Negative Obligations. Except (i) as expressly provided by this Agreement, (ii) as may be required by Legal Requirements, (iii) as set forth in Section 5.2 of the Qumu Disclosure Letter or the Synacor Disclosure Letter, as the case may be, or (iv) as approved in advance by the other party hereto in writing (which approval shall not be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Section 9.1 and the Effective Time, neither Qumu nor Synacor shall, nor shall either of them cause or permit any of their respective Subsidiaries to, do any of the following: (a) propose to adopt any amendments to or amend their respective certificates of incorporation or bylaws or comparable organizational documents; (b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of restricted stock units, options, warrants, other equity-based commitments, subscriptions, rights to purchase or otherwise) any of their respective securities or any securities of any of their respective Subsidiaries, except for (i) the issuance and sale of shares of common stock pursuant to the exercise or settlement of stock options, restricted stock units, performance stock units or warrants outstanding as of the date of this Agreement, (ii) grants by Synacor to newly hired Synacor employees of stock options, restricted stock, restricted stock units or other equity awards granted in the ordinary course of business consistent with past practice (including with respect to the type of grant, conditions for vesting and other material terms and conditions), with a per share exercise price (as applicable) that is no less than the fair market value of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) of the total grant becomes vested annually, and not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor Common Stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) of the Synacor Disclosure Letter and (B) the aggregate number of shares of Synacor Common Stock subject to stock options, restricted stock, restricted stock units or other equity awards granted to any individual newly hired Synacor employee does not exceed the current stock or other equity award grant guidelines previously made available to Qumu for any single individual; and (iii) grants by Synacor to existing Synacor directors, employees or contractors of stock options, restricted stock, restricted stock units or other equity awards granted in the ordinary course of business consistent with past practice (including with respect to the type of grant, conditions for vesting and other material terms and conditions), with a per share exercise price (as applicable) that is no less than the then the fair market value of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) of the total grant becomes vested annually, and not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor Common Stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) of the Synacor Disclosure Letter and (B) the aggregate number of shares of Synacor Common Stock subject to restricted stock units or other equity awards granted to any individual existing Synacor director, employee or contractor does not exceed the current stock or other equity award grant guidelines previously made available to Qumu for any single individual; (c) acquire or redeem, directly or indirectly, or amend any of their respective securities or any securities of any of their respective Subsidiaries, except for purchases, redemptions or other acquisitions of capital stock or other securities in connection with the acquisition or withholding of capital stock to pay for the exercise price of, or a holder’s payment of Tax obligations with respect to, or the forfeiture of awards granted under the Qumu Stock Plan or the Synacor Stock Plans; provided, however, that nothing in this paragraph (c) shall prohibit Qumu or Synacor from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole; (d) other than cash dividends made by any of their respective direct or indirect wholly owned Subsidiaries to themselves or one of their respective Subsidiaries, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock; provided, however, that nothing in this paragraph (d) shall prohibit Qumu or Synacor from dissolving and/or merging into any of their respective Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole; (e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of themselves or any of their respective Subsidiaries (other than the transactions contemplated hereby); provided, however, that nothing in this paragraph (e) shall prohibit Qumu or Synacor from dissolving and/or merging into any of their respective Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole; (f) (i) incur or assume any long-term or short-term debt or issue any debt securities, except for (A) letters of credit issued in the ordinary course of business consistent with past practice, and (B) loans or advances to direct or indirect wholly owned Subsidiaries in the ordinary course of business consistent with past practices, provided that such refinancing or extension is at prevailing market interest rates and otherwise on terms not materially less favorable in the aggregate than the existing indebtedness being so refinanced, renewed or extended, (ii) other than in the ordinary course of business, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for any material obligations of any other Person except obligations of any of their respective direct or indirect wholly owned Subsidiaries, (iii) make any material loans, advances or capital contributions to or investments in any other Person or (iv) mortgage or pledge any of their or their respective Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon; (g) except as may be required by applicable Legal Requirements or as necessary to satisfy, any Qumu Employee Plan, Qumu Non-U.S. Employee Plan, Synacor Employee Plan or Synacor Non-U.S. Employee Plan, or to other contractual obligations, in each case, existing on the date hereof: (i) with respect to any consultant, officer, director, or employee, enter into, adopt, amend (including to provide for the acceleration of vesting or lapsing of restrictions), modify, renew or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any consultant, director, officer or employee in any manner or increase in any material manner the compensation, benefits, severance or termination pay of any consultant, director, officer or employee, or enter into, modify or amend any non-competition or similar agreement with any employee, (ii) pay any special bonus, remuneration or benefit to any director, officer or employee not required by any plan or arrangement as in effect as of the date hereof, (iii) promote any existing Section 16 officer or promote any employee to a Section 16 officer position, or terminate any Section 16 officer without cause; provided, however, that this paragraph (g) shall not prevent either Synacor or Qumu or any of their respective Subsidiaries (A) from entering into employment agreements, offer letters or retention agreements with respect to any newly hired employees in the ordinary course of business consistent with past practices to fill positions that are open as of the date of this Agreement or that become open subsequent to the date of this Agreement as a result of a current employee’s departure, (B) from executing routine amendments or renewals to health and welfare plans that would not result in a material increase in cost, or (C) from amending any Employee Plan to avoid the imposition of any excise tax under Section 4999 of the Code, provided that in the event of such an action, Synacor and Qumu shall reasonably consult and agree with any such action or (iv) enter into, amend or terminate any Employee Benefit Plan; (h) forgive any loans to any of their respective employees, officers or directors or any employees, officers or directors of any of their respective Subsidiaries or Affiliates; (i) make any deposits or contributions of cash or other property or take any other action to fund or in any other way secure the payment of compensation or benefits under any of their Employee Benefit Plans or any Employee Benefit Plans of any of their respective Subsidiaries, other than deposits and contributions that are required pursuant to the terms of any such Employee Benefit Plans or any Contracts subject to any such Employee Benefit Plans in effect as of the date hereof or as required by applicable Legal Requirements; (j) enter into, amend, or extend any collective bargaining agreement; (k) acquire, sell, lease, license or dispose of any material property or assets in any single transaction or series of related transactions, except for (i) transactions pursuant to existing Contracts, (ii) transactions in the ordinary course of business consistent with past practice and (x) with respect to Qumu or its Subsidiaries, not in excess of $500,000 individually, or $1,000,000 in the aggregate and (y) with respect to Synacor or its Subsidiaries not in excess of $750,000 individually, or $1,500,000 in the aggregate, and (iii) transactions with customers for the sale or license of Qumu Products or Synacor Products in the ordinary course of business consistent with past practice; (l) except as may be required to remain in compliance with GAAP, make any change in any of the accounting principles or practices used by either of them; (m) make, change or revoke any material Tax election, file any material amendment to any Tax Return, adopt or change any material Tax accounting method, change any annual Tax accounting period, enter into any Tax allocation, sharing or indemnity agreement (other than commercial Contracts entered into in the ordinary course of business the primary purpose of which does not relate to Taxes), settle or compromise any material Tax liability for an amount that exceeds the amount disclosed, reflected or reserved against in the financial statements contained in the Qumu SEC Reports or Synacor SEC Reports as the case may be, or consent to the extension or waiver of the limitations period applicable to a material Tax claim or assessment, surrender any right to claim a material Tax refund, or apply for or enter into any ruling from any Tax authority with respect to Taxes; (n) (i) enter into any Contract that would be a Qumu IP License or a Qumu Material Contract described in clause (ii) or (iii) of Section 3.14(a) (together, the “Qumu IP Contracts”), or a Synacor IP License or a Synacor Material Contract or described in clause (ii) or (iii) of Section 4.14(a) (together, the “Synacor IP Contracts”), as the case may be, or amend in any material respect any such Qumu IP Contract or Synacor IP Contract, as the case may be, or grant any release or relinquishment of any material rights under any such Qumu IP Contract or Synacor IP Contract, as the case may be, or (ii) except in the ordinary course of business consistent with past practices, enter into any Contract that would be any other Qumu Material Contract or other Synacor Material Contract, as the case may be, or amend in any material respect any other Qumu Material Contract or Synacor Material Contract, as the case may be, or grant any release or relinquishment of any material rights under any other Qumu Material Contract or Synacor Material Contract, as the case may be; (o) enter into any Qumu Material Real Property Lease or Synacor Material Real Property Lease, or modify, amend or exercise any right to renew any Qumu Material Real Property Lease of Synacor Material Real Property Lease; (p) fail to maintain or allow to lapse, dispose of or abandon, including by failure to pay the required fees in any jurisdiction, any material Intellectual Property Rights used in or held for use in their respective businesses, or grant permission to enter into the public domain any material trade secrets included in the Qumu Intellectual Property or Synacor Intellectual Property, as applicable; (q) grant any exclusive rights with respect to any of their respective material Intellectual Property Rights or the material Intellectual Property Rights of any of their respective Subsidiaries, or divest any of their respective material Intellectual Property Rights or the material Intellectual Property Rights of any of their respective Subsidiaries; (r) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein; (s) authorize, incur or commit to incur any new capital expenditure(s) that in the aggregate exceeds, in any given quarter, one hundred ten percent (110%) of the amount set forth in the respective capital expenditure budget of each party, as provided to the other party prior to the date of this Agreement; provided, however, that the foregoing shall not limit any maintenance capital expenditures or capital expenditures required pursuant to existing Contracts; (t) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any Liability, other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings and Liabilities (i) reflected or reserved against in full in the balance sheet included in the Qumu Balance Sheet or the Synacor Balance Sheet, as the case may be, (ii) covered by existing insurance policies, (iii) settled since the respective dates thereof in the ordinary course of business consistent with past practice or (iv) settlements of any pending or threatened Legal Proceeding, other than arising out of the breach or alleged breach of this Agreement by a party and other than Transaction Litigation, that only involves the payment of cash in amounts that (x) with respect to Qumu or its Subsidiaries do not exceed $100,000 in any individual case and (y) with respect to Synacor or its Subsidiaries do not exceed $500,000 in any individual case; (u) except as required by GAAP, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable other than in the ordinary course of business consistent with past practice; (v) convene any special meeting of their shareholders (or any postponem
Appears in 3 contracts
Sources: Loan and Security Agreement (Synacor, Inc.), Merger Agreement (Synacor, Inc.), Merger Agreement (Qumu Corp)
Negative Obligations. (a) Except (iA) as expressly provided required by this Agreement, (ii) as may be required by Legal Requirements, (iiiB) as set forth in Section 5.2 4.4(a) of the Qumu Parent Disclosure Letter or the Synacor Disclosure LetterSchedule, (C) as the case may berequired by applicable Law, or (ivD) as approved in advance by with the other party hereto in writing prior written consent of the Company (which approval consent shall not be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Section 9.1 and the Effective TimePre-Closing Period, neither Qumu nor Synacor shallParent shall not, nor shall either of them it cause or permit any Subsidiary of their respective Subsidiaries Parent to, do any of the following:
(a) propose to adopt any amendments to or amend their respective certificates of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of restricted stock units, options, warrants, other equity-based commitments, subscriptions, rights to purchase or otherwise) any of their respective securities or any securities of any of their respective Subsidiaries, except for (i) the issuance and sale of shares of common stock pursuant to the exercise or settlement of stock optionsdeclare, restricted stock units, performance stock units or warrants outstanding as of the date of this Agreement, (ii) grants by Synacor to newly hired Synacor employees of stock options, restricted stock, restricted stock units or other equity awards granted in the ordinary course of business consistent with past practice (including with respect to the type of grant, conditions for vesting and other material terms and conditions), with a per share exercise price (as applicable) that is no less than the fair market value of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) of the total grant becomes vested annually, and not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor Common Stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) of the Synacor Disclosure Letter and (B) the aggregate number of shares of Synacor Common Stock subject to stock options, restricted stock, restricted stock units or other equity awards granted to any individual newly hired Synacor employee does not exceed the current stock or other equity award grant guidelines previously made available to Qumu for any single individual; and (iii) grants by Synacor to existing Synacor directors, employees or contractors of stock options, restricted stock, restricted stock units or other equity awards granted in the ordinary course of business consistent with past practice (including with respect to the type of grant, conditions for vesting and other material terms and conditions), with a per share exercise price (as applicable) that is no less than the then the fair market value of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) of the total grant becomes vested annually, and not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor Common Stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) of the Synacor Disclosure Letter and (B) the aggregate number of shares of Synacor Common Stock subject to restricted stock units or other equity awards granted to any individual existing Synacor director, employee or contractor does not exceed the current stock or other equity award grant guidelines previously made available to Qumu for any single individual;
(c) acquire or redeem, directly or indirectly, or amend any of their respective securities or any securities of any of their respective Subsidiaries, except for purchases, redemptions or other acquisitions of capital stock or other securities in connection with the acquisition or withholding of capital stock to pay for the exercise price of, or a holder’s payment of Tax obligations with respect to, or the forfeiture of awards granted under the Qumu Stock Plan or the Synacor Stock Plans; provided, however, that nothing in this paragraph (c) shall prohibit Qumu or Synacor from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole;
(d) other than cash dividends made by any of their respective direct or indirect wholly owned Subsidiaries to themselves or one of their respective Subsidiaries, split, combine or reclassify any shares of capital stock, declareaccrue, set aside or pay any dividend or make any other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any stock other actual, constructive or deemed distribution in respect of than pursuant to the shares of capital stock; provided, however, that nothing in this paragraph (d) shall prohibit Qumu or Synacor from dissolving and/or merging into any of their respective Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a wholeContemplated Transactions;
(eii) propose amend the certificate of incorporation, bylaws or adopt other charter or organizational documents of Parent or any Subsidiary of Parent, or effect or be a plan of complete or partial liquidation, dissolution, party to any merger, consolidation, restructuringshare exchange, recapitalization business combination, recapitalization, reclassification of shares, stock split, reverse stock split or other reorganization of themselves or any of their respective Subsidiaries (similar transaction other than pursuant to the transactions contemplated hereby); provided, however, that nothing in this paragraph (e) shall prohibit Qumu or Synacor from dissolving and/or merging into any of their respective Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a wholeContemplated Transactions;
(fiii) form any new Subsidiary or acquire any equity interest or other interest in any other Person other than pursuant to the Contemplated Transactions;
(iiv) lend money to any Person; incur or assume guarantee any long-term Indebtedness for borrowed money; issue or short-term sell any debt securities or issue options, warrants, calls or other rights to acquire any debt securities, except for ; or guarantee any debt securities of others;
(Av) letters make any capital expenditure or commitment in excess of credit issued $10,000 which would not be assumed in connection with the ordinary course of business consistent with past practice, and Spinoff;
(B) loans or advances to direct or indirect wholly owned Subsidiaries in the ordinary course of business consistent with past practices, provided that such refinancing or extension is at prevailing market interest rates and otherwise on terms not materially less favorable in the aggregate than the existing indebtedness being so refinanced, renewed or extended, (iivi) other than in the ordinary course Ordinary Course of businessBusiness or pursuant to the Contemplated Transactions, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for any material obligations of any other Person except obligations of any of their respective direct or indirect wholly owned Subsidiaries, (iii) make any material loans, advances or capital contributions to or investments in any other Person or (iv) mortgage or pledge any of their or their respective Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon;
(g) except as may be required by applicable Legal Requirements or as necessary to satisfy, any Qumu Employee Plan, Qumu Non-U.S. Employee Plan, Synacor Employee Plan or Synacor Non-U.S. Employee Plan, or to other contractual obligations, in each case, existing on the date hereof: (i) with respect to any consultant, officer, director, or employee, enter into, adopt, amend (including to provide for the acceleration of vesting or lapsing of restrictions), modify, renew or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any consultant, director, officer or employee in any manner or increase in any material manner the compensation, benefits, severance or termination pay of any consultant, director, officer or employee, or enter into, modify or amend any non-competition or similar agreement with any employee, (ii) pay any special bonus, remuneration or benefit to any director, officer or employee not required by any plan or arrangement as in effect as of the date hereof, (iii) promote any existing Section 16 officer or promote any employee to a Section 16 officer position, or terminate any Section 16 officer without cause; provided, however, that this paragraph (g) shall not prevent either Synacor or Qumu or any of their respective Subsidiaries (A) from entering adopt, establish or enter into employment agreements, offer letters or retention agreements with respect to any newly hired employees in the ordinary course of business consistent with past practices to fill positions that are open as of the date of this Agreement or that become open subsequent to the date of this Agreement as a result of a current employee’s departureParent Employee Program, (B) from executing routine cause or permit any Parent Employee Program to be amended other than as required by Law or in order to make amendments or renewals to health and welfare plans that would not result in a material increase in cost, or (C) from amending any Employee Plan to avoid for the imposition purposes of any excise tax under Section 4999 409A of the Code, provided that subject to prior review and approval (with such approval not to be unreasonably withheld) by the Company, (C) hire any new employee or consultant, (D) grant, make or pay (or agree to pay) any severance, retention, change in control, bonus or profit-sharing or similar payment to, or increase the event amount of such an actionthe wages, Synacor and Qumu shall reasonably consult and agree salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, employees or consultants (other than any payment which is to be paid prior or in connection with any such action the Closing), or (ivE) enter intoaccelerate the time of payment or vesting of any non-equity benefits or compensation to any of its directors, amend employees or terminate any Employee Benefit Planconsultants;
(hvii) forgive acquire any loans to any of their respective employeesmaterial asset nor sell, officers lease or directors or any employees, officers or directors otherwise irrevocably dispose of any of their respective Subsidiaries its material assets or Affiliatesproperties, nor grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business other than pursuant to the Contemplated Transactions;
(i) make any deposits or contributions of cash or other property or take any other action to fund or in any other way secure the payment of compensation or benefits under any of their Employee Benefit Plans or any Employee Benefit Plans of any of their respective Subsidiaries, other than deposits and contributions that are required pursuant to the terms of any such Employee Benefit Plans or any Contracts subject to any such Employee Benefit Plans in effect as of the date hereof or as required by applicable Legal Requirements;
(j) enter into, amend, or extend any collective bargaining agreement;
(k) acquire, sell, lease, license or dispose of any material property or assets in any single transaction or series of related transactions, except for (i) transactions pursuant to existing Contracts, (ii) transactions in the ordinary course of business consistent with past practice and (x) with respect to Qumu or its Subsidiaries, not in excess of $500,000 individually, or $1,000,000 in the aggregate and (y) with respect to Synacor or its Subsidiaries not in excess of $750,000 individually, or $1,500,000 in the aggregate, and (iii) transactions with customers for the sale or license of Qumu Products or Synacor Products in the ordinary course of business consistent with past practice;
(l) except as may be required to remain in compliance with GAAP, make any change in any of the accounting principles or practices used by either of them;
(mviii) make, change or revoke any material Tax election, election (other than Tax elections made in the Ordinary Course of Business); file any material amendment to any Tax Return, ; adopt or change any material Tax accounting method, method in respect of Taxes; change any annual Tax accounting period, ; enter into any Tax allocation, sharing or indemnity Sharing Agreement; enter into any closing agreement (other than commercial Contracts entered into in the ordinary course of business the primary purpose of which does not relate with respect to Taxes), any material Tax Liability; settle or compromise any claim, notice, audit report or assessment in respect of any material Tax liability for an amount that exceeds the amount disclosed, reflected or reserved against in the financial statements contained in the Qumu SEC Reports or Synacor SEC Reports as the case may be, or consent to the extension or waiver of the limitations period applicable to a material Tax claim or assessment, surrender any right to claim a material Tax refund, or Liability; apply for or enter into any ruling from any Tax authority Taxing Authority with respect to Taxes; or consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(n) (iix) enter into or amend any Contract that would be a Qumu IP License or a Qumu Parent Material Contract described which is not to be included in clause the Spinoff Assets;
(iix) or commence a lawsuit other than (iiiA) for routine collection of Section 3.14(abills, (B) (together, in such cases as Parent in good faith determines that failure to commence such lawsuit would result in the “Qumu IP Contracts”), or material impairment of a Synacor IP License or a Synacor Material Contract or described in clause (ii) or (iii) valuable aspect of Section 4.14(a) (together, the “Synacor IP Contracts”), as the case may be, or amend in Parent’s and/or any material respect any such Qumu IP Contract or Synacor IP Contract, as the case may be, or grant any release or relinquishment Subsidiary of any material rights under any such Qumu IP Contract or Synacor IP Contract, as the case may beParent’s business, or (iiC) except in the ordinary course for a breach of business consistent with past practices, enter into any Contract that would be any other Qumu Material Contract or other Synacor Material Contract, as the case may be, or amend in any material respect any other Qumu Material Contract or Synacor Material Contract, as the case may be, or grant any release or relinquishment of any material rights under any other Qumu Material Contract or Synacor Material Contract, as the case may bethis Agreement;
(o) enter into any Qumu Material Real Property Lease or Synacor Material Real Property Lease, or modify, amend or exercise any right to renew any Qumu Material Real Property Lease of Synacor Material Real Property Lease;
(pxi) fail to maintain or allow to lapse, dispose of or abandon, including by failure to pay the required fees in any jurisdiction, make any material Intellectual Property Rights used in or held for use in their respective businesses, or grant permission to enter into the public domain any material trade secrets included in the Qumu Intellectual Property or Synacor Intellectual Property, as applicable;
(q) grant any exclusive rights payment with respect to any of their respective material Intellectual Property Rights Parent’s accounts payable or Indebtedness in a timely manner in accordance with the material Intellectual Property Rights of any of their respective Subsidiaries, or divest any of their respective material Intellectual Property Rights or the material Intellectual Property Rights of any of their respective Subsidiariesterms thereof and consistent with past practices;
(rxii) acquire (by mergerhire any employees or engage any independent contractors, consolidation consultants or acquisition of stock or assets) any other Person or any equity interest thereinParent Contingent Workers;
(sxiii) authorize, incur or commit to incur any new capital expenditure(sLiability not expressly permitted pursuant to clauses (i) that through (xii) of this Section 4.4(a), other than in the aggregate exceedsOrdinary Course of Business; or
(xiv) amend or modify the terms of the Separation Agreement (other than any amendment or modification required to address any comment from NASDAQ or the SEC), if such amendment or modification would materially, adversely affect Parent’s rights thereunder or impose any material Liability on Parent or the Company after the Effective Time.
(xv) agree to take, take or permit any Subsidiary of Parent to take or agree to take, any of the actions specified in any given quarterclauses (i) through (xiii) of this Section 4.4(a).
