Operation of the Business of the Company and the Company Subsidiaries. (a) Except as expressly contemplated by this Agreement, as required by changes in applicable Law after the date of this Agreement, or with the prior written consent of Parent (which consent will not be unreasonably delayed, withheld or conditioned), between the date of this Agreement and the earlier of the Closing Date and the date of the termination of this Agreement in accordance with its terms (the “Pre-Closing Period”), the Company shall, and shall cause each Company Subsidiary to, (i) conduct its business in the ordinary course of business consistent with past practice, (ii) maintain its books of account and records in the ordinary course of business consistent with its past practice, and (iii) use commercially reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees, maintain its relations with vendors, customers, licensors and others having material business relationships with it, materially comply with all applicable Laws and obligations under Material Contracts, maintain and keep its material properties and assets in the present condition, ordinary wear and tear excepted, and maintain in full force and effect all insurance policies in effect on the date hereof; provided, that notwithstanding anything herein to the contrary, the Company and any Company Subsidiary shall not be obligated pursuant to this Section 5.01(a) to pay any amounts or grant any concessions to any person to maintain such relationships other than payments pursuant to Contracts and in the ordinary course of business consistent with past practice. (b) In addition, and without limiting the generality of the foregoing, except for matters set forth in Section 5.01(b) of the Company Disclosure Letter or as expressly permitted or required by this Agreement, during the Pre-Closing Period, the Company shall not, and shall not permit any Company Subsidiary to, without the prior written consent of Parent (which consent will not be unreasonably delayed, withheld or conditioned), take any of the following actions: (i) (A) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other Equity Interests in respect of, in lieu of or in substitution for shares of its capital stock, other than the issuance of Company Common Stock upon the exercise of Options, in each case, outstanding on the date of this Agreement and in accordance with their present terms, (B) purchase, redeem or otherwise acquire any shares of capital stock or Equity Interests of the Company or any Company Subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities; provided, that, the foregoing covenant shall not apply to any repurchases by the Company of shares of Company Capital Stock from former employees, nonemployee directors and consultants in accordance with any Contracts, the Option Plans, the Company Charter or the Company Bylaws providing for the repurchase of Company Capital Stock in connection with any termination of service, or (C) except for cash dividends paid in full prior to the Closing Date (and taken into account in the calculation of Estimated Cash), make, declare, set aside, authorize or pay any dividend or make any other distribution in respect of its Equity Interests; (ii) issue, deliver, sell, transfer, dispose of, pledge, assign or grant, or authorize to issue, deliver, sell, transfer, dispose of, pledge, assign or grant, permit to be subject to any Lien, or become a party to or enter into, or authorize to issue, sell, become a party to or enter into, any Contract, options, warrants, rights, subscriptions, securities convertible into or exchangeable for, or commitments of any character with respect to the issuance or sale of (A) any shares of its capital stock or any other Equity Interests, other than the issuance of Company Common Stock upon the exercise of Options, in each case, outstanding on the date of this Agreement and in accordance with their present terms, subject to the acceleration of such Options as contemplated by or otherwise permitted pursuant to this Agreement, (B) any Voting Company Debt or other voting securities, (C) any securities convertible into or exchangeable for, or any options, warrants or rights to acquire, any such shares or any other Equity Interests, Voting Company Debt, voting securities or convertible or exchangeable securities or (D) stock appreciation rights or stock-based performance units or similar rights; (iii) amend its certificate of incorporation, bylaws or other comparable charter or organizational documents; (iv) acquire or agree to acquire, in a single transaction or a series of related transactions, (A) by merging or consolidating with, or by purchasing an Equity Interest in, or substantial portion of the assets of, or by any other manner, any business or any corporation, limited liability company, partnership, joint venture, association or other business organization or division thereof or (B) except purchases in the ordinary course of business consistent with past practice, any material assets; (v) except as required pursuant to the terms of any Benefit Plan in effect on the date of this Agreement, (1) grant to or announce any increase in compensation (including salaries and bonuses) of any director, officer, employee or consultant of the Company or any Company Subsidiary, other than bonuses with respect to any