(ii) any estimate, projection, prediction, data, financial information, memorandum, presentation or other materials or information provided or addressed to Parent, Merger Sub or any of their respective Affiliates or Representatives, including any materials or information made available in the electronic data room hosted by or on behalf of the Company in connection with the Merger, in connection with presentations by or discussions with the Company’s management whether prior to or after the date of this Agreement or in any other forum or setting; or
(iii) the accuracy or completeness of any other representation, warranty, estimate, projection, prediction, data, financial information, memorandum, presentation or other materials or information.
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1. Conduct of Business of the Company and its Subsidiaries. During the period from the Agreement Date and continuing until the earlier of the termination of this Agreement in accordance with its terms and the Effective Time (the “Pre-Closing Period”) (except (v) to the extent expressly provided otherwise in this Agreement, (w) consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (x) as set forth in Schedule 4.1 to the Company Disclosure Letter, (y) as necessary to comply with Applicable Legal Requirements or Material Contracts in effect on the Agreement Date and made available to Parent or (z) with respect to actions or omissions that constitute COVID-19 Measures) the Company shall, and shall cause each of its Subsidiaries to:
(a) conduct the Business in the Ordinary Course of Business; and
(b) use commercially reasonable efforts to preserve intact its present business organizations, keep available the services of its present officers and preserve its relationships with customers, suppliers, distributors, licensors, licensees and others having material business dealings with it.
4.2. Restrictions on Conduct of Business of the Company and its Subsidiaries. Without limiting the generality or effect of Section 4.1, during the Pre-Closing Period, the Company shall not, and shall cause each of its Subsidiaries not to, do, cause or permit any of the following (except (v) to the extent expressly provided otherwise in this Agreement, (w) as consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (x) as set forth on a Schedule 4.2 of the Company Disclosure Letter) or (y) as necessary to comply with Applicable Legal Requirements or (z) with respect to actions or omissions that constitute COVID-19 Measures (following reasonable prior consultation with Parent):
(a) Charter Documents. Amend its certificate of incorporation or bylaws, or comparable organizational or governing documents;
(b) Dividends; Changes in Capital Stock. Declare or pay any dividend on or make any other distribution (whether in cash, stock or property) in respect of any of its capital stock (other than the payment of any dividend or distribution by any wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary of the Company in the Ordinary Course of Business), change any rights with respect to its outstanding securities, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock (except, in any such case, (i) from former employees, non-employee directors and consultants (each such Person, a “Company Associate”) in accordance with agreements providing for the repurchase of shares in connection with any termination of service, (ii) by the cancellation of stock-based awards pursuant to the terms of any such award between the Company and a Company Associate upon the termination of such Company Associate’s service to the Company, (iii) in connection with withholding or “net settling” on the vesting of any Company RSUs or Company PSUs or (iv) as required pursuant to the Indentures) or adopt any resolution, plan or arrangement for liquidation, dissolution or winding-up;
(c) Equity Incentive Plans, etc. Except as required by the terms of any Company Employee Plan or Applicable Legal Requirements, (i) accelerate, amend or change the period of exercisability or vesting of any Company Options, Company RSUs, Company PSUs or other rights granted under the Company Equity Plans or the vesting of the securities purchased or purchasable under such Company Options, Company RSUs, Company PSUs or other rights or the vesting schedule or Repurchase Rights applicable to any Unvested Company Shares issued under such stock plans or otherwise, (ii) amend or change any other terms of such
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Company Options, Company RSUs, Company PSUs, other rights or Unvested Company Shares or (iii) authorize cash payments in exchange for any Company Options, Company RSUs, Company PSUs or other rights granted under any of such plans or the securities purchased or purchasable under those Company Options, Company RSUs, Company PSUs or other rights (other than actions as may be necessary for the Company Board to take during the Pre-Closing Period to give effect to the provisions of this Agreement with respect to the Company Options, Company RSUs or Company PSUs) or the Unvested Company Shares issued under such plans or otherwise;
(d) Material Contracts. (i) Enter into any Contract that would constitute a Material Contract if entered into prior to the Agreement Date, other than (A) entering into Contracts for the sale or licensing of Company Products or maintenance or services with respect thereto, or renewing such existing agreements, in either case, in the Ordinary Course of Business and not otherwise prohibited by any other provision of this Section 4.2, (B) entering into Contracts for non-exclusive licenses of Intellectual Property in the Ordinary Course of Business (which shall not modify or limit the restrictions in Section 4.2(h)) and (C) entering into Contracts for the purchase of supplies or materials for Company Products in the Ordinary Course of Business, (ii) violate, terminate (other than allowing expiration according to its scheduled term, including failure to renew) or waive any of the material terms of any Material Contracts or (iii) amend or otherwise modify any of its Material Contracts (or any other Contract that, after giving effect to such amendment or modification, would be a Material Contract if entered into prior to the Agreement Date, taking into account such amendment) in such a way as to materially reduce the expected business or economic benefits thereof (other than renewing or modifying any Contract for Leased Real Property in the Ordinary Course of Business);