(b) Except (A) as expressly required by this Agreement, one hundred ten percent (110%B) as set forth in Section 4.4(b) of the amount Company Disclosure Schedule, (C) as required by applicable Law, or (D) with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), at all times during the Pre-Closing Period, the Company shall not, nor shall it cause or permit any Subsidiary of the Company to, do any of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock; or repurchase, redeem or otherwise reacquire any shares of capital stock or other securities (except for shares of Company Common Stock from terminated employees of the Company) other than pursuant to the Contemplated Transactions;
(ii) except for (A) contractual commitments in place at the time of this Agreement, (B) as set forth in Section 4.4(b)(ii) of the respective capital expenditure budget of each party, as provided Company Disclosure Schedule or (C) pursuant to the other party prior Contemplated Transactions, sell, issue or grant, or authorize the issuance of, or make any commitments to do any of the date of this Agreement; provided, however, that the foregoing shall not limit any maintenance capital expenditures or capital expenditures required pursuant to existing Contracts;
(t) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any Liability, other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings and Liabilities foregoing: (i) reflected any capital stock or reserved against in full in other security (except for Company Common Stock issued upon the balance sheet included in the Qumu Balance Sheet valid exercise of outstanding Company Stock Options, Company Warrants or the Synacor Balance Sheet, as the case may beCompany Convertible Notes), (ii) covered by existing insurance policiesany option, warrant or right to acquire any capital stock or any other security, or (iii) settled since any instrument convertible into or exchangeable for any capital stock or other security;
(iii) amend the respective dates thereof in certificate of incorporation, bylaws or other charter or organizational documents of the ordinary course Company or any Subsidiary of the Company, or effect or be a party to any merger, consolidation, share exchange, business consistent with past practice combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction other than pursuant to the Contemplated Transactions;
(iv) settlements of form any pending Subsidiary or threatened Legal Proceeding, acquire any equity interest or other than arising out of the breach or alleged breach of this Agreement by a party and other than Transaction Litigation, that only involves the payment of cash in amounts that (x) with respect to Qumu or its Subsidiaries do not exceed $100,000 interest in any individual case and (y) with respect to Synacor or its Subsidiaries do not exceed $500,000 in any individual case;
(u) except as required by GAAP, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable other than in the ordinary course of business consistent with past practicePerson;
(v) convene lend money to any special meeting Person; incur or guarantee any Indebtedness for borrowed money; issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities; guarantee any debt securities of their shareholders others;
(vi) or make any capital expenditure or commitment in excess of $250,000 other than in the Ordinary Course of Business;
(vii) other than in the Ordinary Course of Business, (A) adopt, establish or enter into any Company Employee Program, (B) cause or permit any Company Employee Program to be amended other than as required by Law or in order to make amendments for the purposes of Section 409A of the Code, subject to prior review and approval (with such approval not to be unreasonably withheld) by Parent, (C) hire any new employee or consultant, (D) grant, make or pay (or agree to pay) any postponemseverance, retention, change in control, bonus or profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, employees or consultants, or (E) accelerate the time of payment or vesting of any benefits or compensation to any of its directors, employees or consultants;
(viii) acquire any material asset nor sell, lease or otherwise irrevocably dispose of any of its material assets or properties, nor grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(ix) make, change or revoke any material Tax election (other than Tax elections made in the Ordinary Course of Business); file any material amendment to any Tax Return; adopt or change any material accounting method in respect of Taxes; change any annual Tax accounting period; enter into any Tax Sharing Agreement; enter into any closing agreement with respect to any material Tax Liability; settle or compromise any claim, notice, audit report or assessment in respect of any material Tax Liability; apply for or enter into any ruling from any Taxing Authority with respect to Taxes; or consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(x) enter into, amend or terminate any Company Material Contract, or amend or terminate any material Company Permit other than in the Ordinary Course of Business;
(xi) commence a lawsuit other than (A) for routine collection of bills, (B) in such cases as the Company in good faith determines that failure to commence such lawsuit would result in the material impairment of a valuable aspect of the Company’s and/or any Subsidiary of the Company’s business, or (C) for a breach of this Agreement;
(xii) fail to make any material payment with respect to any of the Company’s accounts payable or Indebtedness in a timely manner in accordance with the terms thereof and consistent with past practices;
(xiii) incur any Liability not expressly permitted pursuant to clauses (i) through (xii) of this Section 4.4(b), other than in the Ordinary Course of Business;
(xiv) issue any shares of Company Preferred Stock or any other security convertible into or exercisable or exchangeable for shares of Company Preferred Stock; or
(xv) agree to take, take or permit any Subsidiary of the Company to take, any of the actions specified in clauses (i) through (xiv) of this Section 4.4(b).
Appears in 2 contracts
Sources: Merger Agreement (Emmaus Life Sciences, Inc.), Merger Agreement (MYnd Analytics, Inc.)
Negative Obligations. (a) Except (i) as expressly provided contemplated or permitted by this Agreement, (ii) as may be required by Legal Requirementsset forth in Part 4.4(a) of the Tranzyme Disclosure Schedule, (iii) as set forth in Section 5.2 of the Qumu Disclosure Letter or the Synacor Disclosure Letter, as the case may bereasonably necessary to ensure that Tranzyme complies with Legal Requirements and pre-existing contractual obligations, or (iv) as approved in advance by with the other party hereto in writing prior written consent of the Company (which approval consent shall not be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Section 9.1 9 and the Effective Time, neither Qumu nor Synacor shallTranzyme shall not, nor shall either of them it cause or permit any Subsidiary of their respective Subsidiaries Tranzyme to, do any of the following:
(a) propose to adopt any amendments to or amend their respective certificates of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of restricted stock units, options, warrants, other equity-based commitments, subscriptions, rights to purchase or otherwise) any of their respective securities or any securities of any of their respective Subsidiaries, except for (i) the issuance and sale of shares of common stock pursuant to the exercise or settlement of stock optionsdeclare, restricted stock units, performance stock units or warrants outstanding as of the date of this Agreement, (ii) grants by Synacor to newly hired Synacor employees of stock options, restricted stock, restricted stock units or other equity awards granted in the ordinary course of business consistent with past practice (including with respect to the type of grant, conditions for vesting and other material terms and conditions), with a per share exercise price (as applicable) that is no less than the fair market value of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) of the total grant becomes vested annually, and not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor Common Stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) of the Synacor Disclosure Letter and (B) the aggregate number of shares of Synacor Common Stock subject to stock options, restricted stock, restricted stock units or other equity awards granted to any individual newly hired Synacor employee does not exceed the current stock or other equity award grant guidelines previously made available to Qumu for any single individual; and (iii) grants by Synacor to existing Synacor directors, employees or contractors of stock options, restricted stock, restricted stock units or other equity awards granted in the ordinary course of business consistent with past practice (including with respect to the type of grant, conditions for vesting and other material terms and conditions), with a per share exercise price (as applicable) that is no less than the then the fair market value of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) of the total grant becomes vested annually, and not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor Common Stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) of the Synacor Disclosure Letter and (B) the aggregate number of shares of Synacor Common Stock subject to restricted stock units or other equity awards granted to any individual existing Synacor director, employee or contractor does not exceed the current stock or other equity award grant guidelines previously made available to Qumu for any single individual;
(c) acquire or redeem, directly or indirectly, or amend any of their respective securities or any securities of any of their respective Subsidiaries, except for purchases, redemptions or other acquisitions of capital stock or other securities in connection with the acquisition or withholding of capital stock to pay for the exercise price of, or a holder’s payment of Tax obligations with respect to, or the forfeiture of awards granted under the Qumu Stock Plan or the Synacor Stock Plans; provided, however, that nothing in this paragraph (c) shall prohibit Qumu or Synacor from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole;
(d) other than cash dividends made by any of their respective direct or indirect wholly owned Subsidiaries to themselves or one of their respective Subsidiaries, split, combine or reclassify any shares of capital stock, declareaccrue, set aside or pay any dividend or make any other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock; or repurchase, redeem or make otherwise reacquire any other actual, constructive or deemed distribution in respect of the shares of capital stock; provided, however, that nothing in this paragraph stock or other securities (d) shall prohibit Qumu or Synacor except for shares of Tranzyme Common Stock from dissolving and/or merging into any terminated employees of their respective Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a wholeTranzyme);
(eii) propose except for contractual commitments in place at the time of this Agreement and disclosed in Part 3.9 and/or Part 3.13 of the Tranzyme Disclosure Schedule, and other than as contemplated by the Contemplated Transactions or adopt the Company Financing, sell, issue or grant, or authorize the issuance of: (i) any capital stock or other security (except for Tranzyme Common Stock issued upon the valid exercise of outstanding Tranzyme Options); (ii) any option, warrant or right to acquire any capital stock or any other security; or (iii) any instrument convertible into or exchangeable for any capital stock or other security;
(iii) amend the certificate of incorporation, bylaws or other charter or organizational documents of Tranzyme or any Subsidiary of Tranzyme, or effect or be a plan of complete or partial liquidation, dissolution, party to any merger, consolidation, restructuringshare exchange, recapitalization business combination, recapitalization, reclassification of shares, stock split, reverse stock split or other reorganization of themselves or any of their respective Subsidiaries (other than similar transaction except as related to the transactions contemplated hereby); provided, however, that nothing in this paragraph (e) shall prohibit Qumu or Synacor from dissolving and/or merging into any of their respective Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a wholeContemplated Transactions;
(fiv) form any new Subsidiary or acquire any equity interest or other interest in any other Entity;
(iv) lend money to any Person; incur or assume guarantee any long-term indebtedness for borrowed money; issue or short-term sell any debt securities or issue options, warrants, calls or other rights to acquire any debt securities; guarantee any debt securities of others; or make any capital expenditure or commitment in excess of $25,000, except for (A) letters of credit issued in the ordinary course of business consistent with past practice, and (B) loans or advances to direct or indirect wholly owned Subsidiaries in the ordinary course of business consistent with past practices, provided that such refinancing or extension is at prevailing market interest rates and otherwise on terms not materially less favorable in the aggregate than the existing indebtedness being so refinanced, renewed or extended, (ii) other than in the ordinary course Ordinary Course of business, assume, guarantee, endorse Business or otherwise become liable or responsible (whether directly, contingently or otherwise) for any material obligations in connection with Tranzyme’s winding down of any other Person except obligations of any of their respective direct or indirect wholly owned Subsidiaries, (iii) make any material loans, advances or capital contributions to or investments in any other Person or (iv) mortgage or pledge any of their or their respective Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereuponoperations;
(gvi) except as may be required by applicable Legal Requirements or as necessary to satisfy, any Qumu Employee Plan, Qumu Non-U.S. Employee Plan, Synacor Employee Plan or Synacor Non-U.S. Employee Plan, or to other contractual obligations, in each case, existing on the date hereof: (i) with respect to any consultant, officer, director, or employee, enter into, adopt, amend (including to provide for the acceleration of vesting or lapsing of restrictions), modify, renew or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any consultant, director, officer or employee in any manner or increase in any material manner the compensation, benefits, severance or termination pay of any consultant, director, officer or employee, or enter into, modify or amend any non-competition or similar agreement with any employee, (ii) pay any special bonus, remuneration or benefit to any director, officer or employee not required by any plan or arrangement as in effect as of the date hereof, (iii) promote any existing Section 16 officer or promote any employee to a Section 16 officer position, or terminate any Section 16 officer without cause; provided, however, that this paragraph (g) shall not prevent either Synacor or Qumu or any of their respective Subsidiaries (A) from entering adopt, establish or enter into employment agreements, offer letters or retention agreements with respect to any newly hired employees in the ordinary course of business consistent with past practices to fill positions that are open as of the date of this Agreement or that become open subsequent to the date of this Agreement as a result of a current employee’s departure, Tranzyme Employee Plan; (B) from executing routine amendments cause or renewals to health and welfare plans that would not result in a material increase in cost, or (C) from amending permit any Tranzyme Employee Plan to avoid be amended other than as required by law or in order to make amendments for the imposition purposes of any excise tax under Section 4999 409A of the Code, provided that in subject to prior review and approval (with such approval not to be unreasonably withheld) by the event Company; (C) hire any new employee or consultant, (D) grant, make or pay any severance, bonus or profit-sharing or similar payment to, or increase the amount of such an actionthe wages, Synacor and Qumu shall reasonably consult and agree with salary, commissions, fringe benefits or other compensation or remuneration payable to, any such action of its directors, employees or (iv) enter into, amend or terminate any Employee Benefit Planconsultants;
(hvii) forgive enter into any loans to material transaction outside the Ordinary Course of Business;
(viii) acquire any of their respective employeesmaterial asset nor sell, officers lease or directors or any employees, officers or directors otherwise irrevocably dispose of any of their respective Subsidiaries its material assets or Affiliatesproperties, nor grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(i) make any deposits or contributions of cash or other property or take any other action to fund or in any other way secure the payment of compensation or benefits under any of their Employee Benefit Plans or any Employee Benefit Plans of any of their respective Subsidiaries, other than deposits and contributions that are required pursuant to the terms of any such Employee Benefit Plans or any Contracts subject to any such Employee Benefit Plans in effect as of the date hereof or as required by applicable Legal Requirements;
(j) enter into, amend, or extend any collective bargaining agreement;
(k) acquire, sell, lease, license or dispose of any material property or assets in any single transaction or series of related transactions, except for (i) transactions pursuant to existing Contracts, (ii) transactions in the ordinary course of business consistent with past practice and (x) with respect to Qumu or its Subsidiaries, not in excess of $500,000 individually, or $1,000,000 in the aggregate and (y) with respect to Synacor or its Subsidiaries not in excess of $750,000 individually, or $1,500,000 in the aggregate, and (iii) transactions with customers for the sale or license of Qumu Products or Synacor Products in the ordinary course of business consistent with past practice;
(l) except as may be required to remain in compliance with GAAP, make any change in any of the accounting principles or practices used by either of them;
(mix) make, change or revoke any material Tax election, ; file any material amendment to any Tax Return, ; adopt or change any material Tax accounting method, method in respect of Taxes; change any annual Tax accounting period, ; enter into any Tax allocationallocation agreement, Tax sharing agreement or Tax indemnity agreement (agreement, other than commercial Contracts contracts entered into in the ordinary course Ordinary Course of business the primary purpose of which does not relate Business with vendors, customers or landlords; enter into any closing agreement with respect to Taxes), any Tax; settle or compromise any claim, notice, audit report or assessment in respect of material Tax liability for an amount that exceeds the amount disclosed, reflected or reserved against in the financial statements contained in the Qumu SEC Reports or Synacor SEC Reports as the case may be, or consent to the extension or waiver of the limitations period applicable to a material Tax claim or assessment, surrender any right to claim a material Tax refund, or Taxes; apply for or enter into any ruling from any Tax authority with respect to Taxes; surrender any right to claim a material Tax refund; or consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(n) (ix) enter into into, amend or terminate any Contract that would be a Qumu IP License or a Qumu Material Contract described in clause (ii) or (iii) of Section 3.14(a) (together, the “Qumu IP Contracts”), or a Synacor IP License or a Synacor Material Contract or described in clause (ii) or (iii) of Section 4.14(a) (together, the “Synacor IP Contracts”), as the case may be, or amend in any material respect any such Qumu IP Contract or Synacor IP Contract, as the case may be, or grant any release or relinquishment of any material rights under any such Qumu IP Contract or Synacor IP Contract, as the case may be, or (ii) except in the ordinary course of business consistent with past practices, enter into any Contract that would be any other Qumu Material Contract or other Synacor Tranzyme Material Contract, as the case may be, or amend in any material respect any other Qumu Material Contract or Synacor Material Contract, as the case may be, or grant any release or relinquishment of any material rights under any other Qumu Material Contract or Synacor Material Contract, as the case may be;
(oxi) enter into commence a lawsuit other than (A) for routine collection of bills, (B) in such cases as Tranzyme in good faith determines that failure to commence such lawsuit would result in the material impairment of a valuable aspect of Tranzyme’s and/or any Qumu Material Real Property Lease Subsidiary of Tranzyme’s business, provided that Tranzyme consults with the Company prior to the filing of such lawsuit or Synacor Material Real Property Lease, or modify, amend or exercise any right to renew any Qumu Material Real Property Lease (C) for a breach of Synacor Material Real Property Leasethis Agreement;
(pxii) fail to maintain or allow to lapse, dispose of or abandon, including by failure to pay the required fees in any jurisdiction, make any material Intellectual Property Rights used in or held for use in their respective businesses, or grant permission to enter into the public domain any material trade secrets included in the Qumu Intellectual Property or Synacor Intellectual Property, as applicable;
(q) grant any exclusive rights payment with respect to any of their respective material Intellectual Property Rights Tranzyme’s accounts payable or indebtedness in a timely manner in accordance with the material Intellectual Property Rights of any of their respective Subsidiaries, or divest any of their respective material Intellectual Property Rights or the material Intellectual Property Rights of any of their respective Subsidiaries;terms thereof and consistent with past practice; or
(rxiii) acquire (by mergeragree to take, consolidation take or acquisition permit any Subsidiary of stock or assets) any other Person or any equity interest therein;
(s) authorize, incur or commit Tranzyme to incur any new capital expenditure(s) that in the aggregate exceeds, in any given quarter, one hundred ten percent (110%) of the amount set forth in the respective capital expenditure budget of each party, as provided to the other party prior to the date of this Agreement; provided, however, that the foregoing shall not limit any maintenance capital expenditures or capital expenditures required pursuant to existing Contracts;
(t) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy take or agree to paytake, discharge or satisfy any Liability, other than of the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings and Liabilities actions specified in clauses (i) reflected through (xii) of this Section 4.4(a).
(b) Except (i) as expressly contemplated or reserved against in full in the balance sheet included in the Qumu Balance Sheet or the Synacor Balance Sheet, as the case may bepermitted by this Agreement, (ii) covered by existing insurance policiesas set forth in Part 4.4(b) of the Company Disclosure Schedule, (iii) settled since as reasonably necessary to ensure that the respective dates thereof in the ordinary course of business consistent Company complies with past practice Legal Requirements and pre-existing contractual obligations, or (iv) settlements with the prior written consent of Tranzyme (which consent shall not be unreasonably withheld), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Section 9 and the Effective Time, the Company shall not, nor shall it cause or permit any Subsidiary of the Company to, do any of the following:
(i) Declare, accrue, set aside or pay any dividend or make any other distribution in respect of any pending shares of capital stock; or threatened Legal Proceedingrepurchase, redeem or otherwise reacquire any shares of capital stock or other securities (except for shares of Company Common Stock from terminated employees of the Company);
(ii) amend the certificate of incorporation, bylaws or other charter or organizational documents of the Company (other than to increase the number of authorized shares if required in connection with the Company Financing), or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction;
(iii) except for contractual commitments in place at the time of this Agreement and disclosed in Part 2.9 and/or Part 2.13 of the Company Disclosure Schedule, sell, issue or grant, or authorize the issuance of, or make any commitments to do any of the foregoing, other than arising out as contemplated by the Contemplated Transactions or the Company Financing: (i) any capital stock or other security (except for (a) Company Options or shares of Company Common Stock issued to Company employees or consultants or (b) shares of Company Common Stock issued upon the breach valid exercise of Company Options, each which shall be subject to the adjustments contemplated in the definition of “Fully Diluted Basis”); (ii) any option, warrant or alleged breach of this Agreement by a party and right to acquire any capital stock or any other than Transaction Litigation, that only involves the payment of cash in amounts that security; or (xiii) with respect to Qumu any instrument convertible into or its Subsidiaries do not exceed $100,000 in exchangeable for any individual case and (y) with respect to Synacor capital stock or its Subsidiaries do not exceed $500,000 in any individual caseother security;
(uiv) except as required by GAAP, revalue form any Subsidiary or acquire any equity interest or other interest in any material respect any of its properties or assets, including writing-off notes or accounts receivable other than in the ordinary course of business consistent with past practiceEntity;
(v) convene other than in the Ordinary Course of Business, lend money to any special meeting Person; incur or guarantee any indebtedness for borrowed money; issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities; guarantee any debt securities of their shareholders others; or make any capital expenditure or commitment in excess of $25,000;
(vi) other than in the Ordinary Course of Business, and in observance of common practice for a similarly-situated company: (i) adopt, establish or enter into any postponemCompany Employee Plan; (ii) cause or permit any Company Employee Plan to be amended other than as required by law; or (iii) pay any bonus or made any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees;
(vii) enter into any material transaction outside the Ordinary Course of Business;
(viii) acquire any material asset nor sell, lease or otherwise irrevocably dispose of any of its assets or properties, nor grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business consistent with past practices;
(ix) make, change or revoke any material Tax election; file any material amendment to any Tax Return; adopt or change any accounting method in respect of Taxes; change any annual Tax accounting period; enter into any Tax allocation agreement, Tax sharing agreement or Tax indemnity agreement, other than commercial contracts entered into in the Ordinary Course of Business with vendors, customers or landlords; enter into any closing agreement with respect to any Tax; settle or compromise any claim, notice, audit report or assessment in respect of material Taxes; apply for or enter into any ruling from any Tax authority with respect to Taxes; surrender any right to claim a material Tax refund; or consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(x) enter into, amend or terminate any Company Material Contract;
(xi) commence a lawsuit other than (A) for routine collection of bills, (B) in such cases as the Company in good faith determines that failure to commence such lawsuit would result in the material impairment of a valuable aspect of the Company’s business, provided that the Company consults with Tranzyme prior to the filing of such lawsuit or (C) for a breach of this Agreement;
(xii) fail to make any material payment with respect to any of the Company’s accounts payable or indebtedness in a timely manner in accordance with the terms thereof and consistent with past practices; or
(xiii) agree to take, take or permit any Subsidiary of the Company to take or agree to take, any of the actions specified in clauses (i) through (xi) of this Section 4.4(b).
Appears in 1 contract
Sources: Merger Agreement (Tranzyme Inc)
Negative Obligations. Except (i) as expressly provided contemplated or permitted by this Agreement, (ii) as may be required by Legal Requirements, (iii) as set forth in Section 5.2 of the Qumu Agere Disclosure Letter or the Synacor LSI Disclosure Letter, as the case may be, or (iv) as approved in advance by the other party hereto in writing (which approval shall not be unreasonably withheld, conditioned delayed or delayedconditioned), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Section 9.1 Article VIII and the Effective Time, neither Qumu Agere nor Synacor LSI shall, nor shall either of them cause or permit any of their respective Subsidiaries to, do any of the following:
(a) propose to adopt any amendments to or amend their respective certificates its certificate of incorporation or bylaws or comparable organizational documents, provided that the organizational documents of Subsidiaries may be amended in a way that is not material;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of restricted stock units, options, warrants, other equity-based (whether payable in cash, securities or other property or any combination of the foregoing) commitments, subscriptions, rights to purchase or otherwise) any of their respective its securities or any securities of any of their respective its Subsidiaries, except for (i) the issuance and sale of shares of common stock pursuant to the exercise stock options or settlement of stock options, restricted stock units, performance stock units or warrants outstanding as of prior to the date of this Agreementhereof, (ii) grants by Synacor of purchase rights under an employee stock purchase or other similar plan, and (iii) grants to newly hired Synacor employees of stock options, restricted stock, restricted options to purchase common stock units or other equity awards granted in the ordinary course of business consistent with past practice (including with respect to the type of grant, conditions for vesting and other material terms and conditions)practice, with a per share exercise price (as applicable) that is no less than the fair then-current market value price of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) of the total grant becomes vested annually, and not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or solely as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor Common Stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) of the Synacor Disclosure Letter and (B) the aggregate number of shares of Synacor Common Stock subject to stock options, restricted stock, restricted stock units or other equity awards granted to any individual newly hired Synacor employee does not exceed the current stock or other equity award grant guidelines previously made available to Qumu for any single individual; and (iii) grants by Synacor to existing Synacor directors, employees or contractors of stock options, restricted stock, restricted stock units or other equity awards granted in the ordinary course of business consistent with past practice (including with respect to the type of grant, conditions for vesting and other material terms and conditions), with a per share exercise price (as applicable) that is no less than the then the fair market value of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) of the total grant becomes vested annually, and not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor Common Stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) of the Synacor Disclosure Letter and (B) the aggregate number of shares of Synacor Common Stock subject to restricted stock units or other equity awards granted to any individual existing Synacor director, employee or contractor does not exceed the current stock or other equity award grant guidelines previously made available to Qumu for any single individual;hereby.