employee of the Company (other than members of senior management) in the ordinary course of business consistent with past practice, which shall not exceed 3% of such individual’s base compensation and 5% of the aggregate base compensation of employees (other than members of senior management), (2) grant to any director, officer, employee or consultant of the Company or any Company Subsidiary any increase in severance or termination pay or notice, (3) enter into or amend any employment, severance or termination agreement with any director, officer, employee or consultant of the Company or any Company Subsidiary, (4) terminate, establish, adopt, enter into or amend any Benefit Plan, (5) hire, promote, terminate (other than for cause), demote or otherwise change the employment status of any employee, other than in the ordinary course of business consistent with past practice with respect to an employee whose annual base salary is less than $100,000 or (6) take any action to accelerate the vesting or payment of or fund or in any secure any compensation (including salaries and bonuses), rights or benefits under any Benefit Plan; (vi) make any change in accounting methods, principles or practices affecting the reported consolidated assets, liabilities or results of operations of the Company, except (A) insofar as may have been required by a change in GAAP or (B) for practices that are immaterial in amount or impact; (A) except in the ordinary course of business consistent with past practice, accelerate or delay collection of accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business consistent with past practice; (B) except in the ordinary course of business consistent with past practice, delay or accelerate payment of any account payable in advance of its due date or the date such liability would have been paid in the ordinary course of business consistent with past practice; (C) make any changes to cash management policies, except (x) insofar as may have been required by a change in GAAP or (y) for policies that are immaterial in amount or impact; or (D) make any change to an expected expense (other than the capitalized portion of labor), other than in accordance with the Company’s 2019 budget, except for such deviations from the Company’s 2019 budget that are not, individually or in the aggregate, material; (viii) sell, transfer, lease (as lessor), sublease, license or otherwise dispose of or subject to any Lien (other than Permitted Liens), in a single transaction or a series of related transactions, any material properties or assets of the Company and the Company Subsidiaries, except sales of inventory in the ordinary course of business consistent with past practice; (ix) except as required pursuant to any Contract that has been made available to Parent or entered into after the date hereof in accordance with this Agreement, sell, assign, transfer, convey, modify, grant rights to, license, dispose of, terminate, cancel or abandon or fail to renew any interest in any material Company Owned IP (other than non-exclusive licenses granted in the ordinary course of business); (x) (A) incur, create, assume or become obligated with respect to any Indebtedness or guarantee any Indebtedness of another person, including by issuing or selling any debt securities or warrants or other rights to acquire any debt securities of the Company or any Company Subsidiary, guaranteeing any debt securities of another person, entering into any agreement to maintain any financial statement condition of another person or entering into any arrangement having the economic effect of any of the foregoing, except for borrowings under the Company’s existing credit facility incurred in the ordinary course of business consistent with past practice, (B) make any loans, advances or capital contributions to, or investments in, any other person, other than (x) to or in the Company or any Company Subsidiary or (y) extensions of credit to customers and other persons doing business with the Company and the Company Subsidiaries (but excluding employees of the Company and the Company Subsidiaries), in each case, in the ordinary course of business consistent with past practice or (C) incur, create or assume, or permit the incurrence, creation or assumption of, any Lien on the assets, Equity Interests or properties of the Company or any of the Company Subsidiaries, except for Permitted Liens; (xi) (A) make, change, revoke or rescind any material Tax election with respect to the Company or any Company Subsidiary, (B) except as required by Law, materially change an annual Tax accounting period with respect to the Company or any Company Subsidiary, (C) adopt or change any material Tax accounting method with respect to the Company or any Company Subsidiary, (D) settle or compromise any material Tax claim, assessment, notice or audit or surrender or compromise any right to claim a material refund of Taxes, (E) file or cause to be filed any material amended Tax Return with respect to the Company or any Company Subsidiary, (F) enter into any ruling request, closing agreement, Tax allocation, indemnity, sharing or similar contract with respect to Taxes with respect to the Company or any Company Subsidiary, (other than pursuant to customary provisions in commercial agreements entered into in the ordinary course of business the primary