Negative Covenants Pending Closing. Without limiting the generality of Section 5.1, during the period from the date of this Agreement to the Closing or the date this Agreement is terminated in accordance with its terms, except as (i) expressly contemplated by this Agreement, (ii) consented to by Buyer in writing (which consent shall not be withheld, delayed or conditioned unreasonably) or (iii) as required by applicable Law, the Company shall not, and shall cause its Subsidiaries not to: (a) acquire, sell, lease, encumber, license or otherwise dispose of or transfer any assets or property, including the Company Intellectual Property, or make any investment, in each case, other than arm’s length purchases and sales in the ordinary course of business consistent with past practice or in amounts not exceeding, in the aggregate, $200,000; 39 NY\7370590.17 (b) create, incur, assume or otherwise become liable with respect to any Indebtedness (excluding draws on existing credit facilities), except for amounts not exceeding, in the aggregate, $200,000 (provided the Company shall deliver a payoff letter with respect to any Indebtedness for borrowed money pursuant to and in accordance with Section 1.5(d)); assume, guarantee, endorse or otherwise become liable or responsible (whether directly or contingently) for the obligations of any other Person; or make any loans, advances or capital contributions to, or investments in, any other Person (other than the Company and its Subsidiaries); (c) create, incur, assume or permit to suffer to exist or remain in effect any Liens (other than Liens existing as of the date of this Agreement or Permitted Liens) on any of its assets or properties; (d) increase the compensation payable to any officer, employee or consultant except (i) in the ordinary course of business consistent with past practice or in accordance with existing agreements, and (ii) the Company Transaction Bonuses payable at Closing and included as a Company Transaction Expense; enter into, adopt or amend any employment, severance or other material agreement with any officer, employee or consultant of the Company except in the ordinary course of business consistent with past practice; adopt, amend or materially increase the benefits under any employee benefit plan, except, in each case, as required by Law or in accordance with existing agreements; hire any new officers or any new employees except in the ordinary course of business; or enter into any collective bargaining agreements; (e) terminate or cancel, or take or omit to take any action that would constitute a material violation of or default under, or waive any material rights under, any Material Agreement; (f) enter into contracts or commitments involving potential payments by the Company in any single instance of $50,000 or more or in the aggregate of $100,000 or more, except for contracts or commitments for the purchase of services, supplies, components, parts or materials in the ordinary course of business consistent with past practices; (g) (A) amend in any material respect, terminate, cancel, or waive any material right under, a Material Agreement, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such termination, cancellation, waiver or amendment effected in accordance with the terms of such Material Agreement, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), (B) renew a Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such renewal effected in accordance with the terms of such Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement) or (C) enter into any new Contract that would have been a Material Agreement or a real property lease if it had been entered into prior to the date of this Agreement; provided that, in the event Buyer has not responded to the Company’s request for consent with respect to any of the matters described in this Section 5.2(g) within four (4) Business Days from the Company’s request therefor, Buyer shall be deemed to have consented to such matters;
Appears in 2 contracts
Sources: Merger Agreement, Merger Agreement
Negative Covenants Pending Closing. Without limiting Except as required or specifically permitted by this Agreement (or as expressly set forth in Section 5.1(b) of the generality of Section 5.1Company Disclosure Letter) or as required by applicable Law, during the period from the date of this Agreement to until the Closing or earlier of the date Effective Time and termination of this Agreement is terminated in accordance with Section 8.1, unless Parent otherwise consents in advance in writing (such consent not to be unreasonably withheld, conditioned, or delayed), neither the Company nor any of its terms, except as subsidiaries shall or may:
(i) amend the Company Charter Documents or the organizational or governing documents of any of the Company’s subsidiaries;
(ii) (A) issue, deliver, sell, grant, dispose of, pledge or otherwise encumber any shares of capital stock of any class or any other Equity Interest of the Company or any of its direct or indirect subsidiaries (the “Company Securities”), or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any Company Securities, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any Company Securities, in each case to or in favor of a Person other than the Company or a wholly owned subsidiary of the Company, provided that the Company may issue shares of Company Common Stock solely upon the exercise of Company Options that are outstanding on the date of this Agreement in accordance with their terms as of the date of this Agreement or in accordance with the terms of any Contract in effect as of the date of this Agreement; (B) redeem, purchase or otherwise acquire any outstanding Company Securities, or any rights, warrants, options, calls, commitments, convertible securities or any other agreements of any character to acquire any Company Securities, except in connection with the exercise of Company Options that are outstanding on the date of this Agreement and in accordance with their terms as of the date of this Agreement; (C) adjust, split, combine, subdivide or reclassify any Company Securities; (D) enter into, amend or waive any of the rights under any Contract with respect to the sale or repurchase of any Company Securities; or (E) except as expressly contemplated required by the terms of this Agreement, amend (ii) consented to including by Buyer in writing (which consent shall not be withheld, delayed reducing an exercise price or conditioned unreasonablyextending a term) or waive any of its rights under any agreement evidencing any outstanding Company Options;
(iii) directly or indirectly acquire or agree to acquire in any transaction any Equity Interest in, or business of, any firm, corporation, partnership, company, limited liability company, trust, joint venture, association or other entity or division thereof or the purchase (including by license, collaboration or joint development agreement) directly or indirectly of any properties or assets (other than purchases of supplies and inventory in the ordinary course of business consistent with the Company’s past practice);
(iv) sell, pledge, dispose of, transfer, lease, license, mortgage or otherwise encumber or subject to any Lien (including pursuant to a sale leaseback transaction or an asset securitization transaction) (other than a Company Permitted Lien) any properties, rights or assets (including securities of the Company and its subsidiaries but excluding the Company Intellectual Property), except dispositions of obsolete assets or expired inventory;
(v) (A) incur, create, assume or otherwise become liable for any Indebtedness for borrowed money (including the issuance of any debt security and the assumption or guarantee of obligations of any Person) (or enter into a “keep well” or similar agreement), except for Indebtedness that does not exceed $1,000,000 in the aggregate or (B) issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company, except trade credit or trade payables in the ordinary course of business;
(vi) declare, set aside, make or pay any dividend or other distribution, whether payable in cash, stock, property or otherwise, in respect of the Company Common Stock, or Equity Interests of any non-wholly owned subsidiary of the Company;
(vii) other than as required by applicable LawLaw or in accordance with the terms of any Contract or Company Plan set forth in Section 5.1(b)(vii) of the Company Disclosure Letter, (A) increase the compensation or benefits (including severance benefits) of any current or former employees, officers, directors or other service providers of the Company or its subsidiaries; (B) make any new equity or equity-based awards to any current or former employees, officers, directors or other service providers of the Company or its subsidiaries; (C) take any action to accelerate the vesting or payment, or prefund or in any other way secure the payment of, compensation or benefits under any Company Plan; (D) enter into, negotiate, establish, amend, extend or terminate any Company Plan (including any arrangement that would be a Company Plan if in effect on the date hereof) or any Collective Bargaining Agreement; or (E) 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 insofar as may be required by GAAP, applicable Law or regulatory guidelines;
(viii) communicate in a writing that is intended for broad dissemination to the Company’s (or any of its subsidiary’s) employees regarding compensation, benefits or other treatment they will receive following the Merger, unless any such communication is expressly permitted by this Agreement (in which case, the Company shall notprovide Parent with prior notice of, and shall cause its Subsidiaries not to:the opportunity to review and comment upon, any such communications);
(aix) acquire, sell, lease, encumber, license or otherwise dispose of or transfer any assets or property, including the Company Intellectual Property, or make any investmentmaterial changes in financial accounting methods, in each caseprinciples or practices (or change an annual accounting period), except insofar as may be required by GAAP, applicable Law or regulatory guidelines;
(x) write up, write down or write off the book value of any material assets, except to the extent required by GAAP;
(xi) release, compromise, assign, settle or agree to settle any Action (including without limitation any suit, action, claim, proceeding or investigation relating to this Agreement or Merger and the other the transactions contemplated hereby with adverse parties other than Parent or Merger Sub) or insurance claim, other than arm’s length purchases and sales compromises, settlements or agreements that involve only monetary payments not in excess of $25,000 individually or $100,000 in the aggregate, in any case without the imposition of material equitable relief on, or the admission of wrongdoing by, the Company or any of its subsidiaries;
(xii) make (other than in the ordinary course of business consistent with past practice practices), change or revoke any material income Tax election or adopt or change any material method of Tax accounting (except as required by GAAP), (B) enter into any “closing agreement” as described in amounts not exceedingSection 7121 of the Code (or any comparable or similar provisions of applicable Law), in the aggregate, $200,000; 39 NY\7370590.17
(b) create, incur, assume settle or otherwise become liable compromise any material liability with respect to Taxes, (C) amend any Indebtedness material Tax Return, or (excluding draws on existing credit facilities), except for amounts not exceeding, in D) consent to any extension or waiver of the aggregate, $200,000 (provided the Company shall deliver a payoff letter limitations period applicable to any claim or assessment with respect to any Indebtedness for borrowed money pursuant to and in accordance with Section 1.5(d)); assume, guarantee, endorse or otherwise become liable or responsible (whether directly or contingently) for the obligations of any other Person; or make any loans, advances or capital contributions to, or investments in, any other Person Taxes (other than any extension pursuant to an extension to file any Tax Return), in each case, to the Company extent such action would reasonably be expected to materially and its Subsidiariesadversely affect Parent, the Company, or any of their respective subsidiaries in a taxable period (or portion thereof) ending after the Closing;
(xiii) make or commit to any capital expenditures of greater than $100,000 in the aggregate (other than those set forth in the capital expenditure budget delivered to Parent prior to the date hereof);
(cxiv) create, incur, assume (A) enter into or permit to suffer to exist or remain in effect terminate any Liens Company Material Contract (other than Liens existing as an Acceptable Confidentiality Agreement to the extent permitted by Section 5.3), (B) materially modify, amend, waive any right under or renew any Company Material Contract, (C) enter into or extend the term or scope of any Contract that purports to restrict the date of this Agreement Company, or Permitted Liens) on any of its assets subsidiaries or propertiesAffiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area, or (D) enter into any Contract that would be breached by, or require the consent of any third party in order to continue in full force following, consummation of the Merger and the other transactions contemplated hereby;
(dxv) increase the compensation payable make any investment (by contribution to any officercapital, employee property transfers, purchase of securities or consultant except otherwise) in, or loan or advance (i) other than travel and similar advances to its employees in the ordinary course of business consistent with the Company’s past practice practice) to, any Person;
(xvi) hire or offer employment or engagement to, promote or terminate the employment or engagement of any director or officer, or any employee, independent contractor or consultant with total annual compensation in excess of $100,000;
(xvii) merge or consolidate the Company with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any of its material subsidiaries;
(xviii) cancel, dedicate to the public, disclaim, forfeit, reissue, reexamine, abandon without filing a substantially identical counterpart in the same jurisdiction with the same priority, or allow to lapse (except with respect to issued Patents expiring in accordance with existing agreements, and their terms) any material Company Intellectual Property;
(iixix) fail to maintain in effect material insurance policies covering the Company Transaction Bonuses payable at Closing and included as a Company Transaction Expenseits subsidiaries and their respective properties, assets and businesses;
(A) purchase any marketable securities except in the ordinary course of business, or; enter into(B) change in material manner the investment guidelines with respect to the Company’s investment portfolio;
(xxi) forgive any loans to any employees, adopt officers or amend any employment, severance or other material agreement with any officer, employee or consultant directors of the Company or its subsidiaries, or any of their respective Affiliates, except in the ordinary course of business in connection with relocation activities to any employees of the Company or its subsidiaries;
(xxii) (i) sell, transfer, assign, lease, license, covenant not to enforce, or otherwise dispose of (whether by merger, stock or asset sale or otherwise) to any Person (including any Affiliate) any rights to any Company Intellectual Property material to the Company or its subsidiaries, taken as a whole, other than licensing non-exclusive rights or entering in to customary nondisclosure or material transfer agreements in the ordinary course of business consistent with past practice; adopt, amend (ii) cancel, dedicate to the public, disclaim, forfeit, reissue, reexamine or materially increase abandon without filing a substantially identical counterpart in the benefits under same jurisdiction with the same priority or allow to lapse (except with respect to Patents, Copyrights or Trademarks expiring in accordance with their terms) any employee benefit planCompany Registered Intellectual Property, which the Company or any of its subsidiary controls the prosecution or maintenance thereof, (iii) fail to make any filing, pay any fee, or take any other action necessary to prosecute and maintain in full force and effect any Company Registered Intellectual Property, (iv) make any change in Company Intellectual Property material to the business of the Company and its subsidiaries, taken as a whole, that does or would reasonably be expected to impair such Company Intellectual Property or the Company’s or its subsidiaries rights with respect thereto, (v) disclose to any Person (other than representatives of Parent and Merger Sub) any Trade Secrets, know-how or confidential or proprietary information, except, in each casethe case of confidential or proprietary information, as required by Law or in accordance with existing agreements; hire any new officers or any new employees except in the ordinary course of business; or enter into any collective bargaining agreements;
(e) terminate or cancel, or take or omit to take any action that would constitute a material violation of or default under, or waive any material rights under, any Material Agreement;
(f) enter into contracts or commitments involving potential payments by the Company in any single instance of $50,000 or more or in the aggregate of $100,000 or more, except for contracts or commitments for the purchase of services, supplies, components, parts or materials in the ordinary course of business consistent with past practicesto a Person that is subject to confidentiality obligations or (vi) fail to take or maintain reasonable measures to protect the confidentiality and value of Trade Secrets included in any of the Owned Company Intellectual Property material to the business of the Company and its subsidiaries, taken as a whole;
(g) (A) amend in any material respect, terminate, cancel, or waive any material right under, a Material Agreement, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such termination, cancellation, waiver or amendment effected in accordance with the terms of such Material Agreement, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), (B) renew a Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such renewal effected in accordance with the terms of such Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement) or (Cxxiii) enter into a definitive agreement providing for a Company Licensing Deal (other than Company Licensing Deal that is a Company Superior Proposal); or
(xxiv) authorize any new Contract that would have been a Material Agreement of, or a real property lease if it had been entered into prior commit, resolve, propose or agree in writing or otherwise to take any of, the date of this Agreement; provided that, in the event Buyer has not responded to the Company’s request for consent with respect to any of the matters described in this Section 5.2(g) within four (4) Business Days from the Company’s request therefor, Buyer shall be deemed to have consented to such matters;foregoing actions.
Appears in 2 contracts
Sources: Merger Agreement (Akari Therapeutics PLC), Merger Agreement (Peak Bio, Inc.)
