Conduct of Business by the Company Pending the Merger (a) The Company agrees that, between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with its terms (the “Pre-Closing Period”), except (i) as required by applicable Law, (ii) with the prior written consent of Parent (such consent not to be unreasonably withheld, conditioned or delayed, and such consent shall be deemed given if Parent provides no written response within five (5) Business Days after a written request by the Company for such consent), (iii) as expressly contemplated by any other provision of this Agreement or (iv) as set forth in Section 5.01(a) of the Company Disclosure Schedule, the Company shall, and shall cause the Company Subsidiaries to, use reasonable best efforts (A) to conduct the businesses of the Company Group in the ordinary course of business consistent with past practice and (B) to: (1) preserve substantially intact the business organization, material assets and material properties of the Company Group, (2) keep available the services of its Key Employees on commercially reasonable terms, (3) maintain in effect all Company Permits and (4) maintain in full force and effect its insurance policies (including, for the avoidance of doubt, paying all premiums thereon and renewing or replacing such insurance policies on or prior to their expiration). (b) Without limiting Section 5.01(a), and as an extension thereof, except as expressly contemplated by any other provision of this Agreement, as set forth in Section 5.01(b) of the Company Disclosure Schedule or as required by applicable Law, neither the Company nor any Company Subsidiary shall, during the Pre-Closing Period, do any of the following without the prior written consent of Parent (such consent not to be unreasonably withheld, conditioned or delayed, and such consent shall be deemed given if Parent provides no written response within five (5) Business Days after a written request by the Company for such consent): (i) amend or otherwise change its certificate of incorporation, bylaws or other similar organizational documents (including the Company Charter and the Company Bylaws), whether by merger, consolidation or otherwise; (ii) issue, grant, sell, dispose of, encumber or authorize such issuance, sale, disposition or encumbrance of, any Equity Interests of the Company or any Company Subsidiary (except for the issuance or withholding of Shares issuable pursuant to Company RSUs that are outstanding on the date of this Agreement (in accordance with their existing terms)); (iii) declare, set aside, make or pay any dividend or other distribution, payable in cash, shares, property or otherwise, with respect to any of Equity Interests of the Company or any Company Subsidiary, except for dividends or other distributions by any direct or indirect wholly owned Company Subsidiary to the Company or any other direct or indirect wholly owned Company Subsidiary; (iv) adjust, reclassify, combine, split (including any reverse stock split), recapitalize, exchange, subdivide or redeem, repurchase, or purchase or otherwise acquire, directly or indirectly, any Equity Interests of the Company or any Company Subsidiary; (v) sell, transfer, lease, sublease, license, mortgage, pledge, encumber, allow to lapse, assign, abandon, disclaim, dedicate to the public, incur any Lien on (other than a Permitted Lien) or otherwise dispose of, or authorize any of the foregoing with respect to, any of its properties, assets, licenses, operations, rights, businesses or interests therein (but not including Intellectual Property, which is the subject of Section 5.01(b)(xv)) except (A) pursuant to Contracts in force on the date of this Agreement and made available to Parent, (B) such dispositions of assets no longer used in the ordinary course of business of the Company’s or the applicable Company Subsidiary’s business as conducted as of the date of this Agreement, (C) such dispositions among the Company and the wholly-owned Company Subsidiaries, or (D) Company Products to customers in the ordinary course of business consistent with past practice; (vi) acquire (including by amalgamation, merger, consolidation or acquisition of Equity Interests or assets or any other business combination), directly or indirectly, (A) any assets, securities, or interests, other than in the ordinary course of business consistent with past practice or pursuant to Contracts in effect on the date hereof and made available to Parent, (B) any company, corporation, partnership or other business organization (or any division thereof or any Equity Interest thereof), or (C) any real property; (vii) (A) repurchase, prepay or incur any indebtedness for borrowed money or issue any debt securities, or issue or sell options, warrants, calls or other rights to acquire any of its debt securities, (B) make any loans, advances or capital contributions to, or investments in, any other person (other than a Company Subsidiary) or (C) assume, guarantee, endorse or otherwise become liable or responsible for the indebtedness or other obligations of another person (other than a guaranty by the Company on behalf of any Company Subsidiary), in each case, except pursuant to borrowings under existing lines of credit, letters of credit or similar arrangements as of the date hereof and Contracts for which are made available to Parent; (viii) enter into, materially amend, waive any rights under, or voluntarily