purpose of which is not related to Taxes) or (G) extend or waive or consent to the extension or waiver of the statute of limitations for any Tax claim or assessment with respect to the Company or any Company Subsidiary (other than any such extension that arises solely as a result of an extension of time to file a Tax Return obtained in the ordinary course of business of not more than six (6) months from the date such Tax Return is otherwise required to be filed in accordance with applicable Law), or (H) take any action, or knowingly fail to take any action, which action or failure to act could reasonably be expected to prevent or impede the Intended Tax Treatment. (xii) loan or advance any amount to, or sell, transfer or lease any of its assets to, or enter into any agreement or arrangement with, any holder of Company Capital Stock or any of its affiliates (other than the Company and the Company Subsidiaries), except for (A) dividends and distributions permitted under clause (i) above, (B) payments pursuant to existing Contracts, (C) Benefit Plans the entry into which is not prohibited by Section 5.01(b)(v) or (D) the issuance of Company Common Stock upon the exercise of Options, in each case, outstanding on the date of this Agreement and in accordance with their present terms; (xiii) commence, initiate, settle, satisfy, waive, release, compromise or forgive any litigation, action or Proceeding which involves or would reasonably be expected to involve (A) a value in excess of $50,000 per claim individually or $50,000 in the aggregate, (B) any admission of wrongdoing by the Company or any Company Subsidiary or (C) recourse against, or obligation of, the Company or any Company Subsidiary other than the payment of monetary damages; (xiv) (A) enter into enter into any Contract that would be included in Section 3.14(a)(v) or Section 3.14(a)(xv) of the definition of Material Contract if it had been entered into as of the date of this Agreement, (B) other than in the ordinary course of business consistent with past practice, enter into any Contract that would be included in the definition of Material Contract (other than Section 3.14(a)(v) and Section 3.14(a)(xv)) if it had been entered into as of the date of this Agreement, or (C) terminate or amend or modify in any material respect or waive any material right under any Material Contract (or Contract described in clause (B)), except as the result of the expiration of the term of such Contract; (xv) make any change to its policies or practices regarding the extension of customer credit, collection of accounts receivable or payment of accounts payable; except (A) insofar as may have been required by a change in GAAP or (B) for practices that are immaterial in amount or impact; (xvi) fail to renew any material Governmental Authorization that expires prior to the Closing Date; (xvii) effectuate any “plant closing” or a “mass layoff” (as defined in WARN or similar state law) affecting any single site of employment or one or more facilities or operating units within any single site of employment of the Company or any of the Company Subsidiaries; (xviii) fail to exercise any rights of renewal with respect to any material Company Real Property Lease that by its terms would otherwise expire or be incapable of renewal prior to the Closing Date; (xix) make or commit to any individual capital expenditure, capital addition or capital improvement in excess of $25,000 individually or $100,000 in the aggregate, in each case, except for such capital expenditures, capital additions or capital improvements with respect to the capitalized portion of labor; or (xx) authorize any of, or commit or agree to take any of, the foregoing actions. (c) Nothing contained herein shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company or any Company Subsidiary during the Pre-Closing Period, and the failure by the Company or any Company Subsidiary to take any action specifically prohibited by Section 5.01(b) shall not be a breach of Section 5.01(a) or any other provisions of this Agreement. During the Pre-Closing Period, the Company and Company Subsidiary shall be entitled to exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of their respective operations. Notwithstanding anything to the contrary contained herein, no consent of Parent shall be required with respect to any matter set forth in this Section 5.01 or elsewhere in the Agreement to the extent the requirement of such consent would violate applicable Law. (d) In the event that the Company is required to obtain the prior written consent of Parent (such consent not to be unreasonably withheld, delayed or conditioned) for any action pursuant to this Section 5.01 during the Pre-Closing Period, the Company shall promptly (and in any event no later than at least three (3) Business Days prior to the date on which the Company seeks to take the action for which Parent’s consent is sought) provide Parent with a written description of such action in such reasonable detail to permit Parent to make a reasonably informed decision with respect thereto in accordance with Section 10.01, and Parent shall respond as soon as reasonably practicable (and in any event no later than three (3) Business Days from its receipt of the Company’s written request), email
Appears in 1 contract
Sources: Merger Agreement (2U, Inc.)