(c) acquire or redeem, directly or indirectly, or amend any of their respective its securities or any securities of any of their respective its Subsidiaries, except for purchases, redemptions or other acquisitions of capital stock or other securities in connection with the acquisition or withholding of capital stock to pay for the exercise price of, or a holder’s payment of Tax obligations with respect to, or the forfeiture of awards granted under the Qumu Stock Plan or the Synacor Stock Plans; provided, however, that nothing in this paragraph (c) shall prohibit Qumu Agere or Synacor LSI from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to them it and their respective its Subsidiaries, taken as a whole;
(d) other than cash dividends made by any of their respective its direct or indirect wholly owned Subsidiaries to themselves itself or one of their respective its Subsidiaries, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock; provided, however, that nothing in this paragraph (d) shall prohibit Qumu Agere or Synacor LSI from dissolving and/or merging into any of their respective its Subsidiaries certain other Subsidiaries that are not material to them it and their respective its Subsidiaries, taken as a whole;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of themselves it or any of their respective its Subsidiaries (other than the transactions contemplated hereby); provided, however, that nothing in this paragraph (e) shall prohibit Qumu Agere or Synacor LSI from dissolving and/or merging into any of their respective its Table of Contents Subsidiaries certain other Subsidiaries that are not material to them it and their respective its Subsidiaries, taken as a whole;
(f) (i) incur or assume any long-term or short-term debt or issue any debt securities, except for (A) letters of credit issued in the ordinary course of business consistent with past practice, and (B) short-term debt incurred to fund operations of the business or for cash management purposes, in each case in the ordinary course of business consistent with past practice, (C) loans or advances to direct or indirect wholly owned Subsidiaries in the ordinary course of business consistent with past practices, and (D) with respect only to existing indebtedness having a maturity date occurring after the date of this Agreement but prior to the Effective Time, to refinance, extend or renew the maturity of any existing indebtedness in an amount not to exceed such existing indebtedness, provided that such refinancing or extension is at prevailing market interest rates and otherwise on terms not materially less favorable in the aggregate than the existing indebtedness being so refinanced, renewed or extended, (ii) other than in the ordinary course of business, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for any material obligations of any other Person except obligations of any of their respective direct or indirect wholly owned Subsidiaries, (iii) make any material loans, advances or capital contributions to or investments in any other Person or (iv) mortgage or pledge any of their its or their respective its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon, except (A) pursuant to, or as permitted under the indebtedness described in (i), (B) as incurred in the ordinary course of business consistent with past practices, or (C) any rights granted to any licensee of any Agere Intellectual Property Right entered into in the ordinary course of business consistent with past practice;
(g) except as may be required by applicable Legal Requirements or as necessary to satisfy, any Qumu Employee Plan, Qumu Non-U.S. Employee Plan, Synacor Employee Plan or Synacor Non-U.S. Employee PlanRequirements, or to other satisfy contractual obligations, in each case, obligations existing on the date hereof: ; (i) with respect to any consultant, officer, director, or employee, enter into, adopt, amend (including to provide for the acceleration of vesting or lapsing of restrictionsvesting), modify, renew modify or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any consultant, director, officer or employee in any manner or increase in any material manner the compensation, benefits, severance compensation or termination pay fringe benefits of any consultant, director, officer or employee, or enter into, modify or amend any non-competition or similar agreement with any employee, (ii) pay any special bonus, remuneration or benefit to any director, officer or employee not required by any plan or arrangement as in effect as of the date hereof, (iii) promote any existing Section 16 officer or promote any employee to a Section 16 officer position, or terminate any Section 16 officer without cause; provided, however, that this paragraph (g) shall not prevent either Synacor or Qumu company or any of their respective Subsidiaries (A) from entering into employment agreements, offer letters or retention agreements with respect to any newly hired non-officer employees in the ordinary course of business consistent with past practices to fill positions that are open as of the date of this Agreement practices, or that become open subsequent to the date of this Agreement as a result of a current employee’s departure, (B) from executing routine amendments increasing annual compensation of non-officer employees and/or from providing for or renewals amending bonus arrangements for non-officer employees in the ordinary course of compensation reviews (to health the extent that such compensation increases and welfare plans that would new or amended bonus arrangements are consistent with past practice and do not result in a material increase in cost, benefits or (C) from amending any Employee Plan to avoid the imposition of any excise tax under Section 4999 of the Code, provided that in the event of such an action, Synacor and Qumu shall reasonably consult and agree with any such action or (iv) enter into, amend or terminate any Employee Benefit Plancompensation expense);
(h) forgive any loans to any of their respective its employees, officers or directors or any employees, officers or directors of any of their respective Subsidiaries its Subsidiaries, or any of its Affiliates;; Table of Contents
(i) make any deposits or contributions of cash or other property to or take any other action to fund or in any other way secure the payment of compensation or benefits under any of their its Employee Benefit Plans or any Employee Benefit Plans of any of their respective its Subsidiaries, other than deposits and contributions that are required pursuant to the terms of any such Employee Benefit Plans or any Contracts subject to any such Employee Benefit Plans in effect as of the date hereof or as required by applicable Legal Requirements;
(j) enter into, amend, or extend any collective bargaining agreement;
(k) acquire, sell, lease, license or dispose of any material property or assets in any single transaction or series of related transactions, except for (i) transactions pursuant to existing Contracts, (ii) transactions in the ordinary course of business consistent with past practice and practice, or (xiii) with respect to Qumu or its Subsidiaries, transactions not in excess of $500,000 10,000,000 individually, or $1,000,000 in the aggregate and (y) with respect to Synacor or its Subsidiaries not in excess of $750,000 individually, or $1,500,000 40,000,000 in the aggregate, and (iii) transactions with customers for the sale or license of Qumu Products or Synacor Products in the ordinary course of business consistent with past practice;
(l) except as may be required to remain in compliance with applicable Legal Requirements or GAAP, make any change in any of the accounting principles or practices used by either of themit;
(m) make, make or change or revoke any material Tax election, file any material amendment to any Tax Return, adopt or change any material Tax accounting method, change any annual Tax accounting period, enter into any Tax allocation, sharing or indemnity agreement (other than commercial Contracts entered into in the ordinary course of business the primary purpose of which does not relate to Taxes), settle or compromise any material Tax liability for an amount that exceeds the amount disclosed, reflected or reserved against in the financial statements contained in the Qumu SEC Reports or Synacor SEC Reports as the case may beliability, or consent to the extension or waiver of the limitations period applicable to a material Tax claim or assessment, surrender any right to claim a material Tax refund, or apply for or enter into any ruling from any Tax authority with respect to Taxes;
(n) (i) enter into any Contract that would be a Qumu IP License or a Qumu Material Contract described in clause (ii) or (iii) of Section 3.14(a) (together, the “Qumu IP Contracts”), or a Synacor IP License or a Synacor an Agere Material Contract or described in clause (ii) or (iii) of Section 4.14(a) (together, the “Synacor IP Contracts”), as the case may be, or amend in any material respect any such Qumu IP Contract or Synacor IP Contract, as the case may be, or grant any release or relinquishment of any material rights under any such Qumu IP Contract or Synacor IP Contract, as the case may be, or (ii) except in the ordinary course of business consistent with past practices, enter into any Contract that would be any other Qumu Material Contract or other Synacor an LSI Material Contract, as the case may be, or amend in any material respect any other Qumu Agere Material Contract or Synacor LSI Material Contract, as the case may be, or grant any release or relinquishment of any material rights under any other Qumu Agere Material Contract or Synacor LSI Material Contract, as the case may be;
(o) enter into any Qumu Material Real Property Lease or Synacor Material Real Property Lease, or modify, amend or exercise any right to renew any Qumu Material Real Property Lease of Synacor Material Real Property Lease;
(p) fail to maintain or allow to lapse, dispose of or abandon, including by failure to pay the required fees in any jurisdiction, any material Intellectual Property Rights used in or held for use in their respective businesses, or grant permission to enter into the public domain any material trade secrets included in the Qumu Intellectual Property or Synacor Intellectual Property, as applicable;
(q) grant any exclusive rights with respect to any of their respective its material Intellectual Property Rights or the material Intellectual Property Rights of any of their respective its Subsidiaries, or divest any of their respective its material Intellectual Property Rights or the material Intellectual Property Rights of any of their respective its Subsidiaries, or materially modify the standard warranty terms for Agere Products or LSI Products, as the case may be, or services or materially amend or modify any product or service warranty;
(rp) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein;
(sq) authorize, incur or commit to incur any new capital expenditure(s) that which in the aggregate exceeds, in any given quarter, one hundred ten percent (110%) of the amount set forth in the respective capital expenditure budget of each party, as provided to the other party prior to the date of this Agreementexceed $40,000,000; provided, however, that the foregoing shall not limit any maintenance capital expenditures or capital expenditures required pursuant to existing Contracts;
(tr) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any Liability, other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings and Liabilities (i) reflected or reserved against in full in the balance sheet included in the Qumu Agere Balance Sheet or the Synacor LSI Table of Contents Balance Sheet, as the case may be, (ii) covered by existing insurance policies, (iii) settled since the respective dates thereof in the ordinary course of business consistent with past practice practice, including licensing and other settlements arising out of Agere’s Intellectual Property Business or (iv) settlements of any pending or threatened Legal Proceeding, other otherwise less than arising out of the breach or alleged breach of this Agreement by a party and other than Transaction Litigation, that only involves the payment of cash in amounts that (x) with respect to Qumu or its Subsidiaries do not exceed $100,000 in any individual case and (y) with respect to Synacor or its Subsidiaries do not exceed $500,000 individually and $5,000,000 in any individual casethe aggregate;
(us) except as required by applicable Legal Requirements or GAAP, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
(vt) except as required by applicable Legal Requirements, convene any regular or special meeting of their shareholders (or any postponemadjournment or postponement thereof) of its stockholders; or
(u) enter into a Contract to do any of the foregoing or knowingly take any action which is reasonably expected to result in any of the conditions to the consummation of the transactions contemplated hereby not being satisfied, or knowingly take any action which would materially impair its ability to consummate the transactions contemplated by this Agreement in accordance with the terms hereof or materially delay such consummation.
Appears in 1 contract
Sources: Merger Agreement (Lsi Logic Corp)
Negative Obligations. Except (i) as expressly provided by this Agreement, (ii) as may be required by Legal Requirements, (iii) as set forth in Section 5.2 of the Qumu Disclosure Letter or the Synacor Disclosure Letter, as the case may be, or (iv) as approved in advance by the other party hereto in writing (which approval shall not be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Section 9.1 and the Effective Time, neither Qumu nor Synacor shall, nor shall either of them cause or permit any of their respective Subsidiaries to, do any of the following:
(a) propose to adopt any amendments to or amend their respective certificates of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of restricted stock units, options, warrants, other equity-based commitments, subscriptions, rights to purchase or otherwise) any of their respective securities or any securities of any of their respective Subsidiaries, except for (i) the issuance and sale of shares of common stock pursuant to the exercise or settlement of stock options, restricted stock units, performance stock units or warrants outstanding as of the date of this Agreement, (ii) grants by Synacor to newly hired Synacor employees of stock options, restricted stock, restricted stock units or other equity awards granted in the ordinary course of business consistent with past practice (including with respect to the type of grant, conditions for vesting and other material terms and conditions), with a per share exercise price (as applicable) that is no less than the fair market value of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) of the total grant becomes vested annually, and not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor Common Stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) of the Synacor Disclosure Letter and (B) the aggregate number of shares of Synacor Common Stock subject to stock options, restricted stock, restricted stock units or other equity awards granted to any individual newly hired Synacor employee does not exceed the current stock or other equity award grant guidelines previously made available to Qumu for any single individual; and (iii) grants by Synacor to existing Synacor directors, employees or contractors of stock options, restricted stock, restricted stock units or other equity awards granted in the ordinary course of business consistent with past practice (including with respect to the type of grant, conditions for vesting and other material terms and conditions), with a per share exercise price (as applicable) that is no less than the then the fair market value of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) of the total grant becomes vested annually, and not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor Common Stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) of the Synacor Disclosure Letter and (B) the aggregate number of shares of Synacor Common Stock subject to restricted stock units or other equity awards granted to any individual existing Synacor director, employee or contractor does not exceed the current stock or other equity award grant guidelines previously made available to Qumu for any single individual;
(c) acquire or redeem, directly or indirectly, or amend any of their respective securities or any securities of any of their respective Subsidiaries, except for purchases, redemptions or other acquisitions of capital stock or other securities in connection with the acquisition or withholding of capital stock to pay for the exercise price of, or a holder’s payment of Tax obligations with respect to, or the forfeiture of awards granted under the Qumu Stock Plan or the Synacor Stock Plans; provided, however, that nothing in this paragraph (c) shall prohibit Qumu or Synacor from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole;
(d) other than cash dividends made by any of their respective direct or indirect wholly owned Subsidiaries to themselves or one of their respective Subsidiaries, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock; provided, however, that nothing in this paragraph (d) shall prohibit Qumu or Synacor from dissolving and/or merging into any of their respective Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of themselves or any of their respective Subsidiaries (other than the transactions contemplated hereby); provided, however, that nothing in this paragraph (e) shall prohibit Qumu or Synacor from dissolving and/or merging into any of their respective Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole;
(f) (i) incur or assume any long-term or short-term debt or issue any debt securities, except for (A) letters of credit issued in the ordinary course of business consistent with past practice, and (B) loans or advances to direct or indirect wholly owned Subsidiaries in the ordinary course of business consistent with past practices, provided that such refinancing or extension is at prevailing market interest rates and otherwise on terms not materially less favorable in the aggregate than the existing indebtedness being so refinanced, renewed or extended, (ii) other than in the ordinary course of business, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for any material obligations of any other Person except obligations of any of their respective direct or indirect wholly owned Subsidiaries, (iii) make any material loans, advances or capital contributions to or investments in any other Person or (iv) mortgage or pledge any of their or their respective Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon;
(g) except as may be required by applicable Legal Requirements or as necessary to satisfy, any Qumu Employee Plan, Qumu Non-U.S. Employee Plan, Synacor Employee Plan or Synacor Non-U.S. Employee Plan, or to other contractual obligations, in each case, existing on the date hereof: (i) with respect to any consultant, officer, director, or employee, enter into, adopt, amend (including to provide for the acceleration of vesting or lapsing of restrictions), modify, renew or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any consultant, director, officer or employee in any manner or increase in any material manner the compensation, benefits, severance or termination pay of any consultant, director, officer or employee, or enter into, modify or amend any non-competition or similar agreement with any employee, (ii) pay any special bonus, remuneration or benefit to any director, officer or employee not required by any plan or arrangement as in effect as of the date hereof, (iii) promote any existing Section 16 officer or promote any employee to a Section 16 officer position, or terminate any Section 16 officer without cause; provided, however, that this paragraph (g) shall not prevent either Synacor or Qumu or any of their respective Subsidiaries Subsidiaries
(A) from entering into employment agreements, offer letters or retention agreements with respect to any newly hired employees in the ordinary course of business consistent with past practices to fill positions that are open as of the date of this Agreement or that become open subsequent to the date of this Agreement as a result of a current employee’s departure, (B) from executing routine amendments or renewals to health and welfare plans that would not result in a material increase in cost, or (C) from amending any Employee Plan to avoid the imposition of any excise tax under Section 4999 of the Code, provided that in the event of such an action, Synacor and Qumu shall reasonably consult and agree with any such action or (iv) enter into, amend or terminate any Employee Benefit Plan;
(h) forgive any loans to any of their respective employees, officers or directors or any employees, officers or directors of any of their respective Subsidiaries or Affiliates;
(i) make any deposits or contributions of cash or other property or take any other action to fund or in any other way secure the payment of compensation or benefits under any of their Employee Benefit Plans or any Employee Benefit Plans of any of their respective Subsidiaries, other than deposits and contributions that are required pursuant to the terms of any such Employee Benefit Plans or any Contracts subject to any such Employee Benefit Plans in effect as of the date hereof or as required by applicable Legal Requirements;
(j) enter into, amend, or extend any collective bargaining agreement;
(k) acquire, sell, lease, license or dispose of any material property or assets in any single transaction or series of related transactions, except for (i) transactions pursuant to existing Contracts, (ii) transactions in the ordinary course of business consistent with past practice and (x) with respect to Qumu or its Subsidiaries, not in excess of $500,000 individually, or $1,000,000 in the aggregate and (y) with respect to Synacor or its Subsidiaries not in excess of $750,000 individually, or $1,500,000 in the aggregate, and (iii) transactions with customers for the sale or license of Qumu Products or Synacor Products in the ordinary course of business consistent with past practice;
(l) except as may be required to remain in compliance with GAAP, make any change in any of the accounting principles or practices used by either of them;
(m) make, change or revoke any material Tax election, file any material amendment to any Tax Return, adopt or change any material Tax accounting method, change any annual Tax accounting period, enter into any Tax allocation, sharing or indemnity agreement (other than commercial Contracts entered into in the ordinary course of business the primary purpose of which does not relate to Taxes), settle or compromise any material Tax liability for an amount that exceeds the amount disclosed, reflected or reserved against in the financial statements contained in the Qumu SEC Reports or Synacor SEC Reports as the case may be, or consent to the extension or waiver of the limitations period applicable to a material Tax claim or assessment, surrender any right to claim a material Tax refund, or apply for or enter into any ruling from any Tax authority with respect to Taxes;
(n) (i) enter into any Contract that would be a Qumu IP License or a Qumu Material Contract described in clause (ii) or (iii) of Section 3.14(a) (together, the “Qumu IP Contracts”), or a Synacor IP License or a Synacor Material Contract or described in clause (ii) or (iii) of Section 4.14(a) (together, the “Synacor IP Contracts”), as the case may be, or amend in any material respect any such Qumu IP Contract or Synacor IP Contract, as the case may be, or grant any release or relinquishment of any material rights under any such Qumu IP Contract or Synacor IP Contract, as the case may be, or (ii) except in the ordinary course of business consistent with past practices, enter into any Contract that would be any other Qumu Material Contract or other Synacor Material Contract, as the case may be, or amend in any material respect any other Qumu Material Contract or Synacor Material Contract, as the case may be, or grant any release or relinquishment of any material rights under any other Qumu Material Contract or Synacor Material Contract, as the case may be;
(o) enter into any Qumu Material Real Property Lease or Synacor Material Real Property Lease, or modify, amend or exercise any right to renew any Qumu Material Real Property Lease of Synacor Material Real Property Lease;
(p) fail to maintain or allow to lapse, dispose of or abandon, including by failure to pay the required fees in any jurisdiction, any material Intellectual Property Rights used in or held for use in their respective businesses, or grant permission to enter into the public domain any material trade secrets included in the Qumu Intellectual Property or Synacor Intellectual Property, as applicable;
(q) grant any exclusive rights with respect to any of their respective material Intellectual Property Rights or the material Intellectual Property Rights of any of their respective Subsidiaries, or divest any of their respective material Intellectual Property Rights or the material Intellectual Property Rights of any of their respective Subsidiaries;
(r) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein;
(s) authorize, incur or commit to incur any new capital expenditure(s) that in the aggregate exceeds, in any given quarter, one hundred ten percent (110%) of the amount set forth in the respective capital expenditure budget of each party, as provided to the other party prior to the date of this Agreement; provided, however, that the foregoing shall not limit any maintenance capital expenditures or capital expenditures required pursuant to existing Contracts;
(t) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any Liability, other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings and Liabilities (i) reflected or reserved against in full in the balance sheet included in the Qumu Balance Sheet or the Synacor Balance Sheet, as the case may be, (ii) covered by existing insurance policies, (iii) settled since the respective dates thereof in the ordinary course of business consistent with past practice or (iv) settlements of any pending or threatened Legal Proceeding, other than arising out of the breach or alleged breach of this Agreement by a party and other than Transaction Litigation, that only involves the payment of cash in amounts that (x) with respect to Qumu or its Subsidiaries do not exceed $100,000 in any individual case and (y) with respect to Synacor or its Subsidiaries do not exceed $500,000 in any individual case;
(u) except as required by GAAP, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
(v) convene any special meeting of their shareholders (or any postponem
Appears in 1 contract
Sources: Merger Agreement
Negative Obligations. Except (i) as expressly provided contemplated or permitted by this Agreement, (ii) as may be required by Legal Requirements, (iii) as set forth in Section 5.2 of the Qumu Reliant Disclosure Letter Schedule or the Synacor Thermage Disclosure LetterSchedule, as the case may be, (iii) as required to consummate the Distribution and the execution of the License Agreement, or (iv) as approved in advance with the prior written consent by the other party hereto in writing (hereto, which approval shall not be unreasonably withheld, conditioned delayed or delayed)conditioned, at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Section 9.1 Article VIII and the Effective Time, neither Qumu Reliant nor Synacor Thermage shall, nor shall either of them cause or permit any of their respective Subsidiaries to, do any of the following:
(a) propose to adopt any amendments to or amend their respective certificates its certificate of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of restricted stock units, options, warrants, other equity-based (whether payable in cash, securities or other property or any combination of the foregoing) commitments, subscriptions, rights to purchase or otherwise) any of their respective its securities or any securities of any of their respective its Subsidiaries, except for (i) the issuance and sale of shares of common stock pursuant to the exercise stock options or settlement of stock options, restricted stock units, performance stock units or warrants outstanding as of prior to the date of this Agreementhereof, (ii) grants by Synacor of purchase rights under an employee stock purchase or other similar plan, and (iii) grants to newly hired Synacor employees or refresh grants to current employees of stock options, restricted stock, restricted stock units covering or other equity awards stock options to purchase common stock granted in the ordinary course of business consistent with past practice (including with respect to practice, in the type case of grant, conditions for vesting and other material terms and conditions)stock options, with a per share exercise price (as applicable) that is no less than the fair then-current market value price of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) of the total grant becomes vested annuallystock, and not with respect to either stock options or restricted stock units, not, in the case of grants by Thermage subject to any accelerated vesting or other provision that would be triggered upon a termination of service or solely as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor Common Stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) of the Synacor Disclosure Letter and (B) the aggregate number of shares of Synacor Common Stock subject to stock options, restricted stock, restricted stock units or other equity awards granted to any individual newly hired Synacor employee does not exceed the current stock or other equity award grant guidelines previously made available to Qumu for any single individual; and (iii) grants by Synacor to existing Synacor directors, employees or contractors of stock options, restricted stock, restricted stock units or other equity awards granted in the ordinary course of business consistent with past practice (including with respect to the type of grant, conditions for vesting and other material terms and conditions), with a per share exercise price (as applicable) that is no less than the then the fair market value of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) of the total grant becomes vested annually, and not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor Common Stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) of the Synacor Disclosure Letter and (B) the aggregate number of shares of Synacor Common Stock subject to restricted stock units or other equity awards granted to any individual existing Synacor director, employee or contractor does not exceed the current stock or other equity award grant guidelines previously made available to Qumu for any single individual;hereby.
