of the Capped Call Transactions in accordance with their terms;
(xi) incur or assume any indebtedness for borrowed money, guarantee any indebtedness for borrowed money or enter into a “keep well” or similar arrangement in respect of indebtedness for borrowed money except for any such indebtedness not to exceed $2.5 million individually or $5 million in the aggregate;
(xii) incur, make or authorize any payment of, or accrual or commitment for, capital expenditures, or any obligations or liabilities in connection therewith except as contemplated by or reasonably related to, and which shall not exceed 107.5% of the aggregate amounts set forth in, the Company’s capital budget set forth in Section 7.1(a)(xii) of the Company Disclosure Schedule;
(xiii) enter into, terminate or materially amend any Contract pursuant to which the Company or any of its Subsidiaries purchase from a third party service provider Software (“Third Party IT Contracts”) (other than in the Ordinary Course of Business with respect to any such Contract that involve aggregate annual payments of less than $300,000)Subsidiaries, New LLC and TaxSmart;
Appears in 1 contract
Interim Operations. (a) From and after the execution and delivery of this Agreement date hereof until the earlier of the Effective Time and the termination of this Agreement and abandonment of the transactions contemplated by this Agreement pursuant to Article IXAcceptance Time, except (iA) as otherwise required, contemplated or permitted by this Agreement or as may be required by a Governmental Entity or applicable Law, (iiB) with the prior written consent of Parent (which consent shall not unreasonably be withheld, conditioned or delayed), (C) as expressly contemplated by this Agreement, or (D) as set forth in Section 7.1(a5.1(a) of the Company Disclosure Schedule or Schedule, (iiix) as Parent the Company shall otherwise consent cause the business of the Company and its Subsidiary to be conducted in writing (which consent shall not be unreasonably withheldthe ordinary course consistent with past practice and, delayed or conditioned)to the extent consistent therewith, the Company (A) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to conduct their respective businesses in the Ordinary Course of Business in all material respects, (B) shall, and shall cause its Subsidiaries to, use commercially reasonable best efforts to (xi) preserve intact its and its Subsidiary’s present business organization and maintain all existing the current relationships and goodwill with key customers, suppliers Governmental Entities and other persons Persons having material business relationships dealings with the Company and its Subsidiaries Subsidiary, (ii) prepare and file any requisite regulatory filings with any Regulatory Authority on a timely basis and consistent with their respective past practices and (iii) obtain and maintain quantities of each finished Company Pharmaceutical Product and related raw materials and components that the Company reasonably expects to be required for use in the ongoing and anticipated phase 2 and phase 3 clinical trials of each Company Pharmaceutical Product and (y) keep available the services of the officers and key employees of the Company and its Subsidiaries, and (C) without limiting the generality of clause (x) above and in furtherance thereof, the foregoing, Company shall not, not and shall cause not permit its Subsidiaries not Subsidiary to:
(i) adopt amend its certificate of incorporation, bylaws or propose any change in its Organizational Documentscomparable governing documents;
(ii) merge or consolidate the Company or its Subsidiary with any other Person, except for any such transactions solely among Wholly Owned Subsidiaries of between the Company,Company and its Subsidiary, or dissolve or completely or partially liquidate;
(iii) adopt form any Subsidiary or enter into acquire assets from any other Person with a plan value or purchase price in the aggregate in excess of restructuring$300,000 in any transaction or series of related transactions, reorganizing, dissolving, recapitalizing, complete other than acquisitions in the ordinary course of business consistent with past practice with a value or partial liquidation purchase price in the aggregate not in excess of $300,000 or similar transactionpursuant to Material Contracts in effect as of the date hereof;
(iv) enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(v) acquire or agree to acquire by merger, consolidation, acquisition of stock, equity or assets or otherwise, any business, Person, division, properties or assets from any other Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price not in excess of $1 million in any individual transaction or $2 million in the aggregate;
(vi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(vii) issue, deliver, sell, pledge, dispose of, grant, transfertransfer or encumber, leaseor authorize the issuance, licensesale, guaranteepledge, Encumber disposition, grant, transfer or otherwise enter into any Contract or understanding with respect to the voting of or transfer encumbrance of, any shares of capital stock of the Company or capital stock its Subsidiary, or other equity or equity-based interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of such capital stock or other equity interestsstock, or any options, warrants or other rights of any kind to acquire any such shares of such capital stock, other equity interests stock or such convertible or exchangeable securities (securities, other than (A) the delivery issuance or sales of any Common Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated on the Preferred Shares) in accordance with the terms of the Preferred Shares or (2) the conversion exercise of the Company Notes in accordance with Options or the Indenture and the exercise vesting of the Capped Call Transactions in accordance with the Capped Call Confirmations (B) the issuance of Preferred Shares in connection with the payment of dividends on the Preferred Shares in accordance with the terms of the Preferred Shares Company Restricted Stock or (B) as permitted under Section 5.1(a)(xviii);
(v) other than in the issuance ordinary course of shares of such capital stockbusiness consistent with past practice, create or incur any Lien on (i) any assets (other equity securities or convertible or exchangeable securities (1than Company Intellectual Property) by a Wholly Owned Subsidiary of the Company or its Subsidiary having a value in excess of $300,000, (ii) any material Intellectual Property of the Company or its Subsidiary, or (iii) material Intellectual Property licensed to the Company or another Wholly Owned Subsidiary of the Company, (2) in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans in effect as of the Capitalization Time or (3) pursuant to the ESPP in accordance with its terms and subject to Section 4.3(g))Subsidiary;
(viiivi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than the Company or its Subsidiary) in excess of $200,000 300,000 in the aggregate (other than between the Company and any of its Wholly Owned Subsidiaries in the Ordinary Course of Business)aggregate;
(ixvii) (A) declare, accrue, set aside, establish a record date for accrue, make or pay any dividend or other distribution, distribution payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by the Company’s Subsidiary to the Company), (B) repurchase, redeem or otherwise reacquire any shares of capital stock or other securities, or subdivide, reclassify, recapitalize, split, combine or exchange or enter into any similar transaction with respect to any of its capital stock or other equity interests (and for securities or issue or authorize or propose the avoidance issuance of doubt, excluding the Company Notes) of the Company or its Subsidiaries, except for (A) dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company or (B) dividends payable to the holders of Preferred Shares, payable securities in cash or Preferred Sharesrespect of, in accordance with the terms lieu of the Preferred Shares;
(x) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire (or offer to do any of the foregoing), directly or indirectly, any of its capital stock, other equity interests or securities convertible or exchangeable into or exercisable in substitution for any shares of its capital stock or other equity interestssecurities, other than (A) the withholding except for any split, combination or reclassification of Common Shares to satisfy the payment capital stock of a wholly owned Subsidiary of the exercise price on the exercise Company, or any issuance or authorization or proposal to issue or authorize any securities of a wholly owned Subsidiary of the Company Option to the Company or withholding Tax obligations upon another wholly owned Subsidiary of the exerciseCompany, vesting or settlement (C) enter into any agreement with respect to the voting of its capital stock;