(e) Issuance of Securities. Issue, deliver or sell or authorize or propose the issuance, delivery or sale of, or purchase or propose the purchase of, any Company Voting Debt or any shares of its capital stock (including any Unvested Company Shares) or securities convertible into, or subscriptions, rights, warrants or options to acquire, or other Contracts of any character obligating it to issue any such shares or other convertible securities, other than, in any such case, (i) the issuance of shares of Company Common Stock pursuant to the exercise of Company Options or pursuant to the settlement of Company RSUs or Company PSUs, in each case, outstanding on the Agreement Date or otherwise granted in compliance with this Section 4.2(e), (ii) the grant of Company RSUs pursuant to the terms of any offer letter to a new employee hire outstanding on the Agreement Date as set forth on Schedule 4.2(e)(ii) of the Company Disclosure Letter, (iii) the repurchase of any shares of Company Capital Stock from former employees, non-employee directors and consultants of the Company in accordance with Contracts providing for the repurchase of shares in connection with any termination of service, (iv) in accordance with the terms of the Capped Call Transactions or the Convertible Notes that are outstanding on the date hereof and (v) the grant of Company RSUs on the terms and conditions (and subject to the limitations) as set forth on Schedule 4.2(e)(v) of the Company Disclosure Letter;
(f) Employees; Consultants; Independent Contractors. (i) Hire any additional officers or other employees or materially amend the term of any employment agreement or individual consulting (except hiring or materially amending any employment contract (x) of employees having a title below vice president in the Ordinary Course of Business, or (y) to backfill vacancies in the Ordinary Course of Business of current employees having a title of vice president provided the terms and conditions of employment are substantially similar to the terms and conditions of employment applicable to the departing employee of the Company), with all such hirings to be subject to the Company’s standard terms and conditions of employment (including compensation levels) in the applicable jurisdiction, (ii) terminate the employment (other than for cause or in connection with a restructuring plan disclosed to Parent prior to the Agreement Date) or change the title, office or position of any employee of the Company or any of its Subsidiaries at the level of vice president or above, (iii) enter into any new collective bargaining agreement or other written material Contract with a labor union or similar labor organization or recognize a labor union or similar labor organization (unless required by Applicable Legal Requirements) and (iv) engage in a “mass layoff” or “plant closing” which would trigger the notice requirements of the WARN Act;
(g) Loans and Investments. (i) Make any loans or advances in excess of $1,000,000 (other than routine travel advances and sales commission draws to employees of the Company or any of its Subsidiaries in the Ordinary Course of Business) to any Person (including any officer, director or employee of the Company), other
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than funding to any of its Subsidiaries in order to fund operations in the Ordinary Course of Business (including with respect to amounts thereof), (ii) forgive or discharge in whole or in part any outstanding loans or advances or (iii) adversely modify in any material respect any loan previously granted;
(h) Intellectual Property. (i) Transfer or license to any Person any rights to any Company-Owned Intellectual Property (other than by entering into Standard Outbound IP Agreements), (ii) distribute, license, convey or make available to any Person any software that incorporates, is derived from, contains, or links to any Open Source Materials if such activities would require disclosure on Schedule 2.10(m) if occurring prior to the Agreement Date, in each case of (i) or (ii), other than non-exclusive licenses granted (A) in the Ordinary Course of Business or (B) with respect to Company Source Code, to third parties solely in connection with their capacity to perform services for the Company or its Subsidiaries, consistent with past practice, or (iii) other than in the reasonable business judgment of the Company or its Subsidiaries in the Ordinary Course of Business allow any registrations or applications that are material Company-Owned Intellectual Property to become abandoned, lapse or expire (other than natural statutory expirations);
(i) Data Privacy and Security. Modify any privacy policies of the Company or any of its Subsidiaries or the integrity, security or operation of the IT Systems used in their businesses in any adverse manner that would reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole, except as required by Applicable Legal Requirements;
(j) Restrictive Covenants. Enter into any Contract that would constitute a Material Contract (if entered into prior to the Agreement Date) pursuant to Section 2.18(a)(v), or amend any Contract that would, after giving effect to such amendment, constitute a Material Contract (if so amended prior to the Agreement Date) pursuant to Section 2.18(a)(v);
(k) Dispositions. Sell, lease, exclusively license or otherwise dispose of or encumber (other than Permitted Encumbrances) any of its properties, rights or assets in a manner material, individually or in the aggregate, to the Company and its Subsidiaries, taken as a whole, in each case, other than (i) sales of Company Products in the Ordinary Course of Business or (ii) pursuant to depositions of obsolete, surplus or worn out, as applicable, lease real properties or assets that are no longer useful in conduct of the Business, or enter into any Contract with respect to the foregoing (including any subleases or leased real property entered into in the Ordinary Course of Business);
(l) Indebtedness. Incur, assume, authorize or issue any indebtedness for borrowed money or notes, bonds or other debt securities, enter into any “keep well” or other Contract to maintain any financial statement condition, or enter into any arrangement having the economic effect of any of the foregoing, other than in connection with the financing of trade payables in the Ordinary Course of Business;