Operation of the Business of the Company and the Company Subsidiaries. (a) Except as expressly contemplated by this Agreement, as required by changes in applicable Law after the date of this Agreement, Agreement or with the prior written consent of Parent (which consent will shall not be unreasonably delayedwithheld, withheld delayed or conditioned), between the date of this Agreement and the earlier of the Closing Date and the date of the termination of this Agreement in accordance with its terms (the “Pre-Closing Period”)Date, the Company shall, and shall cause each Company Subsidiary to, (i) conduct its business in the ordinary course of business consistent with past practice, (ii) maintain its books of account and records in substantially the ordinary course of business consistent with its past practicesame manner previously conducted, and (iii) shall use commercially reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees, and maintain its relations with vendorssuppliers, customers, licensors and others having material business relationships with it, materially comply with all applicable Laws and obligations under Material Contracts, maintain and keep its material properties and assets in the present condition, ordinary wear and tear excepted, and maintain in full force and effect all insurance policies in effect on the date hereof; provided, that notwithstanding anything herein to the contrary, the Company and any Company Subsidiary shall not be obligated pursuant to this Section 5.01(a) to pay any amounts or grant any concessions to any person to maintain such relationships other than payments pursuant to Contracts and in the ordinary course of business consistent with past practice.
(b) . In addition, and without limiting the generality of the foregoing, except for matters set forth in Section 5.01(b5.01(a) of the Company Disclosure Letter or as expressly permitted or required otherwise contemplated by this Agreement, during between the Pre-date of this Agreement and the Closing PeriodDate, the Company shall not, and shall not permit any Company Subsidiary to, without the prior written consent of Parent (which consent will shall not be unreasonably delayedwithheld, withheld delayed or conditioned), ) take any of the following actions:
(i) in the case of the Company, (A) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock, except for cash dividends or any dividends or distributions described on Section 5.01(a)(i) of the Company Disclosure Letter, (B) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other Equity Interests securities in respect of, in lieu of or in substitution for shares of its capital stock, other than the issuance of Company Common Stock upon the exercise of Options, in each case, outstanding on the date of this Agreement and in accordance with their present terms, stock or (BC) purchase, redeem or otherwise acquire any shares of capital stock or Equity Interests of the Company or any Company Subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities; provided, that, the foregoing covenant shall not apply to any repurchases by the Company of shares of Company Capital Stock from former employees, nonemployee directors and consultants in accordance with any Contracts, the Option Plans, the Company Charter or the Company Bylaws providing for the repurchase of Company Capital Stock in connection with any termination of service, or (C) except for cash dividends paid in full prior other than pursuant to the Closing Date (and taken into account in the calculation of Estimated Cash), make, declare, set aside, authorize or pay any dividend or make any other distribution in respect of its Equity InterestsShareholders Agreement;
(ii) issue, deliver, sell, transfer, dispose of, pledge, assign or grant, pledge or authorize to issue, deliver, sell, transfer, dispose of, pledge, assign or grant, permit to be subject to any Lien, or become a party to or enter into, or authorize to issue, sell, become a party to or enter into, any Contract, options, warrants, rights, subscriptions, securities convertible into or exchangeable for, or commitments of any character with respect to the issuance or sale of encumber (A) any shares of its capital stock or any other Equity Interests, other than the issuance of Company Common Stock upon the exercise of Options, in each case, outstanding on the date of this Agreement and in accordance with their present terms, subject to the acceleration of such Options as contemplated by or otherwise permitted pursuant to this Agreementstock, (B) any Voting Company Debt or other voting securities, (C) any securities convertible into or exchangeable for, or any options, warrants or rights to acquire, any such shares or any other Equity Interestsshares, Voting Company Debt, voting securities or convertible or exchangeable securities or (D) any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units units, other than, as applicable, grants of PHASARs and PSU Awards, in each case in the ordinary course of business consistent with past practice (I) to any officer or similar rightsemployee of the Company or any Company Subsidiary in the context of promotions based on job performance or workplace requirements, (II) in connection with new hires and (III) to respond to offers of employment made to existing employees by third parties;