(viii) incur any indebtedness for borrowed money or assume, guarantee, endorse or otherwise become liable or responsible for (whether directly, contingently or otherwise) any other Person’s indebtedness for borrowed money, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company Equity Awards outstanding or its Subsidiary, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice not to exceed $300,000 in the aggregate;
(ix) except as of contemplated in capital budgets furnished to Parent prior to the date of this Agreement, make any capital expenditures in each case, in accordance with their terms and, as applicable, the Stock Plans as in effect as excess of the Capitalization Time and (B) pursuant to an exercise of the Capped Call Transactions in accordance with their terms;
(xi) incur or assume any indebtedness for borrowed money, guarantee any indebtedness for borrowed money or enter into a “keep well” or similar arrangement in respect of indebtedness for borrowed money except for any such indebtedness not to exceed $2.5 million individually or $5 million 300,000 in the aggregate;
(x) make any changes with respect to accounting policies or procedures other than as required by changes in GAAP;
(xi) settle any litigation for an amount in excess of $300,000;
(xii) incur, make or authorize any payment of, or accrual or commitment for, capital expenditures, or any obligations or liabilities in connection therewith except other than as contemplated by or reasonably related to, and which shall not exceed 107.5% necessary to facilitate the research and/or clinical operations of the aggregate amounts set forth in, Company in a manner consistent with the Company’s capital budget set forth in Section 7.1(a)(xii) operating budgets furnished to Parent prior to the date of the Company Disclosure Schedulethis Agreement, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement;
(xiii) other than as reasonably necessary to facilitate the research and/or clinical operations of the Company in a manner consistent with the Company’s operating budgets furnished to Parent prior to the date of this Agreement, amend, modify or terminate any Material Contract;
(xiv) other than pursuant to Contracts in effect prior to the date hereof, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material assets, licenses, operations, rights or businesses of the Company or its Subsidiary, except for (A) sales, transfers or dispositions of obsolete or worthless assets or (B) sales, transfers, leases, licenses or other dispositions of assets with a fair market value not in excess of $300,000 in the aggregate;
(xv) assign or grant an exclusive license of any material right in any Company Intellectual Property necessary or useful for the manufacture, use, sale, offer for sale or importation of any Company Pharmaceutical Products or that otherwise enables a third party to compete with the Company with respect to the manufacture or sale of any product that competes with any Company Pharmaceutical Product;
(xvi) waive any inbound license in any IP Contract under any Patent or other Company Intellectual Property material to any Company Pharmaceutical Product and, other than in the ordinary course of business consistent with past practice, (A) amend any inbound license in any IP Contract under any Patent or other Company Intellectual Property material to any Company Pharmaceutical Product or (B) enter intointo any Contract that would constitute an IP Contract if entered into prior to the date of this Agreement;
(xvii) except as contemplated in operating budgets furnished to Parent prior to the date of this Agreement, commence (other than planning) or alter, in a manner that would materially increase the expenditures to be made by the Company in connection therewith, any new Phase I, Phase II, Phase III or Phase IV human clinical trial (including initiation of a new institutional review board) involving any Company Pharmaceutical Product;
(xviii) except as required by applicable Law or otherwise required pursuant to existing Contracts or Benefit Plans in effect as of the date hereof and made available to Parent, (A) increase the salaries or wages of any Employee, except in the ordinary course of business consistent with past practice, (B) promote any Employee except in order to fill a position vacated after the date of this Agreement, (C) pay any bonus to any Employee other than a bonus pursuant to Section 5.8(f), (D) enter into or establish any new employment agreement or change in control severance agreement with any Employee, other than with any new Employee hired to replace an Employee who is party to any such agreement, (E) make any severance payments to any Employee in excess of what they are contractually entitled to, (F) make any new equity awards to any Employee or accelerate the vesting under any equity compensation plan (except for vesting accelerated pursuant to Section 3.3 of this Agreement), (G) other than in accordance with Section 5.1(a)(xviii)(D), establish, adopt, terminate or materially amend any Benefit Plan, (H) hire any employee at the level of Vice President or above, (I) hire any employee in a sales, general or administrative capacity with an annual base salary in excess of $150,000, or (J) hire any employee (other than an employee described in clause “(I)” above) with an annual base salary in excess of $250,000;
(xix) except as required by applicable Law, make, change or rescind any material Tax election, file any amended material Tax Return, settle or compromise any material Tax liability, agree to an extension or waiver of the statute of limitations with respect to material Taxes, enter into any closing agreement with respect to a material Tax, surrender any right to claim a material Tax refund, or change any material method of Tax accounting;
(xx) enter into or consummate any tax planning or restructuring transaction which involves any transfer, assignment or other disposition of any Company Intellectual Property;
(xxi) (A) waive or amend (except in the course of diligently prosecuting the Company Intellectual Property) the Company’s rights in or to any Company Intellectual Property owned by the Company or its Subsidiary that is registered or the subject of an application for registration, (B) fail to diligently prosecute or maintain any material Company Intellectual Property owned by the Company or its Subsidiary that is registered or the subject of an application for registration, in each case in the name of Company or its Subsidiary or (C) fail to make any required payments in accordance with the terms of any IP Contract pursuant to which the Company or licenses any material Intellectual Property;
(xxii) qualify any new site for manufacturing of any Company Pharmaceutical Product; or
(xxiii) enter into any Contract to do any of its Subsidiaries the foregoing.
(b) Each of Parent and Merger Sub, subject to the limitations set forth in Section 5.4(e)(ii), on the one hand, and the Company, on the other hand, agrees that, except as otherwise provided in this Agreement, it shall not knowingly take any action that would reasonably be expected to prevent or delay the consummation of the Offer, the Merger and the other Transactions in accordance with the terms of this Agreement. Without limiting the generality of the foregoing, each of Parent and Merger Sub agrees that, after the date hereof and prior to the Effective Time, it shall not consummate or agree to consummate any purchase from a third party service provider Software (“Third Party IT Contracts”) (or other than acquisition of any assets, licenses, operations, rights or businesses that, individually or in the Ordinary Course aggregate with any other such purchase or acquisition, would reasonably be expected to (i) prevent or delay the parties hereto from obtaining any consents, registrations, approvals, permits or authorizations required to be obtained from any Governmental Entity in connection with the consummation of Business the Offer, the Merger and the other Transactions, (ii) result in the imposition of a condition or conditions on any such consents, registrations, approvals, permits or authorizations, or (iii) otherwise prevent or delay any party hereto from performing its obligations hereunder or consummating the Offer, the Merger and the other Transactions.