(c) acquire or redeem, directly or indirectly, or amend any of their respective its securities or any securities of any of their respective its Subsidiaries, except for purchases, redemptions or other acquisitions of capital stock or other securities in connection with the acquisition or withholding of capital stock to pay for the exercise price of, or a holder’s payment of Tax obligations with respect to, or the forfeiture of awards granted under the Qumu Stock Plan or the Synacor Stock Plans; provided, however, that nothing in this paragraph (c) shall prohibit Qumu Reliant or Synacor Thermage from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to them it and their respective its Subsidiaries, taken as a whole;
(d) incur any indebtedness or guarantee any indebtedness for borrowed money or issue or sell any debt securities or guarantee any debt securities or other than cash dividends made by obligations of others or create a Lien over any of their respective direct or indirect wholly owned Subsidiaries to themselves or one of their respective Subsidiaries, split, combine or reclassify any shares of capital stock, its assets;
(e) declare, set aside or pay any dividend or other distribution (whether in cash, shares or of property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution of property in respect of the shares of capital stock; provided, however, that nothing in this paragraph (d) shall prohibit Qumu or Synacor from dissolving and/or merging into any of their respective Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole;
(ef) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of themselves it or any of their respective its Subsidiaries (other than the transactions contemplated hereby); provided, however, that nothing in this paragraph (e) shall prohibit Qumu Reliant or Synacor Thermage from dissolving and/or merging into any of their respective its Subsidiaries certain other Subsidiaries that are not material to them it and their respective its Subsidiaries, taken as a whole;
(f) (i) incur or assume any long-term or short-term debt or issue any debt securities, except for (A) letters of credit issued in the ordinary course of business consistent with past practice, and (B) loans or advances to direct or indirect wholly owned Subsidiaries in the ordinary course of business consistent with past practices, provided that such refinancing or extension is at prevailing market interest rates and otherwise on terms not materially less favorable in the aggregate than the existing indebtedness being so refinanced, renewed or extended, (ii) other than in the ordinary course of business, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for any material obligations of any other Person except obligations of any of their respective direct or indirect wholly owned Subsidiaries, (iii) make any material loans, advances or capital contributions to or investments in any other Person or (iv) mortgage or pledge any of their or their respective Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon;
(g) except as may be required by applicable Legal Requirements or as necessary to satisfy, any Qumu Employee Plan, Qumu Non-U.S. Employee Plan, Synacor Employee Plan or Synacor Non-U.S. Employee Plan, or to other contractual obligations, in each case, existing on the date hereof: (i) with respect to any consultant, officer, director, or employee, enter into, adopt, amend (including to provide for the acceleration of vesting or lapsing of restrictions), modify, renew or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any consultant, director, officer or employee in any manner or increase in any material manner the compensation, benefits, severance or termination pay of any consultant, director, officer or employee, or enter into, modify or amend any non-competition or similar agreement with any employee, (ii) pay any special bonus, remuneration or benefit to any director, officer or employee not required by any plan or arrangement as in effect as of the date hereof, (iii) promote any existing Section 16 officer or promote any employee to a Section 16 officer position, or terminate any Section 16 officer without cause; provided, however, that this paragraph (g) shall not prevent either Synacor or Qumu or any of their respective Subsidiaries (A) from entering into employment agreements, offer letters or retention agreements with respect to any newly hired employees in the ordinary course of business consistent with past practices to fill positions that are open as of the date of this Agreement or that become open subsequent to the date of this Agreement as a result of a current employee’s departure, (B) from executing routine amendments or renewals to health and welfare plans that would not result in a material increase in cost, or (C) from amending any Employee Plan to avoid the imposition of any excise tax under Section 4999 of the Code, provided that in the event of such an action, Synacor and Qumu shall reasonably consult and agree with any such action or (iv) enter into, amend or terminate any Employee Benefit Plan;
(h) forgive any loans to any of their respective its employees, officers or directors or any employees, officers or directors of any of its Subsidiaries, or any of its Affiliates;
(h) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or enter into any severance agreement with any director, officer or other employee, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any such director, officer or employee, except the parties may make any amendments to existing employee benefit plans to the extent necessary to maintain their respective Subsidiaries compliance with applicable Legal Requirements (including any amendments necessary or Affiliatesdesirable to comply with Section 409A of the Code so as to avoid the imposition of additional Tax with respect thereto);
(i) make any deposits or contributions of cash or other property to or take any other action to fund or in any other way secure the payment of compensation or benefits under any of their its Employee Benefit Plans or any Employee Benefit Plans of any of their respective its Subsidiaries, other than deposits and contributions that are required pursuant to the terms of any such Employee Benefit Plans or any Contracts subject to any such Employee Benefit Plans in effect as of the date hereof or as required by applicable Legal Requirements;
(j) enter into, amend, or extend any collective bargaining agreement;
(k) acquire, sell, lease, license or dispose of any material property or assets in any single transaction or series of related transactions, except for (i) transactions pursuant to existing Contracts, or (ii) transactions in the ordinary course of business consistent with past practice and (x) with respect to Qumu or its Subsidiaries, not in excess of $500,000 individually, or $1,000,000 in the aggregate and (y) with respect to Synacor or its Subsidiaries not in excess of $750,000 individually, or $1,500,000 in the aggregate, and (iii) transactions with customers for the sale or license of Qumu Products or Synacor Products in the ordinary course of business consistent with past practice;
(l) except as may be required to remain in compliance with by applicable Legal Requirements or GAAP, make any change in any of the accounting principles or practices used by either of themit;
(m) make, make or change or revoke any material Tax election, file any material amendment to any Tax Return, adopt or change any material Tax accounting method, change any annual Tax accounting period, enter into any Tax allocation, sharing or indemnity agreement (other than commercial Contracts entered into in the ordinary course of business the primary purpose of which does not relate to Taxes), settle or compromise any material Tax liability for an amount that exceeds the amount disclosed, reflected or reserved against in the financial statements contained in the Qumu SEC Reports or Synacor SEC Reports as the case may beliability, or consent to the extension or waiver of the limitations period applicable to a material Tax claim or assessment, surrender any right to claim a material Tax refund, or apply for or enter into any ruling from any Tax authority with respect to Taxes;
(n) (i) enter into any Contract that would be a Qumu IP License or a Qumu Material Contract described in clause (ii) or (iii) of Section 3.14(a) (together, the “Qumu IP Contracts”), or a Synacor IP License or a Synacor Material Contract or described in clause (ii) or (iii) of Section 4.14(a) (together, the “Synacor IP Contracts”), as the case may be, or amend in any material respect any such Qumu IP Contract or Synacor IP Contract, as other than for the case may be, or grant any release or relinquishment sale of any material rights under any such Qumu IP Contract or Synacor IP Contract, as the case may be, or (ii) except products in the ordinary course of business consistent with past practices, enter into any Contract that would be any other Qumu Material Contract or other Synacor Material Contract, as the case may be, or ;
(o) amend in any material respect any other Qumu Reliant Material Contract or Synacor Thermage Material Contract, as the case may be, or grant any release or relinquishment of any material rights under any other Qumu Reliant Material Contract or Synacor Thermage Material Contract, as the case may be;
(o) enter into any Qumu Material Real Property Lease or Synacor Material Real Property Lease, or modify, amend or exercise any right to renew any Qumu Material Real Property Lease of Synacor Material Real Property Lease;
(p) fail to maintain sell, assign, transfer, license or allow to lapsesublicense, dispose of pledge or abandon, including by failure to pay the required fees in otherwise encumber any jurisdiction, any material Thermage Intellectual Property Rights used in Right or held for use in their respective businessesReliant Intellectual Property Right, or grant permission to enter into the public domain any material trade secrets included as applicable (other than non-exclusive licenses in the Qumu Intellectual Property or Synacor Intellectual Property, as applicable;ordinary course of business consistent with past practice); or
(q) grant any exclusive rights with respect to any of their respective material Intellectual Property Rights or the material Intellectual Property Rights of any of their respective Subsidiaries, or divest any of their respective material Intellectual Property Rights or the material Intellectual Property Rights of any of their respective Subsidiaries;
(r) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein;
(r) mortgage, pledge or subject to Lien, any of its assets or properties;
(s) authorize, incur or commit to incur any new capital expenditure(s) that which in the aggregate exceeds, in any given quarter, one hundred ten percent (110%) of the amount set forth in the respective capital expenditure budget of each party, as provided to the other party prior to the date of this Agreementexceed $100,000; provided, however, that the foregoing shall not limit any maintenance capital expenditures or capital expenditures required pursuant to existing Contracts;
(t) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any Liability, other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings and Liabilities (i) reflected or reserved against in full in the balance sheet included in the Qumu Reliant Balance Sheet or the Synacor Thermage Balance Sheet, as the case may be, (ii) covered by existing insurance policies, (iii) settled since the respective dates thereof in the ordinary course of business consistent with past practice or (iv) settlements of any pending or threatened Legal Proceeding, other than arising out of the breach or alleged breach of this Agreement by a party and other than Transaction Litigation, that only involves the payment of cash in amounts that (x) with respect to Qumu or its Subsidiaries do not exceed $100,000 in any individual case and (y) with respect to Synacor or its Subsidiaries do not exceed $500,000 in any individual case;
(u) initiation of any material Legal Proceeding;
(v) except as required by applicable Legal Requirements or GAAP, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable other than in the ordinary course of business consistent with past practice;; or
(vw) convene enter into a Contract to do any special meeting of their shareholders (the foregoing or knowingly take any postponemaction which is reasonably expected to result in any of the conditions to the consummation of the transactions contemplated hereby not being satisfied, or knowingly take any action which would make any of its representations or warranties set forth in this Agreement untrue or incorrect in any material respect, or that would materially impair its ability to consummate the transactions contemplated by this Agreement in accordance with the terms hereof or materially delay such consummation.
Appears in 1 contract
Sources: Agreement and Plan of Merger and Reorganization (Thermage Inc)
Negative Obligations. Except (i) as expressly provided contemplated or permitted by this Agreement, (ii) as may be required by Legal Requirements, (iii) as set forth in Section 5.2 of the Qumu Rentrak Disclosure Letter or the Synacor comScore Disclosure Letter, as the case may be, or (iv) as approved in advance by the other party hereto in writing (which approval shall not be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Section 9.1 and the Effective Time, neither Qumu Rentrak nor Synacor comScore shall, nor shall either of them cause or permit any of their respective Subsidiaries to, do any of the following:
(a) propose to adopt any amendments to or amend their respective certificates of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of restricted stock units, options, warrants, other equity-based commitments, subscriptions, rights to purchase or otherwise) any of their respective securities or any securities of any of their respective Subsidiaries, except for (i) the issuance and sale of shares of common stock pursuant to the exercise or settlement of stock options, restricted stock units, units or performance stock units or warrants outstanding as of prior to the date of this Agreementhereof, (ii) grants by Synacor of purchase rights under an employee stock purchase or other similar plan, and (iii) grants to newly hired Synacor employees of stock options, restricted stock, restricted stock units options or other equity awards to purchase or receive common stock granted in the ordinary course of business consistent with past practice (including with respect to the type of grant, conditions for vesting and other material terms and conditions)practice, with a per share exercise price (as applicable) that is no less than the fair then-current market value price of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) of the total grant becomes vested annually, and not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event)Agreement, provided that (A) the aggregate number of shares of Synacor Common Stock common stock subject to such additional stock options, restricted stock, restricted stock units options or other equity awards does not exceed 250,000 in the number case of shares set forth on Section 5.2(b) Rentrak, or 500,000 in the case of the Synacor Disclosure Letter comScore, and (B) the aggregate number of shares of Synacor Common Stock common stock subject to stock options, restricted stock, restricted stock units options or other equity awards granted to any individual newly hired Synacor employee does not exceed the current stock or other equity award grant guidelines previously made available to Qumu the other party hereto (and, in any case, 10,000 shares for any single individualindividual in the case of Rentrak or 20,000 shares for any single individual in the case of comScore); and (iiiiv) grants by Synacor to existing Synacor directors, employees or contractors of stock options, restricted stock, restricted stock units options or other equity awards to purchase or receive common stock granted in the ordinary course of business consistent with past practice (including with respect to the type of grant, conditions for vesting and other material terms and conditions)practice, with a per share exercise price (as applicable) that is no less than the then the fair then-current market value price of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) of the total grant becomes vested annually, and not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event)Agreement, provided that (A) the aggregate number of shares of Synacor Common Stock common stock subject to such additional stock options, restricted stock, restricted stock units options or other equity awards does not exceed 250,000 in the number case of shares set forth on Section 5.2(b) Rentrak, or 500,000 in the case of the Synacor Disclosure Letter comScore, and (B) the aggregate number of shares of Synacor Common Stock common stock subject to restricted stock units options or other equity awards granted to any individual existing Synacor director, newly hired employee or contractor does not exceed the current stock or other equity award grant guidelines previously made available to Qumu the other party hereto (and, in any case, 10,000 shares for any single individualindividual in the case of Rentrak or 20,000 shares for any single individual in the case of comScore);
(c) acquire or redeem, directly or indirectly, or amend any of their respective securities or any securities of any of their respective Subsidiaries, except for purchases, redemptions or other acquisitions of capital stock or other securities in connection with the acquisition or withholding of capital stock to pay for the exercise price of, or a holder’s payment of Tax obligations with respect to, or the forfeiture of awards granted under the Qumu Stock Plan or the Synacor Stock Plans; provided, however, that nothing in this paragraph (c) shall prohibit Qumu Rentrak or Synacor comScore from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole;
(d) other than cash dividends made either (i) in the ordinary course of business and consistent with past practice, or (ii) by any of their respective direct or indirect wholly owned Subsidiaries to themselves or one of their respective Subsidiaries, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock; provided, however, that nothing in this paragraph (d) shall prohibit Qumu Rentrak or Synacor comScore from dissolving and/or merging into any of their respective Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of themselves or any of their respective Subsidiaries (other than the transactions contemplated hereby); provided, however, that nothing in this paragraph (e) shall prohibit Qumu Rentrak or Synacor comScore from dissolving and/or merging into any of their respective Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole;
(f) (i) incur or assume any long-term or short-term debt or issue any debt securities, except for (A) letters of credit issued in the ordinary course of business consistent with past practice, and (B) short-term debt incurred to fund operations of the business or for cash management purposes, in each case in the ordinary course of business consistent with past practice, (C) loans or advances to direct or indirect wholly owned Subsidiaries in the ordinary course of business consistent with past practices, and (D) with respect only to existing indebtedness having a maturity date occurring after the date of this Agreement but prior to the Effective Time, to refinance, extend or renew the maturity of any existing indebtedness in an amount not to exceed such existing indebtedness, provided that such refinancing or extension is at prevailing market interest rates and otherwise on terms not materially less favorable in the aggregate than the existing indebtedness being so refinanced, renewed or extended, (ii) other than in the ordinary course of business, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for any material obligations of any other Person except obligations of any of their respective direct or indirect wholly owned Subsidiaries, (iii) make any material loans, advances or capital contributions to or investments in any other Person or (iv) mortgage or pledge any of their or their respective Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon;
(g) except as may be required by applicable Legal Requirements or as necessary to satisfy, any Qumu Employee Plan, Qumu Non-U.S. Employee Plan, Synacor Employee Plan or Synacor Non-U.S. Employee Plan, or to other satisfy contractual obligations, in each case, obligations existing on the date hereof: , and except as required to satisfy any other obligations under this Section 5.2; (i) with respect to any consultant, officer, director, or employee, enter into, adopt, amend (including to provide for the acceleration of vesting or lapsing of restrictionsvesting), modify, renew modify or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance stock unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any consultant, director, officer or employee in any manner or increase in any material manner the compensation, benefits, severance compensation or termination pay fringe benefits of any consultant, director, officer or employee, ; or enter into, modify or amend any non-competition or similar agreement with any employee, (ii) pay any special bonus, remuneration or benefit to any director, officer or employee not required by any plan or arrangement as in effect as of the date hereof, other than, in the case of the preceding subclauses (iiii) promote any existing Section 16 officer and (ii), retention or promote any employee transaction bonuses payable in connection with the Closing in an amount not to a Section 16 officer position, or terminate any Section 16 officer without causeexceed $2,000,000 in the aggregate; provided, however, that this paragraph (gSection 5.2(g) shall not prevent either Synacor comScore or Qumu Rentrak or any of their respective Subsidiaries (A) from entering into employment agreements, offer letters or retention agreements with respect to any newly hired non-officer employees in the ordinary course of business consistent with past practices to fill positions that are open as of the date of this Agreement or that become open subsequent to the date of this Agreement as a result of a current employee’s departurepractices, (B) from executing routine amendments increasing annual compensation of non-officer employees and/or from providing for or renewals amending bonus arrangements for non-officer employees in the ordinary course of compensation reviews (to health the extent that such compensation increases and welfare plans that would new or amended bonus arrangements are consistent with past practice and do not result in a material increase in costthe aggregate in benefits or compensation expense), or (C) from amending any comScore Employee Plan or Rentrak Employee Plan to avoid the imposition extent required by any applicable law or this Agreement, to conform any such comScore Employee Plan or Rentrak Employee Plan to the requirements of any excise tax under Section 4999 of the Code, provided that in the event of such an action, Synacor and Qumu shall reasonably consult and agree with any such action applicable law or (iv) enter into, amend or terminate any Employee Benefit Planthis Agreement;
(h) forgive any loans to any of their respective employees, officers or directors or any employees, officers or directors of any of their respective Subsidiaries or Affiliates;
(i) make any deposits or contributions of cash or other property or take any other action to fund or in any other way secure the payment of compensation or benefits under any of their Employee Benefit Plans or any Employee Benefit Plans of any of their respective Subsidiaries, other than deposits and contributions that are required pursuant to the terms of any such Employee Benefit Plans or any Contracts subject to any such Employee Benefit Plans in effect as of the date hereof or as required by applicable Legal Requirements;
(j) enter into, amend, or extend any collective bargaining agreement;
(k) acquire, sell, lease, license or dispose of any material property or assets in any single transaction or series of related transactions, except for (i) transactions pursuant to existing Contracts, (ii) transactions in the ordinary course of business consistent with past practice and (x) with respect to Qumu or its Subsidiaries, not in excess of $500,000 5,000,000 individually, or $1,000,000 in the aggregate and (y) with respect to Synacor or its Subsidiaries not in excess of $750,000 individually, or $1,500,000 20,000,000 in the aggregate, and or (iii) transactions with customers for the sale or license of Qumu Rentrak Products or Synacor Products services, in the ordinary course of business consistent with past practice;
(l) except as may be required to remain in compliance with GAAP, make any change in any of the accounting principles or practices used by either of them;
(m) make, make or change or revoke any material Tax election, file any material amendment to any Tax Return, adopt or change any material Tax accounting method, change any annual Tax accounting period, enter into any Tax allocation, sharing or indemnity agreement (other than commercial Contracts entered into in the ordinary course of business the primary purpose of which does not relate to Taxes), settle or compromise any material Tax liability for an amount that exceeds the amount disclosed, reflected or reserved against in the financial statements contained in the Qumu SEC Reports or Synacor SEC Reports as the case may beliability, or consent to the extension or waiver of the limitations period applicable to a material Tax claim or assessment, surrender any right to claim a material Tax refund, or apply for or enter into any ruling from any Tax authority with respect to Taxes;
(n) (i) enter into any Contract that would be a Qumu IP License or a Qumu Material Contract described in clause (ii) or (iii) of Section 3.14(a) (together, the “Qumu IP Contracts”), or a Synacor IP License or a Synacor Rentrak Material Contract or described in clause (ii) or (iii) of Section 4.14(a) (together, the “Synacor IP Contracts”), as the case may be, or amend in any material respect any such Qumu IP Contract or Synacor IP Contract, as the case may be, or grant any release or relinquishment of any material rights under any such Qumu IP Contract or Synacor IP Contract, as the case may be, or (ii) except in the ordinary course of business consistent with past practices, enter into any Contract that would be any other Qumu Material Contract or other Synacor a comScore Material Contract, as the case may be, or amend in any material respect any other Qumu Rentrak Material Contract or Synacor comScore Material Contract, as the case may be, or grant any release or relinquishment of any material rights under any other Qumu Rentrak Material Contract or Synacor comScore Material Contract, as the case may be;
(o) enter into any Qumu Material Real Property Lease lease or Synacor Material Real Property Leasesublease of real property, or modify, amend or exercise any right to renew any Qumu Material Real Property Lease lease or sublease of Synacor Material Real Property Leasereal property, in either case with a term or extending a term ending later than the Extended Termination Date;
(p) fail to maintain or allow to lapse, dispose of or abandon, including by failure to pay the required fees in any jurisdiction, any material Intellectual Property Rights used in or held for use in their respective businesses, or grant permission to enter into the public domain any material trade secrets included in the Qumu Intellectual Property or Synacor Intellectual Property, as applicable;
(q) grant any exclusive rights with respect to any of their respective material Intellectual Property Rights that are material to their respective businesses or the material Intellectual Property Rights of any of their respective Subsidiaries that are material to their Subsidiaries, ’ respective businesses or divest any of their respective material Intellectual Property Rights that are material to their respective businesses or the material Intellectual Property Rights of any of their respective SubsidiariesSubsidiaries that are material to their respective businesses;
(q) modify the standard warranty terms for Rentrak Products or comScore Products, as the case may be, or services or materially amend or modify any product or service warranty;
(r) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein;
(s) authorize, incur or commit to incur any new capital expenditure(s) that in the aggregate exceeds, in any given quarter, one hundred ten percent (110%) of the amount set forth in the respective capital expenditure budget of each party, as provided to the other party prior to the date of this Agreementexceed $10 million; provided, however, that the foregoing shall not limit any maintenance capital expenditures or capital expenditures required pursuant to existing Contracts;
(t) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any Liability, other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings and Liabilities (i) reflected or reserved against in full in the balance sheet included in the Qumu Rentrak Balance Sheet or the Synacor comScore Balance Sheet, as the case may be, (ii) covered by existing insurance policies, or (iii) settled since the respective dates thereof in the ordinary course of business consistent with past practice or (iv) settlements of any pending or threatened Legal Proceeding, other than arising out of the breach or alleged breach of this Agreement by a party and other than Transaction Litigation, that only involves the payment of cash in amounts that (x) with respect to Qumu or its Subsidiaries do not exceed $100,000 in any individual case and (y) with respect to Synacor or its Subsidiaries do not exceed $500,000 in any individual casepractice;
(u) except as required by GAAP, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
(v) convene any special meeting of their shareholders stockholders (or any postponempostponement or adjournment thereof), or propose any matters for consideration and a vote of its stockholders at its respective Stockholder Meeting other than this Agreement, the Merger and the other transactions contemplated by this Agreement;
(w) waive (either explicitly or implicitly by non-action or otherwise) any of its rights under any confidentiality, non-disclosure, “standstill,” employee non-solicitation and other similar agreements to which it is a party; or
(x) enter into a Contract to do any of the foregoing or knowingly take any action that is reasonably likely to result in any of the conditions to the consummation of the transactions contemplated hereby not being satisfied, or knowingly take any action that would make any of their respective representations or warranties set forth in this Agreement untrue or incorrect in any material respect, or that would materially impair their ability to consummate the transactions contemplated by this Agreement in accordance with the terms hereof or materially delay such consummation.