(iii) amend its certificate of incorporation, bylaws or other comparable charter or organizational documents;
(iv) acquire or agree to acquire, in a single transaction or a series of related transactions, acquire (A) by merging or consolidating with, or by purchasing an Equity Interest a substantial equity interest in, or substantial portion of the assets of, or by any other manner, any business or any corporation, limited liability company, partnership, joint venture, association or other business organization or division thereof or (B) any assets that are material, individually or in the aggregate, to the Company and the Company Subsidiaries, taken as a whole, except purchases in the ordinary course of business consistent with past practice, any material assets;
(v) except (A) in the ordinary course of business, (B) as required pursuant to the terms of any Benefit Plan Plan, Benefit Agreement or other written agreement, in each case, as in effect on the date of this Agreement, (C) as required to comply with applicable Law or GAAP, (D) as required to comply with the terms of any CBA or (E) as permitted by this Agreement, (1) grant to any director or announce officer of the Company any increase in compensation (including salaries and bonuses) of any director, officer, employee or consultant of the Company or any Company Subsidiary, other than bonuses with respect to any employee of the Company (other than members of senior management) in the ordinary course of business consistent with past practice, which shall not exceed 3% of such individual’s base compensation and 5% of the aggregate base compensation of employees (other than members of senior management)compensation, (2) grant to any director, officer, employee or consultant of the Company or any Company Subsidiary Personnel any increase in severance or termination pay or noticepay, (3) enter into or amend any employment, severance or termination agreement with any director, officer, employee or consultant of the Company or any Company Subsidiary, (4) terminate, establish, adopt, enter into or amend any material Benefit Plan, material Benefit Agreement or CBA, (5) hire, promote, terminate (other than for cause), demote or otherwise change the employment status of any employee, other than in the ordinary course of business consistent with past practice with respect to an employee whose annual base salary is less than $100,000 or (64) take any action to accelerate any rights or benefits, or make any material determinations, under any material Benefit Plan, material Benefit Agreement or material CBA or (5) alter or amend any bonus plan or sales commission structure; provided, however, that the vesting foregoing clauses (1), (2), (3), (4) and (5) shall not restrict the Company or payment any Company Subsidiary from entering into or making available to newly hired employees or to employees in the context of promotions based on job performance or fund or workplace requirements (in any secure any each case in the ordinary course of business), plans, agreements, benefits and compensation arrangements (including salaries incentive grants) that have a value that is materially consistent with the past practice of making compensation and bonuses), rights benefits available to newly hired or benefits under any Benefit Planpromoted employees in similar positions;
(vi) make any change in accounting methods, principles or practices affecting the reported consolidated assets, liabilities or results of operations of the Companypractices, except (A) insofar as may have been required by a change in GAAP or (B) for practices that are immaterial in amount or impactGAAP;
(A) except in the ordinary course of business consistent with past practice, accelerate or delay collection of accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business consistent with past practice; (B) except in the ordinary course of business consistent with past practice, delay or accelerate payment of any account payable in advance of its due date or the date such liability would have been paid in the ordinary course of business consistent with past practice; (C) make any changes to cash management policies, except (x) insofar as may have been required by a change in GAAP or (y) for policies that are immaterial in amount or impact; or (D) make any change to an expected expense (other than the capitalized portion of labor), other than in accordance with the Company’s 2019 budget, except for such deviations from the Company’s 2019 budget that are not, individually or in the aggregate, material;