(c) The Company shall promptly notify Parent and Merger Sub of any significant data relating to the Key Product, including information related to any significant adverse events with respect to the Key Product.
(d) Each party hereto shall promptly advise the other parties hereto of any Proceeding or material claim threatened, commenced or asserted against or with respect to any such Contract that involve aggregate annual payments party relating to the Transactions and promptly provide the parties hereto with copies of less all material complaints, pleadings and filings related thereto.
(e) From the date hereof until the Acceptance Time, the Company shall (i) consult with Parent in connection with any proposed meeting with the FDA or any other Governmental Entity relating to any Company Pharmaceutical Product, (ii) promptly inform Parent of, and provide Parent with a reasonable opportunity to review, any material filing proposed to be made by or on behalf of any of the Company or its Subsidiary, and any material correspondence or other material communication proposed to be submitted or otherwise transmitted to the FDA or any other Governmental Entity by or on behalf of any of the Company or its Subsidiary, in each case relating to any Company Pharmaceutical Product, (iii) keep Parent promptly informed of (A) any communication (written or oral) with or from the FDA and any other Governmental Entity and (B) any material communications (written or oral) received from any Person relating to the Company Intellectual Property and (iv) promptly inform Parent and provide Parent or Merger Sub with a reasonable opportunity (but no more than $300,000three (3) Business Days) to comment, in each case, prior to making any material change to any study protocol, adding any new trial, making any material change to a manufacturing plan or process, making any material change to a development timeline or initiating, or making any material change to, promotional or marketing materials or activities relating to any Company Pharmaceutical Product.
(f) Notwithstanding the above, the delivery of any notice pursuant to Section 5.1(b);, 5.1(c), 5.1(d) or 5.1(e) shall not limit or otherwise affect the representations, warranties, covenants or agreements of the parties hereto, the remedies available hereunder to the party hereto receiving such notice or the conditions to such party's obligation to consummate the Offer, the Merger or any of the other Transactions.
(g) Nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control the Company or its Subsidiary or direct the business or operations of the Company or its Subsidiary prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its operations and the operations of its Subsidiary. Nothing in this Agreement, including any of the actions, rights or restrictions set forth herein, shall be interpreted in such a way as to place the Company, Parent or Merger Sub in violation of any rule, regulation or policy of any Governmental Entity, including any applicable Law.
Appears in 1 contract
Interim Operations. (a) From and after After the execution and delivery of this Agreement until the earlier of the Effective Time and the termination date of this Agreement and abandonment of prior to the transactions Effective Time, except as (w) required by applicable Law or by a Governmental Entity, (x) otherwise expressly contemplated by this Agreement pursuant to Article IX, except (i) as otherwise required, contemplated or permitted by this Agreement or as required by a Governmental Entity or applicable LawAgreement, (iiy) as otherwise set forth in Section 7.1(a6.1(a) of the Company Disclosure Schedule Letter or (iiiz) as Parent shall otherwise consent approve in writing (which consent shall such approval not to be unreasonably withheld, delayed or conditioned), the Company (A) shall, shall use reasonable best efforts to cause the business of it and shall cause its Subsidiaries toto be conducted in the ordinary course and, to the extent consistent therewith, it shall use commercially reasonable best efforts to conduct their respective businesses in the Ordinary Course preserve its business organization and that of Business in all material respects, (B) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to (x) intact and maintain all existing relationships relations and goodwill with key Governmental Entities, customers, suppliers suppliers, employees and other persons having material business relationships with the Company and its Subsidiaries and (y) keep available the services of the officers and key employees of the Company and its Subsidiaries, and (C) without associates. Without limiting the generality of the foregoingforegoing and in furtherance thereof, from the date of this Agreement until the Effective Time, except as (A) required by Law or by a Governmental Entity, (B) otherwise expressly contemplated by this Agreement, (C) as set forth in Section 6.1(a) of the Company Disclosure Letter or (D) Parent shall notapprove in writing (such approval not to be unreasonably withheld, delayed or conditioned), the Company will not and shall will cause its Subsidiaries not to:
(i) adopt or propose any change in its Organizational Documentscertificate of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate with any other PersonPerson or restructure, except for reorganize or completely or partially liquidate the Company or any such transactions solely among Wholly Owned Subsidiaries of the Company,its Subsidiaries;
(iii) adopt acquire (including by merger, consolidation or enter into a plan acquisition of restructuringequity interests or assets or any other business combination) (A) any corporation, reorganizingpartnership, dissolvingother business organization or division thereof or (B) any assets outside of the ordinary course of business from any other Person in any transaction or series of related transactions (in the case of clause (B), recapitalizing, complete or partial liquidation or similar transactionfor consideration in excess of $5 million in the aggregate);
(iv) enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(v) acquire or agree to acquire by merger, consolidation, acquisition of stock, equity or assets or otherwise, any business, Person, division, properties or assets from any other Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price not in excess of $1 million in any individual transaction or $2 million in the aggregate;
(vi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(vii) issue, deliver, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guaranteeguarantee or encumbrance of, Encumber or otherwise enter into any Contract or understanding with respect to the voting of or transfer (x) any shares of capital stock or other equity interests of the Company or capital stock any its Subsidiaries (other than (A) the issuance of Shares upon the exercise of Company Options outstanding on the date hereof or other equity the vesting of Company Restricted Stock (and dividend equivalents thereon, if applicable) outstanding on the date hereof, or equity-based interests (B) the issuance of any shares by a wholly owned Subsidiary of its Subsidiariesthe Company to the Company or another wholly owned Subsidiary), (y) securities convertible or exchangeable into or exercisable for any such shares of such capital stock or other equity interests, or (z) any options, warrants or other rights of any kind to acquire any such shares of such capital stock, other equity interests stock or such convertible or exchangeable securities (other than (A) the delivery of any Common Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated on the Preferred Shares) in accordance with the terms of the Preferred Shares or (2) the conversion of the Company Notes in accordance with the Indenture and the exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations (B) the issuance of Preferred Shares in connection with the payment of dividends on the Preferred Shares in accordance with the terms of the Preferred Shares or (B) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (1) by a Wholly Owned Subsidiary of the Company to the Company or another Wholly Owned Subsidiary of the Company, (2) in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans in effect as of the Capitalization Time or (3) pursuant to the ESPP in accordance with its terms and subject to Section 4.3(g))securities;