Negative Covenants Pending Closing. Without limiting Except as required or specifically permitted by this Agreement (or as expressly set forth in Section 5.2(b) of the generality of Section 5.1Parent Disclosure Letter) or as required by applicable Law, during the period from the date of this Agreement to until the Closing or earlier of the date Effective Time and termination of this Agreement is terminated in accordance with Section 8.1, unless the Company otherwise consents in advance in writing (such consent not to be unreasonably withheld, conditioned, or delayed), neither Parent nor any of its terms, except as subsidiaries shall or may:
(i) amend the Parent Charter Documents or the organizational or governing documents of any of Parent’s subsidiaries;
(ii) (A) issue, deliver, sell, grant, dispose of, pledge or otherwise encumber any shares of capital stock of any class or any other Equity Interest of Parent or any of its direct or indirect subsidiaries (the “Parent Securities”), or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any Parent Securities, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any Parent Securities, in each case to or in favor of a Person other than Parent or a wholly owned subsidiary of Parent, provided that Parent may issue shares of Parent Ordinary Shares solely upon the exercise of Parent Options or the vesting or settlement of Parent restricted stock units that are outstanding on the date of this Agreement in accordance with their terms as of the date of this Agreement or in accordance with the terms of any Contract in effect as of the date of this Agreement; (B) redeem, purchase or otherwise acquire any outstanding Parent Securities, or any rights, warrants, options, calls, commitments, convertible securities or any other agreements of any character to acquire any Parent Securities, except in connection with the exercise of Parent Options that are outstanding on the date of this Agreement and in accordance with their terms as of the date of this Agreement; (C) adjust, split, combine, subdivide or reclassify any Parent Securities; (D) enter into, amend or waive any of the rights under any Contract with respect to the sale or repurchase of any Parent Securities; or (E) except as expressly contemplated required by the terms of this Agreement, amend (ii) consented to including by Buyer in writing (which consent shall not be withheld, delayed reducing an exercise price or conditioned unreasonablyextending a term) or waive any of its rights under any agreement evidencing any outstanding Parent Options;
(iii) directly or indirectly acquire or agree to acquire in any transaction any Equity Interest in, or business of, any firm, corporation, partnership, company, limited liability company, trust, joint venture, association or other entity or division thereof or the purchase (including by license, collaboration or joint development agreement) directly or indirectly of any properties or assets (other than purchases of supplies and inventory in the ordinary course of business consistent with Parent’s past practice);
(iv) sell, pledge, dispose of, transfer, lease, license or mortgage or otherwise encumber or subject to any Lien (including pursuant to a sale leaseback transaction or an asset securitization transaction) (other than a Company Permitted Lien) any properties, rights or assets (including securities of Parent and its subsidiaries but excluding the Parent Intellectual Property), except dispositions of obsolete assets or expired inventory;
(v) incur, create, assume or otherwise become liable for any Indebtedness for borrowed money (including the issuance of any debt security and the assumption or guarantee of obligations of any Person) (or enter into a “keep well” or similar agreement) in excess of $1,000,000 or issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company, except trade credit or trade payables in the ordinary course of business;
(vi) declare, set aside, make or pay any dividend or other distribution, whether payable in cash, stock, property or otherwise, in respect of the Parent Ordinary Shares, Parent ADSs or Equity Interests of any non-wholly owned subsidiary of Parent;
(vii) other than as required by applicable LawLaw or in accordance with the terms of any Contract or Parent Plan set forth in Section 5.2(b)(vii) of the Parent Disclosure Letter, (A) increase the compensation or benefits (including severance benefits) of any current or former employees, officers, directors or other service providers of Parent or its subsidiaries; (B) make any new equity or equity-based awards to any current or former employees, officers, directors or other service providers of the Company or its subsidiaries; (C) take any action to accelerate the vesting or payment, or prefund or in any other way secure the payment of, compensation or benefits under any Parent Plan; (D) enter into, negotiate, establish, amend, extend or terminate any Parent Plan (including any arrangement that would be a Parent Plan if in effect on the date hereof) or any Collective Bargaining Agreement; or (E) change any actuarial or other assumptions used to calculate funding obligations with respect to any Parent Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except insofar as may be required by GAAP, applicable Law or regulatory guidelines;
(viii) communicate in a writing that is intended for broad dissemination to the Company’s (or any of its subsidiary’s) employees regarding compensation, benefits or other treatment they will receive following the Merger, unless any such communication is expressly permitted by this Agreement (in which case, Parent shall notprovide the Company with prior notice of, and shall cause its Subsidiaries not to:the opportunity to review and comment upon, any such communications);
(aix) acquire, sell, lease, encumber, license or otherwise dispose of or transfer any assets or property, including the Company Intellectual Property, or make any investmentmaterial changes in financial accounting methods, in each caseprinciples or practices (or change an annual accounting period), except insofar as may be required by GAAP, applicable Law or regulatory guidelines;
(x) write up, write down or write off the book value of any material assets, except to the extent required by GAAP;
(xi) release, compromise, assign, settle or agree to settle any Action (including without limitation any suit, action, claim, proceeding or investigation relating to this Agreement or Merger and the other the transactions contemplated hereby with adverse parties other than the Company) or insurance claim, other than arm’s length purchases and sales compromises, settlements or agreements that involve only monetary payments not in excess of $25,000 individually or $100,000 in the aggregate, in any case without the imposition of material equitable relief on, or the admission of wrongdoing by, Parent or any of its subsidiaries;
(xii) make (other than in the ordinary course of business consistent with past practice practices), change or revoke any material income Tax election or adopt or change any material method of Tax accounting (except as required by GAAP), (B) enter into any “closing agreement” as described in amounts not exceedingSection 7121 of the Code (or any comparable or similar provisions of applicable Law), in the aggregate, $200,000; 39 NY\7370590.17
(b) create, incur, assume settle or otherwise become liable compromise any material liability with respect to Taxes, (C) amend any Indebtedness material Tax Return, or (excluding draws on existing credit facilities), except for amounts not exceeding, in D) consent to any extension or waiver of the aggregate, $200,000 (provided the Company shall deliver a payoff letter limitations period applicable to any claim or assessment with respect to any Indebtedness for borrowed money pursuant to and in accordance with Section 1.5(d)); assume, guarantee, endorse or otherwise become liable or responsible (whether directly or contingently) for the obligations of any other Person; or make any loans, advances or capital contributions to, or investments in, any other Person Taxes (other than any extension pursuant to an extension to file any Tax Return), in each case, to the Company extent such action would reasonably be expected to materially and its Subsidiariesadversely affect Parent, the Company, or any of their respective subsidiaries in a taxable period (or portion thereof) ending after the Closing make or commit to any capital expenditures (other than those set forth in the capital expenditure budget delivered to Parent prior to the date hereof);
(cxiii) create, incur, assume make or permit commit to suffer to exist or remain any capital expenditures of greater than $100,000 in effect any Liens the aggregate (other than Liens existing as of those set forth in the capital expenditure budget delivered to the Company prior to the date hereof);
(xiv) (A) enter into or terminate any Parent Material Contract (other than an Acceptable Confidentiality Agreement containing a standstill agreement to the extent permitted by Section 5.4), (B) materially modify, amend, waive any right under or renew any Parent Material Contract, (C) enter into or extend the term or scope of this Agreement any Contract that purports to restrict Parent, or Permitted Liens) on any of its assets subsidiaries or propertiesAffiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area, or (D) enter into any Contract that would be breached by, or require the consent of any third party in order to continue in full force following, consummation of the Merger and the other transactions contemplated hereby;
(dxv) increase the compensation payable make any investment (by contribution to any officercapital, employee property transfers, purchase of securities or consultant except otherwise) in, or loan or advance (i) other than travel and similar advances to its employees in the ordinary course of business consistent with Parent’s past practice practice) to, any Person;
(xvi) hire or offer employment or engagement to, promote or terminate the employment or engagement of any director or officer, or any employee, independent contractor or consultant with total annual compensation in excess of $100,000;
(xvii) merge or consolidate Parent with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of Parent or any of its material subsidiaries;
(xviii) cancel, dedicate to the public, disclaim, forfeit, reissue, reexamine, abandon without filing a substantially identical counterpart in the same jurisdiction with the same priority, or allow to lapse (except with respect to issued Patents expiring in accordance with existing agreementstheir terms) any material Parent Intellectual Property;
(xix) fail to maintain in effect material insurance policies covering Parent and its subsidiaries and their respective properties, assets and businesses;
(iiA) purchase any marketable securities except in the Company Transaction Bonuses payable at Closing and included ordinary course of business, or; (B) change in material manner the investment guidelines with respect to the Parent’s investment portfolio;
(xxi) forgive any loans to any employees, officers or directors of Parent or its subsidiaries, or any of their respective Affiliates, except in the ordinary course of business in connection with relocation activities to any employees of Parent or its subsidiaries;
(xxii) (i) sell, transfer, assign, lease, license, covenant not to enforce, or otherwise dispose of (whether by merger, stock or asset sale or otherwise) to any Person (including any Affiliate) any rights to any Parent Intellectual Property material to Parent or its subsidiaries, taken as a Company Transaction Expense; enter intowhole, adopt other than licensing non-exclusive rights or amend any employment, severance entering in to customary nondisclosure or other material agreement with any officer, employee or consultant of the Company except transfer agreements in the ordinary course of business consistent with past practice; adopt, amend (ii) cancel, dedicate to the public, disclaim, forfeit, reissue, reexamine or materially increase abandon without filing a substantially identical counterpart in the benefits under same jurisdiction with the same priority or allow to lapse (except with respect to Patents, Copyrights or Trademarks expiring in accordance with their terms) any employee benefit planParent Registered Intellectual Property, which the Company or any of its subsidiaries controls the prosecution or maintenance thereof, (iii) fail to make any filing, pay any fee, or take any other action necessary to prosecute and maintain in full force and effect any Parent Registered Intellectual Property, (iv) make any change in Parent Intellectual Property material to the business of Parent and its subsidiaries, taken as a whole, that does or would reasonably be expected to impair such Parent Intellectual Property or Parent’s or its subsidiaries rights with respect thereto, (v) disclose to any Person (other than representatives of the Company) any Trade Secrets, know-how or confidential or proprietary information, except, in each casethe case of confidential or proprietary information, as required by Law or in accordance with existing agreements; hire any new officers or any new employees except in the ordinary course of business; or enter into any collective bargaining agreements;
(e) terminate or cancel, or take or omit to take any action that would constitute a material violation of or default under, or waive any material rights under, any Material Agreement;
(f) enter into contracts or commitments involving potential payments by the Company in any single instance of $50,000 or more or in the aggregate of $100,000 or more, except for contracts or commitments for the purchase of services, supplies, components, parts or materials in the ordinary course of business consistent with past practicesto a Person that is subject to confidentiality obligations or (vi) fail to take or maintain reasonable measures to protect the confidentiality and value of Trade Secrets included in any of the Owned Parent Intellectual Property material to the business of Parent and its subsidiaries, taken as a whole;
(g) (A) amend in any material respect, terminate, cancel, or waive any material right under, a Material Agreement, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such termination, cancellation, waiver or amendment effected in accordance with the terms of such Material Agreement, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), (B) renew a Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such renewal effected in accordance with the terms of such Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement) or (Cxxiii) enter into a definitive agreement providing for a Parent Licensing Deal (other than a Parent Licensing Deal that is a Parent Superior Proposal); or
(xxiv) authorize any new Contract that would have been a Material Agreement of, or a real property lease if it had been entered into prior commit, resolve, propose or agree in writing or otherwise to take any of, the date of this Agreement; provided that, in the event Buyer has not responded to the Company’s request for consent with respect to any of the matters described in this Section 5.2(g) within four (4) Business Days from the Company’s request therefor, Buyer shall be deemed to have consented to such matters;foregoing actions.
Appears in 1 contract
Negative Covenants Pending Closing. Without limiting the generality of Section 5.1, during the period from From the date of this Agreement to hereof until the Closing or the date this Agreement is terminated in accordance with its termsClosing, except as (i) for the Distribution, (ii) as expressly contemplated by this Agreement, (ii) consented to by Buyer in writing (which consent shall not be withheld, delayed Agreement or conditioned unreasonably) any other Transaction Document or (iii) as required by applicable Lawset forth in Section 6.2 of the Disclosure Schedule, without the prior written consent of Buyer, the Principal Stockholders shall cause the Company not to, and the Company shall not, not and shall cause its each of the Subsidiaries not to:
(ai) acquiremake any change in the Company's or any Subsidiary's authorized or issued capital stock or other securities, (ii) grant any stock option or other right to purchase shares of the Company's or any Subsidiary's capital stock or other securities, (iii) issue or make any commitment to issue any equity security by the Company or any Subsidiary, including any security convertible into the Company's or any Subsidiary's capital stock, (iv) declare, set aside or issue or pay any dividends, (v) grant any registration rights with respect to the Company's or any Subsidiary's capital stock or other securities or (vi) purchase, redeem, retire or make any other acquisition of any shares of the Company's or any Subsidiary's capital stock or other securities;
(b) adopt or propose any change in the certificate or articles of incorporation or bylaws (or equivalent governing documents) of the Company or any Subsidiary;
(c) except as set forth in Section 6.2(c) of the Disclosure Schedule, merge or consolidate with any other Person or acquire assets from any other Person, other than (i) the acquisition of inventory, (ii) with respect to the Company and the Retained Subsidiaries, capital expenditures of not more than $15,000 per individual expenditure or $100,000 in the aggregate, (iii) transactions between or among the Company and the Retained Subsidiaries and (iv) transactions between or among the KDM Subsidiaries, in the case of each of clauses (i), (ii) and (iii), in the ordinary course of business consistent with past practice;
(d) sell, lease, encumber, license or otherwise dispose of or transfer any assets or property, including property of the Company Intellectual Propertyor any Subsidiary except (i) pursuant to existing contracts or commitments that are disclosed in the Disclosure Schedule, (ii) the sale of inventory and customer list rentals and exchanges, (iii) transactions between or among the Company and the Retained Subsidiaries and (iv) transactions between or among the KDM Subsidiaries, in the case of each of clauses (i), (ii) and (iii), in the ordinary course of business consistent with past practice;
(e) make any material change in the Company's or any Retained Subsidiary's inventory policies or procedures, operating policies or procedures, or advertising and promotional policies or procedures;
(f) enter into or materially modify or amend any financing arrangements, including, without limitation, any credit agreement, loan agreement, bond, debenture, note or other similar instrument;
(g) enter into or modify or amend any lease or sublease of real property or terminate or materially amend or cause or permit the extension of the term of any such lease;
(h) with respect to the Company and the Retained Subsidiaries, enter into or modify or amend any contract with any Related Party;
(i) make any investmentloan, advance or capital contribution to or investment in each caseany Person, other than arm’s length purchases (i) loans, advances or capital contributions between or among the Company and sales the Retained Subsidiaries, (ii) loans, advances or capital contributions between or among the KDM Subsidiaries, (iii) travel and similar advances to employees and (iv) advances and extended payment terms to suppliers, in the case of each of clauses (i), (iii) and (iv), in the ordinary course of business consistent with past practice;
(j) change the independent accountants of the Company or its Subsidiaries or the accounting methods, principles or practices followed by the Company or any Subsidiary (except for any such change required by reason of a change in GAAP or Law);
(i) adopt, amend or modify an Employee Benefit Plan with any director, officer, employee or independent contractor of the Company or any Retained Subsidiary, (ii) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ or termination pay to any director, officer, employee or independent contractor of the Company or any Retained Subsidiary, (iii) increase the compensation of, or pay any bonus to, any director, officer, employee or independent contractor of the Company or any Retained Subsidiary, or (iv) change the compensation or other benefits payable to any director, officer, employee or independent contractor of the Company or any Retained Subsidiary except, in the case of each of clauses (iii) and (iv), in the ordinary course of business consistent with past practice with respect to any employee (excluding any officers) of the Company or any Retained Subsidiary.
(l) (i) with respect to the Company and the Retained Subsidiaries, incur or repay any liability or obligation (whether absolute, accrued, contingent or otherwise) to any Related Party, other than liabilities and obligations to Sellers who are employees of the Company or a Retained Subsidiary incurred in the ordinary course of business consistent with past practice or in amounts not exceeding, in the aggregate, $200,000; 39 NY\7370590.17
(bii) create, incur, assume incur or otherwise become liable with respect repay any material liability or material obligation to any Indebtedness (excluding draws on existing credit facilities), except for amounts not exceeding, in the aggregate, $200,000 (provided the Company shall deliver a payoff letter with respect to any Indebtedness for borrowed money pursuant to and in accordance with Section 1.5(d)); assume, guarantee, endorse or otherwise become liable or responsible (whether directly or contingently) for the obligations of any other Person; or make any loans, advances or capital contributions to, or investments in, any other Person (or discharge or satisfy any material Encumbrance, other than the Company and its Subsidiaries);
(c) create, incur, assume or permit to suffer to exist or remain in effect any Liens (other than Liens existing as of the date of this Agreement or Permitted Liens) on any of its assets or properties;
(d) increase the compensation payable to any officer, employee or consultant except (iA) in the ordinary course of business consistent with past practice or in accordance with existing agreements, and (iiB) pursuant to the terms of agreements to which the Company Transaction Bonuses payable at Closing and included as or a Company Transaction Expense; enter intoRetained Subsidiary is a party on the date hereof or are entered into on terms permitted hereunder after the date hereof;
(m) cancel, adopt discharge or amend satisfy any employment, severance material debts or other material agreement with amounts owed to the Company or any officerRetained Subsidiary or amend, employee terminate, or consultant waive any other material rights of value to the Company or any Retained Subsidiary;
(n) write down or write off the value of any material asset of the Company or any Retained Subsidiary, except for write downs and write offs of accounts receivable and inventory in the ordinary course of business consistent with past practice; adopt;
(o) Compromise or abandon any claims, amend actions, suits or materially increase the benefits under any employee benefit plan, except, in each case, as required by Law or in accordance with existing agreements; hire any new officers or any new employees except proceedings (other than write offs of accounts receivable in the ordinary course of business); or enter into any collective bargaining agreements;or
(ep) terminate or cancel, or take or omit make any commitment to take any action that would constitute a material violation of or default under, or waive any material rights under, any Material Agreement;
(f) enter into contracts or commitments involving potential payments by the Company in any single instance of $50,000 or more or in the aggregate of $100,000 or more, except for contracts or commitments for the purchase of services, supplies, components, parts or materials in the ordinary course of business consistent with past practices;
(g) (A) amend in any material respect, terminate, cancel, or waive any material right under, a Material Agreement, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such termination, cancellation, waiver or amendment effected in accordance with the terms of such Material Agreement, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), (B) renew a Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such renewal effected in accordance with the terms of such Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement) or (C) enter into any new Contract that would have been a Material Agreement or a real property lease if it had been entered into prior to the date of this Agreement; provided that, in the event Buyer has not responded to the Company’s request for consent with respect to do any of the matters described in this Section 5.2(g) within four (4) Business Days from the Company’s request therefor, Buyer shall be deemed to have consented to such matters;foregoing.