(viiivii) sell, transfer, lease (as lessor), sublease, license or otherwise dispose of or subject to any Lien (other than Permitted Liens), in a single transaction or a series of related transactions, ) any material properties or assets of that are material, individually or in the aggregate, to the Company and the Company Subsidiaries, taken as a whole, except sales of inventory excess or obsolete assets in the ordinary course of business consistent with past practicepractice and any sales or other dispositions described in Section 5.01(a)(vii) of the Company Disclosure Letter;
(ix) except as required pursuant to any Contract that has been made available to Parent or entered into after the date hereof in accordance with this Agreement, sell, assign, transfer, convey, modify, grant rights to, license, dispose of, terminate, cancel or abandon or fail to renew any interest in any material Company Owned IP (other than non-exclusive licenses granted in the ordinary course of business);
(xviii) (A) incur, create, assume or become obligated with respect to incur any Indebtedness indebtedness for borrowed money or guarantee any Indebtedness such indebtedness of another person, including by issuing issue or selling sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any Company Subsidiary, guaranteeing guarantee any debt securities of another person, entering enter into any “keep well” or other agreement to maintain any financial statement condition of another person or entering enter into any arrangement having the economic effect of any of the foregoing, except for short-term borrowings under the Company’s existing credit facility incurred in the ordinary course of business consistent with past practicepractice and any other indebtedness for borrowed money or any guarantee thereof set forth on Section 5.01(a)(viii) of the Company Disclosure Letter, or (B) make any loans, advances or capital contributions to, or investments in, any other person, other than (x) to or in the Company or any Company Subsidiary or (y) Subsidiary, except for extensions of credit to customers and other persons doing business with the Company and the Company Subsidiaries (but excluding employees of the Company and the Company Subsidiaries), in each case, in the ordinary course of business consistent with past practice or (C) incur, create or assume, or permit the incurrence, creation or assumption of, any Lien on the assets, Equity Interests or properties of the Company or any of the Company Subsidiaries, except for Permitted Lienspractice;
(xi) (A) make, change, revoke or rescind any material Tax election with respect to the Company or any Company Subsidiary, (Bix) except as required by Law, materially make, change an annual Tax accounting period with respect to the Company or any Company Subsidiary, (C) adopt or change revoke any material Tax accounting method with respect to the Company or any Company Subsidiary, (D) election; settle or compromise any material Tax claim, assessment, notice liability or audit or surrender or compromise any right to claim refund (including entering into a material refund of Taxes, (E) file or cause to be filed any material amended Tax Return with respect to the Company or any Company Subsidiary, (F) enter into any ruling request, “closing agreement, Tax allocation, indemnity, sharing or similar contract with respect to Taxes with respect to the Company or any Company Subsidiary, (other than pursuant to customary provisions in commercial agreements entered into in the ordinary course of business the primary purpose of which is not related to Taxes) or (G) extend or waive or consent to the extension or waiver ” under Section 7121 of the statute Code); change any method of limitations for any Tax claim or assessment with respect to accounting of the Company or any Company Subsidiary (other than for income Tax purposes; change an accounting period of the Company or any such extension that arises solely as a result of an extension of time Company Subsidiary with respect to file a Tax Return obtained any Tax; or, except in the ordinary course of business of not more than six (6) months from the date such business, file an amended Tax Return is otherwise required or extend the applicable statute of limitations with respect to be filed in accordance with applicable Law), or (H) take any action, or knowingly fail to take any action, which action or failure to act could reasonably be expected to prevent or impede the Intended Tax Treatment.Taxes;
(xiix) loan or advance any amount to, or sell, transfer or lease any of its assets to, or enter into any agreement or arrangement with, any holder of Company Capital Common Stock or any of its affiliates (other than the Company and the Company Subsidiaries)) or any Company Affiliate or any current officer or director of the Company or a Company Subsidiary, except for (A) dividends and distributions permitted under clause (i) above, (B) payments pursuant to existing Contracts, contracts and (C) Benefit Plans or Benefit Agreements the entry into which is not prohibited by Section 5.01(b)(v) or (D) the issuance of Company Common Stock upon the exercise of Options, in each case, outstanding on the date of this Agreement and in accordance with their present terms5.01(a)(v);