(viiiv) make any loans, advances, guarantees advances or capital contributions to or investments in any Person (other than among the Company and any direct or indirect wholly owned Subsidiary of the Company) in excess of $200,000 1,000,000 in the aggregate (other than between the Company and any of its Wholly Owned Subsidiaries in the Ordinary Course of Business)aggregate;
(ixvi) declare, set aside, establish a record date for accrue, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise otherwise, with respect to any of its capital stock or other equity interests (and for the avoidance of doubt, excluding the Company Notes) of the Company or its Subsidiaries, except for (A) dividends paid by any Wholly Owned direct or indirect wholly owned Subsidiary to the Company or to any other Wholly Owned direct or indirect wholly owned Subsidiary of and except for quarterly dividends paid by the Company to holders of Shares consistent with past practice and not in excess of $0.05 per Share) or (B) dividends payable enter into any agreement with respect to the holders voting of Preferred Shares, payable in cash or Preferred Shares, in accordance with the terms of the Preferred Sharesits capital stock;
(xvii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire (or offer to do any of the foregoing)acquire, directly or indirectly, any of its capital stock, other equity interests stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests, (other than (A) the withholding acquisition of Common any Shares tendered by current or former employees or directors in order to satisfy the payment of the exercise price on pay Taxes in connection with the exercise of a Company Option Options or withholding Tax obligations upon the exercise, vesting or settlement of Company Equity Awards outstanding as Restricted Stock);
(viii) add an employer stock investment option to any Benefit Plan intended to be qualified under Section 401(a) of the date Code or permit any participant in any such Benefit Plan to direct the investment of this his or her plan account in employer securities within the meaning of Section 407(d) of ERISA;
(ix) incur, assume or otherwise become liable for any Indebtedness for borrowed money or guarantee such Indebtedness of another Person (other than of the Company or any wholly owned Subsidiary of the Company), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for Indebtedness pursuant to the Second Amended and Restated Credit Agreement, dated August 4, 2011 borrowed in each casethe ordinary course of business and in a net amount not to exceed $40 million (including letters of credit pursuant thereto);
(x) make any capital expenditures in excess of $1,000,000 in the aggregate, except as included as a line item in accordance the Company’s 2013 capital budget, with their terms andrespect to the 2013 fiscal year, or in the 2014 capital budget, with respect to the 2014 fiscal year (true and correct copies of which have been made available to Parent) and except for expenditures related to operational emergencies solely to the extent necessary to restore and resume ordinary course operations and functions disrupted as applicable, the Stock Plans as in effect as a result of the Capitalization Time and (B) pursuant to an exercise of the Capped Call Transactions in accordance with their termssuch operational emergency;
(xi) incur make any material changes with respect to accounting policies or assume any indebtedness for borrowed moneyprocedures, guarantee any indebtedness for borrowed money except as required by changes in GAAP, or enter into the interpretation thereof, or by a “keep well” or similar arrangement in respect of indebtedness for borrowed money except for any such indebtedness not to exceed $2.5 million individually or $5 million in the aggregateGovernmental Entity;
(xii) incursettle, make release, waive or authorize compromise any payment ofclaim or obligation (whether absolute, accrued, contingent or accrual or commitment for, capital expenditures, otherwise) or any obligations pending or liabilities in connection therewith except as contemplated threatened Action by or reasonably related to, and which shall not exceed 107.5% of the aggregate amounts set forth in, the Company’s capital budget set forth in Section 7.1(a)(xii) of before a Governmental Entity against the Company Disclosure Schedule;
(xiii) enter intoor any of its Subsidiaries, terminate except for any such claim, obligation or materially amend any Contract pursuant to which Action that would not result in liability for the Company or any of its Subsidiaries purchase from in an amount in excess of $500,000 individually or $1 million in the aggregate (in each case, net of applicable insurance proceeds after payment of deductibles) and that does not otherwise impose any material obligations or restrictions on the business or operations of the Company or any of its Subsidiaries;
(xiii) other than to the extent required by Law, make or change any material Tax election;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material amount of assets, product lines or businesses of the Company, including capital stock of any of its Subsidiaries, other than inventory, supplies and other assets (including with respect to Intellectual Property, which shall be governed solely under Section 6.1(a)(xvii)) in the ordinary course of business or pursuant to Contracts in effect prior to the date of this Agreement (true and correct copies of which, subject to redactions, have been provided to Parent);
(xv) except as required pursuant to the terms of any Benefit Plan set forth on Section 5.1(h)(i) of the Company Disclosure Letter, (A) grant or provide any severance or termination payments or benefits to any employee, director or other individual service provider, (B) grant any new equity-based awards (including any phantom stock award) to any employee or accelerate the vesting of any award under the Stock Plan, (C) materially increase the compensation of any employee, director or other individual service provider, other than routine salary increases for non-officer employees in the ordinary course of business consistent with past practice (with respect to both timing and amount), (D) establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or except to the extent that such amendment would not result in more than a third party de minimis increase to the cost to the Company under such arrangement or plan) or (E) hire any employee, director or other individual service provider Software with an annual base salary in excess of $175,000, and on terms that do not provide for any payments or benefits upon termination;
(“Third Party IT Contracts”xvi) (A) terminate or materially amend or modify any Material Contract or any Lease (other than, except with respect to Leases, extensions at the end of a term or on overall terms no less favorable than the terms of the existing Material Contract and for a term no longer than the existing term of such Material Contract and in no event longer than one year) or enter into a Contract that, if in effect on the date of this Agreement, would have been a Material Contract or (B) enter into any Contract that contains a change of control or similar provision that would require a payment to any Person counterparty thereto in connection with the consummation of the Offer, the Merger and/or the other transactions contemplated in this Agreement that would not otherwise be due;
(xvii) sell, transfer, assign, abandon or otherwise dispose of, or grant any license or sublicense with respect to, any Company Intellectual Property (other than any license granted or abandonment in the ordinary course of business consistent with past practice);
(xviii) implement any facility closings or reductions in force not in compliance with the WARN Act;
(xix) fail to maintain in full force and effect any Insurance Policy material to the operations of the business of the Company and its Subsidiaries taken as a whole;
(xx) accelerate the collection of accounts receivable or delay the payment of accounts payable or participate in any activity that would reasonably be expected to result in a temporary increase in the demand for the products offered by the Company or any of its Subsidiaries (in each case, other than in the Ordinary Course ordinary course of Business business); or
(xxi) agree, authorize or commit to do any of the foregoing.
(b) Neither Parent, Merger Sub nor the Company shall take or permit any of their Affiliates to take any action that is reasonably likely to prevent or delay the consummation of the Offer, the Merger or the other transactions contemplated by this Agreement.
(c) Nothing contained in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time, and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations. Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with respect to any such Contract that involve aggregate annual payments the terms and conditions of less than $300,000);this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
Appears in 1 contract
Interim Operations. (a) From and after the execution and delivery date of this Agreement and until the earlier of the Effective Time and or the earlier termination of this Agreement and abandonment of the transactions contemplated by this Agreement pursuant to Article IXin accordance with its terms, except (i) as otherwise required, contemplated or permitted by this Agreement or as required by a Governmental Entity or applicable Law, (iiw) as set forth in Section 7.1(a6.1(a) of the Company Disclosure Schedule or Letter, (iiix) as Parent shall otherwise consent expressly contemplated or permitted by this Agreement, (y) to the extent consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned)) or (z) as required by applicable Law or by a Governmental Entity, the Company (A) shall use reasonable best efforts to cause the business of it and its Subsidiaries to be conducted in the ordinary course of business and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries toSubsidiaries, to use commercially their respective reasonable best efforts to conduct preserve their respective businesses in the Ordinary Course of Business in all material respectsbusiness organizations intact and maintain satisfactory relationships with Governmental Entities, (B) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to (x) maintain all existing relationships and goodwill with key customers, suppliers vendors, Suppliers, lessors, distributors and other persons having material business relationships with the Company and its Subsidiaries and (y) keep available the services of the officers and key employees of the Company and its Subsidiaries, and (C) without limiting employees. Notwithstanding the generality of the foregoing, and subject to the exceptions set forth in clauses (w), (x), (y) and (z) of the immediately preceding sentence, the Company shall not, not and shall cause not permit its Subsidiaries not to:
(i) adopt amend the certificate of incorporation, bylaws or propose comparable governing documents of the Company or any change in of its Organizational DocumentsSubsidiaries;
(ii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) assets outside of the ordinary course of business consistent with past practice from any other Person (other than the Company or any direct or indirect wholly owned Subsidiary of the Company) with a value or purchase price in the aggregate in excess of $300,000 in any transaction or series of related transactions, other than acquisitions of merchandise for sale in the Company’s stores or acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iii) merge or consolidate with any other PersonPerson or restructure, except for reorganize or completely or partially liquidate the Company or any such transactions solely among Wholly Owned Subsidiaries of the Company,
(iii) adopt or enter into a plan of restructuring, reorganizing, dissolving, recapitalizing, complete or partial liquidation or similar transactionits Subsidiaries;
(iv) enter into any agreements or arrangements imposing new line of business material changes or restrictions on to the Company and its propertiesSubsidiaries, assets, operations or businessestaken as a whole;
(v) acquire or agree to acquire by merger, consolidation, acquisition of stock, equity or assets or otherwise, any business, Person, division, properties or assets from any other Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price not in excess of $1 million in any individual transaction or $2 million in the aggregate;
(vi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(vii) issue, deliver, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber transfer or otherwise enter into any Contract or understanding with respect to the voting of or transfer encumber any shares of capital stock or equity interests or securities convertible, exchangeable or exercisable therefor (collectively, “Equity Interests”) of the Company or capital stock or other equity or equity-based interests of any of its SubsidiariesSubsidiaries (including any Company Stock Options), securities convertible except issuances or exchangeable into or exercisable for any such shares dispositions of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than (A) the delivery of any Common Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated pursuant to Company Stock Options, or Company RSUs, Company DSUs or Company PSUs outstanding on the Preferred Shares) in accordance with the terms of the Preferred Shares or (2) the conversion of the Company Notes in accordance with the Indenture and the exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations (B) the issuance of Preferred Shares in connection with the payment of dividends on the Preferred Shares in accordance with the terms of the Preferred Shares or (B) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (1) by a Wholly Owned Subsidiary of the Company to the Company or another Wholly Owned Subsidiary of the Company, (2) in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, under the Stock Company Plans in effect as or (B) any capital stock of any of the Capitalization Time or (3) pursuant Company’s Subsidiaries to the ESPP in accordance with Company or any other of its terms and subject to Section 4.3(g))direct or indirect wholly-owned Subsidiaries;
(viiivi) make any loanssplit, advancescombine, guarantees subdivide or capital contributions to or investments in any Person in excess of $200,000 in the aggregate (other than between the Company and reclassify any of its Wholly Owned Subsidiaries in the Ordinary Course of Business)Equity Interests;
(ixvii) declare, set aside, establish a record date for accruefor, make or pay any dividend dividends on or make any other distribution, distributions (whether payable in cash, stock, property or a combination thereof) in respect of any of the capital stock, other than any dividends from any wholly owned Subsidiary of the Company to the Company or to another wholly owned Subsidiary of the Company;
(viii) repurchase, redeem or otherwise acquire any of the Equity Interests, except for redemptions, purchases or acquisitions pursuant to the exercise or settlement of Company Stock Options, employee severance, retention, termination, change of control and other contractual rights existing on the date of this Agreement on the terms in effect on the date of this Agreement; provided that the Company shall not undertake any market purchases of Equity Interests.
(ix) incur or modify in any material respect the terms of any Indebtedness (other than with respect to clauses (d) or (e) of the definition of Indebtedness to the extent not otherwise included in clauses (a), (b), (c), (f) or (g)) or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any of its capital stock or other equity interests Person for Indebtedness (and in each case, for the avoidance of doubt, excluding trade payables, immaterial capital lease obligations incurred in the Company Notes) ordinary course of the Company business, or its Subsidiariesobligations issued or assumed as consideration for services or property, including inventory), except for (A) dividends paid by Indebtedness incurred under the Credit Agreement, dated April 5, 2013, among the Company, as lead borrower, the borrowers named therein, the guarantors signatory thereto and Bank of America, N.A. as administrative agent, collateral agent, swing line lender and letter of credit issuer, and the other lender parties thereto (the “Revolving Credit Facility”) and (B) letters of credit issued pursuant to the Revolving Credit Facility in the ordinary course of business in an aggregate amount outstanding for clause (A) and (B) at any Wholly Owned Subsidiary time of less than $5,000,000;