Appears in 1 contract
Negative Covenants Pending Closing. Without limiting Except (x) as required or specifically permitted by this Agreement (or as set forth in Section 5.1(b) of the generality of Section 5.1Company Disclosure Letter) or (y) as required by applicable Law, during the period from the date of this Agreement to until the Closing or earlier of the date Effective Time and termination of this Agreement is terminated in accordance with its termsSection 8.1, except as (i) expressly contemplated by this Agreementunless Parent otherwise consents in writing, (ii) consented to by Buyer in writing (which consent shall will not be unreasonably withheld, delayed or conditioned unreasonably) or (iii) as required by applicable Lawconditioned, the Company shall not, and shall cause not permit any of its Subsidiaries not subsidiaries to:
(ai) acquireamend the Company Charter Documents or other similar organizational documents of any of its material subsidiaries;
(ii) (A) issue, deliver, sell, leasegrant, encumberdispose of, license pledge or otherwise dispose encumber any shares of capital stock of any class or transfer any assets or property, including other Equity Interest of the Company Intellectual Propertyor any of its subsidiaries (the “Company Securities”), or make any investmentrights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any Company Securities, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any Company Securities, provided that the Company may issue shares of Company Common Stock solely upon the exercise or settlement of Company Options, Company Performance Share Awards and Company Restricted Stock Units that are outstanding on the date of this Agreement in accordance with their terms as of the date of this Agreement; (B) redeem, purchase or otherwise acquire any outstanding Company Securities, or any rights, warrants, options, calls, commitments, convertible securities or any other agreements of any character to acquire any Company Securities, except in connection with the exercise or settlement of Company Options, Company Performance Share Awards and Company Restricted Stock Units that are outstanding on the date of this Agreement and in accordance with their terms as of the date of this Agreement and consistent with past practice; (C) adjust, split, combine, subdivide or reclassify any Company Securities; or (D) except as required by the terms of this Agreement (or by the terms of the Company Equity Plan or an applicable award agreement under the Company Equity Plan, each caseas in effect on the date of this Agreement), accelerate the vesting of any outstanding Company Option, Company Performance Share Award, Company Restricted Stock Unit or Company Restricted Share;
(iii) directly or indirectly acquire from a third party (including by merger, consolidation, or purchase of Equity Interests of) any firm, corporation, partnership, company, limited liability company, trust, joint venture, association or other entity or division thereof or, other than arm’s length as may be included in the capital expenditure budgets described in Section 5.1(b)(xii), the purchase directly or indirectly of any properties or assets (other than purchases of supplies and sales inventory in the ordinary course of business consistent with past practice practice), if (1) the aggregate amount of all consideration to be paid or transferred by the Company and the Company’s subsidiaries in amounts not exceeding, connection with such transaction (including the assumption of Indebtedness for borrowed money) exceeds $1 million individually and (2) the total of all consideration to be paid or transferred by the Company and the Company’s subsidiaries in such transactions (including the assumption of Indebtedness for borrowed money) described in clause (1) would exceed $25 million in the aggregate, $200,000; 39 NY\7370590.17;
(biv) createsell, incurdispose of, assume transfer or otherwise become liable with respect to license any Indebtedness properties, rights or assets (excluding draws on existing credit facilities)including securities of the Company’s subsidiaries, except for amounts not exceeding, in the aggregate, $200,000 (provided and the Company shall deliver a payoff letter with respect Intellectual Property) that are material to any Indebtedness for borrowed money pursuant to and in accordance with Section 1.5(d)); assume, guarantee, endorse or otherwise become liable or responsible (whether directly or contingently) for the obligations of any other Person; or make any loans, advances or capital contributions to, or investments in, any other Person (other than the Company and its Subsidiaries);
(c) createsubsidiaries, incurtaken as a whole, assume or permit to suffer to exist or remain in effect any Liens (other than Liens existing as of the date of this Agreement or Permitted Liens) on any of its assets or properties;
(d) increase the compensation payable to any officer, employee or consultant except (iA) sales of inventory in the ordinary course of business consistent with past practice practices, (B) non-exclusive licenses of Intellectual Property in connection with the sale of products or services in the ordinary course of business consistent with past practice, (C) transfers among the Company and its wholly owned subsidiaries or (D) dispositions of obsolete or unsalable inventory or equipment;
(v) create or subject to any Lien (including pursuant to a sale-leaseback transaction or an asset securitization transaction) (other than a Permitted Lien) any properties, rights or assets (including securities of the Company’s subsidiaries, and the Company Intellectual Property) that are material to the Company and its subsidiaries, taken as a whole;
(vi) incur, create, assume or otherwise become liable for any Indebtedness for borrowed money (including the issuance of any debt security and the assumption or guarantee of obligations of any person, but excluding any capital leases) (or enter into a “keep well” or similar agreement), or issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its subsidiaries, in amounts in excess of $10 million in the aggregate, other than (A) through borrowings (including letters of credit) under the Company’s existing Credit Facility, (B) pursuant to inter-company arrangements among or between the Company and one or more of its subsidiaries or among or between subsidiaries of the Company or (C) any Indebtedness to the extent repaid prior to Closing;
(vii) declare, set aside, make or pay any dividend or other distribution, whether payable in cash, stock, property or otherwise, in respect of the Company Common Stock, Company Preferred Stock or Equity Interests of any non-wholly owned subsidiary of the Company;
(viii) (A) increase in any respect the compensation of any of its directors, officers, employees or independent contractors or consultants, other than as required pursuant to applicable Law or the terms of Collective Bargaining Agreements as in effect on the date of this Agreement or in accordance the ordinary course of business consistent with existing agreements, and past practice; (iiB) the Company Transaction Bonuses payable at Closing and included as a Company Transaction Expense; enter into, adopt or amend grant any employment, severance or other material agreement with termination benefits to any director, officer, employee employee, independent contractor or consultant of the Company or any of its subsidiaries, except as required under the terms of any Company Plan or Collective Bargaining Agreement, as each is in effect on the date of this Agreement or as required by applicable Law or except in the ordinary course of business consistent with past practice; adopt(C) make any new equity or equity-based awards to any director, officer, employee, independent contractor or consultant of the Company or any of its subsidiaries other than pursuant to Company obligations in effect as of the date hereof and listed on Section 5.1(b)(viii) of the Company Disclosure Letter; (D) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment of, compensation or benefits under any Company Equity Plan or Company Plan to the extent not required by the terms of such Company Equity Plan or Company Plan as in effect on the date of this Agreement; (E) except as would not result in an incremental cost or expense to the Company, enter into, negotiate, establish, amend or materially increase the benefits under terminate any employee Company Plan or any employment, retention or change in control agreement, bonus or other incentive compensation, profit sharing, health or other welfare, stock option or other equity (or equity-based), pension, retirement, vacation, severance, deferred compensation or other compensation or benefit plan, exceptpolicy, agreement, arrangement that would have been a Company Plan if it were in each case, existence on the date hereof other than as required by applicable Law or in accordance with existing agreements; hire any new officers or any new employees except in the ordinary course of business; or enter into any collective bargaining agreements;
(e) terminate or cancel, or take or omit to take any action that would constitute a material violation of or default under, or waive any material rights under, any Material Agreement;
(f) enter into contracts or commitments involving potential payments by the Company in any single instance of $50,000 or more or in the aggregate of $100,000 or more, except for contracts or commitments for the purchase of services, supplies, components, parts or materials in the ordinary course of business consistent with past practicespractice (except that such ordinary course carve-out shall not apply to retention or change in control agreements, stock option or other equity (or equity-based) plans, policies, agreements or arrangements or any modifications to applicable targets or target awards under any bonus or incentive plans, agreements or arrangements); (F) 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, other than as required pursuant to terms of any Company Plan or as may be required by applicable Law; or (G) enter into, establish or terminate any Collective Bargaining Agreement, other than as required by applicable Law, or negotiate or amend any Collective Bargaining Agreement other than as required by applicable Law or in the ordinary course of business consistent with past practice;
(gix) make any material changes in financial accounting methods, principles or practices (or change an annual accounting period), except insofar as may be required by GAAP (or any interpretation thereof), applicable Law or regulatory or quasi-regulatory (including the Financial Accounting Standards Board or any similar organization) guidelines;
(x) release, compromise, assign or settle any suit, action, claim, proceeding, investigation or litigation (including without limitation any suit, action, claim, proceeding, investigation or litigation relating to this Agreement or the Merger and the other transactions contemplated hereby) other than releases, assignments, compromises and settlements in the ordinary course of business consistent with past practice that involve the payment of monetary damages (not covered by insurance) not in excess of $25,000,000 in the aggregate and do not (A) restrict in any material respect the ongoing operations of the Company and its subsidiaries or, after the Effective Time, the Surviving Corporation or Parent and their respective subsidiaries, or (B) include the admission of wrongdoing by the Company or any of its subsidiaries;
(xi) except in the ordinary course of business consistent with past practice (A) make, change or revoke any Tax election or adopt or change any method of Tax accounting, (B) enter into any “closing agreement” as described in Section 7121 of the Code (or any comparable or similar provisions of applicable Law), settle or compromise any liability with respect to Taxes or surrender any claim for a refund of Taxes, (C) file any amended Tax Return, or (D) consent to any extension or waiver of the limitations period applicable to any claim or assessment with respect of Taxes, in each case, to the extent such action could materially affect Parent, the Company, or any of their subsidiaries in a taxable period (or portion thereof) ending after the Closing;
(xii) make or commit to any material capital expenditures on an annual basis which have an aggregate value in excess of 110% of the aggregate budgeted amount reflected in the capital expenditure budgets provided to Parent by the Company prior to the date hereof;
(xiii) (A) amend enter into any Contract that would be a Material Contract or terminate any Material Contract, (B) enter into, materially modify or materially amend, waive any material rights under or renew for a period longer than six months, any Contract for the distribution of Company Products in any market outside of the United States pursuant to which the Company or any of its subsidiaries has received, or would reasonably expect to receive, payments in excess of $500,000 annually, (C) terminate any Material Contract other than in the ordinary course of business consistent with past practice, (D) materially modify, amend, waive any right under or renew or extend any Material Contract (other than renewals or extensions that, by their terms, renew or extend for periods of one year or less), or (E) enter into or extend the term or scope of any Contract that purports to restrict the Company, or any of its subsidiaries, from engaging or competing in any line of business or in any geographic area in any material respect; provided, terminatehowever, cancelthat clauses (A) and (D), this Section 5.2(b)(xiii) shall not restrict the Company or any of subsidiaries from entering into, modifying, waiving or amending any Contract in the ordinary course of business consistent with past practice and that is: (1) a Contract for the sale of Company Products, including Contracts with group purchasing organizations and wholesalers, (2) a supply or procurement Contract with respect to any raw materials, active pharmaceutical ingredients or other goods or services purchased by the Company or its subsidiaries in the ordinary course of business, or waive (3) a Contract that has a term of one year or less or that may be terminated by the Company or such subsidiary on written notice of one year or less without incurring any material right under, a Material Agreement, real property lease cost or insurance policy penalty;
(or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such termination, cancellation, waiver or amendment effected in accordance with the terms of such Material Agreement, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), (B) renew a Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such renewal effected in accordance with the terms of such Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement) or (Cxiv) enter into any new Contract that would have been a Material Agreement material joint venture, license, alliance, joint promotion, co-marketing or a real property lease if it had been entered into prior to the date of this Agreement; provided thatdevelopment agreement or arrangement with any other person, in the event Buyer has not responded to the Company’s request for consent including with respect to any products or products in development with any other person;
(xv) intentionally fail to pay any required filing, prosecution, maintenance, or other fees, or otherwise intentionally fail to make any document filings or payments required to maintain any material Company Intellectual Property in full force and effect or to diligently prosecute applications for registration of material Company Intellectual Property;
(xvi) (1) except for any such programs already announced or in progress as of the matters described date hereof and disclosed in this Section 5.2(greasonable detail to Parent, implement or effect or (2) within four announce, any reduction in force, lay-off, early retirement program, severance program or other similar program concerning the termination of employment of employees of the Company or any of its subsidiaries, in each case, except in the ordinary course of business and consistent with past practice;
(4xvii) Business Days from make any material investment (by contribution to capital, property transfers, purchase of securities or otherwise) in, or material loan (other than (i) travel and similar advances to its employees in the ordinary course of business consistent with past practice and (ii) deferred purchase price of property or services, including trade payables and obligations extended in the ordinary course of business) to any person other than a direct or indirect wholly owned subsidiary of the Company in the ordinary course of business and consistent with the Company’s request thereforpast practice;
(xviii) (A) terminate any officer of the Company with the title of Corporate Vice President or higher or (B) hire or offer employment to any individual as a director, Buyer officer, employee, independent contractor or consultant of the Company or any of its subsidiaries with total annual base compensation in excess of $250,000;
(xix) enter into, amend or cancel any material Insurance Policies other than in ordinary course of business;
(xx) merge or consolidate the Company or any of its subsidiaries with any person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(xxi) (A) enter into, amend or terminate any interest rate, currency, commodity, equity, credit or other derivative or any other Specified Transaction (as defined in the 2002 ISDA Master Agreement) (a “Hedging Transaction”) other than in the ordinary course of business; or (B) amend, terminate or unwind any Hedging Transaction prior to its maturity, or take such other action that would have a similar effect, to the extent that all such actions would result in a gain or loss to the Company or any of its subsidiaries that exceeds $5,000,000, in the aggregate;
(xxii) agree or commit to the FDA, United States Department of Justice or European Medicines Agency to take, or refrain from taking, any action regarding any of the Company Products or the Company facilities, if such action or inaction would, individually or in combination with other such agreements or commitments, reasonably be expected to be materially adverse to the Company and its subsidiaries taken as a whole; provided, however, that this Section 5.1(b)(xxii) shall not prohibit the Company from agreeing or committing to take any action of the type set forth on Section 5.1(b)(xxii) of the Company Disclosure Letter so long as the Company provides Parent with prompt written notice of such agreement or commitment if the agreed or committed act is or would reasonably be deemed expected to have consented be material to such matters;the Company and its subsidiaries
Appears in 1 contract
Sources: Merger Agreement (Pfizer Inc)
Negative Covenants Pending Closing. Without limiting the generality of Section 5.1, during the period from From the date of this Agreement to hereof until the Closing or the date this Agreement is terminated in accordance with its termsClosing, except as (i) expressly contemplated by this AgreementAgreement or any other Transaction Document and except as set forth in Section 6.2 of the Disclosure Schedule, (ii) consented to by Buyer in writing (which without the prior written consent shall not be withheld, delayed or conditioned unreasonably) or (iii) as required by applicable Lawof Buyer, the Company shall not, and the Company shall cause its Subsidiaries not to:
(a) acquireexcept for the granting of the Specified Employees Bonus Amount to each Specified Employee in an amount not to exceed the portion of the Specified Employee Bonus Amount payable to such Specified Employee as set forth in Section 1.1(a) of the Disclosure Schedule and other than the payment of the Accrued Dividend Amount to the Sellers specified in Section 1.1(c) of the Disclosure Schedule, (i) make any change in the Company's or any Subsidiary's authorized or issued capital stock or other securities; (ii) grant any stock option or other right to purchase shares of the Company's or any Subsidiary's capital stock or other securities; (iii) issue or make any commitment to issue any equity security by the Company or any Subsidiary, including any security convertible into the Company's or any Subsidiary's capital stock (except for issuances of Shares pursuant to stock Options outstanding as of the date of this Agreement and which are described in Section 4.4 of the Disclosure Schedule); (iv) declare, set aside or issue or pay any dividends; (v) grant any registration rights with respect to the Company's or any Subsidiary's capital stock or other securities; or (vi) purchase, redeem, retire or make any other acquisition of any shares of the Company's or any Subsidiary's capital stock or other securities;
(b) adopt or propose any change in the certificate or articles of incorporation or bylaws (or equivalent governing documents) of the Company or any Subsidiary;
(c) merge or consolidate with any other Person or acquire assets from any other Person, other than (i) asset acquisitions pursuant to existing contracts, agreements or commitments, (ii) the acquisition of inventory, (iii) capital expenditures of not more than $100,000 per individual expenditure or $600,000 in the aggregate and (iv) intercompany transactions on an arm's length basis, in each case in the ordinary course of business consistent with past practice;
(d) sell, lease, encumber, license or otherwise dispose of or transfer any material assets or propertyproperty of the Company or any Subsidiary except (i) pursuant to existing contracts or commitments that are disclosed in the Disclosure Schedule, (ii) intercompany transactions and (iii) the sale of inventory and customer list rentals and exchanges, in each case in the ordinary course of business consistent with past practice;
(e) make any material change in the Company's or any Subsidiary's inventory policies or procedures, operating policies or procedures, or advertising and promotional policies or procedures;
(f) enter into or materially modify or amend any financing arrangements, including any financings with respect to the receivables of the Company Intellectual Propertyand its Subsidiaries;
(g) enter into or materially modify or amend any lease or sublease of real property or terminate or materially amend or cause or permit the extension of the term of any lease;
(h) enter into or, or make any investmentother than immaterial modifications and amendments that, in each case, are not adverse to the Company or any Subsidiary, modify or amend any contract with any Related Controlling Party or Related Party;
(i) make any loan, advance or capital contribution to or investment in any Person, other than arm’s length purchases (i) loans, advances or capital contributions to a Subsidiary, (ii) travel and sales similar advances to employees, and (iii) advances and extended payment terms to suppliers, in each case in the ordinary course of business consistent with past practice;
(j) change the independent accountants of the Company or its Subsidiaries or the accounting methods, principles or practices followed by the Company or any Subsidiary (except for any such change required by reason of a change in GAAP or Law);
(i) adopt, amend or modify an Employee Benefit Plan with any director, officer, consultant or employee of the Company or any Subsidiary, (ii) grant severance or termination pay to any director, officer, employee, ▇▇ ▇▇▇▇▇▇▇▇▇▇ of the Company or any Subsidiary, (iii) increase the compensation of, or pay any bonus to, any director, officer, employee, or consultant of the Company or any Subsidiary, or (iv) change the compensation or other benefits payable to any director, officer, employee, or consultant of the Company or any Subsidiary except, in the case of clauses (iii) and (iv), in the ordinary course of business consistent with past practice or in amounts not exceeding, in the aggregate, $200,000; 39 NY\7370590.17
(b) create, incur, assume or otherwise become liable with respect to any Indebtedness employee (excluding draws on existing credit facilities)any officers) of the Company or any Subsidiary, except for amounts not exceedingand except, in the aggregatecase of clause (iii), $200,000 (provided for the determination of the board of directors and stockholders of the Company shall deliver a payoff letter with respect to grant the Specified Employees Bonus Amount to each Specified Employee in an amount not to exceed the portion of the Specified Employees Bonus Amount payable to such Specified Employee as set forth in Section 1.1(a) of the Disclosure Schedule;
(l) (i) incur or repay any liability or obligation (whether absolute, accrued, contingent or otherwise) to any Indebtedness for borrowed money pursuant Related Controlling Party (other than a Controlled Portfolio Company) or Related Party, other than (A) in respect of current liabilities incurred in the ordinary course of business consistent with past practice and (B) liabilities and obligations to and Sellers who are employees of the Company or a Subsidiary incurred in accordance the ordinary course of business consistent with Section 1.5(d)); assume, guarantee, endorse or otherwise become liable or responsible (whether directly or contingently) for the obligations of any other Person; or make any loans, advances or capital contributions topast practice, or investments in, (ii) incur or repay any material liability or material obligation to any other Person (or discharge or satisfy any material Encumbrance, other than the Company and its Subsidiaries);
(c) create, incur, assume or permit to suffer to exist or remain in effect any Liens (other than Liens existing as of the date of this Agreement or Permitted Liens) on any of its assets or properties;
(d) increase the compensation payable to any officer, employee or consultant except (iA) in the ordinary course of business consistent with past practice or in accordance with existing agreementspractice, and (iiB) pursuant to the terms of agreements to which the Company Transaction Bonuses payable at Closing and included as or a Company Transaction Expense; enter intoSubsidiary is a party on the date hereof or are entered into on terms permitted hereunder after the date hereof;
(m) cancel, adopt discharge or amend satisfy any employment, severance material debts or other material agreement with amounts owed to the Company or any officerSubsidiary or amend, employee terminate, or consultant waive any other material rights of value to the Company or any Subsidiary;
(n) write down or write off the value of any material asset of the Company or any Subsidiary, except for write downs and write offs of accounts receivable and inventory in the ordinary course of business consistent with past practice; adopt, amend or materially increase the benefits under any employee benefit plan, except, in each case, as required by Law or in accordance with existing agreements; hire any new officers or any new employees except in the ordinary course of business; or enter into any collective bargaining agreements;or
(eo) terminate or cancel, or take or omit make any commitment to take any action that would constitute a material violation of or default under, or waive any material rights under, any Material Agreement;
(f) enter into contracts or commitments involving potential payments by the Company in any single instance of $50,000 or more or in the aggregate of $100,000 or more, except for contracts or commitments for the purchase of services, supplies, components, parts or materials in the ordinary course of business consistent with past practices;
(g) (A) amend in any material respect, terminate, cancel, or waive any material right under, a Material Agreement, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such termination, cancellation, waiver or amendment effected in accordance with the terms of such Material Agreement, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), (B) renew a Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such renewal effected in accordance with the terms of such Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement) or (C) enter into any new Contract that would have been a Material Agreement or a real property lease if it had been entered into prior to the date of this Agreement; provided that, in the event Buyer has not responded to the Company’s request for consent with respect to do any of the matters described in this Section 5.2(g) within four (4) Business Days from the Company’s request therefor, Buyer shall be deemed to have consented to such matters;foregoing.