Appears in 1 contract
Sources: Merger Agreement (Rentrak Corp)
Negative Obligations. Except (i) as expressly provided contemplated or permitted by this Agreement, (ii) as may be required by Legal Requirements, (iii) as set forth in Section 5.2 of the Qumu fuboTV Disclosure Letter or Section 5.2 of the Synacor FaceBank Disclosure Letter, as the case may be, or (iv) as approved in advance by the other party hereto in writing (which approval shall not be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Section 9.1 and the Effective Time, neither Qumu fuboTV nor Synacor FaceBank shall, nor shall either of them cause or permit any of their respective Subsidiaries to, do any of the following:
(a) propose to adopt any amendments to or amend their respective certificates of incorporation, articles of incorporation or bylaws or comparable organizational documentsdocuments (except with respect to the designation by FaceBank of the Series AA Preferred Stock and the other actions as contemplated by Section 8.1(d));
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of restricted stock units, options, warrants, other equity-based commitments, subscriptions, rights to purchase or otherwise) any of their respective securities or any securities of any of their respective Subsidiaries, except for (i) the issuance and sale of shares of common stock pursuant to the exercise or settlement of stock options, restricted stock units, performance stock units or warrants options outstanding as of prior to the date of this Agreementhereof, (ii) with respect to grants by Synacor to newly hired Synacor employees of stock options, restricted stock, restricted stock units or other equity awards granted in the ordinary course of business consistent with past practice (including with respect options that have been previously committed and disclosed to the type of grant, conditions for vesting other party and other material terms and conditions), with a per share exercise price (as applicable) that is no less than the fair market value of a share of common stock on the date of grant, subject to a four-year vesting schedule in which will not more than twenty-five percent (25%) of the total grant becomes vested annually, and not be subject to any accelerated vesting or other provision that would be triggered upon a termination of service or as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor Common Stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) of the Synacor Disclosure Letter and (B) the aggregate number of shares of Synacor Common Stock subject to stock options, restricted stock, restricted stock units or other equity awards granted to any individual newly hired Synacor employee does not exceed the current stock or other equity award grant guidelines previously made available to Qumu for any single individual; and (iii) grants by Synacor to existing Synacor directors, employees or contractors of stock options, restricted stock, restricted stock units or other equity awards granted in the ordinary course of business consistent with past practice (including with respect to the type of grantFaceBank, conditions for vesting and other material terms and conditions), with a per share exercise price sell up to ten million dollars (as applicable) that is no less than the then the fair market value of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%$10,000,000) of the total grant becomes vested annually, and not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor FaceBank Common Stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) of the Synacor Disclosure Letter and (B) the aggregate number of shares of Synacor securities convertible or exercisable for FaceBank Common Stock subject to restricted stock units so long as any purchaser of any such securities are bound by standstill agreements prohibiting such purchaser from selling securities of fuboTV or other equity awards granted to any individual existing Synacor director, employee or contractor does not exceed FaceBank until the current stock or other equity award grant guidelines previously made available to Qumu for any single individualEffective Time;
(c) acquire or redeem, directly or indirectly, or amend any of their respective securities or any securities of any of their respective Subsidiaries, except for purchases, redemptions or other acquisitions of capital stock or other securities in connection with the acquisition or withholding of capital stock to pay for the exercise price of, or a holder’s payment of Tax obligations with respect to, or the forfeiture of awards granted under the Qumu Stock Plan or the Synacor Stock Plans; provided, however, that nothing in this paragraph (c) shall prohibit Qumu or Synacor from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole;
(d) other than cash dividends made by any of their respective direct or indirect wholly owned Subsidiaries to themselves or one of their respective Subsidiaries, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock; provided, however, that nothing stock (other than in this paragraph (d) shall prohibit Qumu or Synacor from dissolving and/or merging into any of their respective Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a wholeconnection with the transactions contemplated hereby);
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of themselves or any of their respective Subsidiaries (other than the transactions contemplated hereby); provided, however, that nothing in this paragraph (e) shall prohibit Qumu or Synacor from dissolving and/or merging into any of their respective Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole;
(f) other than with respect to the Signing Date Loan or the Closing Date Revolving Credit Facility contemplated hereby or, with respect to FaceBank, to the extent permitted thereunder or under the terms of the Note Purchase Agreement, (i) incur or assume any long-term or short-term debt or issue any debt securities, except for (A) letters of credit issued in the ordinary course of business consistent with past practice, and (B) short-term debt incurred to fund operations of the business or for cash management purposes, in each case in the ordinary course of business consistent with past practice, (C) with respect to fuboTV, short-term debt or debt securities to the extent determined by the board of directors of fuboTV to be necessary or appropriate to fund the operations of its business through the Termination Date; provided that any such debt or debt securities shall be convertible into the Stock Merger Consideration upon occurrence of the Effective Time, (D) loans or advances to direct or indirect wholly owned Subsidiaries in the ordinary course of business consistent with past practices, and (E) with respect only to existing indebtedness having a maturity date occurring after the date of this Agreement but prior to the Effective Time, to refinance, extend or renew the maturity of any existing indebtedness in an amount not to exceed such existing indebtedness, provided that such refinancing or extension is at prevailing market interest rates and otherwise on terms not materially less favorable in the aggregate than the existing indebtedness being so refinanced, renewed or extended, (ii) other than in the ordinary course of business, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for any material obligations of any other Person except obligations of any of their respective direct or indirect wholly owned Subsidiaries, (iii) make any material loans, advances or capital contributions to or investments in any other Person or (iv) mortgage or pledge any of their or their respective Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon;
(g) except as may be required by applicable Legal Requirements or as necessary to satisfy, any Qumu Employee Plan, Qumu Non-U.S. Employee Plan, Synacor Employee Plan or Synacor Non-U.S. Employee Plan, or to other satisfy contractual obligations, in each case, obligations existing on the date hereof: ; (i) with respect to any consultant, officer, director, or employee, enter into, adopt, amend (including to provide for the acceleration of vesting or lapsing of restrictionsvesting), modify, renew modify or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance stock unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any consultant, director, officer or employee in any manner or increase in any material manner the compensation, benefits, severance compensation or termination pay fringe benefits of any consultant, director, officer or employee, ; or enter into, modify or amend any non-competition or similar agreement with any employee, (ii) pay any special bonus, remuneration or benefit to any director, officer or employee not required by any plan or arrangement as in effect as of the date hereof, (iii) promote any existing Section 16 officer or promote any employee to a Section 16 officer position, or terminate any Section 16 officer without cause; provided, however, that this paragraph (gSection 5.2(g) shall not prevent either Synacor FaceBank or Qumu fuboTV or any of their respective Subsidiaries (A) from entering into employment agreements, offer letters or retention agreements with respect to any newly hired non-officer employees in the ordinary course of business consistent with past practices to fill positions that are open as of the date of this Agreement or that become open subsequent to the date of this Agreement as a result of a current employee’s departure, (B) from executing routine amendments or renewals to health and welfare plans that would not result in a material increase in cost, or (C) from amending any FaceBank Employee Plan or fuboTV Employee Plan to avoid the imposition extent required by any applicable law or this Agreement, to conform any such FaceBank Employee Plan or fuboTV Employee Plan to the requirements of any excise tax under Section 4999 of the Code, provided that in the event of such an action, Synacor and Qumu shall reasonably consult and agree with any such action applicable law or (iv) enter into, amend or terminate any Employee Benefit Planthis Agreement;
(h) forgive any loans to any of their respective employees, officers or directors or any employees, officers or directors of any of their respective Subsidiaries or Affiliates;
(i) make any deposits or contributions of cash or other property or take any other action to fund or in any other way secure the payment of compensation or benefits under any of their Employee Benefit Plans or any Employee Benefit Plans of any of their respective Subsidiaries, other than deposits and contributions that are required pursuant to the terms of any such Employee Benefit Plans or any Contracts subject to any such Employee Benefit Plans in effect as of the date hereof or as required by applicable Legal Requirements;
(j) enter into, amend, or extend any collective bargaining agreement;
(k) acquire, sell, lease, license or dispose of any material property or assets in any single transaction or series of related transactions, except for (i) transactions pursuant to existing Contracts, (ii) transactions in the ordinary course of business consistent with past practice and (x) with respect to Qumu or its Subsidiaries, not in excess of $500,000 individually, or $1,000,000 in the aggregate and (y) with respect to Synacor or its Subsidiaries not in excess of $750,000 individually, or $1,500,000 100,000 in the aggregate, and or (iii) transactions with customers for the sale or license of Qumu fuboTV Products or Synacor services or FaceBank Products or services, in the ordinary course of business consistent with past practice;
(l) except as may be required to remain in compliance with GAAPGAAP or as may be instructed by auditors as part of audit procedures, make any change in any of the accounting principles or practices used by either of them;
(m) make, make or change or revoke any material Tax election, file any material amendment to any Tax Return, adopt or change any material Tax accounting method, change any annual Tax accounting period, enter into any Tax allocation, sharing or indemnity agreement (other than commercial Contracts entered into in the ordinary course of business the primary purpose of which does not relate to Taxes), settle or compromise any material Tax liability for an amount that exceeds the amount disclosed, reflected or reserved against in the financial statements contained in the Qumu SEC Reports or Synacor SEC Reports as the case may beliability, or consent to the extension or waiver of the limitations period applicable to a material Tax claim or assessment, surrender any right to claim a material Tax refund, or apply for or enter into any ruling from any Tax authority with respect to Taxes;
(n) (i) enter into any Contract that would be a Qumu IP License or a Qumu Material Contract described in clause (ii) or (iii) of Section 3.14(a) (together, the “Qumu IP Contracts”), or a Synacor IP License or a Synacor fuboTV Material Contract or described in clause (ii) or (iii) of Section 4.14(a) (together, the “Synacor IP Contracts”), as the case may be, or amend in any material respect any such Qumu IP Contract or Synacor IP Contract, as the case may be, or grant any release or relinquishment of any material rights under any such Qumu IP Contract or Synacor IP Contract, as the case may be, or (ii) except in the ordinary course of business consistent with past practices, enter into any Contract that would be any other Qumu Material Contract or other Synacor a FaceBank Material Contract, as the case may be, or amend in any material respect any other Qumu fuboTV Material Contract or Synacor FaceBank Material Contract, as the case may be, or grant any release or relinquishment of any material rights under any other Qumu fuboTV Material Contract or Synacor FaceBank Material Contract, as the case may be, in each case, other than in the ordinary course of business or, with respect to fuboTV, other than any Affiliation Agreement;
(o) enter into any Qumu Material Real Property Lease lease or Synacor Material Real Property Leasesublease of real property, or modify, amend or exercise any right to renew any Qumu Material Real Property Lease lease or sublease of Synacor Material Real Property Leasereal property;
(p) fail to maintain or allow to lapse, dispose of or abandon, including by failure to pay the required fees in any jurisdiction, any material Intellectual Property Rights used in or held for use in their respective businesses, or grant permission to enter into the public domain any material trade secrets included in the Qumu Intellectual Property or Synacor Intellectual Property, as applicable;
(q) grant any exclusive rights with respect to any of their respective material Intellectual Property Rights that are material to their respective businesses or the material Intellectual Property Rights of any of their respective Subsidiaries that are material to their Subsidiaries, ’ respective businesses or divest any of their respective material Intellectual Property Rights that are material to their respective businesses or the material Intellectual Property Rights of any of their respective SubsidiariesSubsidiaries that are material to their respective businesses;
(rq) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein;
(sr) authorize, incur or commit to incur any new capital expenditure(s) that in the aggregate exceeds, in any given quarter, one hundred ten percent (110%) of the amount set forth in the respective capital expenditure budget of each party, as provided to the other party prior to the date of this Agreementexceed $100,000; provided, however, that the foregoing shall not limit any maintenance capital expenditures or capital expenditures required pursuant to existing Contracts;
(ts) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any Liability, other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings and Liabilities (i) reflected or reserved against in full in the balance sheet included in the Qumu fuboTV Balance Sheet or the Synacor FaceBank Balance Sheet, as the case may be, (ii) covered by existing insurance policies, or (iii) settled since the respective dates thereof in the ordinary course of business consistent with past practice or (iv) settlements of any pending or threatened Legal Proceeding, other than arising out of the breach or alleged breach of this Agreement by a party and other than Transaction Litigation, that only involves the payment of cash in amounts that (x) with respect to Qumu or its Subsidiaries do not exceed $100,000 in any individual case and (y) with respect to Synacor or its Subsidiaries do not exceed $500,000 in any individual casepractice;
(ut) except as required by GAAP, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
(vu) convene any special meeting of their shareholders stockholders (or any postponempostponement or adjournment thereof), or propose any matters for consideration and a vote of its stockholders, other than this Agreement, the Merger and the other transactions contemplated by this Agreement;
(v) waive (either explicitly or implicitly by non-action or otherwise) any of its rights under any confidentiality, non-disclosure, “standstill,” employee non-solicitation and other similar agreements to which it is a party; or
(w) enter into a Contract to do any of the foregoing or knowingly take any action that is reasonably likely to result in any of the conditions to the consummation of the transactions contemplated hereby not being satisfied, or knowingly take any action that would make any of their respective representations or warranties set forth in this Agreement untrue or incorrect in any material respect, or that would materially impair their ability to consummate the transactions contemplated by this Agreement in accordance with the terms hereof or materially delay such consummation.
Appears in 1 contract
Negative Obligations. Except The Lessee may not, without the Lessor's approval:
(a) do anything in or about the Premises or the Building which is illegal, noxious, offensive or audibly or visually a nuisance to the Lessor or the owner or occupier of an adjoining property;
(b) carry out works which interfere with the Services (unless the Lessor has approved the contractor and the plans and specifications of the proposed work), or otherwise interfere with the Services;
(c) obstruct access to or overload the Services;
(d) use any method of heating, cooling or lighting the Premises other than those provided by the Lessor;
(e) use any facilities in or about the Premises or the Building including any lavatory, sink, drain or other sewerage or plumbing facility and any gas or electrical fitting or appliance for any purpose other than that for which it was designed;
(f) construct or place any sign or advertisement whether fixed or free standing on any part of the Premises unless of appropriate design or size for the Premises and the surrounding area and complying with the requirements of the local authority;
(g) hold auction, bankrupt, fire or closing down sales in the Premises;
(h) use the Premises as a residence;
(i) as expressly provided by this Agreementkeep any live animal or bird on the Premises;
(j) grant concessions, licences or otherwise give permission to any person to carry on the Lessee's Business in the Premises;
(iik) as may be required by Legal Requirements, (iii) as set forth in Section 5.2 lodge or permit to exist a caveat on the title of the Qumu Disclosure Letter Land except a caveat noting the Lessee's "subject to claim" interest under this Lease and any option to renew the Term;
(l) make holes in or otherwise interfere with the Synacor Disclosure Letterwalls in the Premises except so far as is reasonably necessary to fix or place signs, as the case may beadvertisements, blinds, awnings or (iv) as shop fittings approved in advance by the other party hereto in writing (Lessor which approval shall not be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Section 9.1 and the Effective Time, neither Qumu nor Synacor shall, nor shall either of them cause or permit any of their respective Subsidiaries to, do any of the following:
(a) propose to adopt any amendments to or amend their respective certificates of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of restricted stock units, options, warrants, other equity-based commitments, subscriptions, rights to purchase or otherwise) any of their respective securities or any securities of any of their respective Subsidiaries, except for (i) the issuance and sale of shares of common stock pursuant to the exercise or settlement of stock options, restricted stock units, performance stock units or warrants outstanding as of the date of this Agreement, (ii) grants by Synacor to newly hired Synacor employees of stock options, restricted stock, restricted stock units or other equity awards granted in the ordinary course of business consistent with past practice (including with respect to the type of grant, conditions for vesting and other material terms and conditions), with a per share exercise price (as applicable) that is no less than the fair market value of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) of the total grant becomes vested annually, and not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor Common Stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) of the Synacor Disclosure Letter and (B) the aggregate number of shares of Synacor Common Stock subject to stock options, restricted stock, restricted stock units or other equity awards granted to any individual newly hired Synacor employee does not exceed the current stock or other equity award grant guidelines previously made available to Qumu for any single individual; and (iii) grants by Synacor to existing Synacor directors, employees or contractors of stock options, restricted stock, restricted stock units or other equity awards granted in the ordinary course of business consistent with past practice (including with respect to the type of grant, conditions for vesting and other material terms and conditions), with a per share exercise price (as applicable) that is no less than the then the fair market value of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) of the total grant becomes vested annually, and not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor Common Stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) of the Synacor Disclosure Letter and (B) the aggregate number of shares of Synacor Common Stock subject to restricted stock units or other equity awards granted to any individual existing Synacor director, employee or contractor does not exceed the current stock or other equity award grant guidelines previously made available to Qumu for any single individual;
(c) acquire or redeem, directly or indirectly, or amend any of their respective securities or any securities of any of their respective Subsidiaries, except for purchases, redemptions or other acquisitions of capital stock or other securities in connection with the acquisition or withholding of capital stock to pay for the exercise price of, or a holder’s payment of Tax obligations with respect to, or the forfeiture of awards granted under the Qumu Stock Plan or the Synacor Stock Plans; provided, however, that nothing in this paragraph (c) shall prohibit Qumu or Synacor from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole;
(d) other than cash dividends made by any of their respective direct or indirect wholly owned Subsidiaries to themselves or one of their respective Subsidiaries, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock; provided, however, that nothing in this paragraph (d) shall prohibit Qumu or Synacor from dissolving and/or merging into any of their respective Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of themselves or any of their respective Subsidiaries (other than the transactions contemplated hereby); provided, however, that nothing in this paragraph (e) shall prohibit Qumu or Synacor from dissolving and/or merging into any of their respective Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole;
(f) (i) incur or assume any long-term or short-term debt or issue any debt securities, except for (A) letters of credit issued in the ordinary course of business consistent with past practice, and (B) loans or advances to direct or indirect wholly owned Subsidiaries in the ordinary course of business consistent with past practices, provided that such refinancing or extension is at prevailing market interest rates and otherwise on terms not materially less favorable in the aggregate than the existing indebtedness being so refinanced, renewed or extended, (ii) other than in the ordinary course of business, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for any material obligations of any other Person except obligations of any of their respective direct or indirect wholly owned Subsidiaries, (iii) make any material loans, advances or capital contributions to or investments in any other Person or (iv) mortgage or pledge any of their or their respective Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon;
(g) except as may be required by applicable Legal Requirements or as necessary to satisfy, any Qumu Employee Plan, Qumu Non-U.S. Employee Plan, Synacor Employee Plan or Synacor Non-U.S. Employee Plan, or to other contractual obligations, in each case, existing on the date hereof: (i) with respect to any consultant, officer, director, or employee, enter into, adopt, amend (including to provide for the acceleration of vesting or lapsing of restrictions), modify, renew or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any consultant, director, officer or employee in any manner or increase in any material manner the compensation, benefits, severance or termination pay of any consultant, director, officer or employee, or enter into, modify or amend any non-competition or similar agreement with any employee, (ii) pay any special bonus, remuneration or benefit to any director, officer or employee not required by any plan or arrangement as in effect as of the date hereof, (iii) promote any existing Section 16 officer or promote any employee to a Section 16 officer position, or terminate any Section 16 officer without cause; provided, however, that this paragraph (g) shall not prevent either Synacor or Qumu or any of their respective Subsidiaries (A) from entering into employment agreements, offer letters or retention agreements with respect to any newly hired employees in the ordinary course of business consistent with past practices to fill positions that are open as of the date of this Agreement or that become open subsequent to the date of this Agreement as a result of a current employee’s departure, (B) from executing routine amendments or renewals to health and welfare plans that would not result in a material increase in cost, or (C) from amending any Employee Plan to avoid the imposition of any excise tax under Section 4999 of the Code, provided that in the event of such an action, Synacor and Qumu shall reasonably consult and agree with any such action or (iv) enter into, amend or terminate any Employee Benefit Plan;
(h) forgive any loans to any of their respective employees, officers or directors or any employees, officers or directors of any of their respective Subsidiaries or Affiliates;
(i) make any deposits or contributions of cash or other property or take any other action to fund or in any other way secure the payment of compensation or benefits under any of their Employee Benefit Plans or any Employee Benefit Plans of any of their respective Subsidiaries, other than deposits and contributions that are required pursuant to the terms of any such Employee Benefit Plans or any Contracts subject to any such Employee Benefit Plans in effect as of the date hereof or as required by applicable Legal Requirements;
(j) enter into, amend, or extend any collective bargaining agreement;
(k) acquire, sell, lease, license or dispose of any material property or assets in any single transaction or series of related transactions, except for (i) transactions pursuant to existing Contracts, (ii) transactions in the ordinary course of business consistent with past practice and (x) with respect to Qumu or its Subsidiaries, not in excess of $500,000 individually, or $1,000,000 in the aggregate and (y) with respect to Synacor or its Subsidiaries not in excess of $750,000 individually, or $1,500,000 in the aggregate, and (iii) transactions with customers for the sale or license of Qumu Products or Synacor Products in the ordinary course of business consistent with past practice;
(l) except as may be required to remain in compliance with GAAP, make any change in any of the accounting principles or practices used by either of them;
(m) make, change or revoke burn any material Tax election, file any material amendment to any Tax Return, adopt or change any material Tax accounting method, change any annual Tax accounting period, enter into any Tax allocation, sharing or indemnity agreement (other than commercial Contracts entered into rubbish on the Premises except in an incinerator and in a place approved by the ordinary course of business Lessor and the primary purpose of which does not relate to Taxes), settle or compromise any material Tax liability local authority for an amount that exceeds the amount disclosed, reflected or reserved against in the financial statements contained in the Qumu SEC Reports or Synacor SEC Reports as the case may be, or consent to the extension or waiver of the limitations period applicable to a material Tax claim or assessment, surrender any right to claim a material Tax refund, or apply for or enter into any ruling from any Tax authority with respect to Taxes;purpose; or
(n) (i) enter into if there is any Contract that would be a Qumu IP License or a Qumu Material Contract described in clause (ii) or (iii) of Section 3.14(a) (togetherCommon Area, obstruct the “Qumu IP Contracts”), or a Synacor IP License or a Synacor Material Contract or described in clause (ii) or (iii) of Section 4.14(a) (together, the “Synacor IP Contracts”), as the case may be, or amend in any material respect any such Qumu IP Contract or Synacor IP Contract, as the case may be, or grant any release or relinquishment of any material rights under any such Qumu IP Contract or Synacor IP Contract, as the case may be, or (ii) except in the ordinary course of business consistent with past practices, enter into any Contract that would be any other Qumu Material Contract or other Synacor Material Contract, as the case may be, or amend in any material respect any other Qumu Material Contract or Synacor Material Contract, as the case may be, or grant any release or relinquishment of any material rights under any other Qumu Material Contract or Synacor Material Contract, as the case may be;
(o) enter into any Qumu Material Real Property Lease or Synacor Material Real Property Lease, or modify, amend or exercise any right to renew any Qumu Material Real Property Lease of Synacor Material Real Property Lease;
(p) fail to maintain or allow to lapse, dispose of or abandon, including by failure to pay the required fees in any jurisdiction, any material Intellectual Property Rights used in or held for use in their respective businesses, or grant permission to enter into the public domain any material trade secrets included in the Qumu Intellectual Property or Synacor Intellectual Property, as applicable;
(q) grant any exclusive rights with respect to any of their respective material Intellectual Property Rights or the material Intellectual Property Rights of any of their respective Subsidiaries, or divest any of their respective material Intellectual Property Rights or the material Intellectual Property Rights of any of their respective Subsidiaries;
(r) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein;
(s) authorize, incur or commit to incur any new capital expenditure(s) that in the aggregate exceeds, in any given quarter, one hundred ten percent (110%) of the amount set forth in the respective capital expenditure budget of each party, as provided to the other party prior to the date of this Agreement; provided, however, that the foregoing shall not limit any maintenance capital expenditures or capital expenditures required pursuant to existing Contracts;
(t) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any Liability, other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings and Liabilities (i) reflected or reserved against in full in the balance sheet included in the Qumu Balance Sheet or the Synacor Balance Sheet, as the case may be, (ii) covered by existing insurance policies, (iii) settled since the respective dates thereof in the ordinary course of business consistent with past practice or (iv) settlements of any pending or threatened Legal Proceeding, other than arising out of the breach or alleged breach of this Agreement by a party and other than Transaction Litigation, that only involves the payment of cash in amounts that (x) with respect to Qumu or its Subsidiaries do not exceed $100,000 in any individual case and (y) with respect to Synacor or its Subsidiaries do not exceed $500,000 in any individual case;
(u) except as required by GAAP, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
(v) convene any special meeting of their shareholders (or any postponemCommon Area.