terminate any Material Contract (or any other Contract that would be deemed a Material Contract if it had been entered into prior to the date of this Agreement), other than (A) with respect to Contracts that are Material Contracts solely as a result of clauses (i), (ii) and (iii) of Section 3.16(a), in the ordinary course of business consistent with past practice or (B) terminations as a result of a material breach or default of the counterparty, or the expiration of such Contract in accordance with its terms as in effect on the date of this Agreement; (ix) authorize, or make any commitment with respect to, capital expenditures that exceed $500,000 individually or $1,500,000 in the aggregate; (x) except to the extent required by applicable Law, or as otherwise required pursuant to the terms of any Plan in effect as of the date hereof or entered into, amended or modified after the date of this Agreement in a manner not in contravention with this Section 5.01(b)(x), (A) increase the compensation payable or to become payable or the benefits provided to any Employee or Non-Employee Service Provider (except for increases in the ordinary course of business consistent with past practice to Employees who are not Key Employees of not more than ten percent (10%) on an individual basis, and not more than ten percent (10%) in the aggregate, in annual base salary or wages in connection with promotions), (B) establish, adopt, enter into, terminate or amend any Plan, or establish, adopt or enter into any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the date of this Agreement, (C) grant any retention, severance, termination pay, deferred compensation, change in control, transaction bonus or other incentive compensation (or enter into or amend any plan, agreement, program, policy or other arrangement providing for the foregoing), (D) grant any equity or equity-based awards to, or discretionarily accelerate the vesting or payment of any equity or equity-based awards held by, any Employee or Non-Employee Service Provider, (E) establish, adopt, enter into or amend any collective bargaining agreement or similar labor agreement, (F) hire any employees who, upon hire, would be a Key Employee, (G) terminate the employment of any Key Employee other than for cause; or (H) take any action that is reasonably likely to result in a reduction in force or terminations employment that would give rise to notice or payment in lieu of notice obligations under the WARN Act; (xi) (A) settle (or propose to settle) any Action, other than (1) settlements for monetary damages (net of insurance proceeds) involving not more than $250,000 in the aggregate and that do not (x) require any material actions or impose any restrictions or future payment obligations on the business or operations of the Company Group, or after the Effective Time, Parent or its Subsidiaries or (y) include the admission of wrongdoing by any member of the Company Group and (2) stockholder litigation, which is the subject of, and settled in accordance with, Section 6.10 or (B) settle or propose to settle any investigation or inquiry by any Governmental Authority, including by entering into any consent decree or other similar agreement; (xii) (A) change the Company’s financial accounting policies or procedures in effect as of December 31, 2023, other than as required by applicable Law or GAAP or (B) write up, write down or write off the book value of any of the Company’s assets, other than (1) in the ordinary course of business consistent with past practice or (2) as may be required by applicable Law or GAAP, as approved by the Company’s independent public accountants; (xiii) adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any of the Company Subsidiaries; (xiv) (A) materially change or adopt (or file a request to change or adopt) any method of Tax accounting or any annual Tax accounting period, (B) make, change or rescind any material Tax election, (C) file any material Tax Return relating to the Company or any of the Company Subsidiaries that has been prepared in a manner that is inconsistent with past practice, as applicable, (D) settle or compromise any material claim, investigation, audit or controversy relating to Taxes, (E) surrender any right to claim a material Tax refund, (F) file any material amended Tax Return, (G) enter into any closing agreement with respect to any material amount of Tax or (H) waive or extend the statute of limitations with respect to any Tax Return other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business consistent with past practice; (xv) abandon, disclaim, dedicate to the public, allow to lapse, sell, assign, transfer, license, sublicense, dispose of, or incur any Lien (other than Permitted Liens) on, or otherwise fail to take any action necessary to maintain, enforce, or protect, any material Owned Intellectual Property, other than non-exclusive licenses granted in the ordinary course of business consistent with past practice; (xvi) enter into, amend, waive or terminate (other than expirations or terminations in accordance with their terms) any Affiliate Transaction; (xvii) enter into any new line of business outside the existing businesses of the Company and its Subsidiaries as of the date of this Agreement; or (xviii) agree, resolve, announce an intention, enter into any formal or informal Contract or otherwise make a commitment, to do any of the foregoing.