Appears in 1 contract
Negative Covenants Pending Closing. Without limiting Except as required by this Agreement (or as expressly set forth in Section 6.01(b) of the generality of Section 5.1Company Disclosure Letter) or as required by applicable Law, during the period from the date of this Agreement to until the Closing or earlier of the date Effective Time and termination of this Agreement is terminated in accordance with Section 9.01, unless Parent otherwise consents in advance in writing (such consent not to be unreasonably withheld, conditioned, or delayed), neither the Company nor any of its terms, except as direct or indirect subsidiaries shall or may:
(i) expressly contemplated by this Agreement, amend the Company Charter Documents or the organizational or governing documents of any of the Company’s subsidiaries;
(ii) consented (A) issue, deliver, sell, grant, dispose of, pledge or otherwise encumber any shares of capital stock of any class or any other Equity Interest of the Company or any of its direct or indirect subsidiaries (the “Company Securities”), or any rights, warrants, options, calls, commitments or any other agreements of any character to by Buyer purchase or acquire any Company Securities, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any Company Securities, in writing each case to or in favor of a person other than the Company or a wholly owned subsidiary of the Company, provided, that the Company may issue shares of Company Common Stock upon the exercise, vesting or settlement of Company Stock Options and Company Restricted Stock Units that are outstanding on the date of this Agreement (which consent shall not including in satisfaction of any amounts required to be withhelddeducted or withheld for Tax obligations under applicable Law) in accordance with their terms as of the date of this Agreement or in accordance with the terms of any Contract in effect as of the date of this Agreement; (B) redeem, delayed purchase or conditioned unreasonablyotherwise acquire any outstanding Company Securities, or any rights, warrants, options, calls, commitments, convertible securities or any other agreements of any character to acquire any Company Securities, except in connection with the exercise, vesting or settlement of Company Stock Options and Company Restricted Stock Units (including the withholding of shares of Company Common Stock to satisfy Tax obligations pertaining to such exercise, vesting or settlement) that are outstanding on the date of this Agreement and in accordance with their terms as of the date of this Agreement; (C) adjust, split, combine, subdivide or reclassify any Company Securities; (D) enter into, amend or waive any of the rights under any Contract with respect to the sale or repurchase of any Company Securities; or (iiiE) except as required by the terms of this Agreement or as required by applicable Law, amend (including by reducing an exercise price or extending a term) or waive any of its rights under any agreement evidencing any outstanding Company Stock Options or Company Restricted Stock Units;
(iii) directly or indirectly acquire or agree to acquire in any transaction any Equity Interest in, or business of, any firm, corporation, partnership, company, limited liability company, trust, joint venture, association or other entity or division thereof (other than in accordance with Section 6.01(b)(xvii)) or the Company shall notpurchase (including by license, and shall cause its Subsidiaries not to:
collaboration or joint development agreement) directly or indirectly of any properties or assets (other than (a) acquirenon-exclusive in-licenses of third party Intellectual Property and (b) purchases of supplies and inventory, in each case ((a)-(b)) in the ordinary course of business consistent with the Company’s past practice);
(iv) except as set forth on Section 6.01(b)(iv) of the Company Disclosure Letter, sell, pledge, dispose of, transfer, abandon, allow to lapse or expire, lease, encumberlicense, license mortgage or otherwise dispose encumber or subject to any Lien (including pursuant to a sale-leaseback transaction or an asset securitization transaction) (other than a Company Permitted Lien) any properties, rights or assets (including securities of or transfer any assets or property, including the Company and its subsidiaries and the Company Intellectual Property) with a fair market value in excess of $50,000 individually or $100,000 in the aggregate, or make any investmentexcept (A) as required to be effected prior to the Effective Time pursuant to Contracts in force on the date of this Agreement and listed on Section 6.01(b)(iv) of the Company Disclosure Letter, in each case, other than arm’s length purchases (B) transfers among the Company and sales its wholly-owned subsidiaries in the ordinary course of business consistent with past practice practices or in amounts not exceeding, in the aggregate, $200,000; 39 NY\7370590.17(C) dispositions of obsolete assets or expired inventory;
(bv) incur, create, incur, assume or otherwise become liable with respect to any Indebtedness (excluding draws on existing credit facilities), except for amounts not exceeding, in the aggregate, $200,000 (provided the Company shall deliver a payoff letter with respect to any Indebtedness for borrowed money pursuant to (including the issuance of any debt security and in accordance with Section 1.5(d)); assume, guarantee, endorse the assumption or otherwise become liable or responsible (whether directly or contingently) for the guarantee of obligations of any person) (or enter into a “keep well” or similar agreement) or issue or sell any debt securities or options, warrants, calls or other Person; or make rights to acquire any loansdebt securities of the Company, advances or capital contributions toin amounts in excess of $100,000 in the aggregate, or investments in, any other Person except for (other than A) Indebtedness among the Company and any of its Subsidiaries)wholly-owned subsidiaries, (B) letters of credit issued in the ordinary course of business and (C) trade credit or trade payables in the ordinary course of business;
(cvi) createdeclare, incurset aside, assume make or permit to suffer to exist pay any dividend or remain other distribution, whether payable in cash, stock, property or otherwise, in respect of the Company Common Stock, Company Preferred Stock or Equity Interests of any non-wholly owned subsidiary of the Company;
(vii) other than as required by applicable Law or the terms of a Company Plan in effect any Liens (other than Liens existing as of the date of this Agreement or Permitted Liens) on any of its assets or properties;
Agreement, (dA) increase the compensation payable to or benefits (including contractual severance benefits) of any officercurrent or former employees, employee or consultant except (i) in the ordinary course of business consistent with past practice or in accordance with existing agreementsofficers, and (ii) the Company Transaction Bonuses payable at Closing and included as a Company Transaction Expense; enter into, adopt or amend any employment, severance directors or other material agreement with any officer, employee or consultant service providers of the Company except or its subsidiaries,; (B) make any new equity or equity-based awards to any current or former employees, officers, directors or other service providers of the Company or its subsidiaries, other than in the ordinary course of business consistent with past practice; adopt(C) take any action to accelerate the vesting or payment, amend or materially increase prefund or in any other way secure the payment of, compensation or benefits under any employee benefit Company Plan; (D) enter into, negotiate, establish, amend, extend or terminate any Company Plan (including any plan, exceptprogram, arrangement, agreement or policy that would be a Company Plan if in effect on the date hereof) or any Collective Bargaining Agreement; or (E) 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 insofar as may be required by GAAP, applicable Law or regulatory guidelines;
(viii) make any material changes in financial accounting methods, principles or practices (or change an annual accounting period), except insofar as may be required by GAAP, applicable Law or regulatory guidelines;
(ix) write up, write down or write off the book value of any material assets, except to the extent required by GAAP;
(x) release, compromise, assign, settle or agree to settle any Proceeding, other than Stockholder Litigation subject to Section 7.07, (including without limitation any Proceeding or investigation relating to this Agreement or Merger and the other the transactions contemplated hereby with adverse parties other than Parent or Merger Sub) or insurance claim, other than compromises, settlements or agreements that involve only monetary payments not in excess of $50,000 individually or $100,000 in the aggregate, in each caseany case without the imposition of material equitable relief on, as required by Law or in accordance with existing agreements; hire any new officers the admission of wrongdoing by, the Company or any new employees except of its subsidiaries;
(xi) (A) make, change or revoke any material Tax election or adopt or change any material method of Tax accounting outside of the ordinary course of business, (B) enter into any “closing agreement” as described in Section 7121 of the Code (or any comparable or similar provisions of applicable Law), settle or compromise any liability with respect to material Taxes (C) file any material amended Tax Return, or (D) consent to any extension or waiver of the limitations period applicable to any claim or assessment with respect of material Taxes other than such extensions in the ordinary course of business; or enter into any collective bargaining agreements;
(e) terminate or cancel, or take or omit to (E) take any action that would constitute a material violation may result in excise Tax or increase the excise tax base as described in Section 4501 of or default underthe Code, or waive Notice 2023-2 and any material rights under, any Material Agreementsubsequent guidance implementing the foregoing;
(fxii) make or commit to (A) any capital expenditures in excess of $50,000 in the aggregate for the remainder of fiscal year 2024 or (B) any other expenditures outside the ordinary course of business that is in excess of $100,000 individually or in related expenditures, except for this clause (B) as contemplated by the Company’s monthly cash projections previously made available to Parent;
(xiii) (A) enter into contracts or commitments involving potential payments by the voluntarily terminate any Company in Material Contract, (B) materially modify, amend, waive any single instance of $50,000 right under or more or renew any Company Material Contract, other than (in the aggregate case of $100,000 or morethis clause (B)), except for contracts or commitments for the purchase of services, supplies, components, parts or materials in the ordinary course of business consistent with past practices;
(g) (A) amend practice and in any material respecta manner that does not increase the payment obligations of the Company or its subsidiaries by more than $100,000, terminate, cancel, or waive any material right under, a Material Agreement, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such termination, cancellation, waiver or amendment effected in accordance with the terms of such Material Agreement, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), (B) renew a Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such renewal effected in accordance with the terms of such Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement) or (C) enter into or extend the term or scope of any new Contract that purports to restrict the Company, or any of its subsidiaries or Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area, or (D) enter into any material Contract that would have been be breached by, subject to a Material Agreement termination, or a real require the consent of any third party in order to continue in full force following, consummation of the Merger and the other transactions contemplated hereby;
(xiv) implement any layoffs affecting more than fifty (50) Company employees, place more than fifty (50) Company employees on unpaid leave or furlough, or materially reduce the hours or weekly pay of more than fifty (50) Company employees;
(xv) make any investment (by contribution to capital, property lease if it had been entered into prior transfers, purchase of securities or otherwise) in, or loan or advance (other than travel and similar advances to the date of this Agreement; provided that, its employees in the event Buyer has not responded ordinary course of business consistent with the Company’s past practice) to, any person;
(xvi) hire or offer employment or engagement to, promote or terminate (other than for cause) the employment or engagement of any director or officer, or any employee, independent contractor or consultant except as set forth on Section 6.01(b)(xvi) of the Company Disclosure Letter or as contemplated by the Cost Management Process;
(xvii) merge or consolidate the Company with any person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any of its material subsidiaries;
(xviii) fail to maintain in effect material insurance policies covering the Company and its subsidiaries and their respective properties, assets and businesses;
(A) purchase any marketable securities except in the ordinary course of business, or; (B) change in a material manner the investment guidelines with respect to the Company’s request for consent investment portfolio;
(xx) forgive any loans to any employees, officers or directors or other service providers of the Company or its subsidiaries, or any of their respective Affiliates, except in the ordinary course of business in connection with relocation activities to any employees of the Company or its subsidiaries;
(xxi) accelerate any accounts receivable;
(xxii) (i) sell, transfer, assign, lease, license, covenant not to enforce, or otherwise dispose of (whether by merger, stock or asset sale or otherwise) to any person (including any Affiliate) any rights to any Company Intellectual Property material to the Company or its subsidiaries, taken as a whole, other than licensing non-exclusive rights or entering into customary nondisclosure agreements, and agreements with third party contractors conducting services on behalf of the Company or material transfer agreements, in each case, in the ordinary course of business consistent with past practice, (ii) cancel, dedicate to the public, disclaim, forfeit, reissue, reexamine or abandon without filing a substantially identical counterpart in the same jurisdiction with the same priority or allow to lapse (except with respect to Patents, Copyrights or Trademarks expiring in accordance with their terms) any Company Registered Intellectual Property, which the Company or the Company’s subsidiaries controls the prosecution or maintenance thereof (except in the ordinary course of prosecution consistent with past practice), (iii) fail to make any filing, pay any fee, or take any other action necessary to prosecute and maintain in full force and effect any Company Registered Intellectual Property (except in the ordinary course of prosecution consistent with past practice), (iv) make any change in Company Intellectual Property material to the business of the Company and its subsidiaries, taken as a whole, that does or would reasonably be expected to impair such Company Intellectual Property or the Company’s or its subsidiaries rights with respect thereto, (v) disclose to any person (other than representatives of Parent and Merger Sub) any Trade Secrets, know-how or confidential or proprietary information, except, in the case of confidential or proprietary information, in the ordinary course of business to a person that is subject to confidentiality obligations, (vi) provide, disclose, or commit to provide or disclose, to any third party any source code of the Company's Software or of any other Software used by the Company or any of its subsidiaries (other than to its employees, consultants, independent contractors and other service providers pursuant to an agreement binding the recipient to confidentiality and non-disclosure obligations), or (vii) fail to take or maintain reasonable measures to protect the confidentiality and value of Trade Secrets included in any of the matters described in this Section 5.2(g) within four (4) Business Days from Owned Company Intellectual Property material to the business of the Company and the Company’s request thereforsubsidiaries, Buyer shall be deemed taken as a whole; or
(xxiii) authorize any of, or commit, resolve, propose or agree in writing or otherwise to have consented to such matters;take any of, the foregoing actions.
Appears in 1 contract
Sources: Merger Agreement (Akili, Inc.)
Negative Covenants Pending Closing. Without limiting the generality of Section 5.1, during the period from the date of this Agreement to the Closing or the date this Agreement is terminated in accordance with its terms, except as (i) expressly contemplated by this Agreement, (ii) consented to by Buyer in writing (which consent shall not be withheld, delayed or conditioned unreasonably) or (iii) as required by applicable Law, the The Company shall will not, and shall will cause its Subsidiaries each Subsidiary not to:
(ai) acquireaccelerate the collection of any accounts receivable, or otherwise change or deviate from any cash management practices;
(ii) sell, leasetransfer, encumbermortgage, license pledge or otherwise dispose create or permit to be created any Lien on, any of or transfer any assets or property, including the Company Intellectual Property, or make any investment, in each caseits assets, other than arm’s length purchases and sales or transfers in the ordinary course of business consistent with past practice or in amounts not exceeding, in the aggregate, $200,000; 39 NY\7370590.17
(b) create, incur, assume or otherwise become liable with respect to any Indebtedness (excluding draws on existing credit facilities), except for amounts not exceeding, in the aggregate, $200,000 (provided the Company shall deliver a payoff letter with respect to any Indebtedness for borrowed money pursuant to and in accordance with Section 1.5(d)); assume, guarantee, endorse or otherwise become liable or responsible (whether directly or contingently) for the obligations of any other Person; or make any loans, advances or capital contributions to, or investments in, any other Person (other than the Company and its Subsidiaries)Permitted Liens;
(ciii) create, incur, assume without prior written notice to Buyer (A) incur any obligation or permit to suffer to exist or remain in effect any Liens (liability other than Liens existing as of the date of this Agreement or Permitted Liens) on any of its assets or properties;
(d) increase the compensation payable to any officer, employee or consultant except (i1) in the ordinary course of business consistent or (2) for Acquisition Expenses, (B) incur any indebtedness for borrowed money, or (C) enter into any contracts or commitments involving payments by the Company of $100,000 or more, other than purchase orders or commitments for inventory, materials and supplies in the ordinary course of business;
(iv) change the compensation or fringe benefits of any Employee or Independent Contractor (except as required by the Company Employee Plans in effect on the Agreement Date) or enter into or modify any Company Employee Plan (except at will offer letters for non-officer employees with past practice a base salary of $100,000 or less in accordance with existing agreementspast practice);
(v) (A) grant or accelerate the exercisability of any option, and warrant or other right to purchase, or to convert any obligation into, shares of its capital stock (iiexcept for the acceleration of the Restricted Shares in accordance with the Plan), (B) declare or pay any dividend or other distribution with respect to any shares of its capital stock, other than dividends or distributions from Subsidiaries to the Company Transaction Bonuses payable at Closing and included as a Company Transaction Expense; enter intoin the ordinary course of business, adopt or amend (C) issue any employmentshares of its capital stock, severance restricted stock units, subscription rights, preemptive rights or any other material agreement with security convertible into or exchangeable for any officer, employee or consultant of the Company except foregoing;
(vi) amend its Organizational Documents;
(vii) make any acquisition of any other business;
(viii) make any acquisition of property other than in the ordinary course of business consistent with past practice; adopt, amend or materially increase the benefits under any employee benefit plan, except, in each case, as required by Law or in accordance with existing agreements; hire any new officers or any new employees except in the ordinary course of business; or enter into any collective bargaining agreements;
(e) terminate or cancel, or take or omit to take any action that would constitute a material violation of or default under, or waive any material rights under, any Material Agreement;
(fix) enter into contracts or commitments involving potential payments by the Company in modify any single instance of $50,000 or more or in the aggregate of $100,000 or more, except for contracts or commitments for the purchase of services, supplies, components, parts or materials Disclosable Contract other than in the ordinary course of business consistent with past practicespractice;
(gx) take any affirmative action or fail to take any reasonable action within its control as a result of which any of the changes or events listed in Section 2.9 (Aother than any changes or events listed in Sections 2.9(g), (u) amend or (v)) is likely to occur; or
(xi) take, or agree in writing or otherwise to take, any of the actions described in Sections 5.1(b)(i) through (x) above, or any other action or omission that would prevent any Seller or the Company from performing or cause any Seller or the Company not to perform his, her or its obligations hereunder or under the Related Agreements, or that would be likely to cause any of his, her or its representations or warranties contained in this Agreement or under the Related Agreements to be untrue or inaccurate in any material respect, terminate, cancel, respect at or waive any material right under, a Material Agreement, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such termination, cancellation, waiver or amendment effected in accordance with the terms of such Material Agreement, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), (B) renew a Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such renewal effected in accordance with the terms of such Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement) or (C) enter into any new Contract that would have been a Material Agreement or a real property lease if it had been entered into prior to the date of Closing Date.
(xii) Notwithstanding Section 5.1(a) and Section 5.1(b), nothing in this Agreement; provided thatAgreement or the Related Agreements, in shall prevent the event Buyer has not responded to the Company’s request for consent with respect to Company or any of the matters described Subsidiaries from pursuing an escrow, indemnification or other similar claim pursuant to any agreement in this Section 5.2(g) within four (4) Business Days from effect as of the Company’s request therefor, Buyer shall be deemed to have consented to such matters;Agreement Date that the Company or any of its Subsidiaries is a party thereto.