Appears in 1 contract
Sources: Standard Commercial/Industrial Property Lease (Telvent Git S A)
Negative Obligations. Except (i) as expressly provided contemplated or permitted by this Agreement, (ii) Agreement or as may be required by Legal Requirements, (iii) as set forth disclosed in Section 5.2 of the Qumu CoolTouch Disclosure Letter or the Synacor Disclosure Letter, as the case may beSchedule, or (ivii) as approved in advance by with the other party hereto in writing (prior written consent of Syneron, which approval shall not be unreasonably withheld, conditioned delayed or delayed)conditioned, at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Section 9.1 Article X and the Effective Time, neither Qumu nor Synacor shall, nor the Company shall either of them cause or permit any of their respective Subsidiaries to, not do any of the following:
(a) propose to adopt any amendments to or amend their respective certificates its articles of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of restricted stock units, options, warrants, other equity-equity based (whether payable in cash, securities or other property or any combination of the foregoing) commitments, subscriptions, rights to purchase or otherwise) any of their respective securities or any securities of any of their respective Subsidiariesits securities, except for (i) the issuance and sale of shares of common stock pursuant to the exercise stock options or settlement of stock options, restricted stock units, performance stock units or warrants outstanding as of prior to the date of this Agreementhereof, (ii) grants by Synacor of purchase rights under an employee stock purchase or other similar plan, and (iii) grants to newly hired Synacor employees or refresh grants to current employees of restricted stock units covering or stock options to purchase common stock granted in the Ordinary Course of Business, in the case of stock options, restricted stock, restricted stock units or other equity awards granted in the ordinary course of business consistent with past practice (including with respect to the type of grant, conditions for vesting and other material terms and conditions), with a per share exercise price (as applicable) that is no less than the fair then current market value price of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) of the total grant becomes vested annuallystock, and with respect to either stock options or restricted stock units, not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or solely as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor Common Stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) of the Synacor Disclosure Letter and (B) the aggregate number of shares of Synacor Common Stock subject to stock options, restricted stock, restricted stock units or other equity awards granted to any individual newly hired Synacor employee does not exceed the current stock or other equity award grant guidelines previously made available to Qumu for any single individual; and (iii) grants by Synacor to existing Synacor directors, employees or contractors of stock options, restricted stock, restricted stock units or other equity awards granted in the ordinary course of business consistent with past practice (including with respect to the type of grant, conditions for vesting and other material terms and conditions), with a per share exercise price (as applicable) that is no less than the then the fair market value of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) of the total grant becomes vested annually, and not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor Common Stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) of the Synacor Disclosure Letter and (B) the aggregate number of shares of Synacor Common Stock subject to restricted stock units or other equity awards granted to any individual existing Synacor director, employee or contractor does not exceed the current stock or other equity award grant guidelines previously made available to Qumu for any single individual;hereby.
(c) acquire or redeem, directly or indirectly, or amend any of their respective securities or any securities of any of their respective Subsidiaries, except for purchases, redemptions or other acquisitions of capital stock or other securities in connection with the acquisition or withholding of capital stock to pay for the exercise price of, or a holder’s payment of Tax obligations with respect to, or the forfeiture of awards granted under the Qumu Stock Plan or the Synacor Stock Plans; provided, however, that nothing in this paragraph (c) shall prohibit Qumu or Synacor from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a wholesecurities;
(d) incur any indebtedness or guarantee any indebtedness for borrowed money or issue or sell any debt securities or guarantee any debt securities or other obligations of others or create a Lien over any of its assets, other than cash dividends made by any of their respective direct or indirect wholly owned Subsidiaries to themselves or one of their respective Subsidiaries, split, combine or reclassify any shares of capital stock, Permitted Liens;
(e) declare, set aside or pay any dividend or other distribution (whether in cash, shares or of property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution of property in respect of the shares of capital stock; provided, however, that nothing in this paragraph (d) shall prohibit Qumu or Synacor from dissolving and/or merging into any of their respective Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole;
(ef) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of themselves or any of their respective Subsidiaries (other than the transactions contemplated hereby); provided, however, that nothing in this paragraph (e) shall prohibit Qumu or Synacor from dissolving and/or merging into any of their respective Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole;
(f) (i) incur or assume any long-term or short-term debt or issue any debt securities, except for (A) letters of credit issued in the ordinary course of business consistent with past practice, and (B) loans or advances to direct or indirect wholly owned Subsidiaries in the ordinary course of business consistent with past practices, provided that such refinancing or extension is at prevailing market interest rates and otherwise on terms not materially less favorable in the aggregate than the existing indebtedness being so refinanced, renewed or extended, (ii) other than in the ordinary course of business, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for any material obligations of any other Person except obligations of any of their respective direct or indirect wholly owned Subsidiaries, (iii) make any material loans, advances or capital contributions to or investments in any other Person or (iv) mortgage or pledge any of their or their respective Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereuponreorganization;
(g) except as may be required by applicable Legal Requirements forgive any loans to any of its employees, officers or as necessary directors;
(h) increase the compensation payable or to satisfy, any Qumu Employee Plan, Qumu Non-U.S. Employee Plan, Synacor Employee Plan become payable to its officers or Synacor Non-U.S. Employee Planemployees, or to other contractual obligationsgrant any severance or termination pay to, in each case, existing on the date hereof: (i) or enter into any severance agreement with respect to any consultant, officer, director, officer or other employee, enter intoor establish, adopt, enter into or amend (including to provide for the acceleration of vesting or lapsing of restrictions)any collective bargaining, modify, renew or terminate any bonus, profit sharing, thrift, compensation, severance, termination, stock option, appreciation right, performance unit, stock equivalent, share purchase agreementrestricted stock, pension, retirement, deferred compensation, employment, termination, severance or other employee benefit plan, agreement, trust, planfund, fund policy or other arrangement for the compensation, benefit or welfare of any consultant, director, such director or officer or employee in employees, except the parties may make any manner amendments to existing Employee Benefit Plans to the extent necessary to maintain their compliance with applicable Legal Requirements (including any amendments necessary or increase in any material manner the compensation, benefits, severance or termination pay of any consultant, director, officer or employee, or enter into, modify or amend any non-competition or similar agreement desirable to comply with any employee, (ii) pay any special bonus, remuneration or benefit to any director, officer or employee not required by any plan or arrangement as in effect as Section 409A of the date hereof, (iii) promote any existing Section 16 officer or promote any employee to a Section 16 officer position, or terminate any Section 16 officer without cause; provided, however, that this paragraph (g) shall not prevent either Synacor or Qumu or any of their respective Subsidiaries (A) from entering into employment agreements, offer letters or retention agreements with respect to any newly hired employees in the ordinary course of business consistent with past practices to fill positions that are open Code so as of the date of this Agreement or that become open subsequent to the date of this Agreement as a result of a current employee’s departure, (B) from executing routine amendments or renewals to health and welfare plans that would not result in a material increase in cost, or (C) from amending any Employee Plan to avoid the imposition of any excise tax under Section 4999 of the Code, provided that in the event of such an action, Synacor and Qumu shall reasonably consult and agree additional Tax with any such action or (iv) enter into, amend or terminate any Employee Benefit Plan;
(h) forgive any loans to any of their respective employees, officers or directors or any employees, officers or directors of any of their respective Subsidiaries or Affiliatesrespect thereto);
(i) make any deposits or contributions of cash or other property to or take any other action to fund or in any other way secure the payment of compensation or benefits under any of their its Employee Benefit Plans or any Employee Benefit Plans of any of their respective SubsidiariesPlans, other than deposits and contributions that are required pursuant to the terms of any such Employee Benefit Plans or any Contracts subject to any such Employee Benefit Plans in effect as of the date hereof or as required by applicable Legal Requirements;
(j) enter into, amend, or extend any collective bargaining agreement;
(k) acquire, sell, lease, license or dispose of any material property or assets in any single transaction or series of related transactions, except for (i) transactions pursuant to existing Contracts, (ii) transactions in the ordinary course Ordinary Course of business consistent with past practice and (x) with respect to Qumu or its Subsidiaries, not in excess of $500,000 individually, or $1,000,000 in the aggregate and (y) with respect to Synacor or its Subsidiaries not in excess of $750,000 individually, or $1,500,000 in the aggregate, and (iii) transactions with customers for the sale or license of Qumu Products or Synacor Products in the ordinary course of business consistent with past practiceBusiness;
(l) except as may be required to remain in compliance with by applicable Legal Requirements or GAAP, make any change in any of the accounting principles or practices used by either of themit;
(m) make, make or change or revoke any material Tax election, file any material amendment to any Tax Return, adopt or change any material Tax accounting method, change any annual Tax accounting period, enter into any Tax allocation, sharing or indemnity agreement (other than commercial Contracts entered into in the ordinary course of business the primary purpose of which does not relate to Taxes), settle or compromise any material Tax liability for an amount that exceeds the amount disclosed, reflected or reserved against in the financial statements contained in the Qumu SEC Reports or Synacor SEC Reports as the case may beliability, or consent to the extension or waiver of the limitations period applicable to a material Tax claim or assessment, surrender any right to claim a material Tax refund, or apply for or enter into any ruling from any Tax authority with respect to Taxes;
(n) (i) enter into any Contract that would be a Qumu IP License or a Qumu Material Contract described Contract, except in clause the Ordinary Course of Business;
(iio) or (iii) of Section 3.14(a) (together, the “Qumu IP Contracts”), or a Synacor IP License or a Synacor Material Contract or described in clause (ii) or (iii) of Section 4.14(a) (together, the “Synacor IP Contracts”), as the case may be, or amend in any material respect any such Qumu IP Contract or Synacor IP CoolTouch Material Contract, as the case may be, or grant any release or relinquishment of any material rights under any such Qumu IP Contract or Synacor IP Contract, as the case may be, or (ii) except in the ordinary course of business consistent with past practices, enter into any Contract that would be any other Qumu Material Contract or other Synacor CoolTouch Material Contract, as the case may be, or amend in any material respect any other Qumu Material Contract or Synacor Material Contract, as the case may be, or grant any release or relinquishment of any material rights under any other Qumu Material Contract or Synacor Material Contract, as the case may be;
(o) enter into any Qumu Material Real Property Lease or Synacor Material Real Property Lease, or modify, amend or exercise any right to renew any Qumu Material Real Property Lease of Synacor Material Real Property Lease;
(p) fail to maintain sell, assign, transfer, license or allow to lapsesublicense, dispose of pledge or abandon, including by failure to pay the required fees in otherwise encumber any jurisdiction, any material CoolTouch Intellectual Property Rights used in or held for use in their respective businesses, or grant permission to enter into the public domain any material trade secrets included in the Qumu Intellectual Property or Synacor Intellectual Property, as applicableRight;
(q) grant any exclusive rights with respect to any of their respective material Intellectual Property Rights or the material Intellectual Property Rights of any of their respective Subsidiaries, or divest any of their respective material Intellectual Property Rights or the material Intellectual Property Rights of any of their respective Subsidiaries;
(r) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein;
(r) mortgage, pledge or subject to Lien any of its assets or properties, other than Permitted Liens;
(s) authorize, incur or commit to incur any new capital expenditure(s) that which in the aggregate exceeds, in any given quarter, one hundred ten percent (110%) of the amount set forth in the respective capital expenditure budget of each party, as provided to the other party prior to the date of this Agreement; provided, however, that the foregoing shall not limit any maintenance capital expenditures or capital expenditures required pursuant to existing Contractsexceed US$25,000;
(t) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any Liability, other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings and Liabilities (i) reflected or reserved against in full in the balance sheet included in the Qumu Balance Sheet or the Synacor Balance Sheet, as the case may be, (ii) covered by existing insurance policies, (iii) settled since the respective dates thereof in the ordinary course of business consistent with past practice or (iv) settlements of any pending or threatened Legal Proceeding, other than arising out of the breach or alleged breach of this Agreement by a party and other than Transaction Litigation, that only involves the payment of cash in amounts that (x) with respect to Qumu or its Subsidiaries do not exceed $100,000 in any individual case and (y) with respect to Synacor or its Subsidiaries do not exceed $500,000 in any individual caseCoolTouch Financial Statements;
(u) initiation of any material Legal Proceeding;
(v) except as required by applicable Legal Requirements or GAAP, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable other than in the ordinary course Ordinary Course of business consistent with past practiceBusiness;
(vw) convene enter into a Contract to do any special meeting of their shareholders (the foregoing or Knowingly take any postponemaction which is reasonably expected to result in any of the conditions to the consummation of the transactions contemplated hereby not being satisfied, or Knowingly take any action which would make any of its representations or warranties set forth in this Agreement untrue or incorrect in any material respect, or that would materially impair its ability to consummate the transactions contemplated by this Agreement in accordance with the terms hereof or materially delay such consummation.
Appears in 1 contract
Negative Obligations. Except (i) as expressly provided contemplated or permitted by this Agreement, (ii) as may be required by Legal Requirements, (iii) as set forth in Section 5.2 of the Qumu Agere Disclosure Letter or the Synacor LSI Disclosure Letter, as the case may be, or (iv) as approved in advance by the other party hereto in writing (which approval shall not be unreasonably withheld, conditioned delayed or delayedconditioned), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Section 9.1 Article VIII and the Effective Time, neither Qumu Agere nor Synacor LSI shall, nor shall either of them cause or permit any of their respective Subsidiaries to, do any of the following:
(a) propose to adopt any amendments to or amend their respective certificates its certificate of incorporation or bylaws or comparable organizational documents, provided that the organizational documents of Subsidiaries may be amended in a way that is not material;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of restricted stock units, options, warrants, other equity-based (whether payable in cash, securities or other property or any combination of the foregoing) commitments, subscriptions, rights to purchase or otherwise) any of their respective its securities or any securities of any of their respective its Subsidiaries, except for (i) the issuance and sale of shares of common stock pursuant to the exercise stock options or settlement of stock options, restricted stock units, performance stock units or warrants outstanding as of prior to the date of this Agreementhereof, (ii) grants by Synacor of purchase rights under an employee stock purchase or other similar plan, and (iii) grants to newly hired Synacor employees of stock options, restricted stock, restricted options to purchase common stock units or other equity awards granted in the ordinary course of business consistent with past practice (including with respect to the type of grant, conditions for vesting and other material terms and conditions)practice, with a per share exercise price (as applicable) that is no less than the fair then-current market value price of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) of the total grant becomes vested annually, and not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or solely as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor Common Stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) of the Synacor Disclosure Letter and (B) the aggregate number of shares of Synacor Common Stock subject to stock options, restricted stock, restricted stock units or other equity awards granted to any individual newly hired Synacor employee does not exceed the current stock or other equity award grant guidelines previously made available to Qumu for any single individual; and (iii) grants by Synacor to existing Synacor directors, employees or contractors of stock options, restricted stock, restricted stock units or other equity awards granted in the ordinary course of business consistent with past practice (including with respect to the type of grant, conditions for vesting and other material terms and conditions), with a per share exercise price (as applicable) that is no less than the then the fair market value of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) of the total grant becomes vested annually, and not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor Common Stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) of the Synacor Disclosure Letter and (B) the aggregate number of shares of Synacor Common Stock subject to restricted stock units or other equity awards granted to any individual existing Synacor director, employee or contractor does not exceed the current stock or other equity award grant guidelines previously made available to Qumu for any single individual;hereby.
(c) acquire or redeem, directly or indirectly, or amend any of their respective its securities or any securities of any of their respective its Subsidiaries, except for purchases, redemptions or other acquisitions of capital stock or other securities in connection with the acquisition or withholding of capital stock to pay for the exercise price of, or a holder’s payment of Tax obligations with respect to, or the forfeiture of awards granted under the Qumu Stock Plan or the Synacor Stock Plans; provided, however, that nothing in this paragraph (c) shall prohibit Qumu Agere or Synacor LSI from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to them it and their respective its Subsidiaries, taken as a whole;
(d) other than cash dividends made by any of their respective its direct or indirect wholly owned Subsidiaries to themselves itself or one of their respective its Subsidiaries, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock; provided, however, that nothing in this paragraph (d) shall prohibit Qumu Agere or Synacor LSI from dissolving and/or merging into any of their respective its Subsidiaries certain other Subsidiaries that are not material to them it and their respective its Subsidiaries, taken as a whole;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of themselves it or any of their respective its Subsidiaries (other than the transactions contemplated hereby); provided, however, that nothing in this paragraph (e) shall prohibit Qumu Agere or Synacor LSI from dissolving and/or merging into any of their respective its Subsidiaries certain other Subsidiaries that are not material to them it and their respective its Subsidiaries, taken as a whole;
(f) (i) incur or assume any long-term or short-term debt or issue any debt securities, except for (A) letters of credit issued in the ordinary course of business consistent with past practice, and (B) short-term debt incurred to fund operations of the business or for cash management purposes, in each case in the ordinary course of business consistent with past practice, (C) loans or advances to direct or indirect wholly owned Subsidiaries in the ordinary course of business consistent with past practices, and (D) with respect only to existing indebtedness having a maturity date occurring after the date of this Agreement but prior to the Effective Time, to refinance, extend or renew the maturity of any existing indebtedness in an amount not to exceed such existing indebtedness, provided that such refinancing or extension is at prevailing market interest rates and otherwise on terms not materially less favorable in the aggregate than the existing indebtedness being so refinanced, renewed or extended, (ii) other than in the ordinary course of business, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for any material obligations of any other Person except obligations of any of their respective direct or indirect wholly owned Subsidiaries, (iii) make any material loans, advances or capital contributions to or investments in any other Person or (iv) mortgage or pledge any of their its or their respective its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon, except (A) pursuant to, or as permitted under the indebtedness described in (i), (B) as incurred in the ordinary course of business consistent with past practices, or (C) any rights granted to any licensee of any Agere Intellectual Property Right entered into in the ordinary course of business consistent with past practice;
(g) except as may be required by applicable Legal Requirements or as necessary to satisfy, any Qumu Employee Plan, Qumu Non-U.S. Employee Plan, Synacor Employee Plan or Synacor Non-U.S. Employee PlanRequirements, or to other satisfy contractual obligations, in each case, obligations existing on the date hereof: ; (i) with respect to any consultant, officer, director, or employee, enter into, adopt, amend (including to provide for the acceleration of vesting or lapsing of restrictionsvesting), modify, renew modify or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any consultant, director, officer or employee in any manner or increase in any material manner the compensation, benefits, severance compensation or termination pay fringe benefits of any consultant, director, officer or employee, or enter into, modify or amend any non-competition or similar agreement with any employee, (ii) pay any special bonus, remuneration or benefit to any director, officer or employee not required by any plan or arrangement as in effect as of the date hereof, (iii) promote any existing Section 16 officer or promote any employee to a Section 16 officer position, or terminate any Section 16 officer without cause; provided, however, that this paragraph (g) shall not prevent either Synacor or Qumu company or any of their respective Subsidiaries (A) from entering into employment agreements, offer letters or retention agreements with respect to any newly hired non-officer employees in the ordinary course of business consistent with past practices to fill positions that are open as of the date of this Agreement practices, or that become open subsequent to the date of this Agreement as a result of a current employee’s departure, (B) from executing routine amendments increasing annual compensation of non-officer employees and/or from providing for or renewals amending bonus arrangements for non-officer employees in the ordinary course of compensation reviews (to health the extent that such compensation increases and welfare plans that would new or amended bonus arrangements are consistent with past practice and do not result in a material increase in cost, benefits or (C) from amending any Employee Plan to avoid the imposition of any excise tax under Section 4999 of the Code, provided that in the event of such an action, Synacor and Qumu shall reasonably consult and agree with any such action or (iv) enter into, amend or terminate any Employee Benefit Plancompensation expense);
(h) forgive any loans to any of their respective its employees, officers or directors or any employees, officers or directors of any of their respective Subsidiaries its Subsidiaries, or any of its Affiliates;
(i) make any deposits or contributions of cash or other property to or take any other action to fund or in any other way secure the payment of compensation or benefits under any of their its Employee Benefit Plans or any Employee Benefit Plans of any of their respective its Subsidiaries, other than deposits and contributions that are required pursuant to the terms of any such Employee Benefit Plans or any Contracts subject to any such Employee Benefit Plans in effect as of the date hereof or as required by applicable Legal Requirements;
(j) enter into, amend, or extend any collective bargaining agreement;
(k) acquire, sell, lease, license or dispose of any material property or assets in any single transaction or series of related transactions, except for (i) transactions pursuant to existing Contracts, (ii) transactions in the ordinary course of business consistent with past practice and practice, or (xiii) with respect to Qumu or its Subsidiaries, transactions not in excess of $500,000 10,000,000 individually, or $1,000,000 in the aggregate and (y) with respect to Synacor or its Subsidiaries not in excess of $750,000 individually, or $1,500,000 40,000,000 in the aggregate, and (iii) transactions with customers for the sale or license of Qumu Products or Synacor Products in the ordinary course of business consistent with past practice;
(l) except as may be required to remain in compliance with applicable Legal Requirements or GAAP, make any change in any of the accounting principles or practices used by either of themit;
(m) make, make or change or revoke any material Tax election, file any material amendment to any Tax Return, adopt or change any material Tax accounting method, change any annual Tax accounting period, enter into any Tax allocation, sharing or indemnity agreement (other than commercial Contracts entered into in the ordinary course of business the primary purpose of which does not relate to Taxes), settle or compromise any material Tax liability for an amount that exceeds the amount disclosed, reflected or reserved against in the financial statements contained in the Qumu SEC Reports or Synacor SEC Reports as the case may beliability, or consent to the extension or waiver of the limitations period applicable to a material Tax claim or assessment, surrender any right to claim a material Tax refund, or apply for or enter into any ruling from any Tax authority with respect to Taxes;
(n) (i) enter into any Contract that would be a Qumu IP License or a Qumu Material Contract described in clause (ii) or (iii) of Section 3.14(a) (together, the “Qumu IP Contracts”), or a Synacor IP License or a Synacor an Agere Material Contract or described in clause (ii) or (iii) of Section 4.14(a) (together, the “Synacor IP Contracts”), as the case may be, or amend in any material respect any such Qumu IP Contract or Synacor IP Contract, as the case may be, or grant any release or relinquishment of any material rights under any such Qumu IP Contract or Synacor IP Contract, as the case may be, or (ii) except in the ordinary course of business consistent with past practices, enter into any Contract that would be any other Qumu Material Contract or other Synacor an LSI Material Contract, as the case may be, or amend in any material respect any other Qumu Agere Material Contract or Synacor LSI Material Contract, as the case may be, or grant any release or relinquishment of any material rights under any other Qumu Agere Material Contract or Synacor LSI Material Contract, as the case may be;
(o) enter into any Qumu Material Real Property Lease or Synacor Material Real Property Lease, or modify, amend or exercise any right to renew any Qumu Material Real Property Lease of Synacor Material Real Property Lease;
(p) fail to maintain or allow to lapse, dispose of or abandon, including by failure to pay the required fees in any jurisdiction, any material Intellectual Property Rights used in or held for use in their respective businesses, or grant permission to enter into the public domain any material trade secrets included in the Qumu Intellectual Property or Synacor Intellectual Property, as applicable;
(q) grant any exclusive rights with respect to any of their respective its material Intellectual Property Rights or the material Intellectual Property Rights of any of their respective its Subsidiaries, or divest any of their respective its material Intellectual Property Rights or the material Intellectual Property Rights of any of their respective its Subsidiaries, or materially modify the standard warranty terms for Agere Products or LSI Products, as the case may be, or services or materially amend or modify any product or service warranty;
(rp) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein;
(sq) authorize, incur or commit to incur any new capital expenditure(s) that which in the aggregate exceeds, in any given quarter, one hundred ten percent (110%) of the amount set forth in the respective capital expenditure budget of each party, as provided to the other party prior to the date of this Agreementexceed $40,000,000; provided, however, that the foregoing shall not limit any maintenance capital expenditures or capital expenditures required pursuant to existing Contracts;
(tr) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any Liability, other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings and Liabilities (i) reflected or reserved against in full in the balance sheet included in the Qumu Agere Balance Sheet or the Synacor LSI Balance Sheet, as the case may be, (ii) covered by existing insurance policies, (iii) settled since the respective dates thereof in the ordinary course of business consistent with past practice practice, including licensing and other settlements arising out of Agere’s Intellectual Property Business or (iv) settlements of any pending or threatened Legal Proceeding, other otherwise less than arising out of the breach or alleged breach of this Agreement by a party and other than Transaction Litigation, that only involves the payment of cash in amounts that (x) with respect to Qumu or its Subsidiaries do not exceed $100,000 in any individual case and (y) with respect to Synacor or its Subsidiaries do not exceed $500,000 individually and $5,000,000 in any individual casethe aggregate;
(us) except as required by applicable Legal Requirements or GAAP, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
(vt) except as required by applicable Legal Requirements, convene any regular or special meeting of their shareholders (or any postponemadjournment or postponement thereof) of its stockholders; or
(u) enter into a Contract to do any of the foregoing or knowingly take any action which is reasonably expected to result in any of the conditions to the consummation of the transactions contemplated hereby not being satisfied, or knowingly take any action which would materially impair its ability to consummate the transactions contemplated by this Agreement in accordance with the terms hereof or materially delay such consummation.