(m) Capital Expenditures. Make any capital expenditures, capital additions or capital improvements involving payments of more than $20,000,000 in the aggregate in any trailing four (4) calendar quarter period or $6,000,000 in the aggregate in any individual calendar quarter;
(n) Insurance. Materially adversely change the amount or terms of any insurance coverage (subject to policy changes made by carriers);
(o) Employee Benefit Plans; Pay Increases. Except in the Ordinary Course of Business or as required pursuant to the terms of any Company Employee Plan: (i) adopt or amend any employee or compensation benefit plan, including any stock purchase, stock issuance, stock option, bonus or cash incentive plan, compensation, benefit, entitlement, grant or award provided or made under any such plan, except in each case as required under ERISA or Applicable Legal Requirements or as required to maintain the qualified status of such plan under the Code, (ii) amend any deferred compensation plan within the meaning of Section 409A of the Code and Internal Revenue Service Notice 2005-1 except to the extent necessary to meet the requirements of such Section or Notice or (iii) pay any special bonus or special remuneration to any current or former employee or non-employee director or consultant or increase the salaries, wage rates or fees of its employees or consultants (other than pursuant to preexisting plans, policies or Contracts that have been made available to Parent and are set forth on Schedule 4.2(o)(iii) of the Company Disclosure Letter);
(p) Severance Arrangements. Except in the Ordinary Course of Business with respect to employees having a title below vice president or as required pursuant to the terms of any Company Employee Plan or
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Applicable Legal Requirements, grant or pay, or enter into any Contract providing for the granting of any severance, retention or termination pay (other than accrued but unpaid salary), or the acceleration of vesting or other benefits, such a termination of employment, to any Person;
(q) Legal Proceedings; Settlements. (i) Commence a Legal Proceeding other than (A) for the routine collection of accounts receivable or matters in the Ordinary Course of Business, (B) in such cases where the Company in good faith determines that failure to commence such Legal Proceeding would result in the material impairment of a valuable aspect of the Business (provided that the Company consults with Parent prior to the filing of such a suit) or (C) for a breach of this Agreement or (ii) settle, offer to settle or agree to settle any pending or threatened Legal Proceeding or other dispute, including any such Legal Proceeding between a third party and any customers of the Company for which the Company is providing a defense or indemnity, in any such case, other than the settlement of any action, suit, proceeding, claim, arbitration or investigation (but not a criminal proceeding) that requires payments by the Company (net insurance proceeds received and indemnity, contribution, or similar payments actually received) in an amount not to exceed, individually or in the aggregate, $5,000,000, and in each case does not involve any admission of wrongdoing or injunctive or other equitable relief;
(r) Acquisitions. Acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the assets or equity interests of, or by any other manner, any business or any Person or division thereof, or otherwise acquire or agree to acquire any assets or equity or debt securities (other than publicly-traded marketable securities), in each case, for consideration in an amount not to exceed individually or in the aggregate, $50,000,000, or enter into any Contract with respect to a joint venture, strategic alliance or partnership, in each case, that are material, individually or in the aggregate, to the Business;
(s) Reorganization. Adopt or enter into any plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizational or similar change in capitalization;
(t) Taxes. (i) Make or change any material election in respect of Taxes of the Company or any of its Subsidiaries, (ii) adopt or change any accounting method in respect of material Taxes, (iii) file or amend any material Tax Return of the Company or any of its Subsidiaries in a manner that is inconsistent with past practices (provided that Parent will not unreasonably withhold its consent to such a filing), (iv) enter into any Tax sharing or similar agreement with respect to a material amount of Taxes (other than agreements the principal purpose of which does not relate to Taxes) or closing agreement with any Tax Authority with respect to material Taxes, (v) settle any claim or assessment in respect of a material amount of Taxes or (vi) consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of material Taxes relating to the Company or any of its Subsidiaries (other than (1) pursuant to any extension of time to file a Tax Return obtained in the Ordinary Course of Business or (2) pursuant to any extension granted in the Ordinary Course of Business in connection with an audit of Taxes to prevent the assessment or collection of a Tax) or (vii) enter into material intercompany transactions outside the Ordinary Course of Business giving rise to a material amount of deferred gain or loss of any kind;
(u) Accounting. Change accounting methods or practices (including any change in depreciation or amortization policies) or revalue any of its material assets (including writing down the value of inventory or writing off notes or accounts receivable other than in the Ordinary Course of Business), except in each case as required by changes in GAAP and after notice to Parent;
(v) Encumbrances. Place, allow the creation of or assume any Encumbrance on any of its assets or properties, other than Permitted Encumbrances;
(w) Warranties; Discounts. Materially change the manner in which it extends warranties, discounts or credits to customers (other than in the Ordinary Course of Business);
(x) Interested Party Transactions. Enter into any Contract that would be required to be reported by the Company pursuant to Item 404 of Regulation S-K;
(y) Cash Management Transactions. Enter into or materially modify any currency exchange, interest rate, commodities or other hedging or derivative transactions or arrangements, or other investment or cash management transactions or arrangements other than in the Ordinary Course of Business;
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