(xiiixi) commence, initiate, settle, satisfy, waive, release, compromise or forgive any litigation, action or Proceeding which involves or would reasonably be expected to involve (A) a value in excess limit the right of $50,000 per claim individually or $50,000 in the aggregate, (B) any admission of wrongdoing by the Company or any Company Subsidiary to engage in any line of business or business in any territory, to develop, market or distribute products or services, or to compete with any person or (CB) recourse against, or obligation of, the Company or grant any Company Subsidiary other than the payment of monetary damagesexclusive distribution rights to any person;
(xivxii) settle or compromise any material litigation (A) enter into enter into for any Contract material amount (in excess of any insurance coverage related thereto) that would be included results in a liability not reflected in Net Working Capital for the purposes of any adjustment to the Per Share Merger Consideration pursuant to Section 3.14(a)(v2.02 or (B) or Section 3.14(a)(xv) that results in a material restriction on the future conduct of the definition of Material Contract if it had been entered into as business of the date of this Agreement, Company and the Company Subsidiaries;
(Bxiii) other than in the ordinary course of business consistent with past practice, enter into any Contract that would be included in the definition of a Material Contract (other than Section 3.14(a)(v) and Section 3.14(a)(xv)) if it had been entered into as of prior to the date of this Agreement, or (C) terminate hereof or amend or otherwise modify in any material respect or waive any material right under any Material Contract (terminate or Contract described in clause (B)), except as the result of the expiration of the term of such Contract;
(xv) make any change to its policies or practices regarding the extension of customer credit, collection of accounts receivable or payment of accounts payable; except (A) insofar as may have been required by a change in GAAP or (B) for practices that are immaterial in amount or impact;
(xvi) fail to renew any material Governmental Authorization that expires prior to the Closing Date;
(xvii) effectuate any “plant closing” or a “mass layoff” (as defined in WARN or similar state law) affecting any single site of employment or one or more facilities or operating units within any single site of employment of the Company or any of the Company Subsidiaries;
(xviii) fail to exercise any rights of renewal with respect to any material Company Real Property Lease that by its terms would otherwise expire or be incapable of renewal prior to the Closing Date;
(xix) make or commit to any individual capital expenditure, capital addition or capital improvement in excess of $25,000 individually or $100,000 in the aggregate, in each case, except for such capital expenditures, capital additions or capital improvements with respect to the capitalized portion of laborMaterial Contract; or
(xxxiv) authorize any of, or commit or agree to take any of, the foregoing actions.
(c) Nothing contained herein shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company or any Company Subsidiary during the Pre-Closing Period, and the failure by the Company or any Company Subsidiary to take any action specifically prohibited by Section 5.01(b) shall not be a breach of Section 5.01(a) or any other provisions of this Agreement. During the Pre-Closing Period, the Company and Company Subsidiary shall be entitled to exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of their respective operations. Notwithstanding anything to the contrary contained herein, no consent of Parent shall be required with respect to any matter set forth in this Section 5.01 or elsewhere in the Agreement to the extent the requirement of such consent would violate applicable Law.
(d) In the event that the Company is required to obtain the prior written consent of Parent (such consent not to be unreasonably withheld, delayed or conditioned) for any action pursuant to this Section 5.01 during the Pre-Closing Period, the Company shall promptly (and in any event no later than at least three (3) Business Days prior to the date on which the Company seeks to take the action for which Parent’s consent is sought) provide Parent with a written description of such action in such reasonable detail to permit Parent to make a reasonably informed decision with respect thereto in accordance with Section 10.01, and Parent shall respond as soon as reasonably practicable (and in any event no later than three (3) Business Days from its receipt of the Company’s written request), email
Appears in 1 contract