Appears in 1 contract
Sources: Merger Agreement (Agere Systems Inc)
Negative Obligations. Except (i) as expressly provided by this Agreement, (ii) as may be required by Legal Requirements, (iii) as set forth in Section 5.2 of the Qumu Hortonworks Disclosure Letter or the Synacor Cloudera Disclosure Letter, as the case may be, or (iv) as approved in advance by the other party hereto in writing (which approval shall not be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Section 9.1 and the Effective Time, neither Qumu Hortonworks nor Synacor Cloudera shall, nor shall either of them cause or permit any of their respective Subsidiaries to, do any of the following:
(a) propose to adopt any amendments to or amend their respective certificates of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of restricted stock units, options, warrants, other equity-based commitments, subscriptions, rights to purchase or otherwise) any of their respective securities or any securities of any of their respective Subsidiaries, except for (i) the issuance and sale of shares of common stock pursuant to the exercise or settlement of stock options, restricted stock units, units or performance stock units or warrants outstanding as of the date of this Agreement, (ii) grants by Synacor of purchase rights under an employee stock purchase or other similar plan, subject to Section 7.7 of this Agreement, (iii) grants to newly hired Synacor employees of stock options, restricted stock, restricted stock units or other equity awards granted in the ordinary course of business consistent with past practice (including with respect to the type of grant, conditions for vesting and other material terms and conditions), with a per share exercise price (as applicable) that is no less than the fair market value of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) % of the total grant becomes vested annually, and not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor Common Stock common stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) Schedule 5.2(b)(i), in the case of Hortonworks, or Schedule 5.2(b)(ii), in the Synacor Disclosure Letter case of Cloudera, and (B) the aggregate number of shares of Synacor Common Stock subject to stock options, restricted stock, restricted stock units or other equity awards granted to any individual newly hired Synacor employee does not exceed the current stock or other equity award grant guidelines previously made available to Qumu the other party hereto (and, in any case, no greater than the amount set forth on Table of Contents Schedule 5.2(b)(iii) in the case of Hortonworks, or Schedule 5.2(b)(iv), in the case of Cloudera for any single individual); and (iiiiv) grants by Synacor to existing Synacor directors, employees or contractors of stock options, restricted stock, restricted stock units or other equity awards granted in the ordinary course of business consistent with past practice (including with respect to the type of grant, conditions for vesting and other material terms and conditions), with a per share exercise price (as applicable) that is no less than the then the fair market value of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) % of the total grant becomes vested annually, and not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor Common Stock common stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) Schedule 5.2(b)(v), in the case of Hortonworks, or Schedule 5.2(b)(vi), in the Synacor Disclosure Letter case of Cloudera , and (B) the aggregate number of shares of Synacor Common Stock common stock subject to restricted stock units or other equity awards granted to any individual existing Synacor director, employee or contractor does not exceed the current stock or other equity award grant guidelines previously made available to Qumu the other party hereto (and, in any case, no greater than the amount set forth on Schedule 5.2(b)(vii) in the case of Hortonworks, or Schedule 5.2(b)(viii), in the case of Cloudera for any single individual);
(c) acquire or redeem, directly or indirectly, or amend any of their respective securities or any securities of any of their respective Subsidiaries, except for purchases, redemptions or other acquisitions of capital stock or other securities in connection with the acquisition or withholding of capital stock to pay for the exercise price of, or a holder’s payment of Tax obligations with respect to, or the forfeiture of awards granted under the Qumu Stock Plan or the Synacor Stock Plans; provided, however, that nothing in this paragraph (c) shall prohibit Qumu Hortonworks or Synacor Cloudera from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole;
(d) other than cash dividends made by any of their respective direct or indirect wholly owned Subsidiaries to themselves or one of their respective Subsidiaries, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock; provided, however, that nothing in this paragraph (d) shall prohibit Qumu Hortonworks or Synacor Cloudera from dissolving and/or merging into any of their respective Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of themselves or any of their respective Subsidiaries (other than the transactions contemplated hereby); provided, however, that nothing in this paragraph (e) shall prohibit Qumu Hortonworks or Synacor Cloudera from dissolving and/or merging into any of their respective Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole;
(f) (i) incur or assume any long-term or short-term debt or issue any debt securities, except for (A) letters of credit issued in the ordinary course of business consistent with past practice, and (B) loans or advances to direct or indirect wholly owned Subsidiaries in the ordinary course of business consistent with past practices, provided that such refinancing or extension is at prevailing market interest rates and otherwise on terms not materially less favorable in the aggregate than the existing indebtedness being so refinanced, renewed or extended, (ii) other than in the ordinary course of business, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for any material obligations of any other Person except obligations of any of their respective direct or indirect wholly owned Subsidiaries, (iii) make any material loans, advances or capital contributions to or investments in any other Person or (iv) mortgage or pledge any of their or their respective Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon;
(g) except as may be required by applicable Legal Requirements or as necessary to satisfy, any Qumu Hortonworks Employee Plan, Qumu Hortonworks Non-U.S. Employee Plan, Synacor Cloudera Employee Plan or Synacor Cloudera Non-U.S. Employee Plan, or to other contractual obligations, in each case, existing on the date hereof: (i) with Table of Contents respect to any consultant, officer, director, or employee, enter into, adopt, amend (including to provide for the acceleration of vesting or lapsing of restrictions), modify, renew or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any consultant, director, officer or employee in any manner or increase in any material manner the compensation, benefits, severance or termination pay of any consultant, director, officer or employee, or enter into, modify or amend any non-competition or similar agreement with any employee, (ii) pay any special bonus, remuneration or benefit to any director, officer or employee not required by any plan or arrangement as in effect as of the date hereof, or (iii) promote any existing Section 16 officer or promote any employee to a Section 16 officer position, or terminate any Section 16 officer without cause; provided, however, that this paragraph (g) shall not prevent either Synacor Cloudera or Qumu Hortonworks or any of their respective Subsidiaries (A) from entering into employment agreements, offer letters or retention agreements with respect to any newly hired employees in the ordinary course of business consistent with past practices to fill positions that are open as of the date of this Agreement or that become open subsequent to the date of this Agreement as a result of a current employee’s departure, (B) from increasing annual compensation of employees who are below the level of a vice president and/or from providing for or amending bonus arrangements for employees who are below the level of a vice president in the ordinary course of compensation reviews (to the extent that such compensation increases and new or amended bonus arrangements are consistent with past practice and do not result in a material increase in benefits or compensation expense) or (C) from executing routine amendments or renewals to health and welfare plans that would not result in a material increase in cost, or (C) from amending any Employee Plan to avoid the imposition of any excise tax under Section 4999 of the Code, provided that in the event of such an action, Synacor and Qumu shall reasonably consult and agree with any such action or (iv) enter into, amend or terminate any Employee Benefit Planbenefits;
(h) forgive any loans to any of their respective employees, officers or directors or any employees, officers or directors of any of their respective Subsidiaries or Affiliates;
(i) make any deposits or contributions of cash or other property or take any other action to fund or in any other way secure the payment of compensation or benefits under any of their Employee Benefit Plans or any Employee Benefit Plans of any of their respective Subsidiaries, other than deposits and contributions that are required pursuant to the terms of any such Employee Benefit Plans or any Contracts subject to any such Employee Benefit Plans in effect as of the date hereof or as required by applicable Legal Requirements;
(j) enter into, amend, or extend any collective bargaining agreement;
(k) acquire, sell, lease, license or dispose of any material property or assets in any single transaction or series of related transactions, except for (i) transactions pursuant to existing Contracts, (ii) transactions in the ordinary course of business consistent with past practice and (x) with respect to Qumu or its Subsidiaries, not in excess of $500,000 5,000,000 individually, or $1,000,000 in the aggregate and (y) with respect to Synacor or its Subsidiaries not in excess of $750,000 individually, or $1,500,000 20,000,000 in the aggregate, and (iii) transactions with customers for the sale or license of Qumu Products or Synacor Products in the ordinary course of business consistent with past practice;
(l) except as may be required to remain in compliance with GAAP, make any change in any of the accounting principles or practices used by either of them;
(m) make, make or change or revoke any material Tax election, file any material amendment to any Tax Return, adopt or change any material Tax accounting method, change any annual Tax accounting period, enter into any Tax allocation, sharing or indemnity agreement (other than commercial Contracts entered into in the ordinary course of business the primary purpose of which does not relate to Taxes), settle or compromise any material Tax liability for an amount that exceeds the amount disclosed, reflected or reserved against in the financial statements contained in the Qumu SEC Reports or Synacor SEC Reports as the case may beliability, or consent to the extension or waiver of the limitations period applicable to a material Tax claim or assessment, surrender any right to claim a material Tax refund, or apply for or enter into any ruling from any Tax authority with respect to Taxes;
(n) (i) enter into any Contract that would be a Qumu Hortonworks IP License or a Qumu Hortonworks Material Contract described in clause (ii) or (iii) of Section 3.14(a) ((together, the “Qumu Hortonworks IP Contracts”), or a Synacor Cloudera IP License or a Synacor Cloudera Material Contract or described in clause (ii) or (iii) of Section 4.14(a) (together, the “Synacor Cloudera IP Contracts”), as the case may be, or amend in any material respect any such Qumu Hortonworks IP Contract or Synacor Cloudera IP Contract, as the case may be, or grant any release or relinquishment of any material rights under any such Qumu Hortonworks IP Contract or Synacor Cloudera IP Contract, as the case may be, or (ii) except in the ordinary course of business consistent with past practices, enter into any Contract that would be any other Qumu Material Contract or other Synacor Material Contract, as the case may be, or amend in any material respect any other Qumu Material Contract or Synacor Material Contract, as the case may be, or grant any release or relinquishment of any material rights under any other Qumu Material Contract or Synacor Material Contract, as the case may be;
(o) enter into any Qumu Material Real Property Lease or Synacor Material Real Property Lease, or modify, amend or exercise any right to renew any Qumu Material Real Property Lease of Synacor Material Real Property Lease;
(p) fail to maintain or allow to lapse, dispose of or abandon, including by failure to pay the required fees in any jurisdiction, any material Intellectual Property Rights used in or held for use in their respective businesses, or grant permission to enter into the public domain any material trade secrets included in the Qumu Intellectual Property or Synacor Intellectual Property, as applicable;
(q) grant any exclusive rights with respect to any of their respective material Intellectual Property Rights or the material Intellectual Property Rights of any of their respective Subsidiaries, or divest any of their respective material Intellectual Property Rights or the material Intellectual Property Rights of any of their respective Subsidiaries;
(r) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein;
(s) authorize, incur or commit to incur any new capital expenditure(s) that in the aggregate exceeds, in any given quarter, one hundred ten percent (110%) of the amount set forth in the respective capital expenditure budget of each party, as provided to the other party prior to the date of this Agreement; provided, however, that the foregoing shall not limit any maintenance capital expenditures or capital expenditures required pursuant to existing Contracts;
(t) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any Liability, other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings and Liabilities (i) reflected or reserved against in full in the balance sheet included in the Qumu Balance Sheet or the Synacor Balance Sheet, as the case may be, (ii) covered by existing insurance policies, (iii) settled since the respective dates thereof in the ordinary course of business consistent with past practice or (iv) settlements of any pending or threatened Legal Proceeding, other than arising out of the breach or alleged breach of this Agreement by a party and other than Transaction Litigation, that only involves the payment of cash in amounts that (x) with respect to Qumu or its Subsidiaries do not exceed $100,000 in any individual case and (y) with respect to Synacor or its Subsidiaries do not exceed $500,000 in any individual case;
(u) except as required by GAAP, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
(v) convene any special meeting of their shareholders (or any postponem
Appears in 1 contract
Sources: Merger Agreement (Hortonworks, Inc.)
Negative Obligations. Except (i) as expressly provided by this Agreement, (ii) as may be required by Legal Requirements, (iii) as set forth in Section 5.2 of the Qumu Hortonworks Disclosure Letter or the Synacor Cloudera Disclosure Letter, as the case may be, or (iv) as approved in advance by the other party hereto in writing (which approval shall not be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Section 9.1 and the Effective Time, neither Qumu Hortonworks nor Synacor Cloudera shall, nor shall either of them cause or permit any of their respective Subsidiaries to, do any of the following:
(a) propose to adopt any amendments to or amend their respective certificates of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of restricted stock units, options, warrants, other equity-based commitments, subscriptions, rights to purchase or otherwise) any of their respective securities or any securities of any of their respective Subsidiaries, except for (i) the issuance and sale of shares of common stock pursuant to the exercise or settlement of stock options, restricted stock units, units or performance stock units or warrants outstanding as of the date of this Agreement, (ii) grants by Synacor of purchase rights under an employee stock purchase or other similar plan, subject to Section 7.7 of this Agreement, (iii) grants to newly hired Synacor employees of stock options, restricted stock, restricted stock units or other equity awards granted in the ordinary course of business consistent with past practice (including with respect to the type of grant, conditions for vesting and other material terms and conditions), with a per share exercise price (as applicable) that is no less than the fair market value of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) % of the total grant becomes vested annually, and not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor Common Stock common stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) Schedule 5.2(b)(i), in the case of Hortonworks, or Schedule 5.2(b)(ii), in the Synacor Disclosure Letter case of Cloudera, and (B) the aggregate number of shares of Synacor Common Stock subject to stock options, restricted stock, restricted stock units or other equity awards granted to any individual newly hired Synacor employee does not exceed the current stock or other equity award grant guidelines previously made available to Qumu the other party hereto (and, in any case, no greater than the amount set forth on Schedule 5.2(b)(iii) in the case of Hortonworks, or Schedule 5.2(b)(iv), in the case of Cloudera for any single individual); and (iiiiv) grants by Synacor to existing Synacor directors, employees or contractors of stock options, restricted stock, restricted stock units or other equity awards granted in the ordinary course of business consistent with past practice (including with respect to the type of grant, conditions for vesting and other material terms and conditions), with a per share exercise price (as applicable) that is no less than the then the fair market value of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) % of the total grant becomes vested annually, and not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor Common Stock common stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) Schedule 5.2(b)(v), in the case of Hortonworks, or Schedule 5.2(b)(vi), in the Synacor Disclosure Letter case of Cloudera , and (B) the aggregate number of shares of Synacor Common Stock common stock subject to restricted stock units or other equity awards granted to any individual existing Synacor director, employee or contractor does not exceed the current stock or other equity award grant guidelines previously made available to Qumu the other party hereto (and, in any case, no greater than the amount set forth on Schedule 5.2(b)(vii) in the case of Hortonworks, or Schedule 5.2(b)(viii), in the case of Cloudera for any single individual);
(c) acquire or redeem, directly or indirectly, or amend any of their respective securities or any securities of any of their respective Subsidiaries, except for purchases, redemptions or other acquisitions of capital stock or other securities in connection with the acquisition or withholding of capital stock to pay for the exercise price of, or a holder’s payment of Tax obligations with respect to, or the forfeiture of awards granted under the Qumu Stock Plan or the Synacor Stock Plans; provided, however, that nothing in this paragraph (c) shall prohibit Qumu Hortonworks or Synacor Cloudera from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole;
(d) other than cash dividends made by any of their respective direct or indirect wholly owned Subsidiaries to themselves or one of their respective Subsidiaries, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock; provided, however, that nothing in this paragraph (d) shall prohibit Qumu Hortonworks or Synacor Cloudera from dissolving and/or merging into any of their respective Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of themselves or any of their respective Subsidiaries (other than the transactions contemplated hereby); provided, however, that nothing in this paragraph (e) shall prohibit Qumu Hortonworks or Synacor Cloudera from dissolving and/or merging into any of their respective Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole;
(f) (i) incur or assume any long-term or short-term debt or issue any debt securities, except for (A) letters of credit issued in the ordinary course of business consistent with past practice, and (B) loans or advances to direct or indirect wholly owned Subsidiaries in the ordinary course of business consistent with past practices, provided that such refinancing or extension is at prevailing market interest rates and otherwise on terms not materially less favorable in the aggregate than the existing indebtedness being so refinanced, renewed or extended, (ii) other than in the ordinary course of business, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for any material obligations of any other Person except obligations of any of their respective direct or indirect wholly owned Subsidiaries, (iii) make any material loans, advances or capital contributions to or investments in any other Person or (iv) mortgage or pledge any of their or their respective Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon;
(g) except as may be required by applicable Legal Requirements or as necessary to satisfy, any Qumu Hortonworks Employee Plan, Qumu Hortonworks Non-U.S. Employee Plan, Synacor Cloudera Employee Plan or Synacor Cloudera Non-U.S. Employee Plan, or to other contractual obligations, in each case, existing on the date hereof: (i) with respect to any consultant, officer, director, or employee, enter into, adopt, amend (including to provide for the acceleration of vesting or lapsing of restrictions), modify, renew or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any consultant, director, officer or employee in any manner or increase in any material manner the compensation, benefits, severance or termination pay of any consultant, director, officer or employee, or enter into, modify or amend any non-competition or similar agreement with any employee, (ii) pay any special bonus, remuneration or benefit to any director, officer or employee not required by any plan or arrangement as in effect as of the date hereof, or (iii) promote any existing Section 16 officer or promote any employee to a Section 16 officer position, or terminate any Section 16 officer without cause; provided, however, that this paragraph (g) shall not prevent either Synacor Cloudera or Qumu Hortonworks or any of their respective Subsidiaries (A) from entering into employment agreements, offer letters or retention agreements with respect to any newly hired employees in the ordinary course of business consistent with past practices to fill positions that are open as of the date of this Agreement or that become open subsequent to the date of this Agreement as a result of a current employee’s departure, (B) from increasing annual compensation of employees who are below the level of a vice president and/or from providing for or amending bonus arrangements for employees who are below the level of a vice president in the ordinary course of compensation reviews (to the extent that such compensation increases and new or amended bonus arrangements are consistent with past practice and do not result in a material increase in benefits or compensation expense) or (C) from executing routine amendments or renewals to health and welfare plans that would not result in a material increase in cost, or (C) from amending any Employee Plan to avoid the imposition of any excise tax under Section 4999 of the Code, provided that in the event of such an action, Synacor and Qumu shall reasonably consult and agree with any such action or (iv) enter into, amend or terminate any Employee Benefit Planbenefits;
(h) forgive any loans to any of their respective employees, officers or directors or any employees, officers or directors of any of their respective Subsidiaries or Affiliates;
(i) make any deposits or contributions of cash or other property or take any other action to fund or in any other way secure the payment of compensation or benefits under any of their Employee Benefit Plans or any Employee Benefit Plans of any of their respective Subsidiaries, other than deposits and contributions that are required pursuant to the terms of any such Employee Benefit Plans or any Contracts subject to any such Employee Benefit Plans in effect as of the date hereof or as required by applicable Legal Requirements;
(j) enter into, amend, or extend any collective bargaining agreement;
(k) acquire, sell, lease, license or dispose of any material property or assets in any single transaction or series of related transactions, except for (i) transactions pursuant to existing Contracts, (ii) transactions in the ordinary course of business consistent with past practice and (x) with respect to Qumu or its Subsidiaries, not in excess of $500,000 5,000,000 individually, or $1,000,000 in the aggregate and (y) with respect to Synacor or its Subsidiaries not in excess of $750,000 individually, or $1,500,000 20,000,000 in the aggregate, and (iii) transactions with customers for the sale or license of Qumu Products or Synacor Products in the ordinary course of business consistent with past practice;
(l) except as may be required to remain in compliance with GAAP, make any change in any of the accounting principles or practices used by either of them;
(m) make, make or change or revoke any material Tax election, file any material amendment to any Tax Return, adopt or change any material Tax accounting method, change any annual Tax accounting period, enter into any Tax allocation, sharing or indemnity agreement (other than commercial Contracts entered into in the ordinary course of business the primary purpose of which does not relate to Taxes), settle or compromise any material Tax liability for an amount that exceeds the amount disclosed, reflected or reserved against in the financial statements contained in the Qumu SEC Reports or Synacor SEC Reports as the case may beliability, or consent to the extension or waiver of the limitations period applicable to a material Tax claim or assessment, surrender any right to claim a material Tax refund, or apply for or enter into any ruling from any Tax authority with respect to Taxes;
(n) (i) enter into any Contract that would be a Qumu Hortonworks IP License or a Qumu Hortonworks Material Contract described in clause (ii) or (iii) of Section 3.14(a) ((together, the “Qumu Hortonworks IP Contracts”), or a Synacor Cloudera IP License or a Synacor Cloudera Material Contract or described in clause (ii) or (iii) of Section 4.14(a) (together, the “Synacor Cloudera IP Contracts”), as the case may be, or amend in any material respect any such Qumu Hortonworks IP Contract or Synacor Cloudera IP Contract, as the case may be, or grant any release or relinquishment of any material rights under any such Qumu Hortonworks IP Contract or Synacor Cloudera IP Contract, as the case may be, or (ii) except in the ordinary course of business consistent with past practices, enter into any Contract that would be any other Qumu Hortonworks Material Contract or other Synacor Cloudera Material Contract, as the case may be, or amend in any material respect any other Qumu Hortonworks Material Contract or Synacor Cloudera Material Contract, as the case may be, or grant any release or relinquishment of any material rights under any other Qumu Hortonworks Material Contract or Synacor Cloudera Material Contract, as the case may be;
(o) enter into any Qumu Hortonworks Material Real Property Lease or Synacor Cloudera Material Real Property Lease, or modify, amend or exercise any right to renew any Qumu Hortonworks Material Real Property Lease of Synacor Cloudera Material Real Property Lease;
(p) fail to maintain or allow to lapse, dispose of or abandon, including by failure to pay the required fees in any jurisdiction, any material Intellectual Property Rights used in or held for use in their respective businesses, or grant permission to enter into the public domain any material trade secrets included in the Qumu Hortonworks Intellectual Property or Synacor Cloudera Intellectual Property, as applicable;
(q) grant any exclusive rights with respect to any of their respective material Intellectual Property Rights or the material Intellectual Property Rights of any of their respective Subsidiaries, or divest any of their respective material Intellectual Property Rights or the material Intellectual Property Rights of any of their respective Subsidiaries, or modify the standard warranty terms for Hortonworks Products or Cloudera Products, as the case may be, or services or materially amend or modify any product or service warranty;
(r) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein;
(s) authorize, incur or commit to incur any new capital expenditure(s) that in the aggregate exceeds, in any given quarter, one hundred ten percent (110%) % of the amount set forth in the respective capital expenditure budget of each party, as provided to the other party prior to the date of this AgreementAgreement Date; provided, however, that the foregoing shall not limit any maintenance capital expenditures or capital expenditures required pursuant to existing Contracts;
(t) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any Liability, other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings and Liabilities (i) reflected or reserved against in full in the balance sheet included in the Qumu Hortonworks Balance Sheet or the Synacor Cloudera Balance Sheet, as the case may be, (ii) covered by existing insurance policies, or (iii) settled since the respective dates thereof in the ordinary course of business consistent with past practice or (iv) settlements of any pending or threatened Legal Proceeding, other than arising out of the breach or alleged breach of this Agreement by a party and other than Transaction Litigation, that only involves the payment of cash in amounts that (x) with respect to Qumu or its Subsidiaries do not exceed $100,000 in any individual case and (y) with respect to Synacor or its Subsidiaries do not exceed $500,000 in any individual casepractice;
(u) except as required by GAAP, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
(v) convene any special meeting of their shareholders stockholders(or any postponement or adjournment thereof), or propose any matters for consideration and a vote of its stockholders at its respective Stockholder Meeting other than this Agreement and the Merger; or
(w) enter into a Contract to do any of the foregoing, or announce an intention, enter into a formal or informal agreement or otherwise make a commitment to do any postponemof the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Cloudera, Inc.)