Appears in 1 contract
Sources: Stock Purchase Agreement (Parametric Technology Corp)
Negative Covenants Pending Closing. Without limiting the generality of Section 5.1Except as set forth on Schedule 6.2, during the period from the date of this Agreement prior to the Closing or Date, each of the date this Agreement is terminated in accordance with its terms, Companies covenants and agrees that except as (i) expressly to the extent contemplated by this Agreement, (ii) consented to by Buyer in writing (which consent shall not be withheld, delayed or conditioned unreasonably) or (iii) as required by applicable Law, the Company shall it will not, and shall cause its Subsidiaries not to:
(a) acquireissue, sell, leasepledge, dispose of, encumber, license or, authorize the issuance, sale, pledge, disposition, grant or otherwise dispose encumbrance of: (i) any shares of or transfer its capital stock of any assets or property, including the Company Intellectual Propertyclass, or make any investmentoptions, in each casewarrants, convertible securities or other than arm’s length purchases and sales in the ordinary course of business consistent with past practice or in amounts not exceeding, in the aggregate, $200,000; 39 NY\7370590.17
(b) create, incur, assume or otherwise become liable with respect to any Indebtedness (excluding draws on existing credit facilities), except for amounts not exceeding, in the aggregate, $200,000 (provided the Company shall deliver a payoff letter with respect to any Indebtedness for borrowed money pursuant to and in accordance with Section 1.5(d)); assume, guarantee, endorse or otherwise become liable or responsible (whether directly or contingently) for the obligations rights of any kind to acquire any shares of such capital stock, or any other Personownership interest, of it; or make any loans, advances or capital contributions to, or investments in, any other Person (other than the Company and its Subsidiaries);
(cii) create, incur, assume or permit to suffer to exist or remain in effect any Liens (other than Liens existing as of the date of this Agreement or Permitted Liens) on any of its assets respective assets, tangible or properties;
(d) increase the compensation payable to any officerintangible, employee or consultant except (i) in the ordinary course of business consistent with past practice or in accordance with existing agreements, and (ii) the Company Transaction Bonuses payable at Closing and included as a Company Transaction Expense; enter into, adopt or amend any employment, severance or other material agreement with any officer, employee or consultant of the Company except in the ordinary course of business consistent with past practice; adopt;
(i) acquire (including, amend without limitation, for cash or materially increase the benefits under shares of stock or units, by merger, consolidation, or acquisition of stock or assets) any employee benefit planinterest in any corporation, except, in each case, as required by Law partnership or in accordance with existing agreements; hire any new officers other business organization or division thereof or any new employees assets, or make any investment either by purchase of stock or securities, contributions of capital or property transfer, or, except in the ordinary course of business, consistent with past practice, purchase any property or assets of any other Person; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans or advances; or (iii) enter into any Contract other than in the ordinary course of business, consistent with past practice;
(c) increase the compensation payable or to become payable to its respective officers or directors, or, except as presently bound to do, grant any severance or termination pay to, or enter into any employment or severance agreement with, any of its respective directors or officers, or establish, adopt, enter into or amend or take any action to accelerate any rights or benefits under any collective bargaining agreementsbargaining, bonus, profit sharing, trust, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees;
(ed) terminate or cancel, or take or omit to take any action that would constitute a material violation of or default under, or waive any material rights under, any Material Agreement;
(f) enter into contracts or commitments involving potential payments by the Company in any single instance of $50,000 or more or in the aggregate of $100,000 or more, except for contracts or commitments for the purchase of services, supplies, components, parts or materials other than in the ordinary course of business and in a manner consistent with past practicespractice with respect to accounting policies or procedures;
(e) pay, discharge or satisfy any existing claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of due and payable liabilities reflected or reserved against in its financial statements, as appropriate, or liabilities incurred after the date hereof in the ordinary course of business and consistent with past practice;
(f) increase or decrease prices charged to its respective customers, except for previously announced price changes or except in the ordinary course of business, or take any other action which might reasonably result in any material increase in the loss of customers through non-renewal or termination of contracts or other causes;
(g) (A) amend in any material respect, terminateforgive, cancel, or waive any rights of material right undervalue or any debts or other material obligations owed to it, a Material Agreementin each case, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such termination, cancellation, waiver or amendment effected in accordance with the terms of such Material Agreement, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), (B) renew a Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such renewal effected in accordance with the terms of such Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement) or (C) enter into any new Contract that would have been a Material Agreement or a real property lease if it had been entered into prior to the date of this Agreementextent included in the Purchased Assets; provided thator
(h) agree, in the event Buyer has not responded writing or otherwise, to the Company’s request for consent with respect to take or authorize any of the matters described foregoing actions or any action which would make any representation or warranty in this Section 5.2(g) within four (4) Business Days from the Company’s request therefor, Buyer shall be deemed to have consented to such matters;Article IV untrue or incorrect.
Appears in 1 contract
Negative Covenants Pending Closing. Without limiting the generality of Section 5.1, during the period from From the date of this Agreement to hereof until the Closing or the date this Agreement is terminated in accordance with its termsClosing, except as (i) expressly contemplated by this Agreementany of the Transaction Documents or as set forth in Section 7.2 of the Disclosure Schedule, without the prior written consent of Buyer, CTI shall cause the Company and each of the Subsidiaries not to, and with respect to Sections 7.2(j), (iio) consented to by Buyer in writing and (which consent p), CTI also shall not be withheld, delayed or conditioned unreasonably) or (iii) as required by applicable Law, the Company shall not, and shall cause each of its Subsidiaries Affiliates not to:
(a) acquire(i) make any change in the Company’s or any Subsidiary’s authorized or issued capital stock or other securities; (ii) grant any stock option or other right to purchase shares of the Company’s or any Subsidiary’s capital stock or other securities; (iii) issue or make any commitment to issue any equity security of the Company or any Subsidiary, including any security convertible into the Company’s or any Subsidiary’s capital stock; (iv) grant any registration rights with respect to the Company’s or any Subsidiary’s capital stock or other securities; or (v) purchase, redeem, retire or make any other acquisition of any shares of the Company’s or any Subsidiary’s capital stock or other securities;
(b) adopt or propose any change in the certificate or articles of incorporation or bylaws (or equivalent governing documents) of the Company or any Subsidiary;
(c) merge or consolidate with any other Person, acquire any equity securities of any other Person, or acquire assets from any other Person, other than (i) the acquisition of inventory in the ordinary course of business in accordance with past practice, (ii) capital expenditures of not more than those set forth in the capital expenditure budget for the current fiscal year previously provided to Buyer;
(d) sell, lease, encumber, license or otherwise dispose of any material assets or transfer property (including any Intellectual Property but excluding the Excluded Assets) of the Company and the Subsidiaries, considered as a whole, except the sale of inventory and customer list rentals and exchanges, in each case in the ordinary course of business consistent with past practice;
(e) make any material change in the Company’s or any Subsidiary’s inventory policies or procedures, operating policies or procedures, or advertising and promotional policies or procedures;
(f) enter into or materially modify or amend any financing arrangements, including any financings with respect to the receivables of the Company and the Subsidiaries, or create any Encumbrance on any assets or property, properties (including any Intellectual Property) of the Company Intellectual Propertyother than Permitted Encumbrances;
(g) enter into or materially modify or amend any lease or sublease of real property (excluding any lease included in the Excluded Assets) or enter into or materially modify or amend any agreement, plan and other document that is required to be disclosed in Section 5.11 of the Disclosure Schedule or terminate or cause or permit the extension of the term of any such lease, agreement, or plan or other document;
(h) make any investmentloan, advance or capital contribution to or investment in any Person, other than (i) loans, advances or capital contributions to a Subsidiary, (ii) travel and similar advances to employees, and (iii) advances and extended payment terms to suppliers, in each casecase in the ordinary course of business consistent with past practice;
(i) change the independent accountants of the Company or its Subsidiaries or the accounting methods, principles or change in any material respect the practices followed by the Company or any Subsidiary (except for any such change required by reason of a change in GAAP or Law);
(j) (i) adopt, amend or modify an Employee Benefit Plan other than arm’s length purchases an amendment or modification to comply with applicable Laws and sales adoptions, amendments and modifications that do not apply to any Listed Employee or any officer, employee or consultant of the Company or any Subsidiary, (ii) grant any severance or termination pay or any other compensation of any kind or nature payable, in whole or in part, by reason of the transactions contemplated by this Agreement to any Listed Employee or any officer, employee or consultant of the Company or any Subsidiary, (iii) make any change in employment terms, including, compensation or other benefits for any Listed Employee or any officer, employee or consultant of the Company or any Subsidiary or increase the contingent or non-contingent compensation of, or pay any bonus to, any Listed Employee or any officer, employee or consultant of the Company or any Subsidiary, and (iv) hire, commit to hire or terminate any Listed Employee or any employee of the Company or any Subsidiary, except, in the case of clauses (iii) and (iv), in the ordinary course of business consistent with past practice or in amounts not exceeding, in the aggregate, $200,000; 39 NY\7370590.17
(b) create, incur, assume or otherwise become liable with respect to any Indebtedness non-management Listed Employee;
(excluding draws on existing credit facilities)k) cancel, except for discharge, waive, compromise or release any debts, Liabilities or other amounts not exceeding, in the aggregate, $200,000 (provided the Company shall deliver a payoff letter with respect owed to any Indebtedness for borrowed money pursuant to and in accordance with Section 1.5(d)); assume, guarantee, endorse or otherwise become liable or responsible (whether directly or contingently) for the obligations of any other Person; or make any loans, advances or capital contributions to, or investments in, any other Person (other than the Company and its the Subsidiaries that are material to the Company and the Subsidiaries), taken as a whole, by a Person other than a Related Party, or amend, terminate, or waive any other material rights of value to the Company or any Subsidiary;
(cl) create, incur, assume settle any claim or permit to suffer to exist lawsuit for an amount involving in excess of $25,000 in the aggregate or remain in effect any Liens (other than Liens existing as of the date of this Agreement involving equitable or Permitted Liens) on any of its assets or propertiesinjunctive relief;
(dm) increase write down or write off the compensation payable value of any asset material to any officer, employee or consultant except (i) in the ordinary course of business consistent with past practice or in accordance with existing agreements, and (ii) the Company Transaction Bonuses payable at Closing and included the Subsidiaries, taken as a Company Transaction Expense; enter intowhole, adopt or amend any employment, severance or other material agreement with any officer, employee or consultant except as required by GAAP and for write downs and write offs of the Company except accounts receivable and inventory in the ordinary course of business consistent with past practice; adopt;
(n) except as specifically permitted by this Agreement and the other Transaction Documents, amend take any other action or materially increase engage in any other practice that would reasonably be expected to cause the benefits under any employee benefit plan, except, in each case, as required by Law Company and its Subsidiaries to be delivered at the Closing with more Liabilities or in accordance with existing agreements; hire any new officers or any new employees except fewer assets than they would have been had the Company and its Subsidiaries operated their respective businesses in the ordinary course of business; or enter in a manner consistent with past practice taking into any collective bargaining agreementsaccount seasonal fluctuations;
(eo) terminate or canceltake, or take or omit to take take, any action with respect to the Business, that would constitute a material violation of if taken or default under, omitted on or waive any material rights under, any Material Agreement;
(f) enter into contracts or commitments involving potential payments by the Company in any single instance of $50,000 or more or in the aggregate of $100,000 or more, except for contracts or commitments for the purchase of services, supplies, components, parts or materials in the ordinary course of business consistent with past practices;
(g) (A) amend in any material respect, terminate, cancel, or waive any material right under, a Material Agreement, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such termination, cancellation, waiver or amendment effected in accordance with the terms of such Material Agreement, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), (B) renew a Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such renewal effected in accordance with the terms of such Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement) or (C) enter into any new Contract that would have been a Material Agreement or a real property lease if it had been entered into prior to the date hereof, would have been required to be disclosed on Schedule 5.8 hereof; or
(p) make any commitment to do any of this Agreement; provided that, in the event Buyer has not responded to the Company’s request for consent foregoing with respect to any of the matters described in this Section 5.2(g) within four (4) Business Days from the Company’s request therefor, Buyer shall be deemed to have consented to such matters;Business.
Appears in 1 contract
Negative Covenants Pending Closing. Without limiting Except as required or specifically permitted by this Agreement (or as expressly set forth in Section 5.2(b) of the generality of Section 5.1Parent Disclosure Letter) or as required by applicable Law, during the period from the date of this Agreement to until the Closing or earlier of the date Effective Time and termination of this Agreement is terminated in accordance with Section 8.1, unless the Company otherwise consents in advance in writing (such consent not to be unreasonably withheld, conditioned, or delayed), neither Parent nor any of its terms, except as subsidiaries shall or may:
(i) amend the Parent Charter Documents or the organizational or governing documents of any of Parent’s subsidiaries;
(ii) (A) issue, deliver, sell, grant, dispose of, pledge or otherwise encumber any shares of capital stock of any class or any other Equity Interest of Parent or any of its direct or indirect subsidiaries (the “Parent Securities”), or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any Parent Securities, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any Parent Securities, in each case to or in favor of a Person other than Parent or a wholly owned subsidiary of Parent, provided that Parent may issue shares of Parent Ordinary Shares solely upon the exercise of Parent Options or the vesting or settlement of Parent restricted stock units that are outstanding on the date of this Agreement in accordance with their terms as of the date of this Agreement or in accordance with the terms of any Contract in effect as of the date of this Agreement; (B) redeem, purchase or otherwise acquire any outstanding Parent Securities, or any rights, warrants, options, calls, commitments, convertible securities or any other agreements of any character to acquire any Parent Securities, except in connection with the exercise of Parent Options that are outstanding on the date of this Agreement and in accordance with their terms as of the date of this Agreement; (C) adjust, split, combine, subdivide or reclassify any Parent Securities; (D) enter into, amend or waive any of the rights under any Contract with respect to the sale or repurchase of any Parent Securities; or (E) except as expressly contemplated required by the terms of this Agreement, amend (ii) consented to including by Buyer in writing (which consent shall not be withheld, delayed reducing an exercise price or conditioned unreasonablyextending a term) or waive any of its rights under any agreement evidencing any outstanding Parent Options;
(iii) directly or indirectly acquire or agree to acquire in any transaction any Equity Interest in, or business of, any firm, corporation, partnership, company, limited liability company, trust, joint venture, association or other entity or division thereof or the purchase (including by license, collaboration or joint development agreement) directly or indirectly of any properties or assets (other than purchases of supplies and inventory in the ordinary course of business consistent with Parent’s past practice);
(iv) sell, pledge, dispose of, transfer, lease, license or mortgage or otherwise encumber or subject to any Lien (including pursuant to a sale leaseback transaction or an asset securitization transaction) (other than a Company Permitted Lien) any properties, rights or assets (including securities of Parent and its subsidiaries but excluding the Parent Intellectual Property), except dispositions of obsolete assets or expired inventory;
(v) incur, create, assume or otherwise become liable for any Indebtedness for borrowed money (including the issuance of any debt security and the assumption or guarantee of obligations of any Person) (or enter into a “keep well” or similar agreement) in excess of $1,000,000 or issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company, except trade credit or trade payables in the ordinary course of business;
(vi) declare, set aside, make or pay any dividend or other distribution, whether payable in cash, stock, property or otherwise, in respect of the Parent Ordinary Shares, Parent ADSs or Equity Interests of any non-wholly owned subsidiary of Parent;
(vii) other than as required by applicable LawLaw or in accordance with the terms of any Contract or Parent Plan set forth in Section 5.2(b)(vii) of the Parent Disclosure Letter, (A) increase the compensation or benefits (including severance benefits) of any current or former employees, officers, directors or other service providers of Parent or its subsidiaries; (B) make any new equity or equity-based awards to any current or former employees, officers, directors or other service providers of the Company or its subsidiaries; (C) take any action to accelerate the vesting or payment, or prefund or in any other way secure the payment of, compensation or benefits under any Parent Plan; (D) enter into, negotiate, establish, amend, extend or terminate any Parent Plan (including any arrangement that would be a Parent Plan if in effect on the date hereof) or any Collective Bargaining Agreement; or (E) change any actuarial or other assumptions used to calculate funding obligations with respect to any Parent Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except insofar as may be required by GAAP, applicable Law or regulatory guidelines;
(viii) communicate in a writing that is intended for broad dissemination to the Company’s (or any of its subsidiary’s) employees regarding compensation, benefits or other treatment they will receive following the Merger, unless any such communication is expressly permitted by this Agreement (in which case, Parent shall notprovide the Company with prior notice of, and shall cause its Subsidiaries not to:the opportunity to review and comment upon, any such communications);
(aix) acquire, sell, lease, encumber, license or otherwise dispose of or transfer any assets or property, including the Company Intellectual Property, or make any investmentmaterial changes in financial accounting methods, in each caseprinciples or practices (or change an annual accounting period), except insofar as may be required by GAAP, applicable Law or regulatory guidelines;
(x) write up, write down or write off the book value of any material assets, except to the extent required by GAAP;
(xi) release, compromise, assign, settle or agree to settle any Action (including without limitation any suit, action, claim, proceeding or investigation relating to this Agreement or Merger and the other the transactions contemplated hereby with adverse parties other than the Company) or insurance claim, other than arm’s length purchases and sales compromises, settlements or agreements that involve only monetary payments not in excess of $25,000 individually or $100,000 in the aggregate, in any case without the imposition of material equitable relief on, or the admission of wrongdoing by, Parent or any of its subsidiaries;
(xii) make (other than in the ordinary course of business consistent with past practice practices), change or revoke any material income Tax election or adopt or change any material method of Tax accounting (except as required by GAAP), (B) enter into any “closing agreement” as described in amounts not exceedingSection 7121 of the Code (or any comparable or similar provisions of applicable Law), in the aggregate, $200,000; 39 NY\7370590.17
(b) create, incur, assume settle or otherwise become liable compromise any material liability with respect to Taxes, (C) amend any Indebtedness material Tax Return, or (excluding draws on existing credit facilities), except for amounts not exceeding, in D) consent to any extension or waiver of the aggregate, $200,000 (provided the Company shall deliver a payoff letter limitations period applicable to any claim or assessment with respect to any Indebtedness for borrowed money pursuant to and in accordance with Section 1.5(d)); assume, guarantee, endorse or otherwise become liable or responsible (whether directly or contingently) for the obligations of any other Person; or make any loans, advances or capital contributions to, or investments in, any other Person Taxes (other than any extension pursuant to an extension to file any Tax Return), in each case, to the Company extent such action would reasonably be expected to materially and its Subsidiariesadversely affect Parent, the Company, or any of their respective subsidiaries in a taxable period (or portion thereof) ending after the Closing make or commit to any capital expenditures (other than those set forth in the capital expenditure budget delivered to Parent prior to the date hereof);
(cxiii) create, incur, assume make or permit commit to suffer to exist or remain any capital expenditures of greater than $100,000 in effect any Liens the aggregate (other than Liens existing as of those set forth in the capital expenditure budget delivered to the Company prior to the date hereof);
(xiv) (A) enter into or terminate any Parent Material Contract (other than an Acceptable Confidentiality Agreement containing a standstill agreement to the extent permitted by Section 5.4), (B) materially modify, amend, waive any right under or renew any Parent Material Contract, (C) enter into or extend the term or scope of this Agreement any Contract that purports to restrict Parent, or Permitted Liens) on any of its assets subsidiaries or propertiesAffiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area, or (D) enter into any Contract that would be breached by, or require the consent of any third party in order to continue in full force following, consummation of the Merger and the other transactions contemplated hereby;
(dxv) increase the compensation payable make any investment (by contribution to any officercapital, employee property transfers, purchase of securities or consultant except otherwise) in, or loan or advance (i) other than travel and similar advances to its employees in the ordinary course of business consistent with Parent’s past practice practice) to, any Person;
(xvi) hire or offer employment or engagement to, promote or terminate the employment or engagement of any director or officer, or any employee, independent contractor or consultant with total annual compensation in excess of $100,000;
(xvii) merge or consolidate Parent with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of Parent or any of its material subsidiaries;
(xviii) cancel, dedicate to the public, disclaim, forfeit, reissue, reexamine, abandon without filing a substantially identical counterpart in the same jurisdiction with the same priority, or allow to lapse (except with respect to issued Patents expiring in accordance with existing agreementstheir terms) any material Parent Intellectual Property;
(xix) fail to maintain in effect material insurance policies covering Parent and its subsidiaries and their respective properties, assets and businesses;
(iixx) (A) purchase any marketable securities except in the Company Transaction Bonuses payable at Closing and included ordinary course of business, or; (B) change in material manner the investment guidelines with respect to the Parent’s investment portfolio;
(xxi) forgive any loans to any employees, officers or directors of Parent or its subsidiaries, or any of their respective Affiliates, except in the ordinary course of business in connection with relocation activities to any employees of Parent or its subsidiaries;
(xxii) (i) sell, transfer, assign, lease, license, covenant not to enforce, or otherwise dispose of (whether by merger, stock or asset sale or otherwise) to any Person (including any Affiliate) any rights to any Parent Intellectual Property material to Parent or its subsidiaries, taken as a Company Transaction Expense; enter intowhole, adopt other than licensing non-exclusive rights or amend any employment, severance entering in to customary nondisclosure or other material agreement with any officer, employee or consultant of the Company except transfer agreements in the ordinary course of business consistent with past practice; adopt, amend (ii) cancel, dedicate to the public, disclaim, forfeit, reissue, reexamine or materially increase abandon without filing a substantially identical counterpart in the benefits under same jurisdiction with the same priority or allow to lapse (except with respect to Patents, Copyrights or Trademarks expiring in accordance with their terms) any employee benefit planParent Registered Intellectual Property, which the Company or any of its subsidiaries controls the prosecution or maintenance thereof, (iii) fail to make any filing, pay any fee, or take any other action necessary to prosecute and maintain in full force and effect any Parent Registered Intellectual Property, (iv) make any change in Parent Intellectual Property material to the business of Parent and its subsidiaries, taken as a whole, that does or would reasonably be expected to impair such Parent Intellectual Property or Parent’s or its subsidiaries rights with respect thereto, (v) disclose to any Person (other than representatives of the Company) any Trade Secrets, know-how or confidential or proprietary information, except, in each casethe case of confidential or proprietary information, as required by Law or in accordance with existing agreements; hire any new officers or any new employees except in the ordinary course of business; or enter into any collective bargaining agreements;
(e) terminate or cancel, or take or omit to take any action that would constitute a material violation of or default under, or waive any material rights under, any Material Agreement;
(f) enter into contracts or commitments involving potential payments by the Company in any single instance of $50,000 or more or in the aggregate of $100,000 or more, except for contracts or commitments for the purchase of services, supplies, components, parts or materials in the ordinary course of business consistent with past practicesto a Person that is subject to confidentiality obligations or (vi) fail to take or maintain reasonable measures to protect the confidentiality and value of Trade Secrets included in any of the Owned Parent Intellectual Property material to the business of Parent and its subsidiaries, taken as a whole;
(g) (A) amend in any material respect, terminate, cancel, or waive any material right under, a Material Agreement, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such termination, cancellation, waiver or amendment effected in accordance with the terms of such Material Agreement, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), (B) renew a Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such renewal effected in accordance with the terms of such Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement) or (Cxxiii) enter into a definitive agreement providing for a Parent Licensing Deal (other than a Parent Licensing Deal that is a Parent Superior Proposal); or
(xxiv) authorize any new Contract that would have been a Material Agreement of, or a real property lease if it had been entered into prior commit, resolve, propose or agree in writing or otherwise to take any of, the date of this Agreement; provided that, in the event Buyer has not responded to the Company’s request for consent with respect to any of the matters described in this Section 5.2(g) within four (4) Business Days from the Company’s request therefor, Buyer shall be deemed to have consented to such matters;foregoing actions.