ACKNOWLEDGMENTS BY THE EXECUTIVE Executive acknowledges that (a) during the Employment Period and as a part of his employment, Executive will be afforded access to Confidential Information; (b) public disclosure of such Confidential Information could have an adverse effect on Employer and its business; (c) the Employer has required that Executive make the covenants in this Section 7; and (d) the provisions of this Section 7 are reasonable and necessary to prevent the improper use or disclosure of Confidential Information.
Acknowledgments by the Employee The Employee acknowledges that (a) during the Employment Period and as a part of his employment, the Employee will be afforded access to Confidential Information; (b) public disclosure of such Confidential Information could have an adverse effect on the Employer and its business; (c) since the Employee possesses substantial expertise and skill with respect to the Employer's business, the Employer desires to obtain exclusive ownership of each Employee Invention, and the Employer will be at a substantial competitive disadvantage if it fails to acquire exclusive ownership of each Employee Invention; (d) the Compensation provided to Employee hereunder constitutes good and sufficient consideration for the Employee's agreements and covenants in this Section 7; and (e) the provisions of this Section 7 are reasonable and necessary to prevent the improper use or disclosure of Confidential Information and to provide the Employer with exclusive ownership of all Employee Inventions.
Termination by the Executive The Executive may terminate employment hereunder at any time for any reason, including but not limited to, Good Reason. For purposes of this Agreement, “Good Reason” shall mean that the Executive has completed all steps of the Good Reason Process (hereinafter defined) following the occurrence of any of the following events without the Executive’s consent (each, a “Good Reason Condition”):
Termination Upon or Following a Change of Control (a) A Change of Control of the Association ("Change of Control") shall be deemed to have occurred upon the happening of any of the following events: (i) the consummation of a transaction that results in the reorganization, merger or consolidation of the Association with one or more other persons, other than a transaction following which: (A) at least 51% of the equity ownership interests of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the outstanding equity ownership interests in the Association; and (B) at least 51% of the securities entitled to vote generally in the election of directors of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51 % of the securities entitled to vote generally in the election of directors of the Association; (ii) the acquisition of all or substantially all of the assets of the Association or beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the outstanding securities of the Association entitled to vote generally in the election of directors by any person or by any persons acting in concert; (iii) a complete liquidation or dissolution of the Association, or approval by the stockholders of the Association of a plan for such liquidation or dissolution; (iv) the occurrence of any event if, immediately following such event, at least 50% of the members of the Board do not belong to any of the following groups: (A) individuals who were members of the Board on the Initial Effective Date; or (B) individuals who first became members of the Board after the Initial Effective Date either: (I) upon election to serve as a member of the Board by affirmative vote of three-quarters of the members of such Board, or of a nominating committee thereof, in office at the time of such first election; or (II) upon election by the stockholders of the Association to serve as a member of the Board, but only if nominated for election by affirmative vote of three-quarters of the members of the Board, or of a nominating committee thereof, in office at the time of such first nomination; provided, however, that such individual's election or nomination did not result from an actual or threatened election contest (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) other than by or on behalf of the Board; or (v) any event which would be described in Section 11(a)(i), (ii), (iii) or (iv) if the term "Company" were substituted for the term "Association" therein or the term "Board of Directors of the Company" were substituted for the term "Board". In no event, however, shall a Change of Control be deemed to have occurred as a result of any acquisition of securities or assets of the Association, the Company, or an affiliate or subsidiary of either of them, by the Association, the Company, or a subsidiary of either of them, or by any employee benefit plan maintained by any of them. For purposes of this Section 11 (a), the term "person" shall have the meaning assigned to it under Sections 13(d)(3) or 14(d)(2) of the Exchange Act. (b) In the event of a Change of Control, the Executive shall be entitled to the payments and benefits contemplated by Section 9(b) in the event of his or her termination employment with the Association under any of the circumstances described in Section 9(a) of this Agreement or under any of the following circumstances: (i) resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following his or her demotion, loss of title, office or significant authority or responsibility or following any reduction in any element of his or her package of compensation and benefits; (ii) resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following any relocation of his or her principal place of employment or any change in working conditions at such principal place of employment which the Executive, in his or her reasonable discretion, determines to be embarrassing, derogatory or otherwise adverse; (iii) resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following the failure of any successor to the Association in the Change of Control to include the Executive in any compensation or benefit program maintained by it or covering any of its executive officers, unless the Executive is already covered by a substantially similar plan of the Association which is at least as favorable to him or her; or (iv) resignation, voluntary or otherwise, for any reason whatsoever during the Employment Period within six months following the effective date of the Change of Control.