Negative Obligations. (a) Except (i) as expressly provided contemplated or permitted by this Agreement, (ii) as may be required by Legal Requirementsset forth in Part 4.4(a) of the CGI Disclosure Schedule, (iii) as set forth in Section 5.2 of the Qumu Disclosure Letter or the Synacor Disclosure Letter, as the case may be, reasonably necessary to ensure that CGI complies with applicable Legal Requirements and pre-existing contractual obligations or (iv) as approved in advance by with the other party hereto in writing prior written consent of the Company (which approval consent shall not be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Section 9.1 and the Effective TimePre-Closing Period, neither Qumu nor Synacor shallCGI shall not, nor shall either of them it cause or permit any of their respective Subsidiaries Merger Sub to, do any of the following:
(a) propose to adopt any amendments to or amend their respective certificates of incorporation or bylaws or comparable organizational documents;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of restricted stock units, options, warrants, other equity-based commitments, subscriptions, rights to purchase or otherwise) any of their respective securities or any securities of any of their respective Subsidiaries, except for (i) the issuance and sale of shares of common stock pursuant to the exercise or settlement of stock optionsdeclare, restricted stock units, performance stock units or warrants outstanding as of the date of this Agreement, (ii) grants by Synacor to newly hired Synacor employees of stock options, restricted stock, restricted stock units or other equity awards granted in the ordinary course of business consistent with past practice (including with respect to the type of grant, conditions for vesting and other material terms and conditions), with a per share exercise price (as applicable) that is no less than the fair market value of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) of the total grant becomes vested annually, and not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor Common Stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) of the Synacor Disclosure Letter and (B) the aggregate number of shares of Synacor Common Stock subject to stock options, restricted stock, restricted stock units or other equity awards granted to any individual newly hired Synacor employee does not exceed the current stock or other equity award grant guidelines previously made available to Qumu for any single individual; and (iii) grants by Synacor to existing Synacor directors, employees or contractors of stock options, restricted stock, restricted stock units or other equity awards granted in the ordinary course of business consistent with past practice (including with respect to the type of grant, conditions for vesting and other material terms and conditions), with a per share exercise price (as applicable) that is no less than the then the fair market value of a share of common stock on the date of grant, subject to a four-year vesting schedule in which not more than twenty-five percent (25%) of the total grant becomes vested annually, and not subject to any accelerated vesting or other provision that would be triggered upon a termination of service or as a result of the consummation of the Merger or any other transactions contemplated by this Agreement (whether alone or in combination with any other event), provided that (A) the aggregate number of shares of Synacor Common Stock subject to such stock options, restricted stock, restricted stock units or other equity awards does not exceed the number of shares set forth on Section 5.2(b) of the Synacor Disclosure Letter and (B) the aggregate number of shares of Synacor Common Stock subject to restricted stock units or other equity awards granted to any individual existing Synacor director, employee or contractor does not exceed the current stock or other equity award grant guidelines previously made available to Qumu for any single individual;
(c) acquire or redeem, directly or indirectly, or amend any of their respective securities or any securities of any of their respective Subsidiaries, except for purchases, redemptions or other acquisitions of capital stock or other securities in connection with the acquisition or withholding of capital stock to pay for the exercise price of, or a holder’s payment of Tax obligations with respect to, or the forfeiture of awards granted under the Qumu Stock Plan or the Synacor Stock Plans; provided, however, that nothing in this paragraph (c) shall prohibit Qumu or Synacor from dissolving and/or merging into any of its Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a whole;
(d) other than cash dividends made by any of their respective direct or indirect wholly owned Subsidiaries to themselves or one of their respective Subsidiaries, split, combine or reclassify any shares of capital stock, declareaccrue, set aside or pay any dividend or make any other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock; or repurchase, redeem or otherwise reacquire any shares of capital stock or other securities (except for shares of CGI Common Stock from terminated employees of CGI);
(ii) except for the Private Placement, contractual commitments in place at the time of this Agreement and disclosed in Part 3.9 and/or Part 3.13 of the CGI Disclosure Schedule, and other than as contemplated by the Contemplated Transactions, sell, issue, grant, authorize the issuance of, or make any commitments to sell, issue, grant or authorize the issuance of: (A) any capital stock or other actual, constructive security (except for (1) CGI Options or deemed distribution in respect of the shares of CGI Common Stock issued to CGI employees, directors or consultants or (2) shares of CGI Common Stock issued upon the valid exercise of outstanding CGI Options); (B) any option, warrant or right to acquire any capital stockstock or any other security (other than as permitted by clause (A) above); provided, however, that nothing in this paragraph or (dC) shall prohibit Qumu any instrument convertible into or Synacor from dissolving and/or merging into exchangeable for any of their respective Subsidiaries certain capital stock or other Subsidiaries that are not material to them and their respective Subsidiaries, taken security (other than as a wholepermitted by clause (A) above);
(eiii) propose amend the Certificate of Incorporation or adopt Articles of Incorporation (as applicable), bylaws or other charter or organizational documents of CGI or Merger Sub, or effect or be a plan of complete or partial liquidation, dissolution, party to any merger, consolidation, restructuringshare exchange, business combination, recapitalization or other reorganization of themselves or any of their respective Subsidiaries (other than similar transaction except as related to the transactions contemplated hereby); provided, however, that nothing in this paragraph (e) shall prohibit Qumu or Synacor from dissolving and/or merging into any of their respective Subsidiaries certain other Subsidiaries that are not material to them and their respective Subsidiaries, taken as a wholeContemplated Transactions;
(fiv) form any new Subsidiary or acquire any equity interest or other interest in any other Entity;
(iv) lend money to any Person; incur or assume guarantee any long-term indebtedness for borrowed money; issue or short-term sell any debt securities or issue options, warrants, calls or other rights to acquire any debt securities, except for (A) letters ; guarantee any debt securities of credit issued others; or make capital or other expenditures or commitments in excess of $100,000 individually or $250,000 in the ordinary course of business consistent with past practiceaggregate, and (B) loans or advances to direct or indirect wholly owned Subsidiaries in the ordinary course of business consistent with past practices, provided that such refinancing or extension is at prevailing market interest rates and otherwise on terms not materially less favorable in the aggregate than the existing indebtedness being so refinanced, renewed or extended, (ii) other than in the ordinary course Ordinary Course of businessBusiness;
(vi) (A) adopt, assumeestablish, guaranteeenter into or terminate any CGI Employee Plan or any agreement, endorse plan, policy or otherwise become liable arrangement that would constitute a CGI Employee Plan if it were in existence on the date hereof; (B) cause or responsible permit any CGI Employee Plan to be amended other than as required by law or in order to make amendments for the purposes of compliance with Section 409A of the Code, subject to prior review and approval (whether directlywith such approval not to be unreasonably withheld) by the Company; (C) pay or establish any bonus or any profit-sharing or similar payment to, contingently or, except in the Ordinary Course of Business, increase the amount of the wages, salary, commissions, benefits or otherwiseother compensation or remuneration payable to, any of its directors, officers, employees, or other individual service providers; (D) increase or accelerate the vesting or payment of any compensation or benefit; (E) except in the Ordinary Course of Business, terminate (other than for “cause”), hire or promote any employee or other service provider; or (F) grant any severance, retention, termination or similar payments or benefits to any individual;
(vii) enter into any material obligations transaction outside the Ordinary Course of Business;
(viii) acquire any material asset, sell, license, permit to lapse or abandon, lease other Person except obligations otherwise irrevocably dispose of any of their respective direct its material assets or indirect wholly owned Subsidiariesproperties (including any CGI Intellectual Property, or exclusively licensed CGI Third Party Intellectual Property) or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(iiiix) make any material loans, advances or capital contributions to or investments in any other Person or (iv) mortgage or pledge any of their or their respective Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon;
(g) except as may be required by applicable Legal Requirements or as necessary to satisfy, any Qumu Employee Plan, Qumu Non-U.S. Employee Plan, Synacor Employee Plan or Synacor Non-U.S. Employee Plan, or to other contractual obligations, in each case, existing on the date hereof: (i) with respect to any consultant, officer, director, or employee, enter into, adopt, amend (including to provide for the acceleration of vesting or lapsing of restrictions), modify, renew or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any consultant, director, officer or employee in any manner or increase in any material manner the compensation, benefits, severance or termination pay of any consultant, director, officer or employee, or enter into, modify or amend any non-competition or similar agreement with any employee, (ii) pay any special bonus, remuneration or benefit to any director, officer or employee not required by any plan or arrangement as in effect as of the date hereof, (iii) promote any existing Section 16 officer or promote any employee to a Section 16 officer position, or terminate any Section 16 officer without cause; provided, however, that this paragraph (g) shall not prevent either Synacor or Qumu or any of their respective Subsidiaries (A) from entering into employment agreements, offer letters or retention agreements with respect to any newly hired employees in the ordinary course of business consistent with past practices to fill positions that are open as of the date of this Agreement or that become open subsequent to the date of this Agreement as a result of a current employee’s departure, (B) from executing routine amendments or renewals to health and welfare plans that would not result Tax election in a material increase in cost, or (C) from amending any Employee Plan to avoid the imposition of any excise tax under Section 4999 of the Code, provided that in the event of such an action, Synacor and Qumu shall reasonably consult and agree manner inconsistent with any such action or (iv) enter into, amend or terminate any Employee Benefit Plan;
(h) forgive any loans to any of their respective employees, officers or directors or any employees, officers or directors of any of their respective Subsidiaries or Affiliates;
(i) make any deposits or contributions of cash or other property or take any other action to fund or in any other way secure the payment of compensation or benefits under any of their Employee Benefit Plans or any Employee Benefit Plans of any of their respective Subsidiaries, other than deposits and contributions that are required pursuant to the terms of any such Employee Benefit Plans or any Contracts subject to any such Employee Benefit Plans in effect as of the date hereof or as required by applicable Legal Requirements;
(j) enter into, amend, or extend any collective bargaining agreement;
(k) acquire, sell, lease, license or dispose of any material property or assets in any single transaction or series of related transactions, except for (i) transactions pursuant to existing Contracts, (ii) transactions in the ordinary course of business consistent with past practice and (x) with respect to Qumu or its Subsidiaries, not in excess of $500,000 individually, or $1,000,000 in the aggregate and (y) with respect to Synacor or its Subsidiaries not in excess of $750,000 individually, or $1,500,000 in the aggregate, and (iii) transactions with customers for the sale or license of Qumu Products or Synacor Products in the ordinary course of business consistent with past prior practice;
(l) except as may be required to remain in compliance with GAAP, make any change in any of the accounting principles or practices used by either of them;
(m) make, change or revoke any material Tax election, ; fail to pay any income or material Tax as such Tax becomes due and payable; file any material amendment to any Tax Return, ; adopt or change any material Tax accounting method, method in respect of Taxes; change any annual Tax accounting period, ; enter into any Tax allocationallocation agreement, Tax sharing agreement or Tax indemnity agreement (agreement, other than commercial Contracts entered into in the ordinary course of business contracts the primary purpose of which does not relate to Taxes)Taxes entered into in the Ordinary Course of Business with vendors, customers or landlords; enter into any closing agreement with respect to any Tax; settle or compromise any claim, notice, audit report or assessment in respect of material Tax liability for an amount that exceeds the amount disclosed, reflected or reserved against in the financial statements contained in the Qumu SEC Reports or Synacor SEC Reports as the case may be, or consent to the extension or waiver of the limitations period applicable to a material Tax claim or assessment, surrender any right to claim a material Tax refund, or Taxes; apply for or enter into any ruling from any Tax authority with respect to Taxes; surrender any right to claim a material Tax refund; or consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(nx) settle or compromise any material action, suit, arbitration or proceeding pending or threatened against CGI or Merger Sub;
(ixi) enter into, amend or terminate any CGI Material Contract or enter into any Contract that would be a Qumu IP License new contract, agreement or a Qumu Material Contract described in clause (ii) or (iii) of Section 3.14(a) (togetherarrangement that, the “Qumu IP Contracts”), or a Synacor IP License or a Synacor Material Contract or described in clause (ii) or (iii) of Section 4.14(a) (together, the “Synacor IP Contracts”), as the case may be, or amend in any material respect any such Qumu IP Contract or Synacor IP Contract, as the case may be, or grant any release or relinquishment of any material rights under any such Qumu IP Contract or Synacor IP Contract, as the case may be, or (ii) except in the ordinary course of business consistent with past practices, enter if entered into any Contract that would be any other Qumu Material Contract or other Synacor Material Contract, as the case may be, or amend in any material respect any other Qumu Material Contract or Synacor Material Contract, as the case may be, or grant any release or relinquishment of any material rights under any other Qumu Material Contract or Synacor Material Contract, as the case may be;
(o) enter into any Qumu Material Real Property Lease or Synacor Material Real Property Lease, or modify, amend or exercise any right to renew any Qumu Material Real Property Lease of Synacor Material Real Property Lease;
(p) fail to maintain or allow to lapse, dispose of or abandon, including by failure to pay the required fees in any jurisdiction, any material Intellectual Property Rights used in or held for use in their respective businesses, or grant permission to enter into the public domain any material trade secrets included in the Qumu Intellectual Property or Synacor Intellectual Property, as applicable;
(q) grant any exclusive rights with respect to any of their respective material Intellectual Property Rights or the material Intellectual Property Rights of any of their respective Subsidiaries, or divest any of their respective material Intellectual Property Rights or the material Intellectual Property Rights of any of their respective Subsidiaries;
(r) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein;
(s) authorize, incur or commit to incur any new capital expenditure(s) that in the aggregate exceeds, in any given quarter, one hundred ten percent (110%) of the amount set forth in the respective capital expenditure budget of each party, as provided to the other party prior to the date of this Agreement, would have been a CGI Material Contract (and, for the avoidance of doubt, a confidentiality agreement between CGI and any Person in response to a bona fide written Acquisition Proposal entered into in accordance with Section 4.5(a) shall not be considered a CGI Material Contract for purposes of this Agreement); providedor
(xii) agree to take, howevertake or permit Merger Sub to take or agree to take, any of the actions specified in clauses (i) through (xi) of this Section 4.4(a).
(b) Except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth in Part 4.4(b) of the Company Disclosure Schedule, (iii) as reasonably necessary to ensure that the foregoing Company complies with applicable Legal Requirements and pre-existing contractual obligations or (iv) with the prior written consent of CGI (which consent shall not limit be unreasonably withheld, conditioned or delayed), at all times during the Pre-Closing Period, the Company shall not do any maintenance of the following:
(i) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock; or repurchase, redeem or otherwise reacquire any shares of capital stock or other securities (except for shares of Company Common Stock from terminated employees of the Company);
(ii) amend the charter, bylaws or other organizational documents of the Company, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction, except as related to the Contemplated Transactions;
(iii) except for contractual commitments in place at the time of this Agreement and disclosed in Part 2.9 and/or Part 2.13 of the Company Disclosure Schedule and other than as contemplated by the Contemplated Transactions, sell, issue, grant, authorize the issuance of, or make any commitments to sell, issue, grant or authorize the issuance of: (A) any capital stock or other security (except for (1) Company Options or shares of Company Common Stock issued to Company employees, directors or consultants or (2) shares of Company Common Stock issued upon the valid exercise of outstanding Company Options); (B) any option, warrant or right to acquire any capital stock or any other security (other than as permitted by clause (A) above); or (C) any instrument convertible into or exchangeable for any capital stock or other security (other than as permitted by clause (A) above);
(iv) form any Subsidiary or acquire any equity interest or other interest in any other Entity;
(v) lend money to any Person; incur or guarantee any indebtedness for borrowed money; issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities; guarantee any debt securities of others; or make capital expenditures or capital expenditures required pursuant to existing Contractscommitments in excess of $100,000 individually or $250,000 in the aggregate, other than in the Ordinary Course of Business;
(tvi) adopt, establish, enter into or terminate any Company Employee Plan or any agreement, plan, policy or arrangement that would constitute a Company Employee Plan if it were in existence on the date hereof; (B) cause or permit any Company Employee Plan to be amended other than as required by law or in order to make amendments for the purposes of compliance with Section 409A of the Code, subject to prior review and approval (with such approval not to be unreasonably withheld, conditioned or delayed) by CGI; (C) pay or establish any bonus or any profit-sharing or similar payment to, or, except in the Ordinary Course of Business, increase the amount of the wages, salary, commissions, benefits or other compensation or remuneration payable to, any of its directors, officers, employees, or other individual service providers; (D) increase or accelerate the vesting or payment of any compensation or benefit; (E) except in the Ordinary Course of Business, terminate (other than for “cause”), hire or promote any employee or other service provider; or (F) grant any severance, retention, termination or similar payments or benefits to any individual;
(vii) enter into any material transaction outside the Ordinary Course of Business;
(viii) acquire any material asset, sell, license, permit to lapse or abandon, lease or otherwise irrevocably dispose of any of its material assets or properties (including any Company Intellectual Property, or exclusively licensed Company Third Party Intellectual Property) or grant any Encumbrance with respect to such assets or properties, except in the Ordinary Course of Business;
(ix) settle or compromise any material action, suit, arbitration or proceeding pending or threatened Legal Proceeding against the Company;
(x) make any material Tax election in a manner inconsistent with its prior practice, change or payrevoke any material Tax election; fail to pay any income or material Tax as such Tax becomes due and payable; file any material amendment to any Tax Return; adopt or change any accounting method in respect of Taxes; change any annual Tax accounting period; enter into any Tax allocation agreement, discharge Tax sharing agreement or satisfy or agree to pay, discharge or satisfy any LiabilityTax indemnity agreement, other than commercial contracts the settlementprimary purpose of which does not relate to Taxes entered into in the Ordinary Course of Business with vendors, compromisecustomers or landlords; enter into any closing agreement with respect to any Tax; settle or compromise any claim, paymentnotice, discharge audit report or satisfaction assessment in respect of Legal Proceedings material Taxes; apply for or enter into any ruling from any Tax authority with respect to Taxes; surrender any right to claim a material Tax refund; or consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(xi) enter into, amend or terminate any Company Material Contract or enter into any new contract, agreement or arrangement that, if entered into prior to the date of this Agreement, would have been a Company Material Contract (and, for the avoidance of doubt, a confidentiality agreement between the Company and Liabilities any Person in response to a bona fide written Acquisition Proposal entered into in accordance with Section 4.5(a) shall not be considered a Company Material Contract for purposes of this Agreement); or
(xii) agree to take, take or permit any of the actions specified in clauses (i) reflected or reserved against in full in the balance sheet included in the Qumu Balance Sheet or the Synacor Balance Sheet, as the case may be, (ii) covered by existing insurance policies, (iii) settled since the respective dates thereof in the ordinary course of business consistent with past practice or (iv) settlements of any pending or threatened Legal Proceeding, other than arising out of the breach or alleged breach of this Agreement by a party and other than Transaction Litigation, that only involves the payment of cash in amounts that through (x) with respect to Qumu or its Subsidiaries do not exceed $100,000 in any individual case and (y) with respect to Synacor or its Subsidiaries do not exceed $500,000 in any individual case;
(u) except as required by GAAP, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
(v) convene any special meeting of their shareholders (or any postponemthis Section 4.4(b).
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