Appears in 1 contract
Sources: Merger Agreement (Peak Bio, Inc.)
Negative Covenants Pending Closing. Without limiting Except as required or specifically permitted by this Agreement (or as expressly set forth in Section 5.1(b) of the generality of Section 5.1Company Disclosure Letter) or as required by applicable Law, during the period from the date of this Agreement to until the Closing or earlier of the date Effective Time and termination of this Agreement is terminated in accordance with Section 8.1, unless Parent otherwise consents in advance in writing (such consent not to be unreasonably withheld, conditioned, or delayed), neither the Company nor any of its terms, except as direct or indirect subsidiaries shall or may:
(i) amend the Company Charter Documents or the organizational or governing documents of any of the Company’s subsidiaries;
(ii) except with respect to compensatory equity grant issuances made to new hires of the Company or its subsidiaries of a level lower than Vice President in the ordinary course of business consistent with past practice, (A) issue, deliver, sell, grant, dispose of, pledge or otherwise encumber any shares of capital stock of any class or any other Equity Interest of the Company or any of its direct or indirect subsidiaries (the “Company Securities”), or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any Company Securities, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any Company Securities, in each case to or in favor of a person other than the Company or a wholly owned subsidiary of the Company, provided that the Company may issue shares of Company Common Stock solely upon the exercise or settlement of Company Options and Company Restricted Stock Units and purchase rights under the ESPP that are outstanding on the date of this Agreement in accordance with their terms as of the date of this Agreement; (B) redeem, purchase or otherwise acquire any outstanding Company Securities, or any rights, warrants, options, calls, commitments, convertible securities or any other agreements of any character to acquire any Company Securities, except in connection with the exercise or settlement of Company Options and Company Restricted Stock Units that are outstanding on the date of this Agreement and in accordance with their terms as of the date of this Agreement; (C) adjust, split, combine, subdivide or reclassify any Company Securities; (D) enter into, amend or waive any of the rights under any Contract with respect to the sale or repurchase of any Company Securities; or (E) except as expressly contemplated required by the terms of this Agreement, amend (ii) consented to including by Buyer in writing (which consent shall not be withheld, delayed reducing an exercise price or conditioned unreasonablyextending a term) or waive any of its rights under any agreement evidencing any outstanding Company Options, Company Restricted Stock Units or purchase rights under the ESPP;
(iii) directly or indirectly acquire or agree to acquire in any transaction any Equity Interest in, or business of, any firm, corporation, partnership, company, limited liability company, trust, joint venture, association or other entity or division thereof (other than in accordance with Section 5.1(b)(xviii)) or the purchase (including by license, collaboration or joint development agreement) directly or indirectly of any properties or assets (other than purchases of supplies and inventory in the ordinary course of business consistent with the Company’s past practice), if the aggregate amount of all consideration to be paid or transferred by the Company and its subsidiaries in connection with all such transactions (including the assumption of liabilities) would reasonably be expected to exceed $250,000;
(iv) except as set forth on Section 5.1(b)(iv) of the Company Disclosure Letter, sell, pledge, dispose of, transfer, abandon, allow to lapse or expire, lease, license, mortgage or otherwise encumber or subject to any Lien (including pursuant to a sale-leaseback transaction or an asset securitization transaction) (other than a Company Permitted Lien) any properties, rights or assets (including securities of the Company and its subsidiaries and the Company Intellectual Property) with a fair market value in excess of $100,000 individually or $250,000 in the aggregate, except (A) as required to be effected prior to the Effective Time pursuant to Contracts in force on the date of this Agreement and listed on Section 5.1(b)(iv) of the Company Disclosure Letter, (B) transfers among the Company and its wholly-owned subsidiaries in the ordinary course of business consistent with past practices or (C) dispositions of obsolete assets or expired inventory;
(v) incur, create, assume or otherwise become liable for any Indebtedness for borrowed money (including the issuance of any debt security and the assumption or guarantee of obligations of any person) (or enter into a “keep well” or similar agreement) or issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company, in amounts in excess of $250,000 in the aggregate, except for (A) Indebtedness among the Company and any of its wholly-owned subsidiaries, (B) letters of credit issued in the ordinary course of business and (C) trade credit or trade payables in the ordinary course of business;
(vi) declare, set aside, make or pay any dividend or other distribution, whether payable in cash, stock, property or otherwise, in respect of the Company Common Stock, Company Preferred Stock or Equity Interests of any non-wholly owned subsidiary of the Company;
(vii) other than as required by applicable LawLaw or the terms of a Company Plan, (A) increase the compensation or benefits (including severance benefits) of any current or former employees, officers, directors or other service providers of the Company shall not, and shall cause or its Subsidiaries not to:
(a) acquire, sell, lease, encumber, license or otherwise dispose of or transfer any assets or property, including the Company Intellectual Property, or make any investment, in each casesubsidiaries, other than arm’s length purchases and sales an increase in the salary or wages of any employee of the Company or its subsidiaries at a level lower than the Vice President level in the ordinary course of business consistent with past practice and in an amount not to exceed $150,000 in the aggregate; (B) make any new equity or equity-based awards to any current or former employees, officers, directors or other service providers of the Company or its subsidiaries; (C) take any action to accelerate the vesting or payment, or prefund or in amounts any other way secure the payment of, compensation or benefits under any Company Plan; (D) enter into, negotiate, establish, amend, extend or terminate any Company Plan (including any arrangement that would be a Company Plan if in effect on the date hereof) or any Collective Bargaining Agreement; or (E) 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 insofar as may be required by GAAP, applicable Law or regulatory guidelines;
(viii) communicate in a writing that is intended for broad dissemination to the Company’s (or any of its subsidiary’s) employees regarding compensation, benefits or other treatment they will receive following the Merger, unless any such communication has been previously approved by Parent;
(ix) make any material changes in financial accounting methods, principles or practices (or change an annual accounting period), except insofar as may be required by GAAP, applicable Law or regulatory guidelines;
(x) write up, write down or write off the book value of any material assets, except to the extent required by GAAP;
(xi) release, compromise, assign, settle or agree to settle any Action, other than Stockholder Litigation subject to Section 6.8, (including without limitation any suit, action, claim, proceeding or investigation relating to this Agreement or Merger and the other the transactions contemplated hereby with adverse parties other than Parent or Merger Sub) or insurance claim, other than compromises, settlements or agreements that involve only monetary payments not exceeding, in excess of $100,000 individually or $250,000 in the aggregate, $200,000; 39 NY\7370590.17in any case without the imposition of material equitable relief on, or the admission of wrongdoing by, the Company or any of its subsidiaries;
(bxii) create(A) make, incurchange or revoke any material Tax election or adopt or change any material method of Tax accounting outside of the ordinary course of business, assume (B) enter into any “closing agreement” as described in Section 7121 of the Code (or otherwise become liable any comparable or similar provisions of applicable Law), settle or compromise any liability with respect to material Taxes (C) file any Indebtedness material amended Tax Return, or (excluding draws on existing credit facilities), except for amounts not exceeding, in D) consent to any extension or waiver of the aggregate, $200,000 (provided the Company shall deliver a payoff letter limitations period applicable to any claim or assessment with respect to any Indebtedness for borrowed money pursuant to and in accordance with Section 1.5(d)); assume, guarantee, endorse or otherwise become liable or responsible (whether directly or contingently) for the obligations of any other Person; or make any loans, advances or capital contributions to, or investments in, any other Person (material Taxes other than the Company and its Subsidiaries);
(c) create, incur, assume or permit to suffer to exist or remain in effect any Liens (other than Liens existing as of the date of this Agreement or Permitted Liens) on any of its assets or properties;
(d) increase the compensation payable to any officer, employee or consultant except (i) such extensions in the ordinary course of business consistent with past practice business, or (E) take any action that may result in accordance with existing agreements, and (ii) excise Tax or increase the Company Transaction Bonuses payable at Closing and included excise tax base as a Company Transaction Expense; enter into, adopt or amend any employment, severance or other material agreement with any officer, employee or consultant described in Section 4501 of the Code, Notice 2023-2 and any subsequent guidance implementing the foregoing;
(xiii) make or commit to any capital expenditures in excess of $300,000 in the aggregate for the remainder of fiscal year 2023;
(xiv) (A) enter into or voluntarily terminate any Company except Material Contract (other than a confidentiality agreement containing a standstill agreement as contemplated by Section 5.3), (B) materially modify, amend, waive any right under or renew any Company Material Contract, other than (in the case of this clause (B)), in the ordinary course of business consistent with past practice; adopt, amend (C) enter into or extend the term or scope of any Contract that purports to restrict the Company, or any of its subsidiaries or Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area, or (D) enter into any material Contract that would be breached by, or require the consent of any third party in order to continue in full force following, consummation of the Merger and the other transactions contemplated hereby;
(xv) implement any layoffs affecting more than fifty (50) Company employees, place more than fifty (50) Company employees on unpaid leave or furlough, or materially increase reduce the benefits under hours or weekly pay of more than fifty (50) Company employees;
(xvi) make any employee benefit planinvestment (by contribution to capital, exceptproperty transfers, purchase of securities or otherwise) in, or loan or advance (other than travel and similar advances to its employees in each casethe ordinary course of business consistent with the Company’s past practice) to, as required by Law any person;
(xvii) hire or in accordance with existing agreements; hire offer, outside of the ordinary course of business, employment or engagement to, promote or terminate the employment or engagement of any new officers director or officer, or any new employees employee, independent contractor or consultant with total annual compensation in excess of $100,000 or except as set forth on Section 5.1(b)(xvii) of the Company Disclosure Letter;
(xviii) merge or consolidate the Company with any person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any of its material subsidiaries;
(xix) fail to maintain in effect material insurance policies covering the Company and its subsidiaries and their respective properties, assets and businesses;
(A) purchase any marketable securities except in the ordinary course of business, or; or enter into any collective bargaining agreements(B) change in a material manner the investment guidelines with respect to the Company’s investment portfolio;
(exxi) terminate forgive any loans to any employees, officers or canceldirectors of the Company or its subsidiaries, or take any of their respective Affiliates, except in the ordinary course of business in connection with relocation activities to any employees of the Company or omit to take any action that would constitute a material violation of or default under, or waive any material rights under, any Material Agreementits subsidiaries;
(fxxii) enter into contracts (i) sell, transfer, assign, lease, license, covenant not to enforce, or commitments involving potential payments otherwise dispose of (whether by merger, stock or asset sale or otherwise) to any person (including any Affiliate) any rights to any Company Intellectual Property material to the Company or its subsidiaries, taken as a whole, other than licensing non-exclusive rights or entering in any single instance to customary nondisclosure, and agreements with third party contractors conducting services on behalf of $50,000 the Company or more or material transfer agreements, in the aggregate of $100,000 or moreeach case, except for contracts or commitments for the purchase of services, supplies, components, parts or materials in the ordinary course of business consistent with past practices;
practice, (gii) (A) amend in any material respect, terminate, cancel, dedicate to the public, disclaim, forfeit, reissue, reexamine or waive any material right underabandon without filing a substantially identical counterpart in the same jurisdiction with the same priority or allow to lapse (except with respect to Patents, a Material Agreement, real property lease Copyrights or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such termination, cancellation, waiver or amendment effected Trademarks expiring in accordance with their terms) any Company Registered Intellectual Property, which the terms Company or the Company’s subsidiaries controls the prosecution or maintenance thereof (except in the ordinary course of such Material Agreement, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreementprosecution consistent with past practice), (Biii) renew fail to make any filing, pay any fee, or take any other action necessary to prosecute and maintain in full force and effect any Company Registered Intellectual Property (except in the ordinary course of prosecution consistent with past practice, (iv) make any change in Company Intellectual Property material to the business of the Company and its subsidiaries, taken as a Material Agreement whole, that does or real property lease would reasonably be expected to impair such Company Intellectual Property or the Company’s or its subsidiaries rights with respect thereto, (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), v) disclose to any person (other than representatives of Parent and Merger Sub) any such renewal effected in accordance with the terms of such Material Agreement Trade Secrets, know-how or real property lease (confidential or Contract thatproprietary information, if in existence on the date of this Agreement, would constitute a Material Agreement) or (C) enter into any new Contract that would have been a Material Agreement or a real property lease if it had been entered into prior to the date of this Agreement; provided thatexcept, in the event Buyer has not responded case of confidential or proprietary information, in the ordinary course of business to a person that is subject to confidentiality obligations or (vi) fail to take or maintain reasonable measures to protect the confidentiality and value of Trade Secrets included in any of the Owned Company Intellectual Property material to the business of the Company and the Company’s request for consent with respect subsidiaries, taken as a whole; or
(xxiii) authorize any of, or commit, resolve, propose or agree in writing or otherwise to take any of of, the matters described in this Section 5.2(g) within four (4) Business Days from the Company’s request therefor, Buyer shall be deemed to have consented to such matters;foregoing actions.