(x) grant or incur any Lien material to the Company and its Subsidiaries taken as a whole, other than Liens incurred in the ordinary course of business consistent with past practice, Liens that may be incurred or granted pursuant to any other Wholly Owned Subsidiary of the Company or (B) dividends payable to the holders of Preferred Shares, payable in cash or Preferred Shares, in accordance with the terms of any Indebtedness in effect as of the Preferred Sharesdate hereof to the extent, in connection with any Indebtedness permitted pursuant to Section 6.1(a)(ix) or pursuant to licenses or sublicenses of Intellectual Property granted in the ordinary course of business;
(xi) except as (x) reclassifyrequired pursuant to Company Plans in effect prior to the date of this Agreement that have been disclosed in Section 5.1(i)(i) of the Company Disclosure Letter, split(y) set forth in Section 6.1(a)(xi) of the Company Disclosure Letter or (z) otherwise required by this Agreement, combine(A) loan or advance any money or grant to any Employee of the Company or any of its Subsidiaries, subdivide except in the case of employees who are not executive officers of the Company wage advances in the ordinary course of business consistent with past practice, (B) provide any severance, retention or redeemtermination payments or benefits to any Employee of the Company or any of its Subsidiaries, purchase except in the case of employees who are not executive officers of the Company in the ordinary course of business consistent with past practice, (C) increase or modify the compensation, bonus or pensions or welfare benefits of any Employee of the Company or any of its Subsidiaries, except in the case of employees who are not executive officers of the Company merit increases or promotions in the ordinary course of business consistent with past practice, (D) establish, adopt, terminate or amend any Company Plan, accelerate the timing of payments under or increase the amount of funding of any Company Plan or amend the terms of any outstanding equity-based awards, (E) enter into any offer letter, employment, consulting or other service agreement or arrangement with any individual who would be an Employee if such individual were employed on the date hereof, except that the Company shall be permitted to hire Employees who are not executive officers of the Company, (x) to replace terminated employees, provided that the total compensation opportunities for such individual shall be no greater in any material respect than that of the terminated employee such individual is intended to replace or (y) to hire employees with annual compensation and benefits of less than $100,000 or (F) use discretion to waive, accelerate or otherwise acquire amend or establish any vesting or other performance conditions applicable to any incentive awards or make any new incentive awards to any Employee of the Company or any of its Subsidiaries;
(xii) make or offer change any material Tax election, file any material amended Tax Return, settle or compromise any material Tax liability, enter into any closing agreement with respect to any material Tax or surrender any right to claim a material Tax refund, or change the Company’s or any Subsidiary of the Company’s method of accounting for Tax purposes;
(xiii) except as required by GAAP, make any material changes to accounting policies or principles;
(xiv) other than as described in Section 6.1(a)(xiv) of the Company Disclosure Letter or as permitted in accordance with Section 6.1(a)(xi), make any loans, advances or capital contributions to, or investments in, any Person, other than to or in the Company or to or in any wholly-owned Subsidiary of the Company;
(xv) other than (A) in the ordinary course of business or (B) as otherwise expressly permitted by this Section 6.1, (1) enter into any Contract that would have been a Company Material Contract pursuant to subsections (B) through (O) of Section 5.1(r)(i) had it been entered into prior to the date of this Agreement or (2) terminate, renew, amend or waive any material rights under any Company Material Contract excluding any termination upon expiration of a term in accordance with the terms of such Company Material Contract; provided in each case that the Company and its Subsidiaries shall be permitted to renew or replace any Company Material Contract which has terminated in accordance with its terms with one or more Contracts on substantially similar terms with the same counterparty;
(xvi) other than stockholder litigation (which is governed by Section 6.4), compromise, settle or agree to settle any claims (A) involving amounts in excess of $150,000 individually or $500,000 in the aggregate or (B) that would impose any material non-monetary obligations on the Company or its Subsidiaries that would continue after the Effective Time;
(xvii) transfer, sell, lease, license, pledge, surrender, encumber, divest, cancel, abandon, let lapse, assign or otherwise dispose of any material assets, rights, product lines or businesses of the Company and its Subsidiaries taken as a whole, including capital stock of any of its Subsidiaries, or any material Intellectual Property other than (A) as may be permitted pursuant to Section 6.1(a)(xv), (B) inventory, supplies and other assets in the ordinary course of business consistent with past practice, (C) pursuant to Contracts in effect prior to the date of this Agreement as set forth in Section 6.1(a)(xvii) of the Company Disclosure Schedule, (D) pursuant to transactions solely among the Company and/or any of its Subsidiaries, (E) pursuant to non-exclusive licenses or sublicenses of Intellectual Property granted in the ordinary course of business consistent with past practice or (F) the abandonment or lapse of Intellectual Property not material to the conduct of the business of the Company and its Subsidiaries;
(xviii) except for the expenditures contemplated by and consistent with the annual capital budgets set forth in Section 6.1(a)(xviii) of the Company Disclosure Letter, make or authorize any capital expenditures in excess of $250,000 in the aggregate;
(xix) fail to maintain in full force and effect any Company Insurance Policies in a form and amount consistent with past practice; or
(xx) agree, authorize or commit to do any of the foregoing).
(b) Nothing contained in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, any the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time, and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations. Prior to the Effective Time, each of its capital stock, other equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests, other than (A) Parent and the withholding of Common Shares to satisfy the payment of the exercise price on the exercise of a Company Option or withholding Tax obligations upon the shall exercise, vesting or settlement of Company Equity Awards outstanding as of consistent with the date terms and conditions of this Agreement, in each case, in accordance with their terms and, as applicable, the Stock Plans as in effect as of the Capitalization Time complete control and (B) pursuant to an exercise of the Capped Call Transactions in accordance with their terms;
(xi) incur or assume any indebtedness for borrowed money, guarantee any indebtedness for borrowed money or enter into a “keep well” or similar arrangement in respect of indebtedness for borrowed money except for any such indebtedness not to exceed $2.5 million individually or $5 million in the aggregate;
(xii) incur, make or authorize any payment of, or accrual or commitment for, capital expenditures, or any obligations or liabilities in connection therewith except as contemplated by or reasonably related to, supervision over its and which shall not exceed 107.5% of the aggregate amounts set forth in, the Company’s capital budget set forth in Section 7.1(a)(xii) of the Company Disclosure Schedule;
(xiii) enter into, terminate or materially amend any Contract pursuant to which the Company or any of its Subsidiaries purchase from a third party service provider Software (“Third Party IT Contracts”) (other than in the Ordinary Course of Business with respect to any such Contract that involve aggregate annual payments of less than $300,000);Subsidiaries’ respective operations.
Appears in 1 contract
Sources: Merger Agreement (Rue21, Inc.)
Interim Operations. (a) From and after the execution and delivery of this Agreement date hereof until the earlier of the Effective Time and the termination of this Agreement and abandonment of the transactions contemplated by this Agreement pursuant to Article IXAcceptance Time, except (iA) as otherwise required, contemplated or permitted by this Agreement or as may be required by a Governmental Entity or applicable Law, (iiB) with the prior written consent of Parent (which consent shall not unreasonably be withheld, conditioned or delayed), (C) as expressly contemplated by this Agreement, or (D) as set forth in Section 7.1(a5.1(a) of the Company Disclosure Schedule or Schedule, (iiix) as Parent the Company shall otherwise consent cause the business of the Company and its Subsidiary to be conducted in writing (which consent shall not be unreasonably withheldthe ordinary course consistent with past practice and, delayed or conditioned)to the extent consistent therewith, the Company (A) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to conduct their respective businesses in the Ordinary Course of Business in all material respects, (B) shall, and shall cause its Subsidiaries to, use commercially reasonable best efforts to (xi) preserve intact its and its Subsidiary’s present business organization and maintain all existing the current relationships and goodwill with key customers, suppliers Governmental Entities and other persons Persons having material business relationships dealings with the Company and its Subsidiaries Subsidiary, (ii) prepare and file any requisite regulatory filings with any Regulatory Authority on a timely basis and consistent with their respective past practices and (iii) obtain and maintain quantities of each finished Company Pharmaceutical Product and related raw materials and components that the Company reasonably expects to be required for use in the ongoing and anticipated phase 2 and phase 3 clinical trials of each Company Pharmaceutical Product and (y) keep available the services of the officers and key employees of the Company and its Subsidiaries, and (C) without limiting the generality of clause (x) above and in furtherance thereof, the foregoing, Company shall not, not and shall cause not permit its Subsidiaries not Subsidiary to:
(i) adopt amend its certificate of incorporation, bylaws or propose any change in its Organizational Documentscomparable governing documents;
(ii) merge or consolidate the Company or its Subsidiary with any other Person, except for any such transactions solely among Wholly Owned Subsidiaries of between the Company,Company and its Subsidiary, or dissolve or completely or partially liquidate;
(iii) adopt form any Subsidiary or enter into acquire assets from any other Person with a plan value or purchase price in the aggregate in excess of restructuring$300,000 in any transaction or series of related transactions, reorganizing, dissolving, recapitalizing, complete other than acquisitions in the ordinary course of business consistent with past practice with a value or partial liquidation purchase price in the aggregate not in excess of $300,000 or similar transactionpursuant to Material Contracts in effect as of the date hereof;
(iv) enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(v) acquire or agree to acquire by merger, consolidation, acquisition of stock, equity or assets or otherwise, any business, Person, division, properties or assets from any other Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price not in excess of $1 million in any individual transaction or $2 million in the aggregate;
(vi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(vii) issue, deliver, sell, pledge, dispose of, grant, transfertransfer or encumber, leaseor authorize the issuance, licensesale, guaranteepledge, Encumber disposition, grant, transfer or otherwise enter into any Contract or understanding with respect to the voting of or transfer encumbrance of, any shares of capital stock of the Company or capital stock its Subsidiary, or other equity or equity-based interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of such capital stock or other equity interestsstock, or any options, warrants or other rights of any kind to acquire any such shares of such capital stock, other equity interests stock or such convertible or exchangeable securities (securities, other than (A) the delivery issuance or sales of any Common Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated on the Preferred Shares) in accordance with the terms of the Preferred Shares or (2) the conversion exercise of the Company Notes in accordance with Options or the Indenture and the exercise vesting of the Capped Call Transactions in accordance with the Capped Call Confirmations (B) the issuance of Preferred Shares in connection with the payment of dividends on the Preferred Shares in accordance with the terms of the Preferred Shares Company Restricted Stock or (B) as permitted under Section 5.1(a)(xviii);
(v) other than in the issuance ordinary course of shares of such capital stockbusiness consistent with past practice, create or incur any Lien on (i) any assets (other equity securities or convertible or exchangeable securities (1than Company Intellectual Property) by a Wholly Owned Subsidiary of the Company or its Subsidiary having a value in excess of $300,000, (ii) any material Intellectual Property of the Company or its Subsidiary, or (iii) material Intellectual Property licensed to the Company or another Wholly Owned Subsidiary of the Company, (2) in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans in effect as of the Capitalization Time or (3) pursuant to the ESPP in accordance with its terms and subject to Section 4.3(g))Subsidiary;
(viiivi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than the Company or its Subsidiary) in excess of $200,000 300,000 in the aggregate (other than between the Company and any of its Wholly Owned Subsidiaries in the Ordinary Course of Business)aggregate;
(ixvii) (A) declare, accrue, set aside, establish a record date for accrue, make or pay any dividend or other distribution, distribution payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by the Company’s Subsidiary to the Company), (B) repurchase, redeem or otherwise reacquire any shares of capital stock or other securities, or subdivide, reclassify, recapitalize, split, combine or exchange or enter into any similar transaction with respect to any of its capital stock or other equity interests (and for securities or issue or authorize or propose the avoidance issuance of doubt, excluding the Company Notes) of the Company or its Subsidiaries, except for (A) dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company or (B) dividends payable to the holders of Preferred Shares, payable securities in cash or Preferred Sharesrespect of, in accordance with the terms lieu of the Preferred Shares;
(x) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire (or offer to do any of the foregoing), directly or indirectly, any of its capital stock, other equity interests or securities convertible or exchangeable into or exercisable in substitution for any shares of its capital stock or other equity interestssecurities, other than (A) the withholding except for any split, combination or reclassification of Common Shares to satisfy the payment capital stock of a wholly owned Subsidiary of the exercise price on the exercise Company, or any issuance or authorization or proposal to issue or authorize any securities of a wholly owned Subsidiary of the Company Option to the Company or withholding Tax obligations upon another wholly owned Subsidiary of the exerciseCompany, vesting or settlement (C) enter into any agreement with respect to the voting of its capital stock;
(viii) incur any indebtedness for borrowed money or assume, guarantee, endorse or otherwise become liable or responsible for (whether directly, contingently or otherwise) any other Person’s indebtedness for borrowed money, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company Equity Awards outstanding or its Subsidiary, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice not to exceed $300,000 in the aggregate;
(ix) except as of contemplated in capital budgets furnished to Parent prior to the date of this Agreement, make any capital expenditures in each case, in accordance with their terms and, as applicable, the Stock Plans as in effect as excess of the Capitalization Time and (B) pursuant to an exercise of the Capped Call Transactions in accordance with their terms;
(xi) incur or assume any indebtedness for borrowed money, guarantee any indebtedness for borrowed money or enter into a “keep well” or similar arrangement in respect of indebtedness for borrowed money except for any such indebtedness not to exceed $2.5 million individually or $5 million 300,000 in the aggregate;
(x) make any changes with respect to accounting policies or procedures other than as required by changes in GAAP;
(xi) settle any litigation for an amount in excess of $300,000;
(xii) incur, make or authorize any payment of, or accrual or commitment for, capital expenditures, or any obligations or liabilities in connection therewith except other than as contemplated by or reasonably related to, and which shall not exceed 107.5% necessary to facilitate the research and/or clinical operations of the aggregate amounts set forth in, Company in a manner consistent with the Company’s capital budget set forth in Section 7.1(a)(xii) operating budgets furnished to Parent prior to the date of the Company Disclosure Schedulethis Agreement, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement;
(xiii) other than as reasonably necessary to facilitate the research and/or clinical operations of the Company in a manner consistent with the Company’s operating budgets furnished to Parent prior to the date of this Agreement, amend, modify or terminate any Material Contract;
(xiv) other than pursuant to Contracts in effect prior to the date hereof, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material assets, licenses, operations, rights or businesses of the Company or its Subsidiary, except for (A) sales, transfers or dispositions of obsolete or worthless assets or (B) sales, transfers, leases, licenses or other dispositions of assets with a fair market value not in excess of $300,000 in the aggregate;
(xv) assign or grant an exclusive license of any material right in any Company Intellectual Property necessary or useful for the manufacture, use, sale, offer for sale or importation of any Company Pharmaceutical Products or that otherwise enables a third party to compete with the Company with respect to the manufacture or sale of any product that competes with any Company Pharmaceutical Product;
(xvi) waive any inbound license in any IP Contract under any Patent or other Company Intellectual Property material to any Company Pharmaceutical Product and, other than in the ordinary course of business consistent with past practice, (A) amend any inbound license in any IP Contract under any Patent or other Company Intellectual Property material to any Company Pharmaceutical Product or (B) enter intointo any Contract that would constitute an IP Contract if entered into prior to the date of this Agreement;
(xvii) except as contemplated in operating budgets furnished to Parent prior to the date of this Agreement, commence (other than planning) or alter, in a manner that would materially increase the expenditures to be made by the Company in connection therewith, any new Phase I, Phase II, Phase III or Phase IV human clinical trial (including initiation of a new institutional review board) involving any Company Pharmaceutical Product;
(xviii) except as required by applicable Law or otherwise required pursuant to existing Contracts or Benefit Plans in effect as of the date hereof and made available to Parent, (A) increase the salaries or wages of any Employee, except in the ordinary course of business consistent with past practice, (B) promote any Employee except in order to fill a position vacated after the date of this Agreement, (C) pay any bonus to any Employee other than a bonus pursuant to Section 5.8(f), (D) enter into or establish any new employment agreement or change in control severance agreement with any Employee, other than with any new Employee hired to replace an Employee who is party to any such agreement, (E) make any severance payments to any Employee in excess of what they are contractually entitled to, (F) make any new equity awards to any Employee or accelerate the vesting under any equity compensation plan (except for vesting accelerated pursuant to Section 3.3 of this Agreement), (G) other than in accordance with Section 5.1(a)(xviii)(D), establish, adopt, terminate or materially amend any Benefit Plan, (H) hire any employee at the level of Vice President or above, (I) hire any employee in a sales, general or administrative capacity with an annual base salary in excess of $150,000, or (J) hire any employee (other than an employee described in clause “(I)” above) with an annual base salary in excess of $250,000;
(xix) except as required by applicable Law, make, change or rescind any material Tax election, file any amended material Tax Return, settle or compromise any material Tax liability, agree to an extension or waiver of the statute of limitations with respect to material Taxes, enter into any closing agreement with respect to a material Tax, surrender any right to claim a material Tax refund, or change any material method of Tax accounting;
(xx) enter into or consummate any tax planning or restructuring transaction which involves any transfer, assignment or other disposition of any Company Intellectual Property;
(xxi) (A) waive or amend (except in the course of diligently prosecuting the Company Intellectual Property) the Company’s rights in or to any Company Intellectual Property owned by the Company or its Subsidiary that is registered or the subject of an application for registration, (B) fail to diligently prosecute or maintain any material Company Intellectual Property owned by the Company or its Subsidiary that is registered or the subject of an application for registration, in each case in the name of Company or its Subsidiary or (C) fail to make any required payments in accordance with the terms of any IP Contract pursuant to which the Company or licenses any material Intellectual Property;
(xxii) qualify any new site for manufacturing of any Company Pharmaceutical Product; or
(xxiii) enter into any Contract to do any of its Subsidiaries the foregoing.
(b) Each of Parent and Merger Sub, subject to the limitations set forth in Section 5.4(e)(ii), on the one hand, and the Company, on the other hand, agrees that, except as otherwise provided in this Agreement, it shall not knowingly take any action that would reasonably be expected to prevent or delay the consummation of the Offer, the Merger and the other Transactions in accordance with the terms of this Agreement. Without limiting the generality of the foregoing, each of Parent and Merger Sub agrees that, after the date hereof and prior to the Effective Time, it shall not consummate or agree to consummate any purchase from a third party service provider Software (“Third Party IT Contracts”) (or other than acquisition of any assets, licenses, operations, rights or businesses that, individually or in the Ordinary Course aggregate with any other such purchase or acquisition, would reasonably be expected to (i) prevent or delay the parties hereto from obtaining any consents, registrations, approvals, permits or authorizations required to be obtained from any Governmental Entity in connection with the consummation of Business the Offer, the Merger and the other Transactions, (ii) result in the imposition of a condition or conditions on any such consents, registrations, approvals, permits or authorizations, or (iii) otherwise prevent or delay any party hereto from performing its obligations hereunder or consummating the Offer, the Merger and the other Transactions.
(c) The Company shall promptly notify Parent and Merger Sub of any significant data relating to the Key Product, including information related to any significant adverse events with respect to the Key Product.
(d) Each party hereto shall promptly advise the other parties hereto of any Proceeding or material claim threatened, commenced or asserted against or with respect to any such Contract that involve aggregate annual payments party relating to the Transactions and promptly provide the parties hereto with copies of less all material complaints, pleadings and filings related thereto.
(e) From the date hereof until the Acceptance Time, the Company shall (i) consult with Parent in connection with any proposed meeting with the FDA or any other Governmental Entity relating to any Company Pharmaceutical Product, (ii) promptly inform Parent of, and provide Parent with a reasonable opportunity to review, any material filing proposed to be made by or on behalf of any of the Company or its Subsidiary, and any material correspondence or other material communication proposed to be submitted or otherwise transmitted to the FDA or any other Governmental Entity by or on behalf of any of the Company or its Subsidiary, in each case relating to any Company Pharmaceutical Product, (iii) keep Parent promptly informed of (A) any communication (written or oral) with or from the FDA and any other Governmental Entity and (B) any material communications (written or oral) received from any Person relating to the Company Intellectual Property and (iv) promptly inform Parent and provide Parent or Merger Sub with a reasonable opportunity (but no more than $300,000three (3) Business Days) to comment, in each case, prior to making any material change to any study protocol, adding any new trial, making any material change to a manufacturing plan or process, making any material change to a development timeline or initiating, or making any material change to, promotional or marketing materials or activities relating to any Company Pharmaceutical Product.
(f) Notwithstanding the above, the delivery of any notice pursuant to Section 5.1(b);, 5.1(c), 5.1(d) or 5.1(e) shall not limit or otherwise affect the representations, warranties, covenants or agreements of the parties hereto, the remedies available hereunder to the party hereto receiving such notice or the conditions to such party’s obligation to consummate the Offer, the Merger or any of the other Transactions.
(g) Nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control the Company or its Subsidiary or direct the business or operations of the Company or its Subsidiary prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its operations and the operations of its Subsidiary. Nothing in this Agreement, including any of the actions, rights or restrictions set forth herein, shall be interpreted in such a way as to place the Company, Parent or Merger Sub in violation of any rule, regulation or policy of any Governmental Entity, including any applicable Law.
Appears in 1 contract
Sources: Merger Agreement (Pharmasset Inc)