Appears in 1 contract
Negative Covenants Pending Closing. Without limiting The Company shall not:
(i) Amend or propose to amend the generality certificate of Section 5.1incorporation or bylaws of the Company or amend the terms of any outstanding security of the Company except as contemplated by SECTION 2 of this Agreement;
(ii) Split, during combine, subdivide or reclassify any shares of capital stock of the period from Company;
(iii) Declare, set aside or pay any dividend or other distribution payable in cash, stock or property (or any combination thereof) with respect to the capital stock of the Company;
(iv) Redeem, purchase or otherwise acquire, or offer to redeem, purchase or otherwise acquire, any shares of capital stock;
(v) Issue, sell, pledge, deliver, transfer, dispose of or encumber any shares of, or securities convertible into or exchangeable for, or grant any restricted stock, restricted stock units or warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of the Company, or grant to any third party any right the value of which is based on the value of Shares or other capital stock, other than the issuance of Shares reserved for issuance upon the conversion or exercise of convertible securities outstanding on the date of this Agreement to the Closing or the date and disclosed in this Agreement is terminated or in accordance with its termsthe Company Disclosure Schedule, except as including the issuance of Shares upon the exercise of the Company Options;
(ivi) expressly contemplated by this AgreementAcquire (1) (whether pursuant to merger, stock or asset purchase or otherwise) in one transaction or any series of related transactions any capital stock in any third party or any business or division of any third party or all or substantially all of the assets of any third party (ii) consented to by Buyer in writing (which consent shall not be withheld, delayed or conditioned unreasonablyany business or division thereof) or (iii2) as required by applicable Law, the Company shall not, and shall cause its Subsidiaries not to:
(a) acquire, sellany material asset, lease, encumber, license or otherwise dispose of or transfer any assets or property, including the Company Intellectual Property, or make any investment, capital contribution or interest in each case, real property other than arm’s length purchases and sales in the ordinary course of business consistent in all material respects with past practice practice;
(vii) Except as contemplated by this Agreement, enter into, terminate or materially amend any contract or other agreement disclosed or required to be disclosed in amounts not exceedinga Form 10-K, Form 10-Q or Form 8-K of the SEC or any other material license, development, research, collaboration, clinical trial, service or lease agreement or statement of work with any third party, other than any termination or amendment in the aggregate, $200,000; 39 NY\7370590.17ordinary course of business consistent in all material respects with past practice;
(bviii) createCommence any activity in connection with any clinical trial or study relating to the Company’s ICA-105665 compound;
(ix) Authorize, incurincur or commit to incur any individual capital expenditure in excess of $50,000 or capital expenditures in the aggregate that exceed $100,000;
(x) Transfer, assume lease, sublease, license, sublicense, sell, mortgage, pledge, dispose of, or otherwise become liable encumber any assets with respect a fair market value in excess of $25,000 individually or $50,000 in the aggregate to any Indebtedness (excluding draws on existing credit facilities)person, except for amounts not exceeding, other than in the aggregate, $200,000 ordinary course of business consistent in all material respects with past practice;
(provided xi) (1) Incur or assume any indebtedness (other than trade debt in the Company shall deliver a payoff letter ordinary course of business and on terms consistent in all material respects with respect to past practice) or issue any Indebtedness for borrowed money pursuant to and in accordance with Section 1.5(d))debt securities; (2) assume, guarantee, endorse or otherwise become liable or responsible (whether directly directly, contingently or contingentlyotherwise) for the obligations indebtedness of any other Personperson; or (3) make any loans, advances or capital contributions to, or investments in, any other Person (person other than customary advances to employees for travel and business expenses in the Company and its Subsidiaries)ordinary course of business consistent in all material respects with past practice;
(cxii) create, incur, assume or permit to suffer to exist or remain in effect any Liens (other than Liens existing as of the date of this Agreement or Permitted LiensA) on any of its assets or properties;
(d) increase Increase the compensation payable to or to become payable to any officer, employee director, employee, agent or consultant, or (B) enter into any employment, severance, retention, bonus, tax gross-up or other similar agreement or arrangement with any officer, director, employee, agent or consultant of the Company, or adopt, or increase the benefits (including fringe benefits) under, any Plan, except (i1) in each case, as required by Law or as required pursuant to an existing agreement disclosed in Section 5.1(b)(xii) of the Company Disclosure Schedule and (2) in the case of actions contemplated by subclause (A), with respect to employees with an annual base salary less than $100,000, agents or consultants, in each case, who are not officers or directors, in the ordinary course of business consistent with past practice or in accordance with existing agreements, and (ii) but only to the Company Transaction Bonuses payable at Closing and included as a Company Transaction Expense; enter into, adopt or amend extent that any employment, severance or other material agreement with any officer, employee or consultant of the Company except foregoing does not materially increase the benefits or compensation expense to the Company; or make any loans to any of its directors, officers or employees, agents or consultants other than customary advances to employees for travel and business expenses in the ordinary course of business consistent with past practice; , or make any change in its existing borrowing or lending arrangements for or on behalf of any such persons pursuant to a Plan or otherwise;
(xiii) Hire or promote any employees, agents or consultants, other than hires or promotions of employees, agents or consultants who are not officers or directors with annual base salary or expected annualized payments for services of less than $100,000, in the ordinary course of business consistent with past practice;
(xiv) Except as otherwise provided for in Sections 2.4(a) and (b) of this Agreement, establish, adopt, amend pay, agree to pay, grant or materially increase the benefits under accelerate any pension, profit-sharing, bonus, incentive, deferred compensation, stock purchase, group insurance, vacation pay, severance pay, retirement or other employee benefit plan, exceptagreement or arrangement, or any employment agreement with or for the benefit of any director, officer or employee of the Company, whether past or present, or amend in any respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing, except (y), in each case, as required by Law or as required by existing agreements described in accordance with existing agreements; hire Section 5.1(b)(xiv) of the Company Disclosure Schedule and (z) amendments to any new officers broad-based employee benefit plans sponsored or any new employees except in maintained by the ordinary course of business; Company, that do not materially increase the benefits or enter into any collective bargaining agreementscompensation expense to the Company;
(exv) terminate Announce, implement or canceleffect any reduction in labor force, lay-off, early retirement program, severance program or take other program or omit to take any action that would constitute a material violation effort concerning the termination of or default underemployment of employees of the Company, or waive any material rights under, any Material Agreement;
(f) enter into contracts or commitments involving potential payments by the Company in any single instance of $50,000 or more or in the aggregate of $100,000 or more, except for contracts or commitments for the purchase of services, supplies, components, parts or materials other than routine employee terminations in the ordinary course of business consistent with past practicespractice;
(gxvi) (A) amend Enter into any agreement or arrangement that in any material respectrespect limits or otherwise restricts the Company or, terminate, cancel, or waive any material right under, a Material Agreement, real property lease or insurance policy (or Contract that, if in existence on upon consummation of the date of transactions contemplated by this Agreement, Parent or Surviving Corporation or any successor thereof from engaging or competing in any line of business or in any location;
(xvii) Enter into any collective bargaining agreement or other agreement with a labor union, workers council or similar organization;
(xviii) Change any of its accounting methods in a manner that materially affects its assets, liabilities or business or that would constitute a Material Agreementrequire the Company to restate, or become obligated to restate, any financial statements included in the Company’s most recent annual report on Form 10-K, except for such changes required by applicable Law or in order to comply with generally accepted accounting principles;
(1) Make any Tax election, prepare or file any Tax Return, or consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment, except, in each case, in the ordinary course of business and consistent with past practice, or (2) file any amended Tax Return, revise or amend any Tax election, settle or compromise any Tax liability (including via any voluntary disclosure agreement), other than change any such terminationannual Tax accounting period, cancellationenter into any closing agreement with respect to Taxes or surrender any right to claim a Tax refund;
(xx) Commence, waiver settle or amendment effected compromise any pending or threatened suit, action or claim which (1) involves payment of monetary damages, net of insurance proceeds actually received, in accordance with excess of $100,000 in the terms aggregate or imposes equitable relief on, or the admission of such Material Agreementwrongdoing by, real property lease or insurance policy the Company, (or Contract that, if in existence 2) would involve restrictions on the date business activities of the Company, or (3) would involve the issuance of Company securities;
(xxi) Except as required by applicable Law or as contemplated by this Agreement, would constitute a Material Agreement), (B) renew a Material Agreement convene any regular or real property lease special meeting (or Contract thatany adjournment or postponement thereof) of the shareholders of the Company;
(xxii) Adopt a plan of complete or partial liquidation, if in existence on dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the date of this Agreement, would constitute a Material Agreement), Company (other than any such renewal effected in accordance with the terms of such Material Agreement or real property lease Merger); or
(or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreementxxiii) or (C) enter Enter into any new Contract that would have been a Material Agreement agreement, contract, commitment or a real property lease if it had been entered into prior arrangement to the date of this Agreement; provided that, in the event Buyer has not responded to the Company’s request for consent with respect to do any of the matters described in this Section 5.2(g) within four (4) Business Days from foregoing or authorize or commit to take any of the Company’s request therefor, Buyer shall be deemed to have consented to such matters;foregoing actions.
Appears in 1 contract
Sources: Merger Agreement (Icagen Inc)
Negative Covenants Pending Closing. Without limiting the generality of Section 5.1, during the period from the date of this Agreement to the Closing or the date this Agreement is terminated in accordance with its terms, except as (i) expressly contemplated by this Agreement, (ii) consented to by Buyer in writing (which consent shall not be withheld, delayed or conditioned unreasonably) or (iii) as required by applicable Law, the The Company shall will not, and shall will cause its Subsidiaries each Subsidiary not to:
(ai) acquireaccelerate the collection of any accounts receivable, or otherwise change or deviate from any cash management practices;
(ii) sell, leasetransfer, encumbermortgage, license pledge or otherwise dispose create or permit to be created any Lien on, any of or transfer any assets or property, including the Company Intellectual Property, or make any investment, in each caseits assets, other than arm’s length purchases sales or transfers in the ordinary course of business and sales Permitted Liens;
(iii) except with prior written notice to Buyer (A) incur any obligation or liability other than (1) in the ordinary course of business or (2) for Acquisition Expenses, (B) incur any indebtedness for borrowed money, or (C) enter into any contracts or commitments involving payments by the Company of $50,000 or more individually, other than purchase orders, contracts or commitments for inventory, materials and supplies in the ordinary course of business;
(iv) change the compensation of or materially change the fringe benefits of any Employee, agent or independent contractor or enter into or modify any Company Employee Plan;
(v) (A) grant or accelerate the exercisability of any option, warrant or other right to purchase, or to convert any obligation into, shares of its capital stock, (B) declare or pay any dividend or other distribution with respect to any shares of its capital stock, other than dividends or distributions (1) that would not reduce the Closing Net Working Capital below zero and (2) from Subsidiaries to the Company in the ordinary course of business, or (C) issue any shares of its capital stock, restricted stock units, Company Phantom Units, Stock Appreciation Rights subscription rights, preemptive rights or any other security convertible into or exchangeable for any of the foregoing;
(vi) amend its Organizational Documents;
(vii) make any acquisition of any other business;
(viii) make any acquisition of property other than in the ordinary course of business consistent with past practice or in amounts not exceeding, in the aggregate, $200,000; 39 NY\7370590.17
(b) create, incur, assume or otherwise become liable with respect to any Indebtedness (excluding draws on existing credit facilities), except for amounts not exceeding, in the aggregate, $200,000 (provided the Company shall deliver a payoff letter with respect to any Indebtedness for borrowed money pursuant to and in accordance with Section 1.5(d)); assume, guarantee, endorse or otherwise become liable or responsible (whether directly or contingently) for the obligations of any other Person; or make any loans, advances or capital contributions to, or investments in, any other Person (other than the Company and its Subsidiaries)practice;
(cix) create, incur, assume enter into or permit to suffer to exist or remain in effect materially modify any Liens (Disclosable Contract other than Liens existing as of the date of this Agreement or Permitted Liens) on any of its assets or properties;
(d) increase the compensation payable to any officer, employee or consultant except (i) in the ordinary course of business consistent with past practice or in accordance with existing agreements, and (ii) the Company Transaction Bonuses payable at Closing and included as a Company Transaction Expense; enter into, adopt or amend any employment, severance or other material agreement with any officer, employee or consultant of the Company except in the ordinary course of business consistent with past practice; adopt, amend or materially increase the benefits under any employee benefit plan, except, in each case, as required by Law or in accordance with existing agreements; hire any new officers or any new employees except in the ordinary course of business; or enter into any collective bargaining agreements;or
(ex) terminate or canceltake, or take agree in writing or omit otherwise to take any action that would constitute a material violation of or default undertake, or waive any material rights under, any Material Agreement;
(f) enter into contracts or commitments involving potential payments by the Company in any single instance of $50,000 or more or in the aggregate of $100,000 or more, except for contracts or commitments for the purchase of services, supplies, components, parts or materials in the ordinary course of business consistent with past practices;
(g) (A) amend in any material respect, terminate, cancel, or waive any material right under, a Material Agreement, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such termination, cancellation, waiver or amendment effected in accordance with the terms of such Material Agreement, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), (B) renew a Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such renewal effected in accordance with the terms of such Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement) or (C) enter into any new Contract that would have been a Material Agreement or a real property lease if it had been entered into prior to the date of this Agreement; provided that, in the event Buyer has not responded to the Company’s request for consent with respect to any of the matters actions described in this Section 5.2(gSections 5.1(b)(i) within four through (4ix) Business Days from the Company’s request therefor, Buyer shall be deemed to have consented to such matters;above.
Appears in 1 contract
Sources: Stock Purchase Agreement (PTC Inc.)
Negative Covenants Pending Closing. Without limiting Except (x) as required or specifically permitted by this Agreement (or as set forth in Section 5.1(b) of the generality of Section 5.1Company Disclosure Letter) or (y) as required by applicable Law, during the period from the date of this Agreement to until the Closing or earlier of the date Effective Time and termination of this Agreement is terminated in accordance with its termsSection 8.1, except as (i) expressly contemplated by this Agreementunless Parent otherwise consents in writing, (ii) consented to by Buyer in writing (which consent shall will not be unreasonably withheld, delayed or conditioned unreasonably) or (iii) as required by applicable Lawconditioned, the Company shall not, and shall cause not permit any of its Subsidiaries not subsidiaries to:
(ai) acquireamend the Company Charter Documents or other similar organizational documents of any of its material subsidiaries;
(ii) (A) issue, deliver, sell, leasegrant, encumberdispose of, license pledge or otherwise dispose encumber any shares of capital stock of any class or transfer any assets or property, including other Equity Interest of the Company Intellectual Propertyor any of its subsidiaries (the “Company Securities”), or make any investmentrights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any Company Securities, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any Company Securities, provided that the Company may issue shares of Company Common Stock solely upon the exercise or settlement of Company Options, Company Performance Share Awards and Company Restricted Stock Units that are outstanding on the date of this Agreement in accordance with their terms as of the date of this Agreement; (B) redeem, purchase or otherwise acquire any outstanding Company Securities, or any rights, warrants, options, calls, commitments, convertible securities or any other agreements of any character to acquire any Company Securities, except in connection with the exercise or settlement of Company Options, Company Performance Share Awards and Company Restricted Stock Units that are outstanding on the date of this Agreement and in accordance with their terms as of the date of this Agreement and consistent with past practice; (C) adjust, split, combine, subdivide or reclassify any Company Securities; or (D) except as required by the terms of this Agreement (or by the terms of the Company Equity Plan or an applicable award agreement under the Company Equity Plan, each caseas in effect on the date of this Agreement), accelerate the vesting of any outstanding Company Option, Company Performance Share Award, Company Restricted Stock Unit or Company Restricted Share;
(iii) directly or indirectly acquire from a third party (including by merger, consolidation, or purchase of Equity Interests of) any firm, corporation, partnership, company, limited liability company, trust, joint venture, association or other entity or division thereof or, other than arm’s length as may be included in the capital expenditure budgets described in Section 5.1(b)(xii), the purchase directly or indirectly of any properties or assets (other than purchases of supplies and sales inventory in the ordinary course of business consistent with past practice practice), if (1) the aggregate amount of all consideration to be paid or transferred by the Company and the Company’s subsidiaries in amounts not exceeding, connection with such transaction (including the assumption of Indebtedness for borrowed money) exceeds $1 million individually and (2) the total of all consideration to be paid or transferred by the Company and the Company’s subsidiaries in such transactions (including the assumption of Indebtedness for borrowed money) described in clause (1) would exceed $25 million in the aggregate, $200,000; 39 NY\7370590.17;
(biv) createsell, incurdispose of, assume transfer or otherwise become liable with respect to license any Indebtedness properties, rights or assets (excluding draws on existing credit facilities)including securities of the Company’s subsidiaries, except for amounts not exceeding, in the aggregate, $200,000 (provided and the Company shall deliver a payoff letter with respect Intellectual Property) that are material to any Indebtedness for borrowed money pursuant to and in accordance with Section 1.5(d)); assume, guarantee, endorse or otherwise become liable or responsible (whether directly or contingently) for the obligations of any other Person; or make any loans, advances or capital contributions to, or investments in, any other Person (other than the Company and its Subsidiaries);
(c) createsubsidiaries, incurtaken as a whole, assume or permit to suffer to exist or remain in effect any Liens (other than Liens existing as of the date of this Agreement or Permitted Liens) on any of its assets or properties;
(d) increase the compensation payable to any officer, employee or consultant except (iA) sales of inventory in the ordinary course of business consistent with past practice practices, (B) non-exclusive licenses of Intellectual Property in connection with the sale of products or services in the ordinary course of business consistent with past practice, (C) transfers among the Company and its wholly owned subsidiaries or (D) dispositions of obsolete or unsalable inventory or equipment;
(v) create or subject to any Lien (including pursuant to a sale-leaseback transaction or an asset securitization transaction) (other than a Permitted Lien) any properties, rights or assets (including securities of the Company’s subsidiaries, and the Company Intellectual Property) that are material to the Company and its subsidiaries, taken as a whole;
(vi) incur, create, assume or otherwise become liable for any Indebtedness for borrowed money (including the issuance of any debt security and the assumption or guarantee of obligations of any person, but excluding any capital leases) (or enter into a “keep well” or similar agreement), or issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its subsidiaries, in amounts in excess of $10 million in the aggregate, other than (A) through borrowings (including letters of credit) under the Company’s existing Credit Facility, (B) pursuant to inter-company arrangements among or between the Company and one or more of its subsidiaries or among or between subsidiaries of the Company or (C) any Indebtedness to the extent repaid prior to Closing;
(vii) declare, set aside, make or pay any dividend or other distribution, whether payable in cash, stock, property or otherwise, in respect of the Company Common Stock, Company Preferred Stock or Equity Interests of any non-wholly owned subsidiary of the Company;
(viii) (A) increase in any respect the compensation of any of its directors, officers, employees or independent contractors or consultants, other than as required pursuant to applicable Law or the terms of Collective Bargaining Agreements as in effect on the date of this Agreement or in accordance the ordinary course of business consistent with existing agreements, and past practice; (iiB) the Company Transaction Bonuses payable at Closing and included as a Company Transaction Expense; enter into, adopt or amend grant any employment, severance or other material agreement with termination benefits to any director, officer, employee employee, independent contractor or consultant of the Company or any of its subsidiaries, except as required under the terms of any Company Plan or Collective Bargaining Agreement, as each is in effect on the date of this Agreement or as required by applicable Law or except in the ordinary course of business consistent with past practice; adopt(C) make any new equity or equity-based awards to any director, officer, employee, independent contractor or consultant of the Company or any of its subsidiaries other than pursuant to Company obligations in effect as of the date hereof and listed on Section 5.1(b)(viii) of the Company Disclosure Letter; (D) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment of, compensation or benefits under any Company Equity Plan or Company Plan to the extent not required by the terms of such Company Equity Plan or Company Plan as in effect on the date of this Agreement; (E) except as would not result in an incremental cost or expense to the Company, enter into, negotiate, establish, amend or materially increase the benefits under terminate any employee Company Plan or any employment, retention or change in control agreement, bonus or other incentive compensation, profit sharing, health or other welfare, stock option or other equity (or equity-based), pension, retirement, vacation, severance, deferred compensation or other compensation or benefit plan, exceptpolicy, agreement, arrangement that would have been a Company Plan if it were in each case, existence on the date hereof other than as required by applicable Law or in accordance with existing agreements; hire any new officers or any new employees except in the ordinary course of business; or enter into any collective bargaining agreements;
(e) terminate or cancel, or take or omit to take any action that would constitute a material violation of or default under, or waive any material rights under, any Material Agreement;
(f) enter into contracts or commitments involving potential payments by the Company in any single instance of $50,000 or more or in the aggregate of $100,000 or more, except for contracts or commitments for the purchase of services, supplies, components, parts or materials in the ordinary course of business consistent with past practicespractice (except that such ordinary course carve-out shall not apply to retention or change in control agreements, stock option or other equity (or equity-based) plans, policies, agreements or arrangements or any modifications to applicable targets or target awards under any bonus or incentive plans, agreements or arrangements); (F) 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, other than as required pursuant to terms of any Company Plan or as may be required by applicable Law; or (G) enter into, establish or terminate any Collective Bargaining Agreement, other than as required by applicable Law, or negotiate or amend any Collective Bargaining Agreement other than as required by applicable Law or in the ordinary course of business consistent with past practice;
(gix) make any material changes in financial accounting methods, principles or practices (or change an annual accounting period), except insofar as may be required by GAAP (or any interpretation thereof), applicable Law or regulatory or quasi- regulatory (including the Financial Accounting Standards Board or any similar organization) guidelines;
(x) release, compromise, assign or settle any suit, action, claim, proceeding, investigation or litigation (including without limitation any suit, action, claim, proceeding, investigation or litigation relating to this Agreement or the Merger and the other transactions contemplated hereby) other than releases, assignments, compromises and settlements in the ordinary course of business consistent with past practice that involve the payment of monetary damages (not covered by insurance) not in excess of $25,000,000 in the aggregate and do not (A) restrict in any material respect the ongoing operations of the Company and its subsidiaries or, after the Effective Time, the Surviving Corporation or Parent and their respective subsidiaries, or (B) include the admission of wrongdoing by the Company or any of its subsidiaries;
(xi) except in the ordinary course of business consistent with past practice (A) make, change or revoke any Tax election or adopt or change any method of Tax accounting, (B) enter into any “closing agreement” as described in Section 7121 of the Code (or any comparable or similar provisions of applicable Law), settle or compromise any liability with respect to Taxes or surrender any claim for a refund of Taxes, (C) file any amended Tax Return, or (D) consent to any extension or waiver of the limitations period applicable to any claim or assessment with respect of Taxes, in each case, to the extent such action could materially affect Parent, the Company, or any of their subsidiaries in a taxable period (or portion thereof) ending after the Closing;
(xii) make or commit to any material capital expenditures on an annual basis which have an aggregate value in excess of 110% of the aggregate budgeted amount reflected in the capital expenditure budgets provided to Parent by the Company prior to the date hereof;
(xiii) (A) amend enter into any Contract that would be a Material Contract or terminate any Material Contract, (B) enter into, materially modify or materially amend, waive any material rights under or renew for a period longer than six months, any Contract for the distribution of Company Products in any market outside of the United States pursuant to which the Company or any of its subsidiaries has received, or would reasonably expect to receive, payments in excess of $500,000 annually, (C) terminate any Material Contract other than in the ordinary course of business consistent with past practice, (D) materially modify, amend, waive any right under or renew or extend any Material Contract (other than renewals or extensions that, by their terms, renew or extend for periods of one year or less), or (E) enter into or extend the term or scope of any Contract that purports to restrict the Company, or any of its subsidiaries, from engaging or competing in any line of business or in any geographic area in any material respect; provided, terminatehowever, cancelthat clauses (A) and (D), this Section 5.2(b)(xiii) shall not restrict the Company or any of subsidiaries from entering into, modifying, waiving or amending any Contract in the ordinary course of business consistent with past practice and that is: (1) a Contract for the sale of Company Products, including Contracts with group purchasing organizations and wholesalers, (2) a supply or procurement Contract with respect to any raw materials, active pharmaceutical ingredients or other goods or services purchased by the Company or its subsidiaries in the ordinary course of business, or waive (3) a Contract that has a term of one year or less or that may be terminated by the Company or such subsidiary on written notice of one year or less without incurring any material right under, a Material Agreement, real property lease cost or insurance policy penalty;
(or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such termination, cancellation, waiver or amendment effected in accordance with the terms of such Material Agreement, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), (B) renew a Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement), other than any such renewal effected in accordance with the terms of such Material Agreement or real property lease (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement) or (Cxiv) enter into any new Contract that would have been a Material Agreement material joint venture, license, alliance, joint promotion, co-marketing or a real property lease if it had been entered into prior to the date of this Agreement; provided thatdevelopment agreement or arrangement with any other person, in the event Buyer has not responded to the Company’s request for consent including with respect to any products or products in development with any other person;
(xv) intentionally fail to pay any required filing, prosecution, maintenance, or other fees, or otherwise intentionally fail to make any document filings or payments required to maintain any material Company Intellectual Property in full force and effect or to diligently prosecute applications for registration of material Company Intellectual Property;
(1) except for any such programs already announced or in progress as of the matters described date hereof and disclosed in this Section 5.2(greasonable detail to Parent, implement or effect or (2) within four announce, any reduction in force, lay-off, early retirement program, severance program or other similar program concerning the termination of employment of employees of the Company or any of its subsidiaries, in each case, except in the ordinary course of business and consistent with past practice;
(4xvii) Business Days from make any material investment (by contribution to capital, property transfers, purchase of securities or otherwise) in, or material loan (other than (i) travel and similar advances to its employees in the ordinary course of business consistent with past practice and (ii) deferred purchase price of property or services, including trade payables and obligations extended in the ordinary course of business) to any person other than a direct or indirect wholly owned subsidiary of the Company in the ordinary course of business and consistent with the Company’s request thereforpast practice;
(xviii) (A) terminate any officer of the Company with the title of Corporate Vice President or higher or (B) hire or offer employment to any individual as a director, Buyer officer, employee, independent contractor or consultant of the Company or any of its subsidiaries with total annual base compensation in excess of $250,000;
(xix) enter into, amend or cancel any material Insurance Policies other than in ordinary course of business;
(xx) merge or consolidate the Company or any of its subsidiaries with any person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(xxi) (A) enter into, amend or terminate any interest rate, currency, commodity, equity, credit or other derivative or any other Specified Transaction (as defined in the 2002 ISDA Master Agreement) (a “Hedging Transaction”) other than in the ordinary course of business; or (B) amend, terminate or unwind any Hedging Transaction prior to its maturity, or take such other action that would have a similar effect, to the extent that all such actions would result in a gain or loss to the Company or any of its subsidiaries that exceeds $5,000,000, in the aggregate;
(xxii) agree or commit to the FDA, United States Department of Justice or European Medicines Agency to take, or refrain from taking, any action regarding any of the Company Products or the Company facilities, if such action or inaction would, individually or in combination with other such agreements or commitments, reasonably be expected to be materially adverse to the Company and its subsidiaries taken as a whole; provided, however, that this Section 5.1(b)(xxii) shall not prohibit the Company from agreeing or committing to take any action of the type set forth on Section 5.1(b)(xxii) of the Company Disclosure Letter so long as the Company provides Parent with prompt written notice of such agreement or commitment if the agreed or committed act is or would reasonably be deemed expected to have consented be material to such matters;the Company and its subsidiaries as a
Appears in 1 contract
Sources: Merger Agreement (Hospira Inc)
Negative Covenants Pending Closing. Without limiting Except as required or specifically permitted by this Agreement (or as expressly set forth in Section 5.2(b) of the generality of Section 5.1Parent Disclosure Letter) or as required by applicable Law, during the period from the date of this Agreement to until the Closing or earlier of the date Effective Time and termination of this Agreement is terminated in accordance with its terms, except as (i) expressly contemplated by this Agreement, (ii) consented to by Buyer in writing (which consent shall not be withheld, delayed or conditioned unreasonably) or (iii) as required by applicable Law, the Company shall not, and shall cause its Subsidiaries not to:
(a) acquire, sell, lease, encumber, license or otherwise dispose of or transfer any assets or property, including the Company Intellectual Property, or make any investment, in each case, other than arm’s length purchases and sales in the ordinary course of business consistent with past practice or in amounts not exceeding, in the aggregate, $200,000; 39 NY\7370590.17
(b) create, incur, assume or otherwise become liable with respect to any Indebtedness (excluding draws on existing credit facilities), except for amounts not exceeding, in the aggregate, $200,000 (provided the Company shall deliver a payoff letter with respect to any Indebtedness for borrowed money pursuant to and in accordance with Section 1.5(d8.1, unless the Company otherwise consents in advance in writing (such consent not to be unreasonably withheld, conditioned, or delayed)); assume, guarantee, endorse neither Parent nor any of its direct or otherwise become liable indirect subsidiaries shall or responsible may:
(whether directly i) amend the organizational or contingently) for the obligations governing documents of any other Person; of the Parent’s subsidiaries or make propose any loans, advances or capital contributions to, or investments in, any other Person (other than amendment to the Company and its Subsidiaries)Parent Charter Documents;
(c) create, incur, assume or permit to suffer to exist or remain in effect any Liens (other than Liens existing as of the date of this Agreement or Permitted Liens) on any of its assets or properties;
(d) increase the compensation payable to any officer, employee or consultant except (i) in the ordinary course of business consistent with past practice or in accordance with existing agreements, and (ii) the Company Transaction Bonuses payable at Closing and included as a Company Transaction Expense; enter into, adopt or amend any employment, severance or other material agreement except with any officer, employee or consultant of the Company except respect to compensatory equity grant issuances made in the ordinary course of business consistent with past practice; adopt, amend (A) issue, deliver, sell, grant, dispose of, pledge or materially increase otherwise encumber any shares of capital stock of any class or any other Equity Interest of Parent or any of its direct or indirect subsidiaries (the benefits under “Parent Securities”), or any employee benefit planrights, exceptwarrants, options, calls, commitments or any other agreements of any character to purchase or acquire any Parent Securities, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any Parent Securities, in each case to or in favor of a person other than Parent or a wholly owned subsidiary of Parent, provided that Parent may issue Parent Ordinary Shares or Parent ADSs, as applicable, upon the exercise or settlement of Parent Options, options to purchase Parent ADSs, or restricted stock unit-style options or nominal cost options with respect to Parent Ordinary Shares or Parent ADSs, in each case, as required by Law or in accordance with existing agreementstheir terms as of the date of this Agreement; hire (B) redeem, purchase or otherwise acquire any new officers outstanding Parent Securities, or any new employees rights, warrants, options, calls, commitments, convertible securities or any other agreements of any character to acquire any Parent Securities, except in connection with the ordinary course exercise or settlement of businessParent Options, options to purchase Parent ADSs, or restricted stock unit-style options or nominal cost options with respect to Parent Ordinary Shares or Parent ADSs, in each case, in accordance with their terms as of the date of this Agreement; (C) adjust, split, combine, subdivide or reclassify any Parent Securities; or (D) enter into into, amend or waive any collective bargaining agreementsof the rights under any Contract with respect to the sale or repurchase of any Parent Securities;
(eiii) terminate sell, pledge, dispose of, transfer, abandon, allow to lapse or cancelexpire, lease, license, mortgage or take otherwise encumber or omit subject to take any action that would constitute Lien (including pursuant to a material violation sale-leaseback transaction or an asset securitization transaction) (other than a Parent Permitted Lien) any properties, rights or assets (including securities of or default under, or waive any material rights under, any Material Agreement;
(fParent and its subsidiaries and the Parent Intellectual Property) enter into contracts or commitments involving potential payments by the Company with a fair market value in any single instance excess of $50,000 300,000 individually or more or $750,000 in the aggregate of $100,000 or moreaggregate, except for contracts or commitments for (A) as required to be effected prior to the purchase Effective Time pursuant to Contracts in force on the date of servicesthis Agreement and listed on Section 5.1(b)(iv) of the Parent Disclosure Letter, supplies, components, parts or materials (B) transfers among Parent and its wholly-owned subsidiaries in the ordinary course of business consistent with past practicespractices or (C) dispositions of obsolete assets or expired inventory;
(giv) incur, create, assume or otherwise become liable for any Indebtedness for borrowed money (including the issuance of any debt security and the assumption or guarantee of obligations of any person) (or enter into a “keep well” or similar agreement) or issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Parent, in amounts in excess of $750,000 in the aggregate, except for (A) Indebtedness among Parent and any of its wholly-owned subsidiaries, (B) letters of credit issued in the ordinary course of business and (C) trade credit or trade payables in the ordinary course of business;
(v) declare, set aside, make or pay any dividend or other distribution, whether payable in cash, stock, property or otherwise, in respect of the Parent Ordinary Shares, Parent ADSs, or Equity Interests of any non-wholly owned subsidiary of Parent;
(vi) make any material changes in financial accounting methods, principles or practices (or change an annual accounting period), except insofar as may be required by GAAP, applicable Law or regulatory guidelines;
(vii) write up, write down or write off the book value of any material assets, except to the extent required by GAAP;
(viii) except for separation agreements entered into with employees, release, compromise, assign, settle or agree to settle any Action, other than Stockholder Litigation subject to Section 6.8, (including without limitation any suit, action, claim, proceeding or investigation relating to this Agreement or Merger and the other the transactions contemplated hereby with adverse parties other than the Company) or insurance claim, other than compromises, settlements or agreements that involve only monetary payments not in excess of $300,000 individually or $750,000 in the aggregate, in any case without the imposition of material equitable relief on, or the admission of wrongdoing by, Parent or any of its subsidiaries;
(ix) (A) amend in make, change or revoke any material respect, terminate, cancel, Tax election or waive adopt or change any material right under, a Material Agreement, real property lease or insurance policy (or Contract that, if in existence on method of Tax accounting outside of the date ordinary course of this Agreement, would constitute a Material Agreement), other than any such termination, cancellation, waiver or amendment effected in accordance with the terms of such Material Agreement, real property lease or insurance policy (or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement)business, (B) renew a Material Agreement or real property lease enter into any “closing agreement” as described in Section 7121 of the Code (or Contract that, if in existence on the date any comparable or similar provisions of this Agreement, would constitute a Material Agreementapplicable Law), settle or compromise any liability with respect to material Taxes (C) file any material amended Tax Return, or (D) consent to any extension or waiver of the limitations period applicable to any claim or assessment with respect of material Taxes other than such extensions in the ordinary course of business;
(x) make or commit to any such renewal effected capital expenditures in excess of $3,000,000 in the aggregate for the remainder of fiscal year 2023;
(xi) make any investment (by contribution to capital, property transfers, purchase of securities or otherwise) in, or loan or advance (other than travel and similar advances to its employees in the ordinary course of business consistent with Parent’s past practice) to, any person;
(xii) merge or consolidate Parent with any person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of Parent or any of its material subsidiaries;
(xiii) fail to maintain in effect material insurance policies covering Parent and its subsidiaries and their respective properties, assets and businesses;
(A) purchase any marketable securities except in the ordinary course of business, or; (B) change in a material manner the investment guidelines with respect to Parent’s investment portfolio;
(xv) forgive any loans to any employees, officers or directors of Parent or its subsidiaries, or any of their respective Affiliates, except in the ordinary course of business in connection with relocation activities to any employees of Parent or its subsidiaries;
(xvi) (i) cancel, dedicate to the public, disclaim, forfeit, reissue, reexamine or abandon without filing a substantially identical counterpart in the same jurisdiction with the same priority or allow to lapse (except with respect to Patents, Copyrights or Trademarks expiring in accordance with their terms) any Parent Registered Intellectual Property, which Parent or Parent’s subsidiaries controls the terms prosecution or maintenance thereof (except in the ordinary course of prosecution consistent with past practice), (ii) fail to make any filing, pay any fee, or take any other action necessary to prosecute and maintain in full force and effect any Parent Registered Intellectual Property (except in the ordinary course of prosecution consistent with past practice), (iii) make any change in Parent Intellectual Property material to the business of Parent and its subsidiaries, taken as a whole, that does or would reasonably be expected to impair such Material Agreement Parent Intellectual Property or real property lease (Parent’s or Contract that, if in existence on the date of this Agreement, would constitute a Material Agreement) its subsidiaries rights with respect thereto or (Civ) enter into any new Contract that would have been a Material Agreement fail to take or a real property lease if it had been entered into prior maintain reasonable measures to protect the date confidentiality and value of this Agreement; provided that, Trade Secrets included in the event Buyer has not responded to the Company’s request for consent with respect to any of the matters described Owned Parent Intellectual Property material to the business of Parent and Parent’s subsidiaries, taken as a whole; or
(xvii) authorize any of, or commit, resolve, propose or agree in this Section 5.2(g) within four (4) Business Days from writing or otherwise to take any of, the Company’s request therefor, Buyer shall be deemed to have consented to such matters;foregoing actions.
Appears